Agricultural Systems xxx (2014) xxxxxx

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Agricultural Systems
journal homepage: www.elsevier.com/locate/agsy

Comparing conventional and organic citrus grower efciency in Spain

Mercedes Beltrn-Esteve a, Ernest Reig-Martnez a,b,
a
Departament dEconomia Aplicada II, Facultat dEconomia, Universitat de Valncia, Avda. dels Tarongers s/n, 46022 Valencia, Spain
b
Ivie (Valencian Institute of Economic Research), Calle Guardia Civil, 22, Esc. 2, 1., 46020 Valencia, Spain

a r t i c l e i n f o a b s t r a c t

Article history: This paper compares the organic and conventional citriculture systems in Spain from the perspective of
Received 24 July 2013 their technical efciency. The primary objective of the research is to compare the relative efciency of
Received in revised form 22 May 2014 these two systems in relation to a metafrontier that envelops both technologies. In addition, the article
Accepted 27 May 2014
analyses how efcient each growing system is at using its own technology, that is, when farms efciency
Available online xxxx
is benchmarked in relation to the best practices in their group. Contrary to conventional practice, farms
performance is analyzed in terms of specic growing tasks: soil and plant cover management, pruning,
Keywords:
fertilization and phytosanitary treatments. The results obtained highlight that both organic and conven-
Organic citrus farming
Technical efciency
tional orchards would be able to achieve substantial global cost savings if they reached the maximum
Data envelopment analysis level of efciency that their technological restrictions permit. They also reveal that the gap between
Directional distance function the levels of efciency on the frontier of each of the systems and the metafrontier is much wider in
Metafrontier the case of organic citriculture than in conventional growing systems. Consequently, there is evidence
that the limitations imposed on organic citriculture by regulatory and technological determinants have
a signicant impact on the relative efciency of organic orchards in citrus fruit production, with potential
consequences as regards their nancial viability.
2014 Elsevier Ltd. All rights reserved.

1. Introduction of the negative externalities of modern agriculture, the economic

competitiveness of organic versus conventional farming is a more
There is currently wide recognition that society receives many contentious issue. Firstly, there is some agreement concerning
benets, grouped under the label of ecosystem services, from both the fact that yields are frequently lower in organic farms in
natural and managed ecosystems, including agricultural systems comparison with conventional farms operating under similar
(Swinton et al., 2007; Zhang et al., 2007). The external costs and conditions (Offermann and Nieberg, 2000; De Ponti et al., 2012).
benets of modern agriculture raise important policy questions, Secondly, productivity comparisons between organic and conven-
particularly with regards to the most efcient ways for encourag- tional farming can go beyond the observation of yield differences:
ing the right behavioral changes to reduce negative externalities efciency in inputoutput transformation and its measurement
(Pretty et al., 2001) and for promoting locally adapted technologies has motivated a large body of literature (Bravo et al., 2007).
toward agricultural sustainability (Rigby and Cceres, 2001; Pretty, Farm-level research work on efciency has used both parametric
2008). techniques (Tzoulevekas et al., 2001a, 2001b; Mayen et al., 2010;
Organic farming involves maximum reliance on self-regulating Serra et al., 2011) and non-parametric methods (Oude Lansink
ecological or biological processes and renewable resources, while et al., 2002; Wossink and Denaux, 2006; Arandia and Aldanondo,
systematic efforts are undertaken to reduce reliance on external 2007; Bayramoglu and Gundogmus, 2008; Serra and Goodwin,
inputs. Although it is not synonymous with sustainable farming, 2009; Breustedt et al., 2011; Beltrn-Esteve, 2013).
organic farming aims to create a sustainable agricultural produc- A problem for this type of analysis lies in the fact that
tion system. Notwithstanding, while there is growing social recog- efciency scores are not directly comparable across farms if they
nition of the positive role played by this type of farming in the have been computed taking different technological frontiers as
conservation of natural resources and the reduction or elimination a reference. Therefore, it is convenient to draw a distinction
between these frontiers and a metafrontier acting as a global ref-
erence free of the environmental or institutional restrictions char-
Corresponding author at: Departament dEconomia Aplicada II, Facultat
dEconomia, Universitat de Valncia, Avda. dels Tarongers s/n, 46022 Valencia,
acterizing specic production frontiers, a development that was
Spain. Tel.: +34 96 382 83 39; fax: +34 96 3828354. pioneered by Hayami and Ruttan (1970) in the eld of agricultural
E-mail address: [email protected] (E. Reig-Martnez). economics.

http://dx.doi.org/10.1016/j.agsy.2014.05.014
0308-521X/ 2014 Elsevier Ltd. All rights reserved.

Please cite this article in press as: Beltrn-Esteve, M., Reig-Martnez, E. Comparing conventional and organic citrus grower efciency in Spain. Agr. Syst.
(2014), http://dx.doi.org/10.1016/j.agsy.2014.05.014
2 M. Beltrn-Esteve, E. Reig-Martnez / Agricultural Systems xxx (2014) xxxxxx

Context-dependent specic production frontiers can be intro- Finally, by using the so-called metatechnology ratios, we are able
duced into efciency analysis by splitting a sample of Decision to establish the technological gap between best practices within
Making Units (DMUs) into different groups using homogeneity each group technology and best practice when farms are free to
criteria (Charnes et al., 1981). Battese et al. (2004) developed a sto- operate all of the technologically feasible practices, i.e. using the
chastic metafrontier production function aimed at assessing tech- enveloping metafrontier as a reference.
nological gaps between particular technologies and ODonnell
et al. (2008) advanced this line of research in a Data Envelopment 2.1. Metatechnology and group technologies
Analysis (DEA) context by dening group frontiers as boundaries of
restricted technology sets, and an enveloping common metafron- Now, let us start by considering that we are able to observe the
tier as the boundary of an unrestricted technology set. Groups of economic performance of a set of farms k = 1, . . . , K, represented by
rms operating in areas with poor natural endowments, or con- sales revenue v and that their production processes require per-
strained by highly-regulated production environments (i.e. rules forming a series of N growing tasks observed at farm level and
concerning the certication of organic production), may only have denoted by the vector of task costs t = (t1, . . . , tN). The metatechnol-
access to a restricted technology set. In this case, distance func- ogy can be represented by the task requirement set, TRS(v), repre-
tions can be used to measure technical efciency with regards to senting all combinations of task costs that permit the generation of
the unrestricted metatechnology set and to the restricted technol- at least sales revenue v:
ogy sets of different groups of producers, and the closeness of
group frontiers to the metafrontier can be measured. TRSv ftjv ; t 2 Tg 1
On the other hand, technical efciency can be assessed for a T being the set of all feasible combinations of sales value and task
sub-set of inputs rather than for the entire input vector (Fre costs given the present state of the technology. We assume that
et al., 1994). Oude Lansink et al. (2002) pioneered the use of this production technology satises the usual properties as summarized
type of sub-vector efciency in drawing comparisons between in Picazo-Tadeo et al. (2012).
conventional and organic farms. The use of Directional Distance The directional metadistance function (Chambers et al., 1998) is
Functions (DDFs) (Chung et al., 1997; Chambers et al., 1998; Fre another complete representation of metatechnology and can be
and Grosskopf, 2003) has opened up a potentially fertile research dened as:
area for this type of analysis.
This paper applies the above methodology, following MDv ; t; g g v 0  g t  Supfbjt  bg t 2 TRSv bg v g 2
Sez-Fernndez et al. (2012) and Picazo-Tadeo et al. (2012), with g g v 0  g t being the direction vector.
the aim of computing efciency measures for two Spanish citrus The directional metadistance function (DMF) in expression (2)
growing systems, organic and conventional, and drawing compar- is also a highly exible efciency measurement tool. It allows the
isons of their relative performance. One particular feature of our researcher to explore the maximum potential for simultaneously
research is that instead of relying on the use of conventional increasing the value of farm sales and decreasing the task costs
inputs, we analyze farms performance in terms of the specic of particular farm operations along a path that has been previously
growing tasks. An important advantage of this approach is that it established through the selection of a particular direction vector.
allows us to estimate the scope for adopting efciency-enhancing This function is always equal to or greater than zero, with a score
practices by organic and conventional farmers, while at the same of zero meaning that no further reduction in task costs or expan-
time recognizing that the same type of cultivation task can be sion of the value of farm sales is feasible within the available tech-
performed in different ways by both groups of citrus farmers (i.e. nology, thus allowing the farm concerned to qualify as efcient.
using widely different inputs in fertilization, or alternative tech- Increasing values of the function imply a higher potential to save
niques to ght weeds). By using DDFs we are able to determine in task costs and to expand sales value from the observed levels,
the amount of cost-saving, for all growing tasks taken together or which means that farm inefciency also increases.
for particular sub-sets, which could be obtained without decreas- As noted previously, specic constraints imposed by the charac-
ing sales revenue. We are also able to infer the efciency of both teristics of admissible production techniques or natural conditions
systems with regards to an enveloping metafrontier and to pin- result in different farming systems. Producers belonging to a given
point their respective weak and strong points. Our results may farming system are prevented from accessing the full range of
shed some new light on the slow rate of adoption of organic prac- combinations between sales value and production costs that are
tices by citrus farmers in the area under analysis (Beltrn-Esteve potentially available in the metatechnology. Following ODonnell
et al., 2012). et al. (2008), we start by splitting farms in our sample into several
Following this Introduction, Section 2 expounds the methodol- groups or farming systems, named h. Therefore, we are able to
ogy and Section 3 describes the technical aspects of citrus farming dene a task costs requirement set for each farming system h,
in the Region of Valencia (Spain) and the sample data. Section 4 namely TRSh, that can be formally dened as:
presents the results and highlights some policy implications, while
a nal Section summarizes and concludes. TRSh v ftjv ; t 2 T h g 3
And a group h directional distance function
2. Methodology
Dh v ; t; g g v 0  g t  Supfbh t  bh g t 2 TRSh v bh g v g 4
This section describes the building blocks of our methodological where g g v 0  g t is, as before, the direction vector. Group DDFs
approach. In the rst sub-section, we recognize the technological can be employed to estimate the efciency of farms in farming sys-
heterogeneity of farming production systems and, using DDFs, tem h against the technology of their own group. Selection of the
draw a basic distinction between technical efciency measured direction vector enables us to dene several efciency indicators
with regards to the metafrontier and with regards to the group- taking into account the limits imposed by the technology of group h.
specic technological frontier. In the second sub-section, we dene Let us now provide a graphical illustration (Fig. 1). We start by
a set of direction vectors and employ DEA programs to compute assuming a farm technology that generates sales value v by
radial and task-specic efciency scores for each farm, both with performing two cultivation tasks, namely t1 and t2. A number of
regard to the metatechnology and group-specic technologies. efcient farms, from A to F, are observed, in addition to farm J.

Please cite this article in press as: Beltrn-Esteve, M., Reig-Martnez, E. Comparing conventional and organic citrus grower efciency in Spain. Agr. Syst.
(2014), http://dx.doi.org/10.1016/j.agsy.2014.05.014
 M. Beltrn-Esteve, E. Reig-Martnez / Agricultural Systems xxx (2014) xxxxxx 3

and, within a DEA framework, the mathematical optimization pro-

0
gram that computes the distance to the metafrontier, bkall , for farm k0
in expression (2) is
0 0
maximizebk0 ;zk bkall k 2 k 1; . . . ; K 6
all

Subject to:

0 X
K
vk 6 zk v k i
k1

 0
 0 X
K
1  bkall t k P zk t k i 1; . . . ; n ii
k1

zk P 0 k 1; . . . ; K: iii
0
bkallrepresents the maximum proportional reduction that can be
achieved by farm k0 in the cost of all-tasks taken together. By way
0
Fig. 1. Metatechnology, group technologies and DDFs. of example, a value of bkall equal to 0.4 means that the cost of the
whole set of farming tasks performed by this farm could be cut by
40% without the farm being forced to reduce its sales revenue. How-
Observations A, B and C belong to group 1, while farms D, E, F and J ever, when we aim to assess efciency for a particular task, denoted
belong to group 2. The technological frontier for group 1 is dened by i, without increasing the cost of the remaining tasks, denoted by
by efcient farms A, B and C and their convex combinations, while i, and keeping farm sales revenue constant, the directional vector is
the segment connecting the efcient farms D, E and F shapes the
technological frontier of group 2. The metatechnology is built up g i g v 0  g t 0; t i ; 0 7
as a convex combination of the technologies of both groups and and the DEA program that computes efciency in task i with regards
is shaped by observations A, B, and F. 0
to the metafrontier, bki , is
Farm J is inefcient because it generates one unit of sales reve- 0 0
nue with higher task costs than is strictly necessary, with regards maximizebk0 ;zk bki k 2 k 1; . . . ; K 8
i
to both its own group technology and the metatechnology. When subject to:
farm J is projected onto the technological frontier of group 2, with
a direction vector that proportionally reduces task costs t1 and t2, it 0 X
K
vk 6 zk v k i
yields point J1, while projection onto the metatechnology yields k1
point J2. The distance between both projections measures the
technological gap between the best practice achievable within
 0
 0 X
K
1  bki t ki P zk t ki i 2 n; i R i ii
the limits imposed by group 2 technology and the frontier of the
k1
unrestricted metatechnology. The technological gap can also be
computed in a direction that only reduces task cost t2 while main- 0 X
K
tki P zk t ki i2n iii
taining t1 and sales value. According to this new scenario, which
k1
has to do with the management of specic growing task t2, DMU
J is being projected onto points J3 and J4, onto the technology of zk P 0 k 1; . . . ; K iv
group 2 and the metatechnology respectively. 0
where bki
represents the maximal proportional reduction in the cost
of task i that farm k0 could achieve while keeping sales revenue con-
2.2. Efciency measurement with directional distance functions and
stant and avoiding any increase in other task costs. By way of exam-
data envelopment analysis 0
ple, if bki takes a value equal to 0.45, it means that the cost of
cultivation task i in farm k0 could be cut by 45% while maintaining
Several methodological approaches can be taken to address the
the observed sales revenue and without an increase in the costs of
calculation of directional metadistance and distance functions.
performing other cultivation tasks. When both total and task-
Here we make use of DEA, which is a non-parametrical method 0
specic efciency are computed, the value of bkall shows the mini-
that computes a measure of the relative position of each DMU with 0
mum threshold for bki .
regards to a frontier dened by observed best practices and their
Distances to own group h frontier, according to expression (4),
linear convex combinations (see Cooper et al., 2007 for further
can be obtained in similar fashion by taking best within-group
details). The use of DDFs to compute efciency scores allows us 0 0

to dene a variety of efciency measures, by changing the direc- practices as a benchmark. We call these distances bhk hk
all and bi

tional vector, and makes it possible to focus the analysis on differ- respectively. The scores obtained with DDFs computed with
ent facets of production process relationships. respect to the technology of group h must necessarily be, by con-
Here, our analysis focuses on detecting inefciencies concern- struction, equal to or lower than those being computed with
ing the costs corresponding to particular cultivation tasks and respect to the metatechnology.
assessing differences, with regards to this concern, arising from
two technologically different citrus farming systems, namely con- 2.3. Efciency and metatechnology ratios
ventional and organic. We model the directional vector in order to
achieve these objectives. The technological gap of a group h represents the difference
Specically, we target the maximal proportional task cost between the best performance that can be achieved within the
reductions achievable while keeping the observed values of farm restrictions imposed by the technical characteristics of group hs
sales constant by using the following directional vector farming system and the best performance when no such group
restrictions are imposed. This can be measured using the so called
g all g v 0  g t 0; t 5 metatechnology ratios.

Please cite this article in press as: Beltrn-Esteve, M., Reig-Martnez, E. Comparing conventional and organic citrus grower efciency in Spain. Agr. Syst.
(2014), http://dx.doi.org/10.1016/j.agsy.2014.05.014
4 M. Beltrn-Esteve, E. Reig-Martnez / Agricultural Systems xxx (2014) xxxxxx

In order to compute our metatechnology ratios it is convenient fertilization and soil and plant cover management practices, and
to express the directional metadistance and distance functions in a give rise to cost differences per hectare. Organic citrus orchards
more conventional way, as efciency measures. The reason is that, use compost manure, which is then supplemented with complex
as dened by ODonnell et al. (2008), metatechnology ratios involv- organic materials such as animal and plant remains, algae extracts,
ing efcient farms could not be computed as ratios of directional and guano. Green manure crops of rapid growth, which are cut and
distances since for these observations distances are equal to zero buried in the place where they have grown, are annually able to
(Picazo-Tadeo et al., 2012). Let us thus dene the following all-task afford large quantities of humus and nutrients. Pruning waste
cost reducing efciency measures for group hs farm k0 , rstly with incorporated into the soil also helps to improve soil quality,
unrestricted access to available technological combinations, that is reduces the requirements for additional crop fertilization and con-
with regards to the metatechnology, as tributes to reducing CO2 emissions. Organic producers are also rec-
ommended to use traditional techniques such as scratching,
k0 0
Metaefficiencyall 1  MDv ; t; g 0; t 1  bkall 9 which consists of making a shallow circular cut in the main
branches, to favor the fruit set and fattening, instead of resorting
And, secondly, with regards to its own group h, that is, with
to hormone treatments (for a more detailed description of the
restricted access to technology, the efciency measure is
technical aspects of local organic citriculture, see Porcuna et al.,
 
hk0 0
2010 and Domnguez-Gento, 2008).
Efficiencyall 1  Dh v ; t; g 0; t 1  bhk
all 10
Organic citrus currently represents a small proportion of total
The relationship between metadistance/distance functions and farmland devoted to citrus production in the Region of Valencia.
the measures of efciency dened in (9) and (10) can be easily Some reasons have been advanced to explain the slow diffusion
illustrated. For example, a metadistance function of, say, 0.4 means of organic citrus farming: the difculties in isolating organic citrus
that farm k0 could reduce all its costs by 40% and yet maintain sales farms from neighboring intensive conventional plantations, the
value; however, it also means that the same value could be gener- regions long history of intensive production, a lack of appropriate
ated with only 60% of the costs actually involved in growing the distribution channels for organic produce in the domestic market
product, which is just the meaning of expression (9), that is, the and the scarcity of available subsidies to compensate for the higher
metaefciency score is 0.6. This measure of efciency is upper- variable costs incurred in organic production (Peris and Juli,
bounded to one, which corresponds to full efciency, and a 2006). Manure is more expensive than chemical fertilizers and
decrease in the score represents a worsening of the efciency level. must be used in higher quantities to meet the requirements of
Furthermore, metaefciency will always be equal to or lower than adult plantations. Organic orchards are also substantially more
the efciency calculated relative to group-specic technology, labor-demanding than conventional ones: weeds must be removed
because of the enveloping property of the metafrontier. mechanically, organic manure application uses more labor than
The metatechnology ratio for a farm k0 belonging to group h, in a conventional fertilization and mulching formation from crushing
direction that proportionally reduces all-task costs, g = (0, t), can ground wood after pruning also consumes labor input. Besides
be formalized as: those tasks, the organic farmer must spend labor time on maintain-
ing hedgerows in good conditions and on cultivating plant cover.
hk0
Metatechnology Ratioall v ; t; g 0; t Savings in expenditures related to herbicides, fungicides and
 0
 insecticides do not normally compensate for these higher labor
Metaefficiencyall
k0 1  bkall costs. Finally, yields are lower than in conventional production,
hk0
 0
 11
Efficiencyall 1  bhk thus increasing the cost per kilogram and raising the differential
all
break-even point of organic farming (Peris et al., 2005; Peris and
which allows for the following relationship: Juli, 2006).
Despite factors hindering the shift from conventional to organic
k0 hk0 hk0
Metaefficiencyall Metatechnology Ratioall  Efficiencyall 12 citrus production, some farmers have been driven to adopt organic
techniques. Concerning the motivations of citrus farmers in the
Metatechnology ratios, as dened in (11), depict the closeness Region of Valencia to become organic producers, recent research
of the technology of group h to the metatechnology, assessed in a has shown that the main explanatory factors are: environmental
gall = (0, t) direction. Therefore, they measure the gap between concerns, concern for the wellbeing of future generations, an aspi-
the technology of group h and the metatechnology. Let us assume, ration to produce high quality output and a willingness to reduce
for illustration purposes, that the metaefciency score of farm k0 is dependence on agrochemicals, with pecuniary aspects playing a
0.6 and that the efciency score with regards to its own technology less important role (Beltrn-Esteve et al., 2012). Nevertheless
h is 0.7. The metatechnology ratio is 0.85, which means that only nancial viability remains essential for the long term survival of
85% of the efcient task costs corresponding to the technological organic citrus farming, and technical efciency is a critical contri-
frontier of group h will be needed if farms are not operated under bution to this end.
the technological restrictions on group hs farming system (i.e. if The data used in this paper come from a survey designed for a
the metafrontier were employed as a benchmark). larger research project aimed at analysing both the economic and
It may be observed that expressions (9)(12) have been dened environmental performance of conventional and organic citrus
considering a directional vector that keeps sales revenue constant farming in the Spanish region of Valencia. Beltrn-Esteve et al.
and reduces all-tasks costs proportionally. Similar calculations may (2012) provide more detail on this issue. In 2009, all 203 organic
be undertaken to obtain task-specic metatechnology ratios. citrus farmers registered as certied ecological producers in Valen-
cia were contacted and 153 of them agreed to answer a question-
3. Citrus farming techniques and data set naire. Furthermore, 129 conventional citrus farmers, from a control
group of two hundred, responded to the survey. Nevertheless, we
The spread of organic citriculture is sometimes hindered by a faced two kinds of problems. On the one hand, as some farmers
lack of economic viability in comparison with conventional citri- did not provide complete information, missing observations had
culture. Organic citriculture has distinctive technical aspects with to be removed from the sample. And, on the other hand, the pres-
regards to conventional citriculture which clearly establish differ- ence of outliers was tested by using scatterplots and sensitivity
ential environmental impacts. They are mainly concerned with analysis of inuential observations. As it is customary whenever

Please cite this article in press as: Beltrn-Esteve, M., Reig-Martnez, E. Comparing conventional and organic citrus grower efciency in Spain. Agr. Syst.
(2014), http://dx.doi.org/10.1016/j.agsy.2014.05.014
 M. Beltrn-Esteve, E. Reig-Martnez / Agricultural Systems xxx (2014) xxxxxx 5

Table 1
Main sample descriptive statistics of conventional and organic citrus farming.

Conventional farms (105) Organic farms (107) Equality of means

Mean Std. Dev. Mean Std. Dev. t-test p-value
Income ( ha1) 6451 3505 5114 3128 2.929 0.004
Tillage ( ha1) 593 466 1070 747 5.589 0.000
Pruning ( ha1) 870 549 752 475 1.678 0.095
Fertilization ( ha1) 610 339 777 504 2.841 0.005
Phytosanitary ( ha1) 563 367 611 469 0.843 0.400
Surface (ha) 3.61 7.17 3.21 4.40 0.493 0.623

deterministic models are used, outliers were also removed from certication as an organic producer. More specically, this research
the sample (Simar, 1996). After these corrections, the sample com- considers four different farming tasks, namely soil and plant cover
prised of 107 organic citrus farms and 105 conventional citrus management, pruning, fertilization and nally the group of tasks
farms, its size being sufciently representative of each of the farm- related to pest control and fruit setting and fattening. The data
ing systems analyzed. Although organic production represents a used in all cases are per hectare, and include the cost of the inter-
small proportion of total citrus production, this fact was not a mediate inputs, labor and machinery required for each task, all of
problem as our aim was to compare the efciency scores of both them valued at market prices. It must be recalled that unit price
farming systems. Furthermore, in order to characterize and of inputs is the same across farms, which allows to use tasks costs
compare in terms of efciency the organic and conventional citrus as implicit indicators of input quantities.
farming systems it is desirable to have samples of similar size Soil and plant cover management includes tillage and also mow-
sufciently representative of each of the systems analyzed ing and treating weed cover with herbicides (in the tables we use
(Chumpitaz et al., 2010) the term tillage to represent the entirety of these operations).
The survey provides information on output and its sale price for These farming practices constitute alternative ways of handling
each farm. In addition, in relation to costs, it details the amounts of the needs of the crop and entail different requirements in regard
the quantities used of various intermediate inputs, and the number to the use of labor, machinery and herbicides. This research takes
of hours of labor and machinery used to perform each one of the into account both the labor and the machinery used for each of
different farming tasks being analyzed. Survey information has these tasks by each farm, together with their expenditure on
been completed with data from other sources. More specically, herbicides.
the price of phytosanitary products, herbicides, and the rental price Pruning includes the tasks related to pruning fruit trees and the
of labor and machinery come from personal communications.1 This subsequent treatment of pruning debris, either by burning remains
is necessary information for the calculation of the total cost of each or by shredding them for use as plant cover on the farm itself.
farm task. Input prices were needed to solve aggregation issues in Pruning also encompasses other related tasks, such as maintaining
the determination of agricultural tasks, which were particularly hedgerows, primarily in the case of organic orchards. Costs include
complex given the large variety of inputs involved in both farming both the labor and the machinery used.
systems. Family labor has been priced using hourly market wages Fertilization includes all the costs derived from purchasing
paid to contracted workers performing the same tasks. Furthermore, chemical and organic fertilizers and the labor and machinery nec-
the same input prices apply to all farms, as it is assumed that they essary for their application.
operate in a competitive market. Phytosanitary treatment and fruit setting and fattening includes
In reference to farms yields, sales revenue is used instead of a the tasks intended to control pests that can negatively affect the
physical quantity. This information is obtained by multiplying farm quality and appearance of the fruit and the treatments aimed at
returns per hectare, in kilograms, by the farm sale price of the setting and fattening the fruit, either by chemical means (hormone
product as declared by the producer in the questionnaire. The treatment) or physical means (fruit tree thinning and scratching).
use of different output prices across farms allows us to approxi- For each farm, we have considered both the cost of labor and
mate quality differences in output obtained from different farms machinery, together with the cost of purchasing phytosanitary
and, more importantly, between organic and conventional agricul- and hormone products.
tural practices. Consequently, differences between farms unitary Table 1 presents the main statistics of the variables used in the
prices are assumed to represent differences of quality in farms efciency analysis for both citriculture systems, as well as the
product. t-test of equality of means. It is worth highlighting that conven-
As far as inputs are concerned, as mentioned previously, this tional farms obtain higher sales revenue than organic orchards
paper takes a somewhat different methodological approach to due to the price differences in favor of the latter being insufcient
those normally used in efciency analysis. In this sense, instead to offset their disadvantage in terms of returns per unit of area
of using the traditional variables of labor, machinery and interme- (Juli and Server, 2000). Furthermore, the cost of managing soil
diate inputs, we consider the cost of performing certain farming and plant cover as well as fertilization costs are signicantly lower
tasks that, despite sharing a specic common purpose, such as in the case of conventional orchards. In contrast, conventional
fertilizing crops, can have different characteristics across farms farms face higher pruning costs, at statistical signicance levels
and/or growing systems. Such differences can be due to either of 10%. Finally, no signicant differences are observed in phytosan-
the farmers themselves deciding to use different techniques or itary costs or in terms of the size of the farm.
combinations of production factors or because they are required
to do so by the Government as a condition of being awarded
4. Results

1
We mostly thank a specialized rm, trading on farm inputs and supplying
Tables 24 present some summary indicators of the efciency
cooperatives in the Region of Valencia, for providing us with this valuable scores of each of the growing systems analyzed, together with
information. efciency measures of organic and conventional technologies in

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6 M. Beltrn-Esteve, E. Reig-Martnez / Agricultural Systems xxx (2014) xxxxxx

Table 2 Table 4
Estimates of distance, metadistance and metatechnology ratio: Radial direction. Differences in the metatechnology ratio: Conventional versus organic citrus farming.

Mean Std. Dev. Min Max Mean difference Simar_Zelenyuk adapted Li Testa
Directional metadistance function: ball J p-value
Conventional citrus farming 0.477 0.299 0.000 0.952
Radial direction 0.080 17.199 0.000
Organic citrus farming 0.656 0.232 0.000 0.963
Task-specic direction
Directional distance function: bhall Tillage 0.325 35.637 0.000
Conventional citrus farming 0.459 0.299 0.000 0.947 Pruning 0.265 38.182 0.000
Organic citrus farming 0.607 0.258 0.000 0.956 Fertilization 0.213 37.641 0.000
Metatechnology ratio: 1  ball =1  bhall Phytosanitary 0.038 45.496 0.000
Conventional citrus farming 0.959 0.048 0.768 1 a
Original estimates of the MTR are smoothed using Algorithm II (Simar and
Organic citrus farming 0.880 0.095 0.518 1 Zelenyuk 2006, p.508; Li 1996).

relation to the metafrontier, following the methodology described the directional distance function reveal substantial differences in
in Section 2. Here, for computational reasons, we assume constant efciency levels depending on the farming task considered. These
returns to scale. differences are greater in the case of conventional orchards.
Table 2 includes the results when considering the maximal Conventional farms record their highest levels of inefciency in
simultaneous proportional reduction in the costs of all the tasks pruning operations, where it would be possible to reduce costs
while maintaining the observed level of sales revenue of the farm, by 71% on average, while maintaining the costs of the rest of tasks
i.e. following direction vector (5). In the rst place, it is possible to and sales revenue unchanged. The possible cost savings for tillage,
observe that each citriculture farm, on average, can make large fertilization and phytosanitary treatment are smaller, albeit consis-
overall savings in regard to the best practices applied with the tently greater than 60%. As far as organic orchards are concerned,
respective technology of each growing system, in the vicinity of the scores obtained indicate that the most inefcient task is tillage
45% for conventional orchards and 60% for organic orchards. (78%), while the least inefcient, albeit still very high, corresponds
Organic orchards may have recorded a higher level of inefciency to fertilization (almost 75%).
as a result of farmers having to implement techniques that are The metatechnology ratio, as indicated previously, shows the
not commonplace in their environment and which require a spe- relative proximity between the frontier of each system and the
cic learning process. Furthermore, the results obtained for the metafrontier, which acts as enveloping. In relation to the conven-
metatechnology ratio highlight that operating within the techno- tional citriculture system, it is worth highlighting how close its
logical references of each system imposes greater limitations on technological frontier is to the metafrontier both in tillage and also
organic systems. In fact, the efcient level of costs on the meta- pruning and fertilization. As regards these tasks, the most efcient
technology frontier, on average, is only 88% of what should corre- cost levels of the best practices in the conventional system barely
spond to the efcient use of the organic system technology. differ 1% or 2% from those of the metatechnology frontier. How-
The technological frontier of the conventional system is closer ever, this gap is considerably larger in the case of phytosanitary
to the metafrontier. Its metatechnology ratio of nearly 96% treatment, at 8%. In the case of organic citriculture, proximity to
indicates that the restrictions imposed by the traditional growing the metatechnology frontier varies remarkably depending on the
system are hardly signicant. It should be mentioned that the max- direction or type of task considered in the estimation. In this sense,
imum value achieved for the metatechnology ratio is one for both although the organic farming system is not subjected to particu-
farming systems, and therefore there are farmers operating at the larly signicant restrictions where phytosanitary treatment is
metafrontier in both systems. concerned, with cost differences of barely 5%, limitations are con-
The results presented in Table 2 above do not show the full siderable in the case of fertilization and pruning, while the greatest
potential for improvement that exists for a given farming task, disadvantage corresponds to tillage. In reference to this last task,
nor do they show which task or tasks represent the greatest disad- the efcient levels of cost in an unrestricted technological scenario
vantage that each system must face. Table 3 includes the results would only represent 65% of the gure that the most efcient prac-
when considering the efciency indicators that take into account tices would record within the organic system.
the maximal potential reduction in cost of each task, while keeping Table 4 includes the results for the SimarZelenyuk adapted Li
the costs of the rest of tasks and the farms sales revenue constant, test (Simar and Zelenyuk, 2006; Li, 1996) of statistical signicance
i.e. following direction vector (7). As regards the efciency of farms of the differences in the metatechnology ratios obtained for each of
in relation to their own growing system technology, the results of the systems, both when considering the simultaneous reduction of

Table 3
Estimates of distance, metadistance and metatechnology ratio: Task-specic directions.

Tillage Pruning Fertilization Phytosanitary

Mean Std. Dev. Mean Std. Dev. Mean Std. Dev. Mean Std. Dev.
Directional metadistance function: bi
Conventional citrus farming 0.617 0.338 0.718 0.339 0.659 0.320 0.657 0.323
Organic citrus farming 0.851 0.203 0.838 0.225 0.800 0.226 0.788 0.227

Directional distance function: bhi

Conventional citrus farming 0.608 0.341 0.713 0.342 0.651 0.323 0.627 0.332
Organic citrus farming 0.781 0.252 0.774 0.271 0.747 0.264 0.767 0.261

Metatechnology ratio: 1  bi =1  bhi

Conventional citrus farming 0.979 0.067 0.989 0.054 0.982 0.053 0.916 0.107
Organic citrus farming 0.654 0.187 0.724 0.142 0.769 0.079 0.954 0.094

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 M. Beltrn-Esteve, E. Reig-Martnez / Agricultural Systems xxx (2014) xxxxxx 7

Table 5
Characteristics of efcient and inefcient farms in the group technology.

Conventional farms Efcient (15) Inefcient (90) Equality of means

Mean Std. Dev. Mean Std. Dev. t-test p-value
Income ( ha1) 9868 2902 5881 3276 4.833 0.000
Tillage ( ha1) 399 266 626 485 2.646 0.013
Pruning ( ha1) 660 553 905 544 1.595 0.127
Fertilization ( ha1) 557 525 619 301 0.448 0.661
Phytosanitary ( ha1) 528 435 568 357 0.345 0.734
Surface (ha) 5.1 5.9 3.4 7.4 1.007 0.325
Organic farms Efcient (7) Inefcient (100) Equality of means
Mean Std. Dev. Mean Std. Dev. t-test p-value
Income ( ha1) 9669 3136 4795 2883 3.995 0.006
Tillage ( ha1) 779 617 1091 754 1.273 0.242
Pruning ( ha1) 365 240 779 476 4.037 0.003
Fertilization ( ha1) 458 314 800 508 2.645 0.028
Phytosanitary ( ha1) 544 594 616 463 0.316 0.762
Surface (ha) 4.6 5.7 3.1 4.3 0.661 0.532

costs in all tasks and also when analyzing the individual reduction case, the margin for cost savings is calculated for each specic task
in each task. The results indicate that these differences are statisti- without reducing sales or increasing any other task cost.
cally signicant. Consequently, it can be stated that the technolog- The results obtained highlight, rstly, that both organic and
ical differences clearly work in favor of conventional farming conventional orchards would be able to achieve substantial global
systems where tillage, pruning and fertilization are concerned, cost savings if they reached the maximum level of efciency that
and also when considering all farming tasks as a whole, while this their respective technological restrictions permit. The results also
is not the case of phytosanitary treatment, where organic produc- reveal, through the metatechnology ratio, that the gap between
tion enjoys a technological advantage. the levels of efciency on the frontier of each system and the
Finally, we have delved deeper into the characteristics of ef- metafrontier is much wider in the case of organic citriculture than
cient orchards in relation to the inefcient farms that belong to in conventional citrus farming systems. Consequently, there is
each growing system (Table 5). The efcient farms record more evidence that the limitations imposed on organic citriculture by
revenue through citrus fruit sales and also lower execution costs regulatory and technological determinants have a signicant
for the four groups of tasks considered. However, not all the differ- impact on the relative efciency of organic orchards in citrus fruit
ences in favor of the orchards that apply the best practices are sta- production. The difference found is important, as it quanties the
tistically signicant. In order to improve, conventional farms that initial handicap faced by organic farms in relation to conventional
are not efcient must pay special attention to the differences in farming systems as regards their nancial viability.
revenue and tillage costs in regard to their efcient counterparts. Secondly, our work also identies the specic farming tasks that
Meanwhile, the organic orchards that are not efcient must focus display the greatest margins of inefciency. When analyzing each
their attention on revenue and pruning and fertilization costs to orchard in regard to the technological frontier of its group, these
improve their performance. differences provide information regarding the weaknesses in the
production process that farmers can address in order to enhance
5. Conclusions their performance to a greater or lesser extent. More specically,
farms in conventional systems should, particularly, improve their
At present, farmers consider adopting organic farming systems management of pruning operations, a task they are less efcient
bearing in mind their long-term contribution to enhancing the at performing, while organic farms display similar levels of inef-
environmental sustainability of agriculture. However, the nan- ciency in all tasks, although tillage records a slightly higher level.
cial viability of these systems entails certain limitations when The knowledge of the tasks that are on average performed least
compared to conventional ones. This paper compares the organic efciently within each growing system could constitute an inter-
and conventional citriculture systems in the main Spanish esting benchmark for agricultural policymakers, helping them to
production area from the perspective of their technical efciency. focus on disseminating relevant technical information and on
The primary objective of the research is to compare the relative enhancing the effectiveness of agricultural extension and profes-
efciency of the two growing systems in relation to a metafron- sional training programs. Solving the problem of excessive costs
tier that envelops both technologies in order to identify the in performing certain farming tasks, such as sowing and mowing
limitations each farming system faces. In addition, this paper plant cover and soil tillage, could improve the protability of
analyzes how efcient each growing system is at using its own organic citriculture and facilitate conventional producer decisions
technology, measuring farm efciency in relation to the best prac- to convert their orchards into organic farms.
tices in their group. Furthermore, when considering the distance between the group
In order to achieve both goals, the research has taken into technologies and the metatechnology, we can appreciate which
account the values observed at individual farm level of sales reve- tasks impose the greatest cost overruns on a given growing system.
nue and the cost of four large groups of agricultural tasks: soil and As regards how the two growing systems compare, conventional
plant cover management (tillage), pruning, fertilization and phy- citriculture has a clear advantage in efciency where tillage, prun-
tosanitary treatment. Scores have been calculated using DDFs ing and fertilization are concerned, while organic farms have a
within the framework of DEA and by distinguishing between radial small advantage over conventional ones in the case of phytosani-
efciency measures and task-specic efciency measures. In the tary treatment. Metatechnology ratios have allowed us to ascertain
rst case, the inefciency measures the potential to proportionally the superior technical efciency of the conventional citrus farming
reduce the growing costs of all the agricultural tasks, without system in most cultivation tasks in comparison to the organic sys-
reducing the revenue generated by product sales. In the second tem. Our results are coherent with the ndings of other researchers

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(2014), http://dx.doi.org/10.1016/j.agsy.2014.05.014
8 M. Beltrn-Esteve, E. Reig-Martnez / Agricultural Systems xxx (2014) xxxxxx

that agree on the superiority of conventional citrus farming over Fund and the Spanish Government, through Project AGL2010-
organic farming in the Valencian Region in relation to nancial 17560-C02-02, is gratefully acknowledged.
viability (Juli and Server, 2000; Peris et al., 2005; Peris and Juli,
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