Efficiency analysis for organic agricultural producers: the role of soil-improving inputs

Greater emphasis is being placed on indicators of agri-environmental efficiency of organic production systems. Linking environmental measures with profitability measures based on net income is the only way to develop such indicators. A stochastic production frontier model that explicitly incorporates farm decisions about acquiring and managing organic soil-improving inputs is used to measure efficiency. The results confirm that on-farm self-sufficiency in soil-improving inputs is positively related to farm-level efficiency.