The agricultural treadmill - a way out through differentiation? An empirical analysis of organic farming and the agricultural treadmill

Abstract

The agricultural treadmill describes how technological advances create productivity gains for the benefit of progressive farmers, but where the result is also increased supply, falling prices, economic problems for laggard farmers and thus the need for new achievements in technology. In order to escape from this treadmill, farmers are trying to differentiate and diversify into new more attractive segments. Agro-tourism and organic agriculture are examples of differentiation. The elements and processes in the treadmill are described and supported by empirical time series. Possibilities of delaying or stopping the treadmill are discussed. The question is raised whether organic farming is able to escape the treadmill. The question is answered from both a theoretical and an empirical point of view. The empirical analysis is based on examples from Danish agriculture, which has a significant organic agricultural production. The conclusion is, that the structural and productivity developments and the price trends - which are important elements in the treadmill - are almost identical in the organic and conventional agriculture.