Exploring Opportunity Cost of Conversion to Eco-Friendly Farming System: The Case of Samsun and Adana Provinces of Turkey

Abstract

For last decade, adverse effects of agricultural practices to environment have been critically important worldwide. However, there has been very limited information about sufficiency of government subsidies and effects of environmental consideration on productive efficiency. The purposes of the study are, therefore, to calculate the opportunity cost of conversion to eco-friendly farming in Samsun and Adana provinces of Turkey, to determine the effects of participating the program on the farm level production efficiency and to reveal link farmers’ satisfaction and opportunity cost of participating to EFALP. The bulk of data were collected from randomly selected 168 farms by using structured questionnaire during the production year of 2015. The difference between the net revenue of participants and non-participant farms was attributed to opportunity cost of conversion to eco-friendly farming system. Data envelopment analysis was used to calculate the efficiency measures such as technical efficiency, allocative efficiency and economic efficiency for similar participants and non-participant farms, which were selected by using cluster analysis. Research result showed that scores of economic efficiency, allocative efficiency and technical efficiency were 0.37, 0.84 and 0.45 in Adana, while that of Samsun were 0.4, 0.77 and 0.60, respectively. The share of subsidies for environmental protection in total subsidies for participant farms in Samsun and Adana was 88.6% and 55.6%, respectively. The opportunity cost of environment protection for average farm was €4454.3 in Adana and €502.5 in Samsun. The quantity of sacrifice for protecting environment in Adana is higher than that of Samsun. Farm level sufficiency of environmental subsidies was 10.6% in Adana, while that of Samsun was more than a hundred. Research results also showed that government environmental subsidies were not allocated efficiently since EFALP ignored the opportunity cost of conversion and its spatial differences. It was clear from the evidence based on the research findings that the quantity of sacrifice for protecting environment was the basic reason for farmers’ satisfaction from EFALP. Rethinking the mechanism of EFALP considering spatial variability of farms’ sacrifice for protecting the environment may reinforce the EFALP. Research suggested a new option that is allocating the government payment associated with an opportunity cost of conversion to balance spatial satisfaction among farms included EFALP and to increase financial efficiency of the EFALP budget. © 2020, Springer Nature B.V.