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

There is currently wide recognition that society receives many
benets, grouped under the label of ecosystem services, from both
natural and managed ecosystems, including agricultural systems
(Swinton et al., 2007; Zhang et al., 2007). The external costs and
benets of modern agriculture raise important policy questions,
particularly with regards to the most efcient ways for encourag-
ing the right behavioral changes to reduce negative externalities
(Pretty et al., 2001) and for promoting locally adapted technologies
toward agricultural sustainability (Rigby and Cceres, 2001; Pretty,
2008).
Organic farming involves maximum reliance on self-regulating
ecological or biological processes and renewable resources, while
systematic efforts are undertaken to reduce reliance on external
inputs. Although it is not synonymous with sustainable farming,
organic farming aims to create a sustainable agricultural produc-
tion system. Notwithstanding, while there is growing social recog-
nition of the positive role played by this type of farming in the
conservation of natural resources and the reduction or elimination
Corresponding author at: Departament dEconomia Aplicada II, Facultat
dEconomia, Universitat de Valncia, Avda. dels Tarongers s/n, 46022 Valencia,
Spain. Tel.: +34 96 382 83 39; fax: +34 96 3828354.
E-mail address: Ernest.Reig@uv.es (E. Reig-Martnez).
competitiveness of organic versus conventional farming is a more
contentious issue. Firstly, there is some agreement concerning
the fact that yields are frequently lower in organic farms in
comparison with conventional farms operating under similar
conditions (Offermann and Nieberg, 2000; De Ponti et al., 2012).
Secondly, productivity comparisons between organic and conven-
tional farming can go beyond the observation of yield differences:
efciency in inputoutput transformation and its measurement
has motivated a large body of literature (Bravo et al., 2007).
Farm-level research work on efciency has used both parametric
techniques (Tzoulevekas et al., 2001a, 2001b; Mayen et al., 2010;
Serra et al., 2011) and non-parametric methods (Oude Lansink
et al., 2002; Wossink and Denaux, 2006; Arandia and Aldanondo,
2007; Bayramoglu and Gundogmus, 2008; Serra and Goodwin,
2009; Breustedt et al., 2011; Beltrn-Esteve, 2013).
A problem for this type of analysis lies in the fact that
efciency scores are not directly comparable across farms if they
have been computed taking different technological frontiers as
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-
acterizing specic production frontiers, a development that was
pioneered by Hayami and Ruttan (1970) in the eld of agricultural
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-
duced into efciency analysis by splitting a sample of Decision
Making Units (DMUs) into different groups using homogeneity
criteria (Charnes et al., 1981). Battese et al. (2004) developed a sto-
chastic metafrontier production function aimed at assessing tech-
nological gaps between particular technologies and ODonnell
et al. (2008) advanced this line of research in a Data Envelopment
Analysis (DEA) context by dening group frontiers as boundaries of
restricted technology sets, and an enveloping common metafron-
tier as the boundary of an unrestricted technology set. Groups of
rms operating in areas with poor natural endowments, or con-
strained by highly-regulated production environments (i.e. rules
concerning the certication of organic production), may only have
access to a restricted technology set. In this case, distance func-
tions can be used to measure technical efciency with regards to
the unrestricted metatechnology set and to the restricted technol-
ogy sets of different groups of producers, and the closeness of
group frontiers to the metafrontier can be measured.
On the other hand, technical efciency can be assessed for a
sub-set of inputs rather than for the entire input vector (Fre
et al., 1994). Oude Lansink et al. (2002) pioneered the use of this
type of sub-vector efciency in drawing comparisons between
conventional and organic farms. The use of Directional Distance
Functions (DDFs) (Chung et al., 1997; Chambers et al., 1998; Fre
and Grosskopf, 2003) has opened up a potentially fertile research
area for this type of analysis.
This paper applies the above methodology, following
Sez-Fernndez et al. (2012) and Picazo-Tadeo et al. (2012), with
the aim of computing efciency measures for two Spanish citrus
growing systems, organic and conventional, and drawing compar-
isons of their relative performance. One particular feature of our
research is that instead of relying on the use of conventional
inputs, we analyze farms performance in terms of the specic
growing tasks. An important advantage of this approach is that it
allows us to estimate the scope for adopting efciency-enhancing
practices by organic and conventional farmers, while at the same
time recognizing that the same type of cultivation task can be
performed in different ways by both groups of citrus farmers (i.e.
using widely different inputs in fertilization, or alternative tech-
niques to ght weeds). By using DDFs we are able to determine
the amount of cost-saving, for all growing tasks taken together or
for particular sub-sets, which could be obtained without decreas-
ing sales revenue. We are also able to infer the efciency of both
systems with regards to an enveloping metafrontier and to pin-
point their respective weak and strong points. Our results may
shed some new light on the slow rate of adoption of organic prac-
tices by citrus farmers in the area under analysis (Beltrn-Esteve
et al., 2012).
Following this Introduction, Section 2 expounds the methodol-
ogy and Section 3 describes the technical aspects of citrus farming
in the Region of Valencia (Spain) and the sample data. Section 4
presents the results and highlights some policy implications, while
a nal Section summarizes and concludes.
2. Methodology
This section describes the building blocks of our methodological
approach. In the rst sub-section, we recognize the technological
heterogeneity of farming production systems and, using DDFs,
draw a basic distinction between technical efciency measured
with regards to the metafrontier and with regards to the group-
specic technological frontier. In the second sub-section, we dene
a set of direction vectors and employ DEA programs to compute
radial and task-specic efciency scores for each farm, both with
regard to the metatechnology and group-specic technologies.
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
Finally, by using the so-called metatechnology ratios, we are able
to establish the technological gap between best practices within
each group technology and best practice when farms are free to
operate all of the technologically feasible practices, i.e. using the
enveloping metafrontier as a reference.
2.1. Metatechnology and group technologies
Now, let us start by considering that we are able to observe the
economic performance of a set of farms k = 1, . . . , K, represented by
sales revenue v and that their production processes require per-
forming a series of N growing tasks observed at farm level and
denoted by the vector of task costs t = (t1, . . . , tN). The metatechnol-
ogy can be represented by the task requirement set, TRS(v), repre-
senting all combinations of task costs that permit the generation of
at least sales revenue v:
TRSv ftjv ; t 2 Tg 1
T being the set of all feasible combinations of sales value and task
costs given the present state of the technology. We assume that
production technology satises the usual properties as summarized
in Picazo-Tadeo et al. (2012).
The directional metadistance function (Chambers et al., 1998) is
another complete representation of metatechnology and can be
dened as:
MDv ; t; g g v 0  g t  Supfbjt  bg t 2 TRSv bg v g 2
g g v 0  g t being the direction vector.
The directional metadistance function (DMF) in expression (2)
is also a highly exible efciency measurement tool. It allows the
researcher to explore the maximum potential for simultaneously
increasing the value of farm sales and decreasing the task costs
of particular farm operations along a path that has been previously
established through the selection of a particular direction vector.
This function is always equal to or greater than zero, with a score
of zero meaning that no further reduction in task costs or expan-
sion of the value of farm sales is feasible within the available tech-
nology, thus allowing the farm concerned to qualify as efcient.
Increasing values of the function imply a higher potential to save
in task costs and to expand sales value from the observed levels,
which means that farm inefciency also increases.
As noted previously, specic constraints imposed by the charac-
teristics of admissible production techniques or natural conditions
result in different farming systems. Producers belonging to a given
farming system are prevented from accessing the full range of
combinations between sales value and production costs that are
potentially available in the metatechnology. Following ODonnell
et al. (2008), we start by splitting farms in our sample into several
groups or farming systems, named h. Therefore, we are able to
dene a task costs requirement set for each farming system h,
namely TRSh, that can be formally dened as:
TRSh v ftjv ; t 2 T h g 3
And a group h directional distance function
Dh v ; t; g g v 0  g t  Supfbh t  bh g t 2 TRSh v bh g v g 4
where g g v 0  g t is, as before, the direction vector. Group DDFs
can be employed to estimate the efciency of farms in farming sys-
tem h against the technology of their own group. Selection of the
direction vector enables us to dene several efciency indicators
taking into account the limits imposed by the technology of group h.
Let us now provide a graphical illustration (Fig. 1). We start by
assuming a farm technology that generates sales value v by
performing two cultivation tasks, namely t1 and t2. A number of
efcient farms, from A to F, are observed, in addition to farm J.
 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-
ent facets of production process relationships.
Here, our analysis focuses on detecting inefciencies concern-
ing the costs corresponding to particular cultivation tasks and
assessing differences, with regards to this concern, arising from
two technologically different citrus farming systems, namely con-
ventional and organic. We model the directional vector in order to
achieve these objectives.
Specically, we target the maximal proportional task cost
reductions achievable while keeping the observed values of farm
sales constant by using the following directional vector
g all g v 0  g t 0; t
respectively. The scores obtained with DDFs computed with
respect to the technology of group h must necessarily be, by con-
struction, equal to or lower than those being computed with
respect to the metatechnology.
2.3. Efciency and metatechnology ratios
The technological gap of a group h represents the difference
between the best performance that can be achieved within the
restrictions imposed by the technical characteristics of group hs
farming system and the best performance when no such group
restrictions are imposed. This can be measured using the so called
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
to express the directional metadistance and distance functions in a
more conventional way, as efciency measures. The reason is that,
as dened by ODonnell et al. (2008), metatechnology ratios involv-
ing efcient farms could not be computed as ratios of directional
distances since for these observations distances are equal to zero
(Picazo-Tadeo et al., 2012). Let us thus dene the following all-task
cost reducing efciency measures for group hs farm k0 , rstly with
unrestricted access to available technological combinations, that is
with regards to the metatechnology, as
k0 0
Metaefficiencyall 1  MDv ; t; g 0; t 1  bkall 9 which consists of making a shallow circular cut in the main
And, secondly, with regards to its own group h, that is, with
restricted access to technology, the efciency measure is
 
hk0 0
Efficiencyall 1  Dh v ; t; g 0; t 1  bhk
all
The relationship between metadistance/distance functions and
the measures of efciency dened in (9) and (10) can be easily
illustrated. For example, a metadistance function of, say, 0.4 means
that farm k0 could reduce all its costs by 40% and yet maintain sales
value; however, it also means that the same value could be gener-
ated with only 60% of the costs actually involved in growing the
product, which is just the meaning of expression (9), that is, the
metaefciency score is 0.6. This measure of efciency is upper-
bounded to one, which corresponds to full efciency, and a
decrease in the score represents a worsening of the efciency level.
Furthermore, metaefciency will always be equal to or lower than
the efciency calculated relative to group-specic technology,
because of the enveloping property of the metafrontier.
The metatechnology ratio for a farm k0 belonging to group h, in a
direction that proportionally reduces all-task costs, g = (0, t), can
be formalized as:
hk0
Metatechnology Ratioall v ; t; g 0; t
 0
 insecticides do not normally compensate for these higher labor
Metaefficiencyall
k0 1  bkall
hk0
 0
 11
Efficiencyall 1  bhk
all
which allows for the following relationship:
k0 hk0 hk0
Metaefficiencyall Metatechnology Ratioall  Efficiencyall
Metatechnology ratios, as dened in (11), depict the closeness
of the technology of group h to the metatechnology, assessed in a
gall = (0, t) direction. Therefore, they measure the gap between
the technology of group h and the metatechnology. Let us assume,
for illustration purposes, that the metaefciency score of farm k0 is
0.6 and that the efciency score with regards to its own technology
h is 0.7. The metatechnology ratio is 0.85, which means that only
85% of the efcient task costs corresponding to the technological
frontier of group h will be needed if farms are not operated under
the technological restrictions on group hs farming system (i.e. if
the metafrontier were employed as a benchmark).
It may be observed that expressions (9)(12) have been dened
considering a directional vector that keeps sales revenue constant
and reduces all-tasks costs proportionally. Similar calculations may
be undertaken to obtain task-specic metatechnology ratios.
3. Citrus farming techniques and data set
The spread of organic citriculture is sometimes hindered by a
lack of economic viability in comparison with conventional citri-
culture. Organic citriculture has distinctive technical aspects with
regards to conventional citriculture which clearly establish differ-
ential environmental impacts. They are mainly concerned with
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
fertilization and soil and plant cover management practices, and
give rise to cost differences per hectare. Organic citrus orchards
use compost manure, which is then supplemented with complex
organic materials such as animal and plant remains, algae extracts,
and guano. Green manure crops of rapid growth, which are cut and
buried in the place where they have grown, are annually able to
afford large quantities of humus and nutrients. Pruning waste
incorporated into the soil also helps to improve soil quality,
reduces the requirements for additional crop fertilization and con-
tributes to reducing CO2 emissions. Organic producers are also rec-
ommended to use traditional techniques such as scratching,
branches, to favor the fruit set and fattening, instead of resorting
to hormone treatments (for a more detailed description of the
technical aspects of local organic citriculture, see Porcuna et al.,
2010 and Domnguez-Gento, 2008).
10
Organic citrus currently represents a small proportion of total
farmland devoted to citrus production in the Region of Valencia.
Some reasons have been advanced to explain the slow diffusion
of organic citrus farming: the difculties in isolating organic citrus
farms from neighboring intensive conventional plantations, the
regions long history of intensive production, a lack of appropriate
distribution channels for organic produce in the domestic market
and the scarcity of available subsidies to compensate for the higher
variable costs incurred in organic production (Peris and Juli,
2006). Manure is more expensive than chemical fertilizers and
must be used in higher quantities to meet the requirements of
adult plantations. Organic orchards are also substantially more
labor-demanding than conventional ones: weeds must be removed
mechanically, organic manure application uses more labor than
conventional fertilization and mulching formation from crushing
ground wood after pruning also consumes labor input. Besides
those tasks, the organic farmer must spend labor time on maintain-
ing hedgerows in good conditions and on cultivating plant cover.
Savings in expenditures related to herbicides, fungicides and
costs. Finally, yields are lower than in conventional production,
thus increasing the cost per kilogram and raising the differential
break-even point of organic farming (Peris et al., 2005; Peris and
Juli, 2006).
Despite factors hindering the shift from conventional to organic
12 citrus production, some farmers have been driven to adopt organic
techniques. Concerning the motivations of citrus farmers in the
Region of Valencia to become organic producers, recent research
has shown that the main explanatory factors are: environmental
concerns, concern for the wellbeing of future generations, an aspi-
ration to produce high quality output and a willingness to reduce
dependence on agrochemicals, with pecuniary aspects playing a
less important role (Beltrn-Esteve et al., 2012). Nevertheless
nancial viability remains essential for the long term survival of
organic citrus farming, and technical efciency is a critical contri-
bution to this end.
The data used in this paper come from a survey designed for a
larger research project aimed at analysing both the economic and
environmental performance of conventional and organic citrus
farming in the Spanish region of Valencia. Beltrn-Esteve et al.
(2012) provide more detail on this issue. In 2009, all 203 organic
citrus farmers registered as certied ecological producers in Valen-
cia were contacted and 153 of them agreed to answer a question-
naire. Furthermore, 129 conventional citrus farmers, from a control
group of two hundred, responded to the survey. Nevertheless, we
faced two kinds of problems. On the one hand, as some farmers
did not provide complete information, missing observations had
to be removed from the sample. And, on the other hand, the pres-
ence of outliers was tested by using scatterplots and sensitivity
analysis of inuential observations. As it is customary whenever
 M. Beltrn-Esteve, E. Reig-Martnez / Agricultural Systems xxx (2014) xxxxxx
Table 1
Main sample descriptive statistics of conventional and organic citrus farming.
Conventional farms (105)
Mean Std. Dev.
Income ( ha1) 6451 3505
Tillage ( ha1) 593 466
Pruning ( ha1) 870 549
Fertilization ( ha1) 610 339
Phytosanitary ( ha1) 563 367
Surface (ha) 3.61 7.17
deterministic models are used, outliers were also removed from
the sample (Simar, 1996). After these corrections, the sample com-
prised of 107 organic citrus farms and 105 conventional citrus
farms, its size being sufciently representative of each of the farm-
ing systems analyzed. Although organic production represents a
small proportion of total citrus production, this fact was not a
problem as our aim was to compare the efciency scores of both
farming systems. Furthermore, in order to characterize and
compare in terms of efciency the organic and conventional citrus
farming systems it is desirable to have samples of similar size
sufciently representative of each of the systems analyzed
(Chumpitaz et al., 2010)
The survey provides information on output and its sale price for
each farm. In addition, in relation to costs, it details the amounts of
the quantities used of various intermediate inputs, and the number
of hours of labor and machinery used to perform each one of the
different farming tasks being analyzed. Survey information has
been completed with data from other sources. More specically,
the price of phytosanitary products, herbicides, and the rental price
of labor and machinery come from personal communications.1 This
is necessary information for the calculation of the total cost of each
farm task. Input prices were needed to solve aggregation issues in
the determination of agricultural tasks, which were particularly
complex given the large variety of inputs involved in both farming
systems. Family labor has been priced using hourly market wages
paid to contracted workers performing the same tasks. Furthermore,
the same input prices apply to all farms, as it is assumed that they
operate in a competitive market.
In reference to farms yields, sales revenue is used instead of a
physical quantity. This information is obtained by multiplying farm
returns per hectare, in kilograms, by the farm sale price of the
product as declared by the producer in the questionnaire. The
use of different output prices across farms allows us to approxi-
mate quality differences in output obtained from different farms
and, more importantly, between organic and conventional agricul-
tural practices. Consequently, differences between farms unitary
prices are assumed to represent differences of quality in farms
product.
As far as inputs are concerned, as mentioned previously, this
paper takes a somewhat different methodological approach to
those normally used in efciency analysis. In this sense, instead
of using the traditional variables of labor, machinery and interme-
diate inputs, we consider the cost of performing certain farming
tasks that, despite sharing a specic common purpose, such as
fertilizing crops, can have different characteristics across farms
and/or growing systems. Such differences can be due to either
the farmers themselves deciding to use different techniques or
combinations of production factors or because they are required
to do so by the Government as a condition of being awarded
1
We mostly thank a specialized rm, trading on farm inputs and supplying
cooperatives in the Region of Valencia, for providing us with this valuable
information.
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
5
Organic farms (107) Equality of means
Mean Std. Dev. t-test p-value
5114 3128 2.929 0.004
1070 747 5.589 0.000
752 475 1.678 0.095
777 504 2.841 0.005
611 469 0.843 0.400
3.21 4.40 0.493 0.623
certication as an organic producer. More specically, this research
considers four different farming tasks, namely soil and plant cover
management, pruning, fertilization and nally the group of tasks
related to pest control and fruit setting and fattening. The data
used in all cases are per hectare, and include the cost of the inter-
mediate inputs, labor and machinery required for each task, all of
them valued at market prices. It must be recalled that unit price
of inputs is the same across farms, which allows to use tasks costs
as implicit indicators of input quantities.
Soil and plant cover management includes tillage and also mow-
ing and treating weed cover with herbicides (in the tables we use
the term tillage to represent the entirety of these operations).
These farming practices constitute alternative ways of handling
the needs of the crop and entail different requirements in regard
to the use of labor, machinery and herbicides. This research takes
into account both the labor and the machinery used for each of
these tasks by each farm, together with their expenditure on
herbicides.
Pruning includes the tasks related to pruning fruit trees and the
subsequent treatment of pruning debris, either by burning remains
or by shredding them for use as plant cover on the farm itself.
Pruning also encompasses other related tasks, such as maintaining
hedgerows, primarily in the case of organic orchards. Costs include
both the labor and the machinery used.
Fertilization includes all the costs derived from purchasing
chemical and organic fertilizers and the labor and machinery nec-
essary for their application.
Phytosanitary treatment and fruit setting and fattening includes
the tasks intended to control pests that can negatively affect the
quality and appearance of the fruit and the treatments aimed at
setting and fattening the fruit, either by chemical means (hormone
treatment) or physical means (fruit tree thinning and scratching).
For each farm, we have considered both the cost of labor and
machinery, together with the cost of purchasing phytosanitary
and hormone products.
Table 1 presents the main statistics of the variables used in the
efciency analysis for both citriculture systems, as well as the
t-test of equality of means. It is worth highlighting that conven-
tional farms obtain higher sales revenue than organic orchards
due to the price differences in favor of the latter being insufcient
to offset their disadvantage in terms of returns per unit of area
(Juli and Server, 2000). Furthermore, the cost of managing soil
and plant cover as well as fertilization costs are signicantly lower
in the case of conventional orchards. In contrast, conventional
farms face higher pruning costs, at statistical signicance levels
of 10%. Finally, no signicant differences are observed in phytosan-
itary costs or in terms of the size of the farm.
4. Results
Tables 24 present some summary indicators of the efciency
scores of each of the growing systems analyzed, together with
efciency measures of organic and conventional technologies in
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
in Section 2. Here, for computational reasons, we assume constant
returns to scale.
Table 2 includes the results when considering the maximal
simultaneous proportional reduction in the costs of all the tasks
while maintaining the observed level of sales revenue of the farm,
i.e. following direction vector (5). In the rst place, it is possible to
observe that each citriculture farm, on average, can make large
overall savings in regard to the best practices applied with the
respective technology of each growing system, in the vicinity of
45% for conventional orchards and 60% for organic orchards.
Organic orchards may have recorded a higher level of inefciency
as a result of farmers having to implement techniques that are
not commonplace in their environment and which require a spe-
cic learning process. Furthermore, the results obtained for the
metatechnology ratio highlight that operating within the techno-
logical references of each system imposes greater limitations on
organic systems. In fact, the efcient level of costs on the meta-
technology frontier, on average, is only 88% of what should corre-
spond to the efcient use of the organic system technology.
The technological frontier of the conventional system is closer
to the metafrontier. Its metatechnology ratio of nearly 96%
indicates that the restrictions imposed by the traditional growing
system are hardly signicant. It should be mentioned that the max-
imum value achieved for the metatechnology ratio is one for both
farming systems, and therefore there are farmers operating at the
metafrontier in both systems.
The results presented in Table 2 above do not show the full
potential for improvement that exists for a given farming task,
nor do they show which task or tasks represent the greatest disad-
vantage that each system must face. Table 3 includes the results
when considering the efciency indicators that take into account
the maximal potential reduction in cost of each task, while keeping
the costs of the rest of tasks and the farms sales revenue constant,
i.e. following direction vector (7). As regards the efciency of farms
in relation to their own growing system technology, the results of
the directional distance function reveal substantial differences in
efciency levels depending on the farming task considered. These
differences are greater in the case of conventional orchards.
Conventional farms record their highest levels of inefciency in
pruning operations, where it would be possible to reduce costs
by 71% on average, while maintaining the costs of the rest of tasks
and sales revenue unchanged. The possible cost savings for tillage,
fertilization and phytosanitary treatment are smaller, albeit consis-
tently greater than 60%. As far as organic orchards are concerned,
the scores obtained indicate that the most inefcient task is tillage
(78%), while the least inefcient, albeit still very high, corresponds
to fertilization (almost 75%).
The metatechnology ratio, as indicated previously, shows the
relative proximity between the frontier of each system and the
metafrontier, which acts as enveloping. In relation to the conven-
tional citriculture system, it is worth highlighting how close its
technological frontier is to the metafrontier both in tillage and also
pruning and fertilization. As regards these tasks, the most efcient
cost levels of the best practices in the conventional system barely
differ 1% or 2% from those of the metatechnology frontier. How-
ever, this gap is considerably larger in the case of phytosanitary
treatment, at 8%. In the case of organic citriculture, proximity to
the metatechnology frontier varies remarkably depending on the
direction or type of task considered in the estimation. In this sense,
although the organic farming system is not subjected to particu-
larly signicant restrictions where phytosanitary treatment is
concerned, with cost differences of barely 5%, limitations are con-
siderable in the case of fertilization and pruning, while the greatest
disadvantage corresponds to tillage. In reference to this last task,
the efcient levels of cost in an unrestricted technological scenario
would only represent 65% of the gure that the most efcient prac-
tices would record within the organic system.
Table 4 includes the results for the SimarZelenyuk adapted Li
test (Simar and Zelenyuk, 2006; Li, 1996) of statistical signicance
of the differences in the metatechnology ratios obtained for each 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

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

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
8 M. Beltrn-Esteve, E. Reig-Martnez / Agricultural Systems xxx (2014) xxxxxx
that agree on the superiority of conventional citrus farming over
organic farming in the Valencian Region in relation to nancial
viability (Juli and Server, 2000; Peris et al., 2005; Peris and Juli,
2006; Caballero et al., 2011). Current price differentials in favor
of organic produce do not compensate for lower yields and higher
production costs.
Soil and plant cover management (tillage) represents the main
weakness of organic citrus farming with regards to its conventional
counterpart, according to our results. Organic farms cannot make
use of chemical control to manage plant cover, therefore they have
higher labor expenditures that could be reduced by resorting to
mechanisation. However, this alternative is hindered by specic
conditions of citrus orchards in the area. The absolute predomi-
nance of dense tree plantation schemes represents a structural
obstacle that must be surmounted in order to improve the chances
of successful mechanisation. As a consequence the Valencian
Region still the main citrus producing area in the Mediterranean
Basin is slowly losing its comparative advantage in favor of other
Spanish regions, such as Andalusia, where farmland is less expen-
sive and new plantations can be designed from the beginning to
overcome this sort of structural problems. Therefore, while the
Valencian Region still represents 56% of the total Spanish citrus
cultivation area, it only accounts for 20% of the citrus organic
surface (Porcuna et al., 2010). As a result, besides other policy mea-
sures (i.e. developing specic marketing channels, providing better
technical advice, subsidizing organic farmers), improving technical
efciency in the management of some growing tasks is thus a nec-
essary requirement in order to create better conditions for a higher
speed of diffusion of organic citrus production.
By pointing to the task-specic efciency of organic versus
conventional citrus farms this paper contributes to provide new
insights into the links between technical inefciency and slow
diffusion of organic citrus farming in the particular conditions
of the Valencian Region, and more generally in Spanish citricul-
ture. Besides measures oriented to provide nancial incentives
to individual farmers to make the transition to organic produc-
tion, agricultural policy makers could target two important policy
goals. The rst is to create the conditions to overcome the struc-
tural problems of citriculture, in particular a decrease in the den-
sity of the plantation to facilitate the use of machinery in various
tasks. The second is to promote the diffusion of efcient organic
practices and knowledge among cooperatives and specialized
hired professionals, who are increasingly responsible for perform-
ing many cultivation tasks on behalf of part-time small citrus
farmers.
Finally it is necessary to point out that our analysis has been
conducted in terms of a task-oriented technical efciency model.
Therefore, neither the positive environmental externalities (i.e.
reduction in CO2 emissions, increased soil fertility, protection of
biodiversity, etc.) generated by organic farm practices nor the neg-
ative environmental spillovers of conventional farming practices
have been taken into account. Hence, the results should be inter-
preted bearing these considerations in mind. A fair assessment of
all of the environmental impacts of conventional and organic citrus
farming systems could possibly justify public support of organic
farms in order to overcome their economic disadvantages and
facilitate farmer conversion from conventional to organic citrus
farming. In any case, we should not overlook the wide scope for
increasing the efciency of farms in both farming systems, through
which signicant improvements can be achieved in the environ-
mental performance of both organic and conventional farms.
Acknowledgements
We wish to thank two anonymous referees for their comments.
Also nancial support from the European Regional Development
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
Fund and the Spanish Government, through Project AGL2010-
17560-C02-02, is gratefully acknowledged.
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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