Document Type

Article

Publication Date

8-17-2021

Abstract

Background

There has been a piqued interest in alternative agricultural production systems that are environmentally friendly due to concerns on how sustainable it is to grow conventionally. However, in the producer’s point of view, economic returns are an important issue in decision-making in adaptation. The purpose of this study is to assess the economic risk of conventional and organic sweetpotato production in the Southeastern US. The primary and secondary data were used for the analysis. We identified risk variables in stochastic profit function and performed Monte Carlo simulation in analyzing profitability and economic risk of conventional and organic production systems.

Results

Findings from the meta-analysis suggest lower sweetpotato yields and higher selling prices, are to be expected in the organic sweetpotato production systems compared with the conventional. A higher probability of having positive net return from organically grown sweetpotato compared to conventional production systems was observed.

Conclusions

Increase in unit cost leads to a decrease in net profit in both conventional and organic production systems. Sweetpotato price has more effect on net return compared to its yield in conventional production systems. The higher selling price, lower yield and lower unit costs provide a higher net profit return for the organic sweetpotato production systems. Unit cost in conventional production was noted to be higher in general, inferring conventional sweetpotato production could potentially experience a higher variability in net farm income. Despite the high production cost, however, farmers are encouraged to go into sweetpotato production as it appears to be profitable. Further studies should be conducted on conventional treatments without synthetic pesticides and fertilizers as these systems perhaps, may display lower external input costs that might make them more profitable similar to organic systems.

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