Comparison of Risk Between Cropping Systems in Eastern Norway

The aim of this study was to compare production and policy risk of organic, integrated and conventional cropping systems in Norway. Experimental cropping system data (1991-1999) from eastern Norway were combined with budgeted data. Empirical distributions of total farm income for different cropping systems were estimated with a simulation model that uses a multivariate kernel density function to smooth the limited experimental data. Stochastic efficiency with respect to a function (SERF) was used to rank the cropping systems for farmers with various risk aversion levels. The results show that the organic system had the greatest net farm income variability, but the existing payment system and organic price premiums makes it the most economically viable alternative