ECONOMICS OF CONVENTIONAL AND PARTIAL ORGANIC FARMING SYSTEMS AND IMPLICATIONS FOR RESOURCE UTILIZATION IN PUNJAB (PAKISTAN)

The study aimed to compare profitability and resource used efficiency of organic and conventional farming systems. The data is collected from Sheikhupura district for the Rabi season crops both from conventional and organic farming systems and 15 farmers from each system are interviewed. The organic farming system is found to be more profitable under the assumption of zero opportunity cost of family labourers. However, conclusion reversed when family labour is evaluated at average market wage rate. In profit maximization of organic farming system with Linear Programming (LP) approach indicates that irrigation is a limiting factor, where policy planners need to focus. It implied that potential exists in organic farming system that can be explored by improving the availability of canal water. However, in profit maximization of conventional farming system with LP, the shadow price of land is observed to be highest followed by canal water, implying that land and canal water are crucial factors to increase the profitability of poor farmers in conventional farming system. This clearly depicts that conventional farming system has exhausted and no further potential exists for improvement in profit without increasing the area.