Cost Behavior of Organic Versus Conventional Farms:Assessing Economic Resilience and the Ecological Dividend

Abstract

This study empirically examines the cost behavior in organic versus conventional farming to assess economic resilience. Using Spanish FADN data(2015–2021),results showorganicfarms exhibit higher cost elasticity during output increases and lower elasticity during decreases. This rigidity reflects a commitment to natural capital and agroecological dependencies. However, organic farms benefit from an “ecological dividend”—a baseline cost advantage derived from internal synergies and reduced reliance on external inputs—making them more competitive during typical fluctuations. This advantage persists until output variation thresholds of 40%–50% (increases) and 22%–29% (decreases) are reached, beyond which conventional systems adjust more flexibly. These findings support the economicviability of agroecology and suggest the needfor institutional safeguards against extreme shocks to protect sustainable production models.