Substitute or complementary: Relationship between U.S. farmers’ adoption of organic farming and direct marketing

Purpose: The purpose of this paper is to examine the relationship between US farmers’ adoption of organic farming and direct marketing, both of which are increasingly important practices in the US agricultural and food sector. In addition, the effects of the two practices on farm income are evaluated. Design/methodology/approach: The research uses the Agricultural and Resource Management Survey from the US Department of Agriculture. Farmers’ adoption of the two practices is modeled with a simultaneous linear probability model, which accounts for the possible linkage between the adoption of the two practices in farmers’ decision-making process. Farm income is modeled with a linear regression model, accounting for the possible endogeneity of the adoption of the two practices. Findings: The main finding is that farmers’ adoption of organic farming decreases their probability of adopting direct marketing, whereas the reverse effect is insignificant. In addition, organic farming helps to improve gross farm income, whereas the effect of direct marketing is insignificant. Practical implications: These results facilitate better coordination among numerous government programs aimed at promoting organic farming or direct marketing in the US. Originality/value: This paper extends previous literature by specifically accounting for the possible linkage between farmers’ adoption of organic farming and direct marketing, and demonstrates that farmers do not make the decision to adopt one particular practice in isolation.