Labor input substitution decisions and business sustainability strategies under changing farm labor market conditions: comparative economic viability analyses of organic and conventional farming systems

Project Overview

Project Type: Research and Education
Funds awarded in 2007: $120,000.00
Projected End Date: 12/31/2010
Region: Southern
State: Georgia
Principal Investigator:
Dr. Cesar Escalante
University of Georgia

Annual Reports


  • Agronomic: peanuts
  • Fruits: berries (blueberries)
  • Vegetables: tomatoes


  • Farm Business Management: budgets/cost and returns, feasibility study, agricultural finance, whole farm planning
  • Production Systems: organic agriculture
  • Sustainable Communities: employment opportunities


    This project analyzed the organic and conventional farms’ strategic responses to changes in the farm labor market conditions arising from stricter implementation of immigration policies. Quantitative and qualitative research results indicate that the usually more economically dominant organic farms may experience more limited farm labor management strategy options due to certain structural constraints. While our technical efficiency analysis establish synergy of combining several business strategies for greater efficiency, case studies, however, reveal that even offering combined, enhanced workers’ compensation, at the expense of sagging farm profits, could not attract laborers to perform menial tasks usually done by illegal foreign workers.

    Project objectives:

    1. 1. To determine and compare the strategic plans (or decisions) adopted (or intended to be adopted) by organic and conventional farm businesses in most of the Southeast region in maintaining overall business profitability and viability as farm wage rates increase due to changes in the government’s immigration policies;

      2. To identify structural, demographic and economic determinants of farm labor input substitution decisions (i.e. substituting family with hired labor, and vice versa) made by conventional farms and organic farms at various stages of business maturity (such as established versus transitioning organic farms); and

      3. To supplement the quantitative research (survey and econometric analyses) approach of objectives 1 and 2 with qualitative case studies designed to analyze relationships of business decisions and strategic actions under a whole-farm perspective, and determine other operational constraints, strategies and their business implications not captured by the other (quantitative) research method used in this study.

    Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.