5. Conclusion
As the demand for organic products is growing, this paper has tried to shed light on the profitability of organic production in the pineapple sector. In particular, we have focused on spatial price transmission between organic and conventional
pineapple on the European market. The analysis is set up with a development perspective since organic products in general and organic pineapple in particular are still niche markets not yet dominated by large multinationals. Hence, organic production might be a valuable alternative for developing countries with many smallholders. Our results suggest that while prices for conventional pineapple are 23 independent of organic prices, organic price movements are responding to their conventional counterparts. This means that the conventional market development can be used to forecast the developments of the organic market.Moreover, as organic prices react to conventional price changes not only
immediately but also with a lag, high-frequency fluctuations in the conventional market are smoothed out for organic prices. These results suggest that organic prices are more stable in the short-run compared to conventional ones. This is an important factor when considering organic production, since more stable prices mean less risk and more certainty in production plans especially for smaller farmers. This suggests that organic production could indeed be a profitable and
more certain alternative for small farmers in developing countries. This however assumes that the price premium on organic pineapple will continue to exist. Our observations above do not show a clear trend for the price premium in the
pineapple market so far. However, to understand price premiums and their behaviour in more detail, future research might investigate what part of the price premium can be attributed to the organic nature and what part to other product
characteristics such as quality. This would also help to make predictions about the development of the organic premium on the producer level in the future and hence its sustainability over time. Although these questions are still to be
analyzed, our results suggest already a positive effect on the price received, as well as the price stability, of switching from conventional to organic production when competing on the global market for pineapple.