Can Community Supported Agriculture be an Economically Viable Approach to Sustainable Agriculture?
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The purpose of this thesis is to examine the economic viability of Community Supported Agriculture (CSA) . The growing concern over food safety and a desire to be closer to the source of their food has led consumers to demand local and organic produce. CSA farms use sustainable agricultural practices to provide its shareholders in the community with fresh and quality fruits and vegetables. The system is one of mutual commitment where farmers and consumers share the inherent risks and potential bounty of the harvest. This study examines the characteristics of CSA farms to understand the economic, environmental and social motivations behind running or joining a CSA operation. We find that current share prices of CSA farms do not reflect all of the costs of production, and hence might not be an economically viable approach to sustainable agriculture if CSA farms continue their current pricing strategy. We discuss the possibility of raising share prices and providing government subsidies to CSA farms, after conducting a Contingent Valuation (CV) survey. The CV survey is designed to understand how much consumers are willing to pay for the different aspects of CSA, including the positive externalities that are not captured in the share prices. In particular, we find that CSA farms have potential to raise their share prices without losing sales and the U.S. government may in the long run benefit from subsidizing farms that practice sustainable agriculture rather than subsidizing industrial agriculture.