Spatial distribution of organic farming in Germany: does neighbourhood matter?

The spatial distribution of organic farming can be explained by combining the traditional location factors that account for spatial heterogeneity with the concept of spatial dependence. We present a theoretical model that explains a farmer's decision to convert to organic farming, and this conceptual framework is then implemented in a spatial lag model by using secondary data for Germany at the county level. The results support the assertion that agglomeration effects are important in the organic farming sector. Potential policy implications include a concentration of development measures for organic farming in certain regions.