ISSN 1177-4258 15 Journal of Organic Systems, 10(1), 2015 ORIGINAL PAPER Economic costs and returns from organic farming in Oyo state, Nigeria OO Alawode* and VO Abegunde Department of Agricultural Economics, University of Ibadan, Nigeria. * Corresponding author: busolaferanmi@gmail.com Abstract The study evaluated the costs and returns of organic farming using the farmers in Akinyele Local Government of Oyo state, Nigeria as case study. An interview schedule was administered to the respondents to elicit useful information. The analysis was based on input and output data collected from one hundred and eighty farmers selected at random from the area from which eighty-eight used organic farming, fifty-eight used non-organic farming and thirty-four used both farming systems. The data were analysed using descriptive statistics, Duncan Multiple Range Test (DMRT), t-test group statistics and gross margin analysis. Results of the analysis indicated that 57.8% of the respondents were male, 66.1% were married and all the respondents had formal education either at primary, secondary or tertiary level. Furthermore, 48.9% of the respondents adopted organic farming system, 32.2% adopted non-organic farming system while 18.9% adopted both organic and non-organic farming systems. From the gross margin analysis done, both organic and non-organic farming are profitable. However, it is more profitable to produce vegetable and maize organically. Costs related to fertiliser and the post-harvest preservation and sales was higher in non-organic farming, whereas the cost of crude farm implements and labour was higher in organic farming. There should be an intensified awareness to improve the level of participation of farmers in organic farming, recommendation of organic products to people, and government policies that encourage farmers to go into organic farming, especially by making their products readily disposable in already prepared market at encouraging prices. Keywords: benefits, constraints, conventional farming, environmental effects, cost of production, product damage. Introduction The adoption of non-organic farming by farmers over time can be traced to solving the problem of insufficient food to meet the growing world population. This system of farming is a shift from the traditional means of farming. It was done to fast track growth and enhance rapid crop development, check the effect of pest threat to crop production and reduce or prevent competition of crops with unwanted plants. This method of production was widely accepted by farmers either at a small scale or large scale level of production because to an extent, it made farming activities break even depending on the size of production, and it also met the timely requirement of food for the growing population. Over time, it was realized that the effects of the chemicals used in the course of farming have lots of negative effects on both the environment and health of man, hence the need to discourage such practice and encourage the other alternative, organic farming (Kutama et al., 2013). The United States Department of Agriculture (USDA) defines organic farming as a farming system which avoids or largely excludes the use of synthetically compounded fertilizers, pesticides, growth regulators and livestock feed additives to the maximum extent feasible, or the farming system that relies on crop rotations, residues, animal manure, legumes, green manure, off-farm organic wastes, and the aspects of biological pest control measures, soil productivity and tilt, to supply plant nutrients and to control insects, weeds and other pests (Alvares et al., 1999). According to the Organic Organization (HDRA, 1998), organic farming involves using techniques to achieve good crop yields without harming the natural environment or the people who live and work in it. Organic farming works in harmony with nature rather than against it. It keeps and builds good soil structure and fertility as well as controls pests, diseases and weeds. Organic farming also involves careful use of water resources and good animal husbandry. According to the International Federation of Organic Agriculture Movements (IFOAM, 2006), organic farming is a production system that sustains the health of soils, ecosystems and people. Its production systems are based on specific and precise standards of production which is based on the goal of