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The classes of benefits and costs, private and external, arising from a partial movement from conventional to chemical-free farming are considered, a report is provided on a comparison of physical and financial characteristics of chemical-free and conventional cereal/livestock farming in southeastern Australia, a key finding is that private net returns were similar for the two types of farmers, A favourable change in net externalities could be expected from a movement towards chemical-free farming, policy implications relating to the taxation of chemical use in agriculture, and to research, extension and marketing are discussed.


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