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Abstract
After the introduction of the new tobacco regime, many regions in Greece, formerly specialized in
tobacco cultivation, are now facing serious threats of economic and social decline. Sheep farming is
considered by many analysts as a viable alternative to tobacco. This study analyses the financial
performance of sheep production and the risk that producers are taking. Through a stochastic
efficiency analysis with respect to a function we explore the economic viability of conventional and
organic sheep farming; key factors determining the economic outcome of these activities are also
investigated. Both organic and conventional sheep farming appear as viable alternatives. The viability
of organic farming lies, mainly, in organic payments. Conventional farming generates a slightly lower
but less uncertain net return.