Organic Farming and Agricultural Sustainability

Organic farming is increasingly recognised, by consumers, farmers, environmentalists and policy-makers, as one of a number of possible models for environmental, social and financial sustainability in agriculture. It has taken a long time to get this far. Organic farming’s roots can be traced back more than 100 years, to various individuals and movements concerned about soil conservation, pesticide use, resource use, animal welfare, land stewardship, nature conservation, diet, human health and social justice. Certified organic production dates back nearly 30 years (70 years in the case of Demeter-certified bio-dynamic production), with production standards reflecting the evolving priorities and objectives of organic farming. But the main role of organic production standards and certification has been to define a distinct market for the products, so that consumer willingness to pay for the benefits of organic farming can be harnessed to compensate producers for internalising external costs. As such, the market developed as a means to achieving the ethical objectives of organic farming, not an end in itself. Recent years have seen very rapid growth in organic farming. In 1985, certified and policy-supported organic production accounted for just 100,000 ha in western Europe (EU and EFTA), or less than 0.1% of the total agricultural area. By the end of 1997, this figure had increased to 2.3 million ha, more than 1.6% of the total agricultural area (Foster and Lampkin, 1999). It is likely that by the end of 1998, nearly 3.0 million ha was managed organically, representing a 30-fold increase in 13 years. These figures hide great variability within and between countries. Several countries have now achieved 5-10% of their agricultural area managed organically, and in some cases more than 30% on a regional basis. Countries like Austria, Italy, Sweden and Switzerland, and this year the UK, have seen the fastest rates of growth. But a number of others still languish below the 1% level. Alongside the increase in the supply base, the market for organic produce has also grown, but statistics on the overall size of the market for organic produce in Europe are still very limited. Recent estimates have placed the retail sales value of the European market for organic food at £3-5 billion in 1997. 70% of the expansion in the land area has taken place in the last five years, since the implementation in 1993 of EC Regulation 2092/91 defining organic crop production, and the widespread application of policies to support conversion to and continued organic farming as part of the agri-environment programme (EC Reg. 2078/92). The former has provided a secure basis for the agri-food sector to respond to the rapidly increasing demand for organic food across Europe. The latter has provided the financial basis to overcome perceived and real barriers to conversion. Despite some obvious successes in terms of consumer demand and supply growth, many policy makers, academics and farming leaders are still uncertain about the potential contribution of organic farming to the future development of mainstream agriculture, and to sustainability issues in particular. Organic farming is considered by some to be too idealistic and restrictive. What is needed, they argue, is an intermediate approach, such as integrated crop management that is not as ‘extreme’ as organic farming and is therefore more likely to be acceptable to the majority of farmers. Policy-makers face a difficult choice. Should they encourage more organic farming, which may offer more environmental and other benefits than the intermediate approaches, but will only be adopted by a minority of farmers? Or should they encourage the intermediate approaches, which, although the environmental benefits are more limited, may be adopted by more farmers, with possibly greater overall impact? And if, contrary to expectations, organic farming did become widely adopted, how could we feed a growing global population? This paper seeks to address a number of these questions

European Organic Production Statistics 1993 - 1996

Detailed official statistics on organic farming in Europe are scarce. This volume is the most authoritative source for statistical data on organic farming with respect to land area, number of farms, livestock and crop production for all EU member countries plus Norway, Switzerland and the Czech Republic. Time series are provided from 1993 - 1996. This book is essential reading for policy makers, the private sector, researchers and students in the field of economics and politics of organic farming

Organic Farm incomes in England and Wales 2004-05(OF 0189)

Results from research work carried out for the Department of Environment, Food and Rural Affairs (DEFRA) by the Organic Research Group at the Institute of Rural Sciences, UWA on the economic performance of organic farms in 2004/05 are presented in this report. This report is the last of a series1 of four on organic farm incomes from 2001/02 through to 2004/05 as part of project OF0189. The main aim of this work is to assess the financial performance of organic farms differentiated by farm type, in order to inform DEFRA policy-making with respect to economics of organic farming, and to provide a basis for assessments by farmers, advisers and other interested parties of the farm-level implications of conversion to and continued organic farming. This research area builds on previous economics work on organic farming carried out by Institute of Rural Sciences, UWA (Project OF0190, covering 1995/96 to 1998/99). In this report, time series financial data are shown for an identical farm sample for the 2003/04 and 2004/05 financial years, covering seven organic farm types including cropping, horticulture, lowland and LFA dairy, lowland and LFA cattle and sheep and mixed farming systems. The identical farm samples comprise farms that are present in both 2003/04 and 2004/05. The total number of organic farms for 2004/05, also referred to as the full farm sample data, is shown alongside the identical datasets. Summarised and detailed financial input, output, income, returns to labour and capital, liabilities and assets and some physical performance measures are presented based on current Farm Business Survey (FBS) data collection and collation guidelines. The full samples of organic farms per robust farm type are sufficiently large to give some reasonable level of confidence in the data; however, it should be noted that the organic farm samples are not statistically representative of their type, although the results can be seen as a reasonable indication of farm income levels for comparable organic and conventional farms. Smaller identical farm samples should be treated more cautiously as there is a possibility for outliers (especially larger farms) to have some influence on the average results. An additional element of this work is the inclusion of comparable conventional farm data for the farm types shown. Each organic farm within this study was matched with an appropriate cluster of conventional farms based on the resource endowment indicators for individual organic farms. Broadly speaking, the indicators included farm type, FBS region, Less Favoured Area (LFA) status, utilisable agricultural area (UAA), milk quota holding (where applicable) and farm business size. The cluster farm data were averaged for each farm type to derive the comparable conventional farm (CCF) data based on the organic farms from the identical and full farm samples. Overall, the identical sample of organic farms showed a similar or higher level of net farm income for all farm types in 2004/05 than in 2003/04 with the exception of lowland dairy farms, which decreased over the period. On comparing the organic data with the comparable conventional data, the greatest differences in performance were seen in the cropping, lowland cattle and sheep and mixed farm types where organic farms performed significantly better in 2004/05. LFA cattle and sheep farm types performed similarly to the comparable conventional farm samples while LFA organic dairy farms achieved lower net farm incomes than the conventional comparison farms. The full sample datasets compared similarly to the identical datasets for both organic and conventional farms in 2004/05. Gross margin data are presented for organic dairy herds on a herd size and top five performing herd basis. Cattle and sheep gross margins are shown for lowland and LFA farm types. Crops shown include winter and spring wheat, spring barley, winter and spring oats, beans, ware potatoes, calabrese, cauliflower and cabbage crops. Where applicable, 2003/04 gross margin data are shown alongside the 2004/05 data. Benchmarking data are shown for organic milk, suckler store, finishing beef and lamb production enterprises. The results for the beef and lamb enterprises show the significance of support payments in making these enterprises viable, raising questions about the possible impact of the single farm payment on producer perceptions of their profitability

Economics of organic farming (extension to OF0125)(0F0190)

This project OF0190 was an extension to OF0125 to cover completing the comparison data for 1997/98 and to extend the data collection by one further year (1998/99). The final reports for the two projects are therefore being submitted jointly. The OF0125 report covers the period 1995/96-1997/98, for which a detailed report was submitted to MAFF in July 1999, and a revised detailed report including a complete set of comparisons with conventional farms was submitted to MAFF, after revisions, in July 2000. That report has now been published at www.organic.aber.ac.uk/library/organic farm incomes.pdf. A detailed report for 1998/99 has been submitted to MAFF in March 2001, and will be published at the same internet site once accepted. The report presents results from research work carried out for the Ministry of Agriculture, Fisheries and Food (MAFF) on the financial performance of organic farms in 1998/99. The aim of the research was to assess the financial performance of organic farms differentiated by farm type, in order to inform MAFF policy-making with respect to organic farming, and to provide a basis for assessments by farmers, advisers and other interested parties of the farm-level implications of conversion to and continued organic farming. To provide an idea of the trends over time, where possible data for continuous samples of farms are presented for 1997/98 and 1998/99. The specific objectives were to extend the previous project (OF0125, covering 1995/96 to 1997/98) to collect and collate data on the financial performance of organic farms, differentiated by farm type . This was achieved through the collation of financial data collected under three different MAFF-funded research projects supplemented by data collected on other farm types. The samples of organic farms are small because of the limited number of organic holdings over 8 ESU (European Size Units) with identifiable holding numbers in 1996, when the previous study was started. As the sample is small there is limitation on how the results may be extrapolated to the wider population of organic farms, especially as the structure and objectives of those converting to organic production in the late 1990s may be different from those that converted in the 1970s and 1980s. Detailed financial input, output, income, liabilities and assets and some physical performance measures are presented for 1998/99. Where an identical sample of five farms is available, data are presented for 1997/98 and 1998/99 for the sample. The organic farm samples are so small that outliers (especially larger farms) have a large influence on the average. If the samples were larger, general trends would be more apparent and less influenced by individual farms; despite this, some explanation has been attempted of trends and changes in inputs, outputs and incomes. However, great care must be taken in extrapolating results. Of those farm types for which a continuous identical sample of five farms was available, Net Farm Incomes (NFI) increased for cropping (£281/ha) and dairy farms (£487/ha) in 1998/99 compared with 1997/98; in both cases outputs as well as inputs increased between years. Mixed farms showed an average reduction in outputs and increase in inputs, lowering the average NFI to £15/ha in 1998/99. The five lowland cattle and sheep farms improved a negative NFI of £161/ha in 1997/98 to a positive £7/ha in 1998/99 through an increase in livestock outputs with a similar level of inputs to that of 1997/98. Due to the high level of farmer and spouse labour on horticultural holdings, the average Management and Investment Income (MII) of the sample was negative, but the average NFI was £1,836/ha. On four holdings, 1998/99 average outputs were 92%, and inputs were 97% of the previous year, resulting in an average NFI in 1998/99 for that group of 75% of the 1997/98 result. The group of LFA farms, consisting of four cattle and sheep and one mixed farm, achieved an average NFI of £72/ha in 1998/99

The Policy and Regulatory Environment for Organic Farming in Europe

Organic Farming is one of the key issues in reshaping European agricultural policy. This book clarifies the policy and regulatory environment within which organic farming currently operates in all EU-15 member states and in three non-EU countries (Norway, Switzerland and the Czech Republic). European and national regulations and their implementation are reviewed. Focus is led on agri-environmental and mainstream agricultural support measures, marketing and regional development programmes, certification systems and organic farming support in the form of advice, training and research. The book aims at policy makers, the private sector, researchers and students in the field of economics and politics of organic farming

How cost-effective are direct payments to organic farms for achieving environmental policy targets?

Since 1993, the Swiss federal agricultural policy has been providing financial support for organic farming via area payments. Like other voluntary agri-environmental measures (AEM), these payments are intended as incentives for farmers to comply with defined production standards. Such payments lead to better environmental performance, as compliance with organic production standards averts negative and provides positive external effects compared to conventional or integrated farming (CRER, 2002). For instance, organic farming is largely not dependent on external inputs. This minimises the resource use of the farming system and limits the nutrient loads in the system, which in turn leads to less overfertilisation and reduced eutrophication risks involving nitrogen and phosphorus (Haas et al., 2001). Besides effectiveness, against the background of limited public budgets, efficiency in delivering environmental impacts plays a fundamental role in the further development of direct payment schemes (Swiss Federal Council, 2009). The targeting and tailoring of policies to achieve maximum effectiveness with a given budget is essential (OECD, 2007). It is therefore necessary to compare both environmental effects and the societal costs of AEM with each other in order to provide a basis for economically sound policy design (Pearce, 2005). Agricultural economists hold differing views on the cost-effectiveness of organic farming support payments. Von Alvensleben (1998) argues that the organic farming area support payments are not economically sound, as the policy goals could be achieved more efficiently using more flexible and targeted combinations of various AEM. The economic rationale behind this argument was introduced by Tinbergen (1956), who theorised that an efficient policy requires at least as many specific instruments as there are specific goals. However, the Tinbergen Rule may not apply fully in this case due to interactions between policies, conflicting goals and the limited determinability of different aspects of environmental performance. Furthermore, the multi-purpose character of organic agriculture could increase its cost-effectiveness due to its potentially lower transaction costs compared to targeted AEM (Dabbert et al., 2004). Empirical papers on this question lack. Thus, this paper aims to compare the cost-effectiveness of a) direct payments to organic farms and b) AEM, in providing environmental services. This is done, using the current Swiss agricultural policy scheme as a case study

A Modelling Approach for Evaluating Agri-Environmental Policies at Sector Level

This paper presents a new approach to evaluate the cost effectiveness of agri-environmental policies at sector level. Policy uptake, cumulative environmental effects and public expenditure are identified as the main determinants of cost-effectiveness. On the basis of the sector-consistent, comparative-static, farm group model FARMIS, the determinants of policy cost-effectiveness at sector level are addressed. Firstly, intensity levels for the FARMIS activities are defined in order to model uptake of agri-environmental policies with FARMIS, secondly, life-cycle assessment data is attached to these intensity levels to determine environmental effects of the policies and thirdly, public expenditure is calculated under consideration of transaction costs. This paper concludes delineating the strengths and limitations of the approach

Horizontal activites. QLIF subproject 7: Horizontal activities

QLIF subproject 7 represents four horizontal activities common to the project, namely: • Environmental and sustainability audits • Cost-benefit analyses and socio-economic impact assessments • Dissemination and technology transfer • Training of graduate and postgraduate researchers Activities in the horizontal research have shown that organic crop production systems generally are more energy-efficient and have lower greenhouse gas emissions than the conventional production. In terms of dissemination the QLIF website has been central and the QLIF newsletter has attracted more than 1000 subscribers. Coupling of the website with the open access database Organic Eprints provides a prospective source of project information that can be accessed also by future stakeholders in organic and low-input systems. Training events arranged annually for students have contributed to proliferation of skills and knowledge gained in QLIF. Also, these events have served to mediate the attitude needed for research in organic and low-input farming

Modelling Organic Dairy Production Systems

In this study, a large number of organic dairy production strategies were compared in terms of physical and financial performance through the integrated use of computer simulation models and organic case study farm data. Production and financial data from three organic case study farms were used as a basis for the modelling process to ensure that the modelled systems were based on real sets of resources that might be available to a farmer. The case study farms were selected to represent a range of farming systems in terms of farm size, concentrate use and location. This paper describes the process used to model the farm systems: the integration of the three models used and the use of indicators to assess the modelled farm systems in terms of physical sustainability and financial performance

Elements of a European Action Plan for Organic Farming

The paper gives a number of reasons why a European action plan for organic farming is needed. The elements of a European action plan are outlined. A first step of an action plan is to find as much as possible a coherent description and understanding of the situation of organic farming in Europe at the outset and the barriers to further expansion. Strategic decisions that have to be taken carefully are identified: What weight should be given to organic farming policy? Why does policy want to support organic farming? Is organic farming just a system for less favoured regions? How important are the protectionist elements in organic farming policy? The answers to these questions are important to choosing an effective policy mix. The paper argues that the following policies should be part of a European action plan: • Informing the consumer, especially developing a unified approach to a widely recognised common logo based on EU regulation 2092/91 and subsequent legislation. • Improving the functioning of the organic chain: Production, processing, distribution within the supply chain with major emphasis on improving information, education, technology development, research and extension for organic farming and its process chain. • Supporting organic farmers financially as remuneration for the production of public goods. • Reviewing related policies with direct influence on organic farming such as the general measures of the common agricultural policy or tax laws and others, in particular removing production constraints such as set-aside aimed originally at conventional producers. • Supporting creative conflict between conventional and organic farmers and building as much as possible a consensus on the long term objectives with respect to organic farming. A high priority should be given to measures dealing with improving the information on organic farming to consumers. It is recommended to closely monitor any realisation of an action plan and to adapt the plan accordingly. In order to turn already the development of the plan into a catalytic process for the organic sector it is important to involve the stakeholders in a systematic way