Converting Europe - the potential for organic farming as mainstream

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. Certified organic production dates back 25-30 years (70 years in the case of Demeter-certified bio-dynamic production). Yet little more than one percent of agriculture in Europe is organic, and much less than that in other parts of the world. Many have argued that organic farming will never capture the hearts and minds of the majority of farmers, because it is too idealistic and restrictive. What is needed, they argue, is an intermediate approach, such as integrated crop management or an ill-specified ‘low-input’ or ‘sustainable’ agriculture 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, as research increasingly demonstrates, often offers more environmental and other benefits than the intermediate approaches, but is believed to be only a minority interest? 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? It is time to dispel the myths and challenge the assumptions behind some of these statements in order to permit a fairer assessment of the potential of organic farming to meet sustainability goals in a European context, while also contributing to the pressing need to feed a growing global population in the next century. This paper discuses the growth of organic farming in Europe, and the potential, pre-conditions and implications for widespread conversion

Development of organic farming Europe – implications for Agenda 2000. Paper presented to Soil Association seminar, Organic Farming and Agenda 2000 CAP Reform, Highgrove, 18th February 1999

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. Certified organic production dates back 25-30 years (70 years in the case of Demeter-certified bio-dynamic production). Yet little more than one percent of agriculture in Europe is organic, and much less than that in other parts of the world. Many have argued that organic farming will never capture the hearts and minds of the majority of farmers, because it is too idealistic and restrictive. What is needed, they argue, is an intermediate approach, such as integrated crop management or an ill-specified ‘low-input’ or ‘sustainable’ agriculture 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, as research increasingly demonstrates, often offers more environmental and other benefits than the intermediate approaches, but is believed to be only a minority interest? 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? This paper discuses the growth of organic farming in Europe, the potential and pre-conditions for widespread conversion, integraed action plans and the policy challenge for farmers

Data reveals how organic costs compare with those for conventional production

Organic Centre Wales, supported by Farming Connect, is benchmarking organic dairy, beef and sheep enterprises. The results provide a good basis for understanding the financial contribution of individual enterprises to the farm business, as well as a better basis for price setting. This article presents organic and conventional milk, beef and lamb production costs and net margins for 2004/05

Development of policies for organic agriculture

This report was presented at the UK Organic Research 2002 Conference. Since the late 1980s, policies to support organic farming have become widespread in Europe, in particular in the context of agri-environmental and rural development measures. Policies, originally focused on supporting conversion to and continued production, have been modified to recognise the need for the integration of marketing and information activities, in some cases delivered through national or regional action plans, examples of which are considered. The need for a strategic action plan at the European level has been identified and is under development. The outcome of this and the development of post Agenda 2000 organic farming policies to embrace an enlarged European Union is the subject of a new research programme due to begin in 2002

Organic farming – can policy and markets mix?

Organic farming is an approach to agriculture that emphasises environmental protection, animal welfare, food quality and health, sustainable resource use and social justice objectives, and which utilises the market to help support these objectives and compensate for the internalisation of externalities. Since the early 1990s, the organic sector has grown rapidly across Europe and globally, thanks to a combination of strong consumer demand, developing regulatory frameworks, direct financial support and insecurity in the conventional agricultural sector. The sector’s success in utilising the market to support the broader public good goals has been seen as a role model for mixing market and public support mechanisms in agriculture, but the market has also come to dominate in many circumstances, threatening the achievement of the underlying goals and the integrity of the organic approach. With market growth slowing across Europe, has organic farming achieved its potential? Or is this just an illustration of the limits of relying on markets to support the delivery of public goods – another example of market failure in the making

Organic Farming in Wales 1998 - 2003

In 1998 Ron Davies MP, the then Secretary of State for Wales, established three industry working groups to develop action plans for the dairy, red meat and organic farming sectors in Wales. With the publication of the Organic Sector Action Plan in March 1999, the working group was restructured to form the Organic Strategy Group. In the four years since the publication of the action plan, there has been significant progress in the development of the organic sector in Wales. Organic production has increased, established organic producer groups and processing, distribution and retailing businesses have thrived, and many new businesses and initiatives have been established, bringing a greater business, social and cultural diversity to the organic community in Wales. But there have also been challenges, notably the difficulties faced by milk producers in finding markets for organic milk as a result of the dramatic increase in supplies – this illustrates the need for new initiatives to respond to a dynamic and changing situation as the organic sector develops. This report stands as a record of the achievements of the action plan, and the agencies that have supported its delivery

Production costs and net margins for Welsh organic milk, beef and lamb

In 2006, Organic Centre Wales continued to survey organic dairy, beef and sheep enterprises to establish benchmark production costs and net margins. This report compares the OCW results for 2004/5 and 2005/6 with results published by the Welsh Farm Business Survey (FBS, 2006, 2007)

Review of the market for Welsh organic meat, 2007

The supply situation for Welsh organic meat Organic production in Wales has been developing steadily in the last five years, with particular emphasis on organic cattle and sheep production. This was despite over-supply conditions in some sectors, notably dairy, following the very rapid growth in 1999/2000. Between the end of 2002 and end of 2005, the number of holdings increased by 12% to 688, and the certified land area increased by 29% to 71,000 hectares, of which more than 90% is grassland. Growth in Wales has exceeded other parts of the UK, reaching 5% of agricultural land by end 2005. More rapid growth is projected for 2006 and possibly 2007. Organic cattle and sheep numbers have also increased steadily between 2003 and 2005, with total cattle numbers increasing by 114% to 37,000, and total sheep numbers increasing 105% to 248,000, representing 17 and 36% of the end 2005 UK organic population respectively (compared with 16% of UK holdings and 12% of UK land area). Actual output of Welsh organic lamb and beef is more difficult to quantifying reflecting a continuing need for improved statistical data to support market development and the delivery of public policy. Best estimates are 4000-5000 cattle slaughtered as organic, but potentially available production (some in conversion and/or marketed as conventional) may be as high as 8000 head. For lambs, possible estimates based on availables source range from 25,000 to 57,000, but potentially available production may be as high as 100,000. Better data is available within the industry, but is regarded as highly commercially sensitive and was not made available to the review team. Organic farm gate prices for lamb and beef have remained relatively steady over the period, although the gap with conventional prices has closed as the conventional sector has recovered. Recent increases in demand for organic meat, and the temporary suspension of beef imports from Argentina (now restarted) have resulted in some strengthening of organic prices in 2006. Organic premium prices do not, however, fully compensate for the increased costs of production per kg of meat, so that organic producers, like their conventional counterparts, are being paid less than the real costs of production, and are relying on Tir Mynydd, agri-environmental and Single Farm Payments to subsidise continued production. This leaves the industry vulnerable to any decline in market conditions and will mean continuing pressure on smaller producers to leave the sector. The Welsh organic red meat sector currently relies on two main marketing approaches. The majority of lamb and beef (> 80%) is marketed through multiple retailers, supplied by two producer groups. The need for producer collaboration to ensure a strong price negotiating position with the multiple retailers is recognised and has been yielding benefits. The remainder of Welsh production is marketed on a smaller scale through specialist and local retailers and directly to consumers, through farmers markets, farm shops and via internet sales. There is currently virtually no exploitation of the potential export market (outside the UK) and still some difficulties with marketing light and store lambs as well as dairy bred calves and cull cattle, although various initiatives are in progress to address this. The demand situation for Welsh organic meat From a consumer demand perspective, the overall organic food market is in a healthy state: according to TNS data, it has just passed the £1 billion mark and has put on an extra £200 million in the last two years. Growth in the latest year was 10% and 17% in the previous year. There is still huge opportunity for growth by continuing to convert non-users and simply getting existing users to purchase more often. Household penetration of any organic product is very high at 84%. However, many organic products are purchased by default, and are not planned, as consumers were either satisfying other needs or simply because they liked the product. The positive aspect is that organic is a benefit to products that fall in this category and gives something extra. Current organic users are also interested in most of the ethical issues affecting society today. They regard themselves as connoisseurs of food and wine and as such purchase quality and premium food. As the main contributor to the sales within each of these sectors, this may dilute the expenditure they could make on organic food specifically. Heavy users in total organic represent 20% of buyers and they are responsible for 80% of organic expenditure. You would expect these heavy users to be committed organic purchasers but they only spend 5% of their grocery shopping spend on organic products. None of them are exclusive organic users and they cross-shop across the retail quality tiers (Organic/Premium/Healthy/Standard and Value) extensively. In organic meat the situation is the same. There are 0.3% of meat shoppers who buy only organic and a further 0.1% who buy only organic and premium. The rest shop across all the tiers. This does however identify some of the scope for expansion and these heavy users must be prime targets for increased organic usage. The red meat heavy organic shopper will buy over six times a year but medium users just under twice and light users just over once. This level of frequency is low and would suggest little commitment from the light and medium buyers and a very mixed cross-tier purchasing strategy for the heavy organic buyer. There are 3.2 million households in GB who buy organic meat but there are only 68,000 who only buy organic meat. This figure is lower than that for any of the individual species, indicating that someone who is a loyal organic user of one species is not loyal to organic, when purchasing the other species. (Households who only purchase organic: Beef 108,000, Lamb 269,000, Pork 112,000, Red meat 68,000). Heavy organic meat buyers will have one or two children and be in social class ABC1; they may be younger and older family groups. They are over represented in London, South, Scotland, East England and the South West. Whilst beef is the biggest organic red meat sector, it is only 1.5% of total beef sales; Lamb is the strongest at 2.2% of sales. Pork is a clear third with organic being 1% of sales. Organic meat in Wales is currently worth £2.4 million and is growing at 3% a year. This growth is coming from new entrants into the market. Total GB is growing 10% ahead of Wales but the household penetration in Wales is higher at 13.1% compared to 12.9% for GB. Growth in Wales is coming from all age groups and social classes, with the under 28’s and the C2 groups being particularly strong. This report also looks at the retail market in Great Britain for organic produce; there are additional opportunities within the foodservice sector where a number of specialist organic restaurants are appearing and interest shown by some of the large operators in including an organic alternative on their menus. There are also opportunities for export of organic Welsh lamb; currently some exports to Italy are carried out and there is further potential to exploit and develop this market. The potential for export of light organic lamb is restricted to southern European markets due to the small size and high seasonality of the product. Hybu Cig Cymru is have ongoing discussions with potential buyers in countries such as Portugal, Spain and Greece; however to date, the small volumes required have precluded meaningful developments due to logistical difficulties. Recommendations Despite the generally positive outlook from a demand perspective, there is a need to address some of the factors that might discourage producers from converting, including disruption to the Organic Farming Scheme, price levels that are below costs of production, and lack of markets for some livestock categories, in particular light lamb. To address this, there is a need for: • better statistical data on current and future production levels and market shares; • continued efforts to support producer groups in developing markets for organic meat and in seeking to achieve realistic prices; • continued development of alternative marketing channels, building on Welsh PGI and organic status, including local multiple and smaller retailers, public procurement, distribution hubs and exports; • consumer promotion initiatives and increased Welsh organic meat presence at trade fairs; • improved production systems, supported by effective research and development and knowledge transfer; • improved integration of effort between organic sector businesses and the agencies that support the development of the Welsh meat and organic sectors; • better linkage with the dairy, arable and horticulture sectors to benefit from complementarity relationships between the sectors at production, market development and promotional levels

2001 Consultation of organic farming research priorities in the UK

The following reports a consultation of organic farming research priorities in the UK in 2001. The information was collated by Organic Centre Wales, Institute of Rural Studies, University of Wales, Aberystwyth on behalf of MAFF organic farming unit and UKROFS A total of 62 responses received, of which 24 from farmers, 12 from researchers and research organisations and 26 from organic producers and other farming organisations Information on ongoing research was derived from the MAFF 2001 organic farming research review, SERAD listing of organic farming projects and MAFF project OFO171, Review of current European research on organic farming

CH-FARMIS 2.0: A Sector-Model to Assess the Economic and Environmental Impacts of Swiss Direct Payment Schemes

Quantitative sector models are an essential tool to forecast the sector-wide economic effects of agricultural policies. However, to cover ecological effects with economic sector models is still a methodological challenge. This poster describes a promising approach, which is currently implemented at the Research Institute of Organic Agriculture (FiBL) to meet this challenge. CH-FARMIS is a sector consistent farm group model, which is able to forecast economic impacts of policies on farm, regional and sector-level. In a flexible way, CH-FARMIS is able to split up the farm sector in farm groups according to various characteristics (region, farming system, farm type, etc.). CH-FARMIS is based on positive mathematical programming (PMP) to allow for a realistic reproduction of the Swiss agricultural sector. Currently, CH-FARMIS is augmented in two ways in order to illustrate the environmental impacts of farmers’ decisions and land use: Firstly, intensity levels of farm production are introduced. Secondly, all farm activities and their intensity levels are equipped with ecological indicators, which are derived from LCA data. In an iterative Delphi-procedure, polling a set of competence teams, the LCA data is adapted to the model needs and transposed from farm level to sector level. The following indicators will be implemented in CH-FARMIS 2.0: Biodiversity, water contamination (N, P) and energy use. The enlarged version of CH-FARMIS will be a flexible tool which can be used for both exante assessments of policy reforms and the quantitative evaluation of single direct payments. CH-FARMIS 2.0 is planned to be operable in mid 2008