Oliver Moore: Expert says organic far more profitable

“We analysed the financial performance of organic and conventional agriculture from 40 years of studies, covering 55 crops grown on five continents.
Oliver Moore: Expert says organic far more profitable

"We found that, in spite of lower yields, organic agriculture was significantly more profitable than conventional agriculture and has room to expand globally. Moreover, with its environmental benefits, organic agriculture can contribute a larger share in sustainably feeding the world.”

That’s according to a new study, by David Crowder and John Reganold, published in the prestigious Proceedings of the National Academy of Sciences of the United States of America.

This study has become big news internationally. Time magazine reported on it, stating: “Growing organic food can be significantly more profitable than traditional farming, netting organic farmers 22% to 35% more than their conventional counterparts, according to new research published in the journal PNAS.”

“In the meta-analysis of 120 studies on the economics of organic farming, Crowder, a Washington State University professor of entomology, and his co-author found that organic farming yields 10% to 18% less than conventional farming.

“That lower output may be why some farmers doubt the benefits of going organic, but economic measures besides crop yield play an important role.

“The premium prices that customers pay for organic products more than make up for the lower yield; while only a 5% to 7% premium is required to break even, organic products typically have a 29% to 32% premium, the analysis found. Going organic requires farmers to spend 5% to 7% more on labour, but besides labour, costs are largely the same.”

This is all very well, but what about Ireland? Does organic farming perform to the same level here?

The available research, conducted in 2011 by Teagasc’s Dan Clavin, was not on cropping but on cattle farming.

Nevertheless, it also found that organic farming outperformed conventional.

Farm Family Income (FFI) “per hectare was 30% higher on organic cattle farms (€349/ha organic versus €268/ha conventional).

Higher FFI on organic farms was mainly due to 26% lower production costs/ha (especially direct costs) on organic farms (€545/ha versus €740/ha) and, to a lesser extent, higher direct payments/ha (€495/ha organic versus €471/ha conventional).

Organic was also more socio-economically “viable”, due to higher-earning off-farm work by spouses, and the age profile of organic farmers.

The direct payments mentioned by Clavin as being less of a factor are now, from 2015, far higher. That’s noteworthy

Payments for full-symbol organic are up 60%, while a range of other incentives has also been introduced, such as priority access to GLAS.

Market growth, too, is strong, both in Ireland and, especially, in mainland Europe. Indeed, the main threat to the organic farming and food sectors is regulatory. The ongoing, but faltering, attempts at introducing a new EU organic regulation are continuing.

The EU’s organic representative body — IFOAM EU — has been highly critical of this, fearing it will increase bureaucracy, while reducing trust in the EU organic logo.

The main stumbling block has been threshold. This is the presence of non-authorised substances (e.g. disallowed synthetic pesticides) in organic food, which would result in the automatic decertification of organic produce.

Countries such as Spain already have a zero tolerance threshold, while others, such as Belgium, are keen on this, claiming it is important for maintaining consumer trust.

The organic sector feels it is unfair for its producers to bear the costs of unintentional ‘leakage’ of disallowed inputs from conventional into organic.

However, a last-minute compromise at a Council meeting in Luxembourg, on June 16, means that IFOAM EU’s posiiton on thresholds has been adopted in the reformed compromise text.

More work remains to be done at EU level, but, interestingly, IFOAM EU now expect countries like Spain to phase out their threshold rules by 2020.

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