ORGANIC OUTPERFORMS CONVENTIONAL: FACT!

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ORGANIC OUTPERFORMS CONVENTIONAL: FACT!

Economic performance is higher on organic farms than on conventional farms. That's according to research presented by Teagasc's Dan Clavin and Brian Moran at the recent Teagasc organic conference.

Clavin and Moran point out that direct costs are 53 per-cent/ha lower, and farm family income is 30 per-cent/ha higher, on organic farms. Organic farms also have a more viable socio-economic profile, whilst the Greening of CAP and phased in “flat rate payments” may also benefit

organic farmers.

(photo: (c) oliver moore fab snap of a veg the name of which I forget...)

These are some of the key “take home messages” from the presentation.

14 organic and 507 conventional cattle farms were examined in 2010 for this study. The organic farms were larger - 55 ha compared to 32 ha on average. A significant difference was the per cent in forestry on the organic farms: 12.5 vs 2.5 per cent. Stocking rate was inevitably a little lower on the organic holdings – 0.91 vs 1.18 lu/ha.

Mining deeper into the data, the future looks quite bright for organic farmers: in key areas, the organic model seems robust. While there was little difference in direct payment rates, less of the overall organic farmers' payments came from the Single Farm Payment – important with CAP reform in mind. That said, the high per cent of organic farmer payments that were REPS and Organic Farming Scheme payments is a worry, with cutbacks in motion and signaled for both respectively.

However, the proportion of direct payments retained as income is significantly higher on organic farms – 71% as opposed to 57%.

In another key area direct costs were lower on organic farms: 53% lower overall, a figure very much reflected in the organic farmers' lower overall spend on concentrates and winter forage.

Feed costs will most likely maintain their inexorable rise upwards, notwithstanding occasional blips, as producing feed is fundamentally an energy-intensive practice. Global wheat prices, though lower than the 2008 peak, increased by about 70% in the last year, spurred on by speculative hording by companies operating on commodity markets.

For example, it was reported in August that one company, Frontier Agriculture, bought a month's worth of the entire UK wheat supply earlier in the year.

While organic farmers are of course effected by this sort of volatility, and while organic feed itself is of course more expensive 'pound for pound', the figures presented by Clavin and Moran suggest that organic farmers are in a slightly more secure position: they spend a lower overall proportion of their cash on concentrates.

Socio-economically, organic farmers were slightly younger, more likely to be married and have spouses with an off-farm income.

Taking all the data together, it was found that organic farms were more economically viable: just 14% were classed as vulnerable, compared to 42% of conventional farms.

As with all research, there are limitations.14 is a small number of organic farms for the study. Moreover, the fact that 7 of the organic farms were demonstration farms might skew the data towards better performing organic farms.

The researchers used 2010 Teagasc National Farm Survey data, which is quite recent. But the terrain is fast changing: prices achieved conventionally are rising, almost matching organic in cattle and sometimes surpassing organic in Summer milk.

John Purcell of organic processors the Good Herdsman, however, remains upbeat. “Organic cattle prices are on a par with the UK” he points out.

While he “discusses trends but not price” twice a week with cattle buyers from Slaney and AIBP, and regularly with John Brennan, he refutes the notion that there is a lack of competition in the Irish market. “Even the AIBP factories compete with each other on price” he tells me.

And on the current prices, he stated: “4E off grass is better than E4.40 out of a shed”, adding that while normally prices go down 20c a KG in September, this year they have remained stable.

Having made investments at the Good Herdsman plant, and developed new export markets, his main concern is that organic cattle stay in the organic system at the upcoming organic cattle marts.

Here is the research paper.

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