Competitive organic gross margins

A multi-disciplinary research project has looked at the consequences of converting to organic farming methods. Most of the data studied were from the Duchy Home Farm in Gloucestershire, which began the transition from conventional to organic in 1986 and finally became fully organic in 1996.

The social, environmental and long-term benefits of organic farming have been increasingly publicised and debated. Yet Britain has only a small number of organic farms and relatively few farmers prepared to convert. Current agricultural policies and grant support do little to persuade farmers to take the significant step of going organic. 
    The Organic Farming Study, carried out by six research establishments*, has focused on results from paired organic and non-organic farms across England, including the Duchy Home Farm. The main findings were:

• Pollution of air and water is reduced: estimates of whole farm nutrient losses are less under organic compared with conventional farming.
• Significantly more butterflies are found on organic farms. Reasons may include greater plant diversity, rotational cropping, hedgerow management, and an absence of pesticides. Spiders, which are important predators of crop pests, are also more abundant.
• Once fully converted, gross margins (the outputs minus the inputs) on Duchy Home Farm were up to 15% higher than for a similar conventional farm, assuming present day support policies. This improvement would have increased to 30% if these subsidies, currently favouring conventional farms were removed.
• Social benefits flowing from organic farming are estimated to be £75-£125 per hectare per year. These are in addition to the greater burdens to the environment from conventional farming of £15-£25 per ha.
• Evidence shows that the public will continue to pay the additional premium prices for organically produced food. Support for organic farming is increasing as fears over food safety grow.

The researchers conclude that the organic enterprise is not given the full social and environmental recognition it deserves. From the results of this study they recommend that a permanent organic support scheme paying an annual sum of around £40 per ha should be instituted.

* The work was carried out by researchers from  IARC Rothamsted, the Institute of Grassland and Environmental Research, the Wildlife Conservation Research Unit, Oxford, the Institute of Terrestrial Ecology and the School of Environmental Sciences at the University of East Anglia (UEA).

Organic Farming Study, for more information: Dick Cobb, School of Environmental Sciences, UEA, Email, d.cobb@uea.ac.uk

[This article first appeared in Pesticides News No. 40, June 1998, page 11]