They’re Only in it for the Money: Organic Farming in the EU

Organic Farmers in Greece

Organic Farmers in Greece

Organic farming regulations are implemented by EU Member States mainly through the provision of financial support to farmers. There has been an increase in the areas under organic management in most EU countries, which is probably related to the direct effect of financial support. Greece is an important country with respect to organically cultivated land and has one of the highest rates of increasing organic areas in the EU. However, Greek organic products are very difficult to find in the market, and sales are extremely low. In other words, only a small amount of organic products are labeled and sold as organic products. Since farmers were willing to switch from conventional to organic agriculture, with the procedure to obtain the organic label being quite simple for farmers to follow, why are so many farmers not enthusiastic about certifying and labeling their products as organic?

“In Greece, organic farming was majorly promoted through the provision of subsidies to farmers, i.e., since 2004. An average organic farmer in Greece has one of the highest per hectare support compared to other countries. However, subsidies are provided with no limitation regarding crop type, geographic region or other more specific characteristics. It is very likely that farmers are not selecting organic management for ideological reasons, but are driven by financial incentives to receive the available subsidies… In any case, when the organic agricultural sector operates in this way, it stops at the farm, resulting in it being short term and highly unsustainable, as it is completely dependent on direct and uninterrupted financing. 

Consequently, since organic farming is made profitable because of subsidies (sometimes double, as in the case of wheat), it is much easier for the farmers to sell organic products as conventional products in a market that they are already familiar with.

As the majority of EU Member States offer per area payments for the conversion and/or maintenance of organic land, the “Bio without Bio”, i.e., organic farming – without organic products case of Greece, is probably not an exception.”

Authors: Argyropoulos, C., et al.
Affiliation: DIO-Certification Body.
Title: Organic farming without organic products.
Source: Land Use Policy. 2013. 32:324-328.

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Gentlemen Farmers Find the Going a Little Rough

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Steve Kettelle, successful real estate broker

When several ultra-rich celebrities and businesspeople tried their hand at organic farming, they found the going a little rough.

Of course, they knew going in that growing any kind of crop these days demands not only a high level of skill and knowledge, but a comprehensive grasp of factors affecting the bottom line. Didn’t they?

According to an article in WSJ. Money magazine, these modern-day gentleman, and gentlewoman, farmers – who had hoped to prove the principles of organic farming once and for all – instead found it costly, incredibly labor intensive and full of confusing and often conflicting regulations.

“The nation is in the middle of an organic-food boom, and in case you haven’t noticed, a surprising number of boldfaced names are becoming part of it. That includes Oprah Winfrey. …as well as comedian Roseanne Barr.

This gentleman’s farming—or gentlewoman’s farming—movement has spawned its own lifestyle brand.

But the good intentions of these type-A types notwithstanding, the economics of organic farming are a potential blow to their fairly large egos. These are individuals with scores of successes in life, but experts say that despite the price premiums that come with organic labeling or other likeminded practices, the math doesn’t always work out. It is just too expensive to do.

With organic farming, there’s an issue of scale that makes turning a profit hard. In myriad ways, conventional factory farms benefit economically by virtue of their size; not just by purchasing feed and seed in volume, but also in handling pest and weed control. For example, on an organic farm, weeding can be far more labor intensive because it can involve actual weeding. And crops can wither due to one problem or another, with no jug of Roundup to remedy the situation.

“We had a late-season blight which consumed an entire potato crop….It can happen in a day,” says Steve Kettelle, a successful Florida real-estate broker who started a certified-organic farm in Pine City, N.Y., after partially getting out of the business before the bust, Kerrelle has learned over time to maintain a good diversity of crops in case one fails, which they inevitably do. He considers himself a success story in that he’s in the black with his roughly five acres of produce, but he concedes if he factored the time he puts into his plot, his hourly earnings “would probably be below minimum wage.”

Author: Passy, C.
Affiliation: Reporter.
Title: The New Gentleman Farmer.
Source: The Wall Street Journal. Available at: http://online.wsj.com/news/articles/SB10001424052702303997604579242722533288250

California Avocado Production Would be 82 million Pounds Lower with Conversion to Organic Practices

New Orchard Weeds

New Orchard Weeds

California farmers produce 550 million pounds of avocados annually. 8% of the avocado acres are managed with organic production practices. A recent economic analysis by the University of California shows why so few avocado acres are organic. Even though organic avocados receive a price premium, lower yields (15% lower) means lower profits than avocados grown with chemical inputs. The 15% lower yields would mean a loss of 82 million pounds of avocados if all the California avocado growers switched to organic practices. Weeds are the biggest problem for organic avocado growers.

“Profitability estimate of organic avocados in these counties is lower than avocados produced conventionally. Though organic avocados are considered to receive $0.20 more per pound than conventional avocados, organic avocado production shows lower yield than the conventional production.

Based on our discussions with growers and the UCCE farm advisor, organic yield is considered lower than the conventional production. In this study, organic avocado yield is estimated at 15% lower than the conventional yield.”

Author: Etaferahu Takele, et al.
Affiliation: Area Farm Advisor, Agricultural Economics/Farm Management, University of California Cooperative Extension (UCCE) Southern California
Title: Avocado sample establishment and production costs and profitability analysis san diego and riverside counties, 2011 organic production practices
Source: University of California Cooperative Extension. 2013.