Agriculture Reference
In-Depth Information
extremes in weather conditions are not uncommon. Almost a decade later, Lotter
et al
. (2003)
concluded that in plots with two organic systems at the Rodale Institute in the USA, yields
were higher in four of the five drought years, while the fifth year gave mixed results. The
authors attribute the difference in yields under extreme conditions between the systems to the
higher water-holding capacity of the soils in the organic plots.
Variability in output prices for organic products depends on local arrangements, with pos-
sibilities ranging from fixed prices for a particular period, to a fixed percentage or amount on
top of conventional prices, to a totally deregulated market. Variability in income resulting
from changes in farm output prices is determined more by outside factors than by organic
management
per se
.
Large-scale conversions
What happens when many farmers move towards organic agriculture? This question usually
centres around the assumption of collapsing premiums, leading to lower farm incomes. Several
studies on large-scale conversion in Germany, the German state of Baden-Wuertenberg,
England and Wales are detailed in Lampkin and Padel (1994). Other studies are also discussed
or summarised in that work. Later, Wynen (1997) conducted a study on a large-scale conver-
sion in the cereal-livestock industries in Australia, its largest agricultural industry, and on the
whole of the Danish agricultural sector (1998).
These studies must make assumptions about changes in, for example, future input and
output prices, yields, subsidy and premium levels, the way consumers and producers will react
to changes in prices (price elasticities of demand and supply), population increase or decrease
and level of adoption. The possible outcomes are too numerous to summarise here, so only a
few results are presented as examples.
Farm incomes are the variable considered most often in this respect, but they are not the
only variable affected by a large-scale change to organic farming. As organic management
requires a change in rotation for soil fertility and pest management reasons, a change of man-
agement system by many farmers would make a substantial change to the land use of a whole
country. Hence, there will be a change in the relative importance of total output of different
products and in output prices at the national level, and effects on farm incomes at state and
individual levels. Other factors not discussed here that are sometimes analysed include food
security, employment and income in related industries, environmental and social benefits and
public expenditure (Midmore and Lampkin 1994).
The direction and magnitude of the changes in production and returns will differ between
countries. In the UK, for example, Lampkin (1994) estimated that with a 10% increase in
organic agriculture, there would be a decrease in wheat, barley, potatoes, sugar beet, oilseed
and livestock and an increase in oats and field beans. In Australia, on large-scale cereal-live-
stock farms, large-scale conversion would lead to decreased total production of all cereals
(wheat, oats, barley, canola), and an increase in sheep (Wynen 1997).
The same Australian study estimated total farm incomes under the assumption of an adoption
rate of 30%. Under the worst-case scenario, where premiums for crops were assumed to decrease
from 15% to 0% with no premiums for livestock products at all stages (extreme assumptions)
total returns to the sector would drop by 7% when 30% of farmers had converted. In the best-
case scenario, with premiums decreasing from 15% to 7.5% (probably more realistic), total
returns to the cereal-livestock sector would have a 3% decrease at the 30% adoption rate.
Many studies have been based on the assumption that a very large proportion of the farming
sector becomes organic - often 100%. However, this is rather unlikely, and would certainly not
happen under conditions that are easily imaginable. More likely is that when, say, 10% or 20%
of farmers have converted, political pressure may result in, for example, more research relevant
to organic farming, information systems more readily accessible to organic farmers, decreased
