Organic farm incomes in England and Wales 2008/09 (OF 0373)

Summary in the original language of the document

This report presents results of research on the financial performance of organic farms in 2007/08 and 2008/09, carried out for the Department for Environment, Food and Rural Affairs (Defra). This research concludes project OF0373 and builds on previous work on the economics of organic farming carried out at Aberystwyth University (Projects OF0190, covering 1995/96 to 1998/99 and OF0189, covering 1999/00 to 2004/05)1.
Analysis of the Defra Data Archive for 2008/09 found a total of 241 businesses with some organic land, and of these holdings, 188 met the criterion for inclusion within this study by having greater than 70% fully organic land. In total, data from 180 organic farms were utilised in the analysis, clustered to a total of 767 comparable conventional holdings. It was not possible to identify comparable conventional businesses for seven organic farms, and one farm was excluded for technical reasons, though the gross margin results from seven of these businesses could be utilised.
The full sample analysis utilises data from 180 organic farms to provide a comparison of organic and comparable conventional farm income data in 2008/09, (with the 2007/08 sample provided for a non-identical comparison). For the full sample, for most farm types, Net Farm Incomes (NFI) remained at or above the level of conventional farms in 2008/09. Organic LFA livestock and mixed farms were considerably more profitable than their conventional comparisons. However, the organic horticulture and poultry farm types did not perform as well as conventional, mainly as a result of the specialisation/intensity of the comparable conventional systems, but the small organic sample size may also have affected the results.
The data are also analysed as an identical sample that compares the performance for an identical sample of organic and comparable conventional farms in each of the two years 2007/08 and 2008/09. This comparison highlights that most organic farm type NFIs were similar to the previous year, but there were some large gains for comparable conventional farms. Within the organic sector, horticulture, lowland cattle and sheep, mixed and LFA dairy farms all showed an improvement in NFI, whilst organic cropping and LFA cattle and sheep NFI declined marginally. Both organic and conventional sectors saw input costs rise in 2008/09, whilst within the conventional sector livestock farms showed considerable improvement in profitability, reflecting gains in conventional livestock and milk prices during the year.