Organic farm incomes in England and Wales 2009/10 (OF 0373)

Summary

This report presents results of research on the financial performance of organic farms in 2008/09 and 2009/10 financial years. Carried out for the Department for Environment, Food and Rural Affairs (Defra), this research continues 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.
This report utilises data collected through the Farm Business Survey in England and Wales. An analysis of the FBS/Defra Data Archive for 2009/10 found a total of 241 businesses with some organic land, and of these holdings, 189 met the criterion for inclusion within this study by having greater than 70% fully organic certified land.
In total, data from 185 organic farms were suitable for inclusion in the analysis. The organic holdings were matched with clusters containing a total of 785 comparable conventional holdings. It was not possible to identify comparable conventional businesses for four organic farms, though the gross margin results from one of these businesses could be utilised.
Comparable conventional farms (CCF) were clustered to each organic farm to ensure that the comparison between farming types is based on a similar resource base e.g. similar land area, farm type, region and other factors. This enabled each organic farm to be matched to the average for a conventional farm cluster that comprised data from at least three comparable conventional holdings.
The full sample analysis utilised data from 185 organic farms and provides the best comparison of organic and comparable conventional farm income data in 2009/10 (2008/09 data is provided for a non-identical comparison). The profitability (Farm Business Income) of most organic farm types was higher than that of comparable conventional farms. Organic lowland dairy and cropping farm types were considerably more profitable than their conventional comparisons, however, the organic LFA dairy and horticulture (not shown) farm types did not perform as well as conventional systems, mainly as a result of high feed and other livestock costs in LFA dairying and the specialisation/intensity of the comparable conventional horticulture systems, but both farm types had small organic samples which may also have affected the results. Data were also analysed using identical samples and gross margins.