Deep pockets needed? Financial health and organic certification adoption in the European Union

Summary

Adoption of organic certification across the EU remains lower than anticipated, with financial risks during and after conversion often cited as barriers. We examine whether farms with stronger financial health (FH) are associated with a higher likelihood of adopting organic certification. Using Farm Accountancy Data Network panel data from 2014 to 2018 covering 24,797 EU farms, we classify farms by FH and apply matching and logit regression to analyse the relationship between preconversion FH and organic certification adoption. Results show no clear association between FH and adoption, while preconversion land-use intensity consistently correlates with organic certification uptake, suggesting relevance for EU policy design efforts.