Converting to organic food production in the UK - some financial implications from case study farms

Summary

This paper explores the financial implications of converting to organic farming in the UK through a case study of farm businesses considering conversion in 2002. Most study farmers were motivated to convert for financial, not ideological or life-style reasons; organic meat production was the most common planned enterprise. At the time of study, organic beef and sheep meat production was particularly profitable. It was found that, in these product sectors, a large improvement in Family Farm Income would result if organic production was introduced on the case study farms. With few exceptions, a fall in Family Farm Income during the conversion period would not be an obstacle to farmers changing to organic methods. Fixed cost changes would also not deter conversion but expensive investment in new livestock and appropriate buldings would be required by some of those businesses studied. These findings are, however, dependent upon the price premia assumptions used.