Organic farms with almost stable profit

Earnings in the conventional area declined sharply

Organic farmers were able to almost maintain their operating result in the 2002/03 financial year. The results of the conventionally farmed comparison group, on the other hand, collapsed significantly. This is the result of a study by the Federal Ministry for Consumer Protection, Food and Agriculture, which was presented in the 2004 Agricultural Report. For the fourth time in a row, a comparison between conventional and organic farming is presented there. The companies examined are a selection of just over 700 companies that are roughly comparable in terms of structure and size. They each farm almost 100 hectares.

Performance and costs vary greatly

As expected, the company's performance differs quite strongly. At 34 quintals per hectare, the wheat yields from organic farming are more than 40 percent below “normal” cultivation. The situation is similar with potatoes; Here too, at 173 quintals per hectare, a lower yield of more than 40 percent was determined. The milk yield in organic farms reaches an average of 85 percent of conventional farms.

However, the performance deficit of organic farming is compensated for by the higher producer prices, especially in crop production. The price advantage in cash crop cultivation is up to 170 percent, but for organic milk the additional revenue is limited to around ten percent. In total, the operating income is around 1.600 to 1.700 euros per hectare, so the performance is quite balanced. However, the slightly better operating yields of organic farming are also due to the higher direct payments, which are almost 15 percent higher than the level of conventional farming.

On the cost side, the figures presented in the agricultural report reveal the well-known structural differences: in organic farming there are hardly any expenses for fertilizers and plant protection, but the costs for doing the work are many times higher. The expenses for the addition of livestock and feed are only slightly lower in organic farms than in conventional companies. A higher level of self-reproduction in the animal stocks and the lower proportion of purchased feed possibly reduce this cost area. In the sum of the variable costs, however, the differences between the managements remain small overall.

Profit advantage for organic farms

Despite a decline, the profits of the organic farms in the 2002/03 financial year, at EUR 33.599 per company, were around 22 percent above the result of the conventional comparison group. Compared to previous years, the operating result of organic farmers is better than that of their conventionally farming colleagues for the first time. Apparently, the negative market and price development of the past financial year had a greater impact on the results of conventionally operating companies than on organic farms.

Source: Bonn [ZmP]