Expansion of organic farming not only a task of politics

What did you spontaneously think when you read about the target in the coalition agreement to expand the share of organic farmland to 30 percent by 2030?

I was not really surprised about the new target after the EU Commission's farm-to-fork strategy advocated an organic share of 25 percent, and in Germany some federal states have increased their organic area targets.

Political expansion targets for organic farming have long been the subject of controversial debate. Proponents point to the signal effect, critics warn of the danger that this will stimulate development that is not in line with the market or fundamentally doubt their usefulness. Who is right?

In view of the major ecological challenges we face, such as limiting a further increase in global warming or preserving biodiversity, I believe it is logical to strengthen production systems such as organic farming that can demonstrably contribute to solving the problem. We should not make this strengthening per se dependent on how the demand for these products develops, because in the end it is about solving the ecological problems. On the other hand, it is also important to consider the consequences of political measures. A clear diversion of supply and demand would be of little use. If, as a result of a policy-induced expansion of supply, prices fall, the relative economic advantage  of ecological production would not increase.

In 2002, under a Green agriculture minister, the German government first set out to expand organic farming to 20 percent of agricultural land by 2010. In the meantime, eleven years later, we are at around 10 percent. Why has it not been possible to come close to achieving the 20 percent target in the past 20 years - was it the target, the market or the policy?

I would say all three factors. At the time, however, I understood 20 percent less as a concrete political goal to strive for than as a vision that organic farming would become a relevant part of the agricultural sector in the medium term. In retrospect, I consider it quite a success that the organically farmed area and the demand for organic food has steadily expanded in Germany. In other European countries such as Great Britain, Denmark or Poland, on the other hand, there have been phases of both growth and contraction. I would like to note at this point that the critics of the 20 percent target were wrong at the time in their prediction that the expansion of organic promotion would lead to falling prices and should therefore be rejected. At the time, the measures led to a strengthening of the entire value chain.

Against this background, do you consider the goal in the coalition agreement of the SPD, the Greens and the FDP to expand organic farming to 30 percent by 2030, i.e. to triple it, to be realistic?

I can understand the interest in the question of whether an area share of 30 percent by 2030 is realistic. But I think it makes more sense to focus attention on two other questions. Firstly, what measures could be taken to achieve the target. And secondly, what consequences would be associated with these measures or how are they to be evaluated. It is important to keep in mind that it is not only about a significant expansion of the area. What is also needed is a corresponding growth in processing capacities and demand for organic food, but also more staff in the inspection bodies, advisory services or agricultural administration.

What are the most important prerequisites for achieving within nine years what could not be nearly achieved in 20 years?

More demand for organic products. More money for rewarding environmental services. More consultation, education and research. But in the end, it's not just about simple upscaling. A tripling of the organic area will only be possible if there are also structural changes. For this, we need more participation and responsibility from economic actors and civil society. And at the same time, we should not see the expansion of organic farming as a task for politics alone. The Future Strategy for Organic Agriculture, which the BMEL presented about five years ago and which has become an important instrument of national organic promotion policy, should therefore be further developed into a public-private-civil society partnership - a platform on which joint solution-finding is advanced.

A coherent agricultural policy as a prerequisite for a further expansion of organic farming - what should it look like?

A formative agricultural policy will remain an important factor in the future. It is important that the impulses of different support measures do not cancel each other out. A coherent agricultural policy therefore requires that possible conflicts of objectives be disclosed. In the past, for example, there were two areas with policies for the expansion of bioenergy and organic farming that were not coherently coordinated. In order to resolve or avoid conflicts of objectives, it is important that objectives are explicitly stated. The CAP strategy plans will provide a good basis for this in the future.

What are the decisive factors for agricultural enterprises to convert?

Agricultural enterprises are businesses that want to generate a sustainable income with their business activities under the given framework conditions. The economic viability of conversion therefore remains a decisive factor. However, it is not the only one. The desire to farm sustainably and to deal responsibly with animals on the farm are further motivations for many farmers to engage in organic farming.

What role does the specific organic support - conversion premium and organic premium - play in the decision of farms to convert?

As long as the consequential costs of agricultural production are not fully internalised, i.e. not reflected in the price of a product, organic support is an important prerequisite for the competitiveness of organic farming vis-à-vis conventional production and thus for conversion. The same applies to the provision of public goods.

How did the economic situation of organic farms develop in the last marketing year?

We have seen for many years that the income situation in German agriculture develops very differently. The same applies to organic farming. Average observations are of little help here. Basically, however, our analyses show that organic farming is a worthwhile option for many farms. The rapid growth of fallow land with an annual increase of about 10 percent in the last five years shows that many farm managers share this assessment for their farm.

How do you assess the economic development this year and in the coming years?

Due to the high level of political attention paid to organic farming and the continued positive market development, I assume that the current trend will continue this year and in the coming years. However, I would like to add that the changes in the new CAP and the new EU organic regulation have led to uncertainty. It remains to be seen what effect this will have.

Why do organic farms generally perform better than conventional farms?

I do not share the view that organic farms generally perform better than conventional farms. However, it is true that many organic farms achieve a higher income than conventional farms that have comparable resources or operate under comparable local conditions. The decisive factors here are savings in material costs, good marketing and certainly state subsidies to some extent.

Agricultural enterprises are successful in different ways. Do organic farms differ from conventional farms in this respect?

No. In organic farming, too, there are successful and less successful farms. A decisive criterion for success here seems to me to be the ability to develop a well-functioning agro-ecological system. Successful organic farmers are always good system managers.

How does the structural change in the organic sector manifest itself?

In organic farming, too, we see that farms are getting bigger or that farms are no longer being managed. And there are also new forms of farm organisation in organic farming. A good example of this is solidarity farming, i.e. local associations of consumers and one or more farmers. This form of cooperation is the exception in organic agriculture, but organic farms are involved more often than average.

Does "grow or give way" also apply to organic farming?

As I said, we are also observing the trend towards larger farms in organic farming. In the last ten years, the average size of organic farms has increased by 6 percent - in agriculture as a whole, however, by 13 percent. The pressure to grow thus seems to be somewhat less pronounced in organic farming. In addition to the option to grow and achieve economies of scale, it is often easier for organic farms to position themselves in the market by adding more value and thus secure their income.

In the past, the Thünen Institute has investigated why farms give up organic farming after they have converted. To what order of magnitude do you estimate the proportion of "converters back"?

We looked into the question of conversion about eight years ago. At that time we found out that about 3 percent leave organic farming every year for very different reasons.

How has this developed in recent years?

We do not yet have any data on this. But I assume that the situation has not changed fundamentally since our last survey. We plan to repeat our analysis next year with new figures from the agricultural structure survey. Then we will know more.

What are the reasons for giving up organic farming?

Whether an organic farm considers returning to conventional farming usually depends on internal, family and personal conditions as well as on external framework conditions. If there are serious changes there, the farm's way of doing business is questioned. As a rule, there are several factors that lead to a change back. Economic motives, lack of development prospects and problems with organic standards and controls play a particularly important role.

Can countermeasures be taken?

The results of our work, but also the analyses of other research institutions, make it clear that conversion cannot be completely avoided. If organic farming no longer suits personal and farm conditions, a return to conventional farming may be an obvious decision. Irrespective of this, however, there are approaches to reducing the rate of conversion. These include well-founded conversion advice, transparent guidelines, standardisation and simplification of organic inspection and measures that contribute to strengthening organic agriculture in general.

An expansion of production alone is only one factor for further growth in the organic sector. Is the value chain set up in such a way that growing demand can be met? What deficits do you see?

Not always. Especially in regions where organic farming is less strongly represented, processing capacities are limited. This is precisely why the federal and state governments support the establishment and further development of organic value chains through a variety of measures.

What share of demand is currently met from domestic production?

The share of domestic production in the organic market varies greatly depending on the product area. For cereals it was recently around 85 percent; for sunflowers, on the other hand, only 10 percent.

Can this be increased through origin labelling?

I think so, because organic consumers in particular are interested in short distances and prefer products from the region. With the regional window, there is already the possibility to indicate the origin of the product on the packaging. However, the label is still not used enough. But it is also true that communication is difficult with processed products that consist of different ingredients.

Scientists are not clairvoyants. Nevertheless, the question is: what percentage of the land will be used for organic farming in Germany in 2030?

I assume that organic farming, as well as agro-ecological practices in general, will continue to gain in importance - and this is mainly because issues of climate protection, biodiversity but also animal welfare will continue to be a driver for change. How high the share of organic land in Germany will be depends on many factors. If all actors pull together, we will have come a good deal closer to the goal by 2030.

Source: Agra-Europe (published there on 13.12.2021)