Facts & Figures
Income development on organic farms
Heike Kuhnert, Frank Offermann | 16.05.2024
"It's the economy, stupid!" – Bill Clinton's legendary saying also applies to organic farming. Whether farmers invest in their organic farm or conventional farmers consider converting to organic farming depends decisively on what farm income is generated or achievable.
The Thünen Institute of Farm Economics has been analysing the income situation of organic farms participating in the German Farm Accountancy Data Network (FADN) for almost 30 years and publishes the annual results.
Certified organic farms of all legal forms and forms of income (full- and part-time) are taken into account. Besides they must be classified as farm type fieldcrops, dairy, other grazing livestock or mixed farms.
The income situation of the analysed 437 organic farms of the German FADN has improved slightly compared to the previous year. They achieved an average income of EUR 45,240 (profit plus paid labour costs per annual work unit (AWU)), compared to EUR 42,607 in the previous year. This corresponds to an increase of EUR 2,633 or six percent. The organic fieldcrops farms had the highest income with EUR 59,225.
Historical income gap in favour of the comparable conventional farms
The average income of the comparable conventional farms with similar site-specific factors and resource endowments as the organic farms has made a real leap upwards: it has increased from EUR 39,147 in the 2021/22 accounting year to EUR 56,614 in the 2022/23 accounting year, which corresponds to an increase of 45 percent.
The longterm analysis shows: At EUR 11,374, the income gap between the organic and comparable conventional farms is historically high and is in favour of the conventional farms. This is only the sixth of 28 years in which the average income of the comparable conventional farms is higher than the average income of organic farms.
The main reason for the difference in income development is that producer prices for organically produced products increased at a significantly lower rate than for conventional products during the 2022/23 accounting year, in particular for milk and cereals. Increased prices for inputs were more than compensated for in the conventional farms in the comparison group, resulting in comparatively very strong profit increases there.
It is striking that there are large differences in success within the organic farms. This is true both with regard to the different farm types and within the four farm types studied (fieldcrops, dairy, other grazing livestock, mixed farms).
Further results on the economic performance of farms in the German FADN see also the analyses in the dossier " Farm income".
Further results are described in the report "Analysis of the economic situation of organic farms in the accounting year 2022/23".
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- Presented in detail:Tabular presentation of the economic situation of organic farms (in German)
- To the point: "Analysis of the economic situation of organic farms in the accounting year 2022/23".
