Organic Farming Expansion Will Be Slow, says Teagasc

Issued, 4 July, 2002

Expansion of organic food production in Ireland will be a slow and difficult process according to a Teagasc economist.

Liam Connolly told the Teagasc National open day on organic farming at Johnstown Castle, Wexford that organic production in Ireland is currently at around one third of the EU average.

''There are 1,000 organic producers in Ireland at present, farming less than 1% of the land area. Total organic food sales are worth €25m per annum of which close on €10m is imported. Irish consumers purchase just 0.4% of their food as organic compared to an average of 2% for EU consumer'', he said.

Liam Connolly said while organic food production will continue to increase it will remain a niche market. A recent Government report projected a trebling of organic food sales by 2006.

''For the forseeable future, it is difficult to see more than 5% of the land area of Ireland devoted to organic production'', said Liam Connolly.

He said beef and lamb make up 60% of organic production at present. Vegetables account for around 15% with dairy products, pigs and poultry making up the remainder.

He gave details of a Teagasc analysis of the economics of organic production, which shows that beef, cereals and potatoes are currently the most profitable organic farm enterprises.

''Our study of organic milk producers last year showed that their income levels were 10% lower than those in conventional milk production. While they received a 29% price premium milk yields were 40% lower than conventional production''.

''In order for organic milk producers to have comparable incomes to those in conventional dairying, they would need a price premium of 36%'', he said.

He referred to the situation in Denmark which experienced a big increase in organic milk production over the past decade. Because of over-production organic producers are now receiving no price premium for their milk and many have reverted to conventional production.

He said beef is currently the most profitable organic production system. A Teagasc survey showed that organic beef incomes in 2000 were almost 60% higher than conventional incomes. ''This was due to significantly lower costs, a 20% price premium and top-up payment of €91 per hectare under the Rural Environment Protection Scheme (REPS). On the other hand, a similar survey on lamb production showed little difference between organic and conventional incomes'', he said.

In relation to cereals and vegetables, he said yields of organic cereals are typically about 60% lower than conventional production. The yield penalty for potatoes is around 25% and between 20% and 50% for vegetables.

''Because of the low level of production, Irish organic wheat and barley growers are making incomes between 20% and 80% higher than their conventional counterparts. Incomes from organic potato production are around 50% higher''.

''As a high proportion of organic vegetables are sold locally, outlets can be easily over-supplied leading to a rapid decline in price premia'', he said.

The open day featured organic production blueprints which have been developed by Teagasc at Johnstown Castle Research Centre.

Dr Noel Culleton, leader of the Teagasc organic research programme said that the only farmers who operate to the highest production standards will survive in organic farming.

''The level of competence in animal and crop husbandry must be of the highest standards . In livestock farming, getting maximum production from clover and high skills in dealing with animal health and welfare are crucial''.

''Organic farming is not an easy option. Farmers who run good commercial conventional operations are the ideal candidates for successful organic farming. Poor conventional farmers will make poor organic farmers'', said Dr Culleton.