Conversion to Organic Farming: Case Study Report Ireland

Executive Summary

In Ireland approximately 60% (29,999 ha total land under organic) or 17,985 ha are in conversion with 12,014 ha fully organic. Of the 1083 registered producers 65% are in meat production with 40% in beef and 25% in sheep meat production. Vegetable production accounts for a further 13%, with cereals, milk, poultry and fruit making up the remainder.

Twenty-seven farms considering conversion to organic production were recruited as case studies for the project. The breakdown of these 27 farms was as follows meat production 19, dairy 4, and tillage 4. The participants were located in all four provinces throughout the Republic of Ireland.

Farms were visited in the winter of 2001 and spring 2002 by trained farm recorders. Detailed financial accounts of existing farm operations were also obtained for the year 2000. Financial output, costs and margins were budgeted for during the organic phase using data obtained from surveys of similar organic farm enterprises and also published farm planning data used by the National Farm Advisory Service. A long-term premium of twenty percent was assumed for the farm gate price of organic beef and lamb. In Ireland, due to the low volume of organic production, premiums on cereals of 60% and vegetables of 50% were assumed. Average farm sizes varied between forty-five hectares and ninety-two hectares for all farm types. Seventeen of the farms are owned outright by the farmers, while the ten remaining farmers had some rented land in addition to their own land that they farm.

Family labour appears to be important as over half of the spouses were involved in farm labour. All but one of the farmers interviewed was male. Three were under thirty; twelve were aged between 30-44, while eleven were aged between 45-59. One farmer was aged over sixty. Three farmers had just Primary education, twelve had a secondary education while four and eight farmers respectively had a technical college and higher education. Twenty-three of the farmers were brought up in a 100% rural environment, three were from a rural/urban mix and one farmer was from a 100% urban background.

When asked about what conversion farming involved the main factors mentioned by farmers were reduced fertiliser use, reduced veterinary involvement, changing farm practices and less chemicals / residues. When asked what type of organic enterprise they were interested in more than half of the farmers expressed an interest in beef / cattle and twelve farmers were interested in lamb / sheep production.

When farmers were asked what the benefits of organic farming would be to them, they stated that they were highly motivated by income earnings and better prices. Environmental concerns were also frequently mentioned. The majority of farmers questioned have livestock holdings and are concerned with how they can control disease and sickness in their animal herd if they convert. Farmers also mentioned the lack of market outlets and inadequate marketing of organics and the problems associated with this. Twelve respondents found information on organic farming in the farming press. Accreditation bodies and state bodies were also utilised by farmers, as well as other farmers / friends/ family to source relevant information.

Converting to organic production resulted in reduced stocking rates and livestock numbers. The majority of the farmers interviewed were involved in meat production and planned to convert to organic meat production. The meat producing farms were divided into three size groups; small, medium and large, with respective average sizes of 18, 36 and 82 ha. Ten meat-producing farmers had mixed sheep and cattle enterprises, with eight farms having cattle only and one farm having sheep only. There was insufficient numbers of dairy and tillage farmers to subdivide into different size categories.

Meat and dairy farms required either new buildings or modification to existing buildings on sixteen out of the twenty-three farms, whilst only one of the four tillage farms required investment in buildings and machinery. It was imperative to qualify for REPS payment plus the extra incentive payment under REPS for converting to organic production. The average extra investment required on drystock farms was €357 per ha, €949 per ha on dairy farms and €253 per ha on tillage farms.

During conversion a decline of four per cent resulted in Family Farm Income on dairy farms. However when fully organic, Family Farm Income increased by 5% over the conventional margin due to a 20% premium in milk price, the organic REPS payment of €242 per ha and lower direct costs of production. Family Farm Income on tillage farms declined from €808 to €721 per ha during conversion but increased to €1003 per ha for organic production. This was due to a twenty-five per cent premium on organic cereal prices combined with organic REPS payments and reduced direct production costs.

Stocking rate was low on many of the meat farms, one third of meat farms were not in REPS and direct costs declined following conversion. The price premium of 20% assumed for organic meat, together with higher REPS payments and higher extensification payments combined with lower direct costs resulted in higher organic Family Farm Income. Family Farm Income on meat farms increased from €261 to €360 per ha during the conversion phase but decreased to €346 per ha for organic production

Principal Component Analysis (PCA) was used to measure the differences and similarities of farmer attitudes. Overall farmers agreed that converting to organic farming would improve the environment, be beneficial to animal welfare, provide good marketing opportunities and create products of better quality compared to traditional farm products.

Based on an analysis of twenty-four attitudinal statements and ten variables, using the Kruskal-Wallis and Mann Whitney tests, the following significant correlations were identified. Only three statements showed any significance with regard to product sector For example meat farmers agreed more strongly (p = 0.004) than dairy and arable farmers that they could make more profit by converting to organic farming. Analysis of the same twenty- four statements mean ranked by age, highlighted four significant statements. For example younger farmers also agreed more strongly that market potential for organic food is growing (p = 0.015). Farmers who have higher education levels more strongly agree that their family will have a better quality of life in organic farming compared to conventional farming (p =
0.041). Overall, farmers who earned 50% or more of their income off farm more strongly agreed with three significant statements covering animal welfare (p = 0.007), information (p = 0.025) and personal values (p = 0.033).