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How the numbers stack-up: Making a business case for organic farming

With organic farming being held up as the poster child for environmentally friendly farming post-Brexit, Alex Black asks how the numbers stack-up.

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How the numbers stack-up: Making a business case for organic farming

Farming needs to reassess the way it looks at productivity and efficiency to create a food production system in the context of the Government’s focus on public goods.

 

A new report by Organic Farmers and Growers (OF&G) has urged farmers to take a ‘new perspective’ from a simple profit and loss approach to a focus on overall equity value or net worth.

 

This would factor in noncash outcomes, such as soil carbon content, biodiversity and animal welfare.

 

And while the focus post-war has been on improving yields to become more productive and feed the world, OF&G chief executive Roger Kerr said despite yields increasing, the economics of agriculture have not changed.

 

“Farmers are still heavily reliant on support to make a profit,” he said.

 

“Variable costs have increased significantly. We have to be careful we do not relate yields to profit.”

 

He added there was a misconception around needing to increase food production to feed a growing population, highlighting the increased numbers of people who were obese and overweight, the problem of food waste and the increasing amount of grain grown for livestock and ethanol.

 

This meant there was not a need to dramatically increase food supply to feed the world.

 

Pressures

 

And with environmental pressures, ‘business as usual’ was no longer an option, Mr Kerr said. He added there needed to be recognition from Government as part of its public payments for public goods approach and they would be presenting the report to Government.

 

“For too long we have expected good farmers to pick up the tab,” he said.

 

Report author Christopher Stopes added organic farming was one way to meet this challenge, although it was not the only one.

 

Mr Stopes said: “Organic defines a whole system approach to food production that can help reverse negative impacts on the environment, by providing healthier soils and a more abundant and diverse mix of flora and fauna, while reducing pollution and nutrient overload.”


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MAKING THE BUSINESS MORE FINANCIALLY STABLE ROSS DILKS, DERBYSHIRE

 

SUSTAINABILITY had been the key driver for Ross Dilks, whose dairy farm in Derbyshire officially became organic in March 2019 after an 18-month conversion.

 

As a rented farm, his landlord wanted the farm looked after, but they were also looking to make the business more financially sustainable.

 

Mr Dilks was milking 120 cows and, without much chance to grow the herd without spending on infrastructure, the family looked to premium markets.

 

He converted and set up a raw milk vending machine.

 

He grew milling wheat varieties and used it to feed the cattle, selling any excess.

 

Excess

 

Mr Dilks also grew winter oats to feed youngstock and sell excess for milling, as well as spring barley as a nurse crop for grass underneath and red clover silage for the dairy cows as a break crop.

 

“Arable crop-wise if we have some to sell, we are probably making £300/acre as opposed to £200/acre,” he said.

 

He sold milk to Arla for McDonald’s, which was achieving 41ppl at the time of the interview. But at the vending machine they could sell for £1.20/litre.

 

And Mr Dilks urged other farmers to not write off the organic option straight away and do their research before making decisions.

70 YEARS OF ORGANIC SUCCESS RICHARD THOMPSON, YORKSHIRE

 

PRODUCING food without chemicals had been the inspiration for Yorkshire farmer Richard Thompson’s father going organic in 1949.

 

But Mr Thompson emphasised without a sustainable business case behind it, they would not have had 70 years of organic success.

 

The family had farmed in the area beforehand, but his grandfather persuaded them to get out of agriculture in the 1930s.

 

However, after working in India and coming across the work of Albert Howard, Mr Thompson’s father had been inspired to start farming organically.

 

“Dad was not happy using chemicals on our food and he made the conscious decision to start farming organically,” he said.

 

His father had sold vegetables and chicken all around the country and was already well-established as an organic farmer when the multiples started taking an interest in the 1970s. Mr Thompson said he believed in organic farming for the same reasons his father had.

 

Proposition

 

“But also as a farm business, it is a viable business proposition. We would not be here if we were not in business,” he said.

 

“If organic farming could not support us we would have to look to do something else.”

 

He said like any farming business, you had to work at it and it was about figuring out what was appropriate for your farm.

 

And he believed conventional and organic farmers could learn from each other, with Mr Thompson highlighting using rotations to control black-grass, with rotation the key to organic success.

SWITCHING SYSTEMS CAN PAY OFF JOHN PAWSEY, SUFFOLK

 

CONVERSION has paid dividends for organic farmer John Pawsey with the financial side of the business the first consideration when switching systems.

 

Mr Pawsey farms 650 hectares in Suffolk, as well as contracting about 850ha, all of which are now organic.

 

He converted the first part of the farm in 1999 and the second in 2001 to run a six-year rotation to compare figures.

 

And when he discovered they were about £150/ha better off, they converted the rest of the farm and the contract farming side of the business.

 

Financial

 

Mr Pawsey said the first reason had been financial, but he was also increasingly concerned about soils.

 

“I used to do all the spraying myself on the farm and I seemed to be increasingly spraying a cocktail of chemicals,” he said.

 

Since becoming organic, his soil health had improved year-onyear and he had seen a boost to the biodiversity of the farm.

 

But he emphasised the farming model had to make a profit. They ran a stockless rotation until 2014, when Mr Pawsey decided to introduce sheep, starting with 250 New Zealand Romneys. They added 200 more in 2015 and will put 1,000 to the tup this autumn.

 

He said they were looking to boost fertility and try and ‘close that nutrient gap’.

 

Challenges in converting had centred around getting modern advice, getting the right equipment and building a market. But he believed there was now more advice available from farmers like him and a lot of research on the equipment side.

 

He added with the Basic Payment Scheme disappearing, farmers needed to tackle input costs and make sure the farm was profitable, and going organic was one option.

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