Demand for organic produce is rising fast, so what are the opportunities for arable producers? Jane Brown finds out.
The British organic market grew by almost 5 per cent last year and is set to manage another 5 per cent growth this year, taking its worth above £2 billion, according to a report by the Soil Association. However, the area of organic land is in decline. In particular, the arable acreage has fallen below 50,000 hectares (123,550 acres), making livestock producers increasingly dependent on imported feed.
With cereal prices at a low ebb and the rise of herbicide-resistant black-grass, perhaps now is the time for arable producers to consider changing to organic?
Soil Association chief executive Helen Browning says: “We have long been worried about potential shortages in some sectors, most notably arable. In particular, we need to encourage more production of organic feed for livestock.”
Demand for fresh produce and packaged cereals is strong and, with the average farm size on the up, just a handful of large growers are now responsible for most field vegetable production.
Consumer interest in organic pulses, lentils and legumes, some of which can be grown in the UK, is also increasing, offering the potential for farmers to improve the health of their soil and have longer crop rotations, aiding pest and disease control, she adds.
The company behind much of the growth in organic pulse sales is Hodmedods, which sells home-produced peas and beans through its website, retailers and wholesalers. Although most organic pulses are grown for livestock feed, Hodmedods is driving demand for human-consumption pulses.
Co-founder Nick Saltmarsh says: “Even though we grow a lot of conventional fava beans in the UK, most are exported. We thought there ought to be a market here for such a fantastic crop.”
Source: Soil Association
Although the market is small, growth in percentage terms is rapid, and Hodmedods works closely with a few select farmers.
“Producing organic pulses for human consumption is challenging,” says Mr Saltmarsh.
“We have had to identify farms with no bruchid beetles and sensitive harvesting methods are key.”
Despite the decline in organic area, interest in conversion is increasing, with a 24 per cent jump in producer applicants to the Soil Association between January and August compared to the same period last year. This could be due to low cereal prices as well as CAP reform; Organic land is seen as green by default, exempting producers from the 5 per cent Ecological Focus Area.
One farmer who has joined this trend is George Brown, who farms with his father Richard at Priors Farm, Newbury, Berkshire. They are in their first year of organic conversion, having made a complete U-turn on their business philosophy.
The family previously farmed conventionally, alongside contract farming and contracting.
Mr Brown says: “We were contracting up to about 890ha, as well as 202ha at home. We had six people working at peak times – three full-time and three part-time – but now we have cut back to one full-time and two part-time, all of whom are family.”
So why the decision to convert to organic?
“The whole system just was not working. Arable prices were not good enough, input costs were high and weed control was not working. Although we had been direct drilling most of the farm for 10 years, resistant black-grass meant we were going to have to go back to a more traditional system of ploughing and cultivating to get rid of weeds, so we thought we might as well go the whole hog.”
The figures stacked up pretty well, too.
“At the peak of contracting we had about £400,000 worth of machinery and equipment. We have cut this down to about £150,000 now and if we were not doing any contracting at all we could probably get away with just one 200hp tractor,” says Mr Brown.
The saving on fertiliser will be about £20,000 a year, with sprays dropping from at least £35,000 to nil.
“We were spending a fortune on black-grass control and a lot of it was not working anyway.”
Of course, yields will drop dramatically, so converting to organic would not work without the conversion payments.
“I think spring barley yields will drop from 6.4 tonnes/ha to 3.7t/ha, with beans going from 3.7-2.5t/ha and spring oats from 6.4-3.7t/ha. In the first year we can only sell to conventional markets. In the second we get 70 per cent of the organic premium and once we are fully organic the price is roughly double conventional values.”
In the two conversion years Mr Brown expects to receive a £38,000 annual conversion payment on top of £23,000 a year under the Mid Tier Stewardship Scheme, for which organic producers automatically qualify. After this, the organic payment drops to £14,000 a year on top of the Mid-Tier grant.
“It is a five-year contract, so we can then re-evaluate whether it is worthwhile continuing,” he says.
“On average, we reckon we will be £50,000 a year better off, all things considered, although once we are fully converted this does drop off. We might get five years down the line and decide to change back, or we might think it is the best thing we have ever done.”
However, there is a period of great uncertainty following the decision to leave the EU.
“The Soil Association have accepted us, so this is our first harvest in conversion and we will be going into autumn with full organic practices,” says Mr Brown.
“But there are reports of Natural England putting all their funding on hold, so it is not absolutely certain they will accept our application and deliver the conversion payments, which is a little worrying.”
From a physical perspective, one of the advantages of converting will be boosting the organic matter in the soils.
“At the moment we have 17ha of grassland for our 70 suckler cows and followers. We are going to increase this to a third of the farm and maybe finish the youngstock, rather than selling them as year-old stores.”
The cattle are over-wintered on straw, so he will spread muck ahead of sowing spring oats, and he is changing the farm rotation from winter wheat, spring or winter barley, and spring beans to a completely spring-sown system.
“We will use a two-year grass and white clover ley as an introduction to spring oats, which will scavenge and hold the nitrogen.
“We will cut grass for silage so nothing can go to seed, and then follow the oats with spring beans undersown with white clover to smother grass weeds, then plant spring barley. We will not grow any wheat as it is not competitive against weeds. Once we have got on top of the weeds we may go back to direct drilling, we will wait and see.”
Growing standard crops means Mr Brown can sell to his usual merchants, rather than having to secure a contract for niche crops. And in the longer term he plans to convert his cattle to organic as well.
“In the conversion years we would need to buy-in organic feed, so we are better to wait until the farm is producing its own organic forage,” he says.
“Next year’s autumn-born calves would be our first organic stock, and by finishing them we will increase stock numbers to match the grass we produce.”
As well as home-grown hay and silage, he will bed them on home-grown straw and feed oats and beans where needed.
Having sold off much of the large arable machinery, Mr Brown has had to invest in grass-related kit, and he is contract silaging or haymaking 242-486ha.
“It is a bit more of a steady income than combining and there seems to be plenty of demand for it. By having less arable land, we will either have more combining capacity for other people, or not have to work the kit so hard and be able to pick and choose our combining days to reduce drying costs.”
Under the Mid-Tier scheme, Mr Brown will have over-wintered stubble, which he may mob-graze with sheep, undersown crops, six-metre grass margins, and wild bird mixtures, which will double up as game bird cover for the farm shoot.
Having contracted for organic growers in the past, Mr Brown has learned a few lessons on best practice and what not to do.
“Green manuring and nitrogen building are essential, and a decent seedbed is absolutely key,” he says.
“It is not going to be easy. Keeping yields up and weed burden down without fertiliser and chemicals, you have got to have your eye on the ball at all times. Timing will be critical. But ultimately it will be good for the farm and give it a bit of a rest.”
So far, it has been good for the family, too.
“It is a bit like going back 50 years. Everybody goes on about how good the golden era was, yet we have all chosen to move on. I think you have just got to go into it with an open mind. At the end of the day if a system is not working you must not be afraid to change it.”