Bioacademy 2004 - The Conclusions of Conference B: “Organic Farming as a Business”
Conference B addressed the issues related to running an organic enterprise. It was divided into three sections: Farm Economics, Marketing, and Policies and Institutional Methods. The following conclusions were made at the individual sections:
Farm Economics
One of the main assets of creating the European Action Plan for Organic Food and Farming is the codification of the support of organic farming in an official document that can be referred to during the negotiations with the European Commission.
More political attention should be focused on the development of the market and its necessary tools (stock exchanges, logistics, processing capacities, etc.), not only on the production support.
The relevant policies should be more well-balanced: a recommendation was made to introduce other means of supporting the demand (tax allowances, market regulations, etc.)
It has been shown that organic enterprises can be profitable (even without support for some products) but it is necessary to look for new distribution routes. In any case, it is desirable to market the production at a premium.
To improve the decision processes at farms, it will be necessary to determine basic economic indicators on the individual level (especially the costs) in the same way as in conventional agriculture.
To ensure the stability of organic farming on the national level, it is desirable to encourage the cooperation between producers, processors and traders in order to support the local consumption and limit massive imports.
Marketing
The market with organic products is imbalanced. Some products are in shortage (vegetables, eggs, pork), others in surplus (milk, beef). It is therefore necessary to focus on the market development, especially in the CEE countries, where a rapid growth in production can be expected. It is essential to finish building the instruments necessary to run the market and focus the current policies on this aspect of organic farming.
The cooperation between organic farmers and the formation of marketing initiatives have proved successful in a number of countries. Essential in this respect is especially professional management, the specification of aims, as well as motivation and innovation. It is advantageous to market the products in bulk (which is cost-effective) and focus on the regional market. Key words like “fresh” are very important.
To increase the sales, especially in the new EU member countries, it is essential to improve the farmers' business skills and to overcome the lack of advisors and market information in this area.
A number of positive examples from various countries have shown that organic products can be launched successfully.
The new member countries should focus on overcoming their unwillingness to cooperate and to create strategic documents, such as action plans, etc.
Policies and Institutional Methods
The CAP is still oriented mostly towards supporting the conventional production and thus in fact prefers conventional agriculture.
Research has shown that the state pays an important role in the development of organic farming, as does the level of cooperation of the participants in the movement.
Even though there are opinions that organic farming should be subsidized primarily if it launches its products on the market (the transaction costs are lower in that case), its support is legitimate even if this is not the case, since the very method organic farming has positive effects on natural resources and thus it represents a positive service to the community.
The liberalization in the EU as well as worldwide will be favourable for organic farming (especially for the viable and diversifying farms), but less so for the conventional farms. This holds true on the assumption that acreage-based payments will continue.
Agricultural policy plays some role in the European organic farming but its position is not essential. The motivation to create the EU was not political and the driving force of its development should not only be favourable policies. For this reason, new ideas in organic farming are needed to strengthen the movement internally.
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