New figures for 2006/07 show Welsh organic farmers achieved returns from milk, beef and lamb to match those on conventional farms.

Organic premiums offset the impact of higher overhead costs and lower product yields, according to the detailed analysis of Farm Business Survey benchmark data by Organic Centre Wales.

The exception was beef breeding, where no significant organic premium price was usually available and net margins were substantially lower.

Some 90,000ha on 800 holdings are now under organic management, the first comprehensive survey of Welsh organic producers shows.

The study shows that like conventional farmers, organic beef and lamb producers could not cover their production costs through sales alone.

"The overall situation for lamb and beef enterprises shows some improvement compared with previous years, but the data shows how reliant farms are on support payments to cover the farm family's own inputs into the business," said Dr Nic Lampkin, director of Organic Centre Wales.

When the value of the unpaid input of family labour, land and capital were taken into account margins for both organic and conventional beef production were negative by a significant amount.

The situation on organic units was worse because costs were spread over lower yields, but higher income from agri-environment and single farm payment support was sufficient to offset this.