Price premiums a must…

1 August 1997

Price premiums a must…

Organic arable farming has been carefully scrutinised by a leading farming company for the past seven years. Andrew Blake reports its findings

ORGANIC arable farming can be as profitable as conventional husbandry systems for farms achieving average results, but price premiums are essential.

That is the picture to emerge from seven years of work by CWS Agriculture at its Stoughton Estate, Leics. It shows the average conventional arable farmer could switch to organic methods and be no worse off, especially now the ministrys Organic Aid Scheme is in place.

But uncertainty over future premiums means the company has no plans to expand its organic operation. Integrated farming methods are much more the way ahead, believes general manager, Mike Calvert.

"We must be careful not to extrapolate the findings on 270 acres to 2700," adds project manager, Alastair Leake. "The market is developing slowly."

CWSs financial comparisons use real costs and results from Stoughton for the organic approach, but average industry figures for the conventional approach. The reasoning is that conventional margins are already above average at Stoughton.

Although no CWS organic crops have been grown on contract, good prices are vital to offset low output, notes Mr Leake. "It is absolutely fundamental to get premiums."

Last year organic wheat, for example, averaged 6.6t/ha (2.6t/acre). But the wheat output from the whole rotation is only about half conventional, he notes.

Up to now premiums have usually been achieved in wheat. But problems achieving good proteins have sometimes meant taking a discount.

With only one outlet for organic oats, regular premiums have been harder to obtain, he notes. In 1994 30% of the crop was sold at conventional prices.

Peas and beans in the CWS study have never made human consumption quality and premiums for organic livestock feed are only just developing.

A big uncertainty is how much the apparently good organic wheat prices have been underpinned by generally high grain prices. The £211/t for organic wheat last year inevitably reflected high conventional prices, says Mr Leake. Likewise the weak market will exert downward pressure on organic premiums, he believes.

Equally important could be the strength of sterling. That restricts valuable organic export opportunities and also makes imports more likely, he explains.

Already there are signs that UK organic yogurt-makers can obtain milk more cheaply from Denmark, and Scandinavian organic grain could become increasingly attractive to millers here. The fact that CWS organic wheat due for collection in February was not collected until June could be significant, he says.

Mayweeds uncontrolled by harrowing in this organic Pastiche wheat (left) are the legacy of past conventional farming, says Alastair Leake. Unharrowed Solva oats just across the road (above) have no such problem and should yield well.

Organic crops can be as profitable as conventional ones – on at least average farms, say CWSs Alastair Leake (left) and Mike Calvert.


&#8226 Seven years of experience.

&#8226 CWS Stoughton Estate, Leics.

&#8226 Stockless and mixed organic farming v conventional.

&#8226 Similar net margins:

– All-arable organic average £656/ha (£265/acre).

– Conventional arable average

£679/ha (£275/acre).

&#8226 Profits need premiums.

&#8226 Will strong pound and low grain price cut premiums?

Lesson learned, mistakes inevitable

Results from a planned second seven-year CWS stab at organic farming could be more rewarding, suggests Mr Leake. Wheat yields have generally increased as lessons have been learned.

Mistakes have been inevitable. "We gave up peas as the yields were abominable because of weeds.

"Interestingly the all-arable system produced about 1t/ha more wheat than the mixed farming system." That result points to the value of vigorous clover swards compared with grazed grass as an organic entry, he believes.

Other points emerging from seven years of organic work include:

lStoughton yields generally higher than national average eg 12% higher for wheat.

lLack of initial meat premium reduced mixed farming margins.

lOats most consistent crop but may have marketing problems.

lSet-aside legume sowing derogation very useful.

lWeeds biggest challenge. Delayed and night-time drilling only partial solutions. Wild oats and spring wheat make excellent silage.

lInter-row hoeing time-consuming and a disaster in lupins.

lLupin crop failed.

lPests and diseases generally no worse than in conventional systems and lodging less likely, thanks to more open crops. But slug control trickier.

lHigher earthworm populations only environmental benefit detected.

lUncontrolled release of nitrogen from clover. Spring ploughing and cropping merely postpones the problem.

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