Executive Summary
Despite the current interest in the organic option, there are significant differences in the rate of conversion to organic farming systems. Organic horticulture is well established, while the number of organic livestock and arable farms as a proportion of their respective sectors, are relatively low. In a series of facilitated sector-based workshops, the major behind-the-farm-gate constraints to increasing organic production in the sheep and beef, dairying, deer and arable sectors were identified and prioritised. A detailed financial analysis was then undertaken to quantify the impact of each constraint on the financial performance of the business. MAF Farm Monitoring models were used as a basis for each evaluation.
This report provides a summary of the workshop findings and the financial analysis. It also summarises the discussion with each of the sector groups on the implication to the environment from the widespread adoption of organic practices by the primary industry.
The major and common technical constraints to growing the organic sectors identified and highlighted by participants at the workshops included; nutrient and soil management, animal health (i.e. gastro-intestinal parasites in all livestock, mastitis in dairy cows, lung worm in deer), woody weeds, and the limited skills, knowledge and access to information. Organic producers do not have the same knowledge and management infrastructure available to them as conventional producers. Gaining knowledge can therefore be more difficult, more time consuming and more expensive.
In contrast to the technical challenges, there were few similarities between sectors in infrastructure and industry constraints. A substantial premium was identified as critical for the organic sheep and beef and arable sectors, but for extensive deer and dairying the "size" of the premium was not a major constraint to growth. The lack of processing and marketing capability was identified as the single biggest factor limiting the growth of the organic dairy sector.
Of the constraints facing the sheep and beef sector, the loss of premium would have the most immediate and devastating effect on the financial viability of the operation. The radical change to the stock policy, with a shift to more and older cattle was a major reason for the need for a premium, because of the lower profitability of older age-class cattle finishing policies.
For more extensive sheep and cattle systems than that examined in this study, fewer changes to the existing livestock policy would be needed to accommodate the constraints to organic production and hence the impact on the financial performance of the operation would accordingly be reduced. This is in contrast to more intensive finishing operations, where the changes required to stock policy would result in a substantial drop in profitability.
Both the cropping and livestock components of the arable business require a substantial premium to be profitable because of the changes necessary in the balance of the cropping and livestock operations, and from the low nitrogen environment for crop growth. Given this, it is reasonable to assume that the conversion process would be financially difficult because premiums are generally not available during conversion.
In contrast to the sheep and beef and arable sectors, dairying was not dependent on a premium to be viable. The major threats to the organic dairy unit are animal health, primarily mastitis, as it reduces the numbers of cows in milk, and the ability to maintain soil fertility.
The deer workshop concluded that extensive, low-stocking-rate deer operations are close to complying with certification for organic supply and require little change and support during conversion. More intensive deer operations, however, would have to drop stocking rate to remain viable so it is reasonable to assume that the conversion period would be financially difficult.
The threat of a breakdown in animal health on an organic livestock system, e.g. gastro-intestinal parasites or lungworm, would impact primarily on limiting the range of intensive finishing options that can initially be considered on a property.
The long-term threat to all sectors is a weed infestation as it affects all aspects of land use. For arable producers the threat of weeds can also be immediate and devastating on crop yield, quality and value. The need to use mechanical control for managing weeds in an organic arable system imposes an additional pressure on the soil resource.
One risk of organic production is that if something unforeseen does occur there is a limited range of allowable responses to fix the problem if the organic status of animals and their products are to be maintained.
The workshops suggested that potential outcomes of the widespread adoption of organic systems would result in:
- a change in the make up of the agriculture service industry in rural areas;
- an increase in the labour requirements, putting more families into rural communities or at least arresting the current decline;
- a greater diversity of land use options, including more forestry, eco-tourism, and mixed livestock and cropping farming systems, with each contributing to landscape enhancement;
- a sense of pride in the community if the origin or location of the product is associated with a brand name and the opportunity to integrate this with eco-tourism to build a greater range of life experiences;
- improved soil and water resources under deer and dairying. Under organic sheep and beef and arable production there could be deterioration unless research gaps were filled;
- potentially improved control of animal pests because the reduced range of control options available in organic systems requires a greater emphasis on preventing problems arising;
- similarly, weeds would not necessarily become rampant in the wider environment under good organic management because, despite the technical challenges that weeds pose, organic farmers are aware of the implications of losing control of weeds.
Contact for Enquiries
Kay Brown
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0695
Fax: +64 4 4 894 0746
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