The Profitability Of Conversion To Organic Farming Systems

The management accounts in Farm Account Scheme (FAS) format of two Scottish farms in Organic conversion are examined and compared to Scottish average data. Farm 1 is a family run mixed farm with cereals, seed potatoes, cattle and sheep. Conversion has been phased with conversion ground in grass and set-aside, while cereals and potatoes have been grown conventionally until they could be grown organically. Cereal area was reduced so that livestock numbers and potato area could be maintained. The phased conversion plus organic aid payments has maintained the above average profitability although good prices for organic malting barley and seed potatoes have helped but these premiums may not be maintained. Farm 2 is an all grass dairy farm with two 150 cow pedigree Holstein herds on a high input high output system now 9 months into conversion. The two herds were reduced and merged on to one site to form one 200 cow herd. This released capital and labour was reduced by one man saving fixed costs, while yield per cow increased with only the grass in conversion. The challenge will be to maintain yield and profitability on organic feeds. The results to date show that with organic aid and careful planning of conversion and structural changes profitability can be maintained.