What lessons can the organic sector learn from the economic downturn?

The economic downturn has effected different European organic markets differently. The UK and Italy have seen significant weakening in demand for organic products. In these countries consumers perceive organic products as expensive and the benefits they provide have not been considered sufficient to continue to pay this premium.

Although this trend seems to be reversing thankfully, other European countries such as Sweden and France have continued to see double digit growth through the recession. They have more effectively informed consumers of the benefits organic food provides. But how?

We need to understand the dynamics in these markets. How have they sold the benefits of organic produce to their consumers and how does this differ from what we do in the UK? To learn from them will make our market more robust through future economic downturns and therefore more financially sustainable.

Perhaps some of the Organic UK promotional budget should be invested in understanding these markets better to see what can be learned.

Recession impact on organics varies across Europe

Can the EU curb commodity speculation?

Hooray for the EU! Perhaps unusual for UK farmers to be cheering on the work of the EU but steps to control speculation on commodity markets should be welcomed.

Speculation does not put money in farmer's pockets but rather in the pockets of the speculators - otherwise they wouldn't do it. It increases volatility in the market, puts millions into food poverty and weakens structures which should assist farmers in marketing their grain.

Whilst the organic sector does not have a futures market we are indirectly affected by it and the immaturity of the organic grain market and small volumes involved make it particularly susceptible to external influence. Stable prices providing farmers a sufficient return would help build confidence in the UK organic grain sector and allow the development we all need to see.

UPDATE 2-EU unveils drive to control commodity speculators | Reuters

GM canola contaminates organic farm | Australian Food News

A case of GM contamination in Australia raises questions about segregation for organic farmers. This case raises two interesting questions. Firstly, whether a polluter pays principle will be followed in Australia and how consumers wishing to buy GM free produce will respond should organic supplies become contaminated.

If a "polluter pays" principle is adopted the likelihood of GM being grown in close proximity to organic land is reduced. However, how far will the principle extend? Over time if GM genes spread far beyond the farm they originated from and contaminate an organic farm will that organic farmer be able to trace the contamination back to source and seek compensation?

If GM free is a major motivation for consumers as the article suggests we should understand how important this is to them. If it is a significant factor in consumer buying decisions, we should rigourously ensure that any contaminated imported supplies are kept out of the UK organic market in order to protect consumer trust in our organic products.

GM canola contaminates organic farm | Australian Food News

Look before you Leap!

With the recent surge in the price of conventional grain and with Organic Entry Level Scheme agreements coming to an end in the next 12 months some will be questioning their future and whether to remain as organic producers.  3 producers have recently indicated their intention to de-certify and so about 700 tonnes of organic grain is lost.

The view of many farmers is that organic farming is more fun and more challenging but most importantly more profitable; with the additional risk of more variable yields and an immature market providing better rewards. However does this remain so when conventional cereal prices have strengthened so strongly and seem likely to remain strong for next harvest too?

Can the organic market provide sufficient premium over the conventional market when the economy is struggling and consumers are facing inflation and tax rises?  But perhaps the premium does not need to be as great as it has been historically as it is margin and profitability which is important not simply the level of the premium over the conventional price. Whilst conventional farmers are seeing higher percentage increases in prices they are also facing increases in the costs of their major inputs.

Ammonium Nitrate prices.  Source: www.dairyco.org.uk

The graph above shows how fertiliser prices have risen significantly since the higher prices grain has been available rising 10% between October 2010 and November 2010 and about £100 between November 2009 and November 2010.  When such increases occurred in 2008 the cost of oil was also rising significantly (see graph below) which gave a reason for the high fertiliser prices.  This year the fertiliser price seemingly has been driven higher by the strength of the grain market.



Higher grain prices have pushed input costs higher which impacts negatively upon farm profitability and more worryingly as a conventional farmer these input prices are beyond your control and so a weakness within your business model.  

In volatile times perhaps better to be in control of your cost structure than to see your input costs rising and being unable to do anything about it.

BQP Producers Annual Awards

Congratulations to Hall Farm organic pig producers for winning the BQP Waitrose Select Farm Highest Scoring Unit 2010.

How do a group of organic cereal producers end up at an awards dinner for the country's best pig producers?  Accept an invite and head off  to meet the customers for your grains.  A group of Organic Arable producers in the Eastern Counties now supply between 80% - 90% of the cereal requirements of BQPs organic pig producers and so were keen to understand how their businesses are fairing and how this might effect future sales of cereals.  Hall Farm is based at Rushbrook Farms one of our members supplying grain into the Waitrose / BQP grain supply initiative.  This initiative has localised the supply of feeds by relying less on imported cereals and now sourcing from local farms.

BQP are the sole supplier of pig meat to Waitrose and it was very interesting to hear how Waitrose see their market developing over the next few years and imagine how that might effect the organic grain supply into BQP. The last 18 months have been good for Waitrose who have seen impressive growth in sales but we heard that they see further expansion ahead.  They estimate that only 39% of their potential customers have access to a Waitrose store and so have an ambitious store building programme ove the next 5 years in both the supermarket and convenience store sectors.  This aligned with various partnerships to put Waitrose products into concessions in other retails' stores should provide continued sales growth.

We are glad to be working within a progressive and dynamic supply chain with BQP and wish Waitrose well in their continued development and expansion of their business.  Their success in accessing additional customer will build their organic pork sales and develop the market for our members to supply their pig feed.

Any organic grain producers in the Eastern Counties looking for supply opportunities should leave a comment below and we will contact you to discuss working together

Andrew Charlton praises the long-term strategy of Norfolk County Council

Organic Arable member Andrew Charlton appeared on Farming Today this morning to discuss his relationship with his landlord, Norfolk County Council.  He suggests they are more flexible and will have a role in supplying local communities once resource scarcity impacts upon agriculture.  Also interesting that they helped fund his agroforestry enterprise as a carbon offset.  Perhaps other councils may follow suit if asked.  (Listen from 10 minutes onwards if you don't have time for the whole programme).

http://www.bbc.co.uk/iplayer/episode/b00w7c3q/Farming_Today_01_12_2010/

East of England Organic Group

Attended an interesting and informative event today which was disappointingly poorly attended.  The invitation was sent out to about 80 organic farmers in the Eastern Counties but only 6 attended.  It is always of interest to discuss the recent harvest, the organic market, general issues about the organic sector as well as enjoying good company.

So what did we learn?

1. That the market remains weak but this is only to be expected given the general economic situation and did not seem of significant concern to those attending.
2. That nitrates seems to be magically made by passing water through sand.
3. How to control creeping thistles in a cereal rotation.  (No I'm not going to reveal how as you should have been there).

The basis of the success of these events is getting informed, interested and interesting people to attend and that is easy - you each have to make sure you put the date in your diary when Ken Kelso sends out the date of the next meeting and then not think you have something more important to do!

Bulgarian Organic Cereal Area set to Increase

Bulgaria looks likely to remain an exporter of organic grains as they report an increase in their arable cropping area for 2010. The total organic area in 2009 was 12335 ha but with increasing interest in both cereal and wine production this looks set to grow. Owing to a lack of domestic processing most organic produce from Bulgaria is exported to Germany as commodities and consumer goods then imported .

Balkans.com Business News : Bulgaria's bio products market is dominated by imported foods

Looking with your eyes closed.

The Food Standards Agency (FSA) has not been a friend to the organic sector and it's recent rebuttal of criticism made by the Soil Association continues their antagonistic approach towards organic food.

Strange when it could be expected that the two would have a common goal: the quality of the food produced in the UK.

However the definition of quality is always the problem. The FSA take a very reductionist view of quality. For them if the matter can't be analysed to within an micrometre of its existence, they aren't interested. Conversely the claims made for organic food can be nebulous and too subjective to stand hard scrutiny.

Fortunately, the QULIF project, an EU project being co-ordinated at University of Newcastle by Carlo Leifert is starting to publish their findings. Scientifically robust, unlike somecalims made by organic advocates this work has should be taken very seriously. It has indicated that:

"organic food production methods resulted in

(a) higher levels of nutritionally desirable

compounds (e.g., vitamins/antioxidants and

poly-unsaturated fatty acids such as CLA and

omega-3) and (b) lower levels of nutritionally

undesirable compounds such as heavy

metals, mycotoxins, pesticide residues and

glyco-alkaloids in a range of crops and/or

milk.

Perhaps the FSA missed this long running EU funded study or perhaps they didn't look hard enough to find it.

Europeans remain uncertain about GM technology

The latest EU report shows EU citizens attitudes towards GM agriculture continue to be sceptical about the technology with supporters outnumbered by 3 to 1. It is seen as providing little benefit whilst there are safety concerns about its use. Interestingly, UK citizens show above average support.

Report available here

Every Food Purchase is a Vote

Americans are thinking about their Thanksgiving turkey. However with Christmas just a few weeks away should we not be considering what our Christmas turkey says about the agricultural system we want to see in the UK.  If so, shouldn't it be an organic turkey this Christmas?

Thanksgiving Turkey (see page 4)

US research which shows us the way perhaps?

Some interesting wheat breeding work going on in the US. A different approach from the Organic Research Centre population breeding work but with a similar hypothesis but perhaps with a more directly commercial approach.  It will be interesting to see whether any of the resulting varieties may be of direct interest to the UK or whether it is the methodology we should adopt to seek to develop more suitable varieties for organic systems our conditions.

 Also, they are exploring the potential for mechanical weed control with minimal soil disturbance which may be of relevance to those exploring non-inversion tillage systems.

 Drawing on the past for organic grains

Corn, SoyBeans, Wheat, Cotton, Organic Farming, Fertilizers | Agriculture.com

Mr Agnew's critical stance on organic systems and enthusiasm for GM technology (see below) failed to mention that some GM solutions available to US farmers are appear not to be providing the benefits originally envisaged. Weeds exhibiting resistance to Monsanto's Roundup herbicide are now being tackled by following an enhanced programme of treatment to prevent this resistance spreading to other fields and in order to encourage farmers to use this enhanced programme financial incentives are being paid.

Monsanto offers incentives to use Roundup Ready products

Fools we are not

Mr Stuart Agnew, MEP for the Eastern Counties, has expressed his views on organic farming and is clearly not impressed. I would ask Mr Agnew to take a more informed approach before dismissing organic farming by looking at some of the many highly successful organic systems that abound - many of which exist in his constituency.

Rather than being fools eastern counties organic farmers are resilient and innovative and producing high quality produce that isn't "submerged in thistles, plastered with fungus or crawling with aphids" as Mr Agnew suggests.

The likelihood of a crop having a high thistle population and high aphid numbers is low as flowering plants within the crop will attract the predator species which feed on the aphids. His comments sound more like ill-informed speculation than genuine observation.

Mr Agnew would be welcome to visit some organic farms in the eastern counties to discover the many benefits organic systems can deliver and why it is a farming system which should be taken seriously by policy makers and not dismissed as foolish.

'stop fooling around' Agnew tells committee

42% of consumers say that they would buy more organic if they could afford it

Interesting reflections from YouGov on the dangers of price inflation for our sector

'Overpriced organics' | YouGov

Reasons to be cheerful ......

Thank you to OF & G for the excellent "Selling Organic" conference last week which raised the question: what to make of all the information?

Selling Organic challenged the perception that the organic market is in the doldrums with the vibrant news that the Yeo! Valley TV advert had become a viral sensation. Alain Guilpain indicated that the multiple retailers have rethought their strategy of de-listing organic lines because it's the organic shopper who spends the most in their weekly basket. They now want us.  And Ed Garner (amusing as ever) enthused us all by saying that Budget, Basic and Bargain have been consigned to the basement as shoppers no longer buy into the thrift agenda and that premium is gaining ground and seeing sales growth.  However his optimism should be tempered by the slide showing that total organic grocery sales through the multiple retailers were down 9% year on year with only Waitrose showing any sales growth.

A mixed  picture than which can be sumarised as still very tough but some signs of recovery.

But how does it translate to the organic cereal producer?  Lets try and peer through the glare of powerpoints and see.

The messages for the cereal producer are mixed.  Great news that the sector as a whole is seeing some recovery but....  .... and it is a big but.  Of the £815 million of sales represented on Ed's graphs £545 million (67%) were represented by 5 categories with vegetables being the biggest and none being cereals.    The areas that are most successful both in terms of sales value and frequency of purchase are those such as milk and yoghurt that show the least premium over the conventional alternative.  Those areas such as eggs, poultry and other meats where the premium is greater the size of the market remains small and indeed in terms of penetration (a marketing terms for the number of households buying) has fallen year on year.  Indeed eggs and poultry continue to show sales decline of 7.5% and 5.5% respectively.

The Feed Working Group gave a preview of the new Soil Association Feed Report which makes interesting reading and sets some tough challenges to meet

It is not the easy market of 2007 for the main consumers of organic grain, the dairy, egg and poultry producers.  It's tough but there are reasons to be cheerful:

1. Yeo Valley are investing in a significant advertising campaign
2. the Organic Trade Board generic promotional campaign starts in earnest in Spring 2010
3. the multiple retailers are no longer actively promoting budget lines at the expense of premium lines (including organic).
4. The grain price is £40 above this time last year

However to believe that grain price increases can be passed through the supply chain to consumers without having an impact upon sales and the continued recovery of the organic market is not borne out by the data coming back from the retailers.  Further increases in grain prices will not help the long term recovery of the organic market.

Lawrence Woodward Steps Down as Director of Organic Research Centre

It has been announced that Lawrence Woodward is stepping down as Director of Organic Research Centre (ORC), the organisation he founded 30 years ago.  Lawrence has had a significant role in the success of the organic movement in the UK over those 30 years and there are few organisations within the movement he has not, at some point been involved with.


One being Organic Arable which he helped to form in 1999 and where he continues as a Director.


Lawrence has not always been kind to the organic sector and has often been an outspoken critic of practices or approaches which he sees as contrary to the principles he holds dear.   There is little doubt that he will remain working in the organic world in some guise in his new life outside ORC and will continue to annoy us and inspire us.  And whatever the future holds for Lawrence  it will be one which challenges us and keeps us all from resting on our laurels.

Some Cracking Upcoming Events

Before the hectic harvest season starts is the time to get off the farm and meet other organic producers, update yourself on the latest research and meet up with old organic friends or make some new ones.  There are two great events coming up which Organic Arable are glad to be supporting.


On 15th June Wakelyns Agroforestry has an open day.  Not only some excellent speakers but a chance to look at the innovative trials and developments Wakelyns are involved with.  Wakelyns is always inspirational and well worth the journey to the depths of the beautiful Suffolk countryside. For more information contact Oliver Crowley on 01488 658298 or click here.


On 8th July is the National Organic Cereals Event organised by Organic Farmers & Growers.  This again looks like an excellent event and Organic Arable are happy to be supporting this year's event.  We shall also be running a Moisture Meter Clinic which is your chance to get your moisture meter calibrated and certified prior to harvest.  Such a test would normally cost £25 minimum but is included in your ticket price so what's to lose?  Look forward to seeing you there.  Click here for more information.

Organic farms do help biodiversity -Times Online

It seems as if Professor Tim Benton Study spikes organic food environment claims - Times Online made some claims about this project which aren't shared by the rest of the researchers working on the project with him. Dr Bruce Pearce is one of these and he has shown surprise at the comments made by Prof. Benton Organic farms do help biodiversity -Times Online. Thank you Bruce. It is unfortunate that the Times chose to carry the story without referring to the study itself, others involved in producing the study or any of the other research which does show the biodiversity benefits that organic farming systems deliver.

It is not just in terms of biodiversity that organic farming provides benefits but across a range of environmental factors. For more details look at Defra's own study.

The Organic Market Contracts

The recently published Soil Association Organic Market Report tells us that the organic market has had a tough time.  Not a revelation for those involved in the sector as we are all finding times tough, but it is good to have some figures that back our hunches.

The scale of the decline in the bakery area was a surprise but as bakery is a late adoption product for organic consumers it should be no surprise it is one they drop quickly.  But why such a rapid decline?  Many "premium" conventional bakery or breakfast cereal products are similarly priced to organic equivalents so are these products also seeing significant declines?

Consumers do not have a "halfway house" for bakery products as they do for other foods (such as choosing a free-range chicken or pork product as an alternative to organic) and we assume they have not dropped organic for standard conventional ranges it seems they have moved away from organic without a significant (if any) price justification for doing so.

Therefore we in the organic sector have not done enough to show shoppers where the benefits of buying an organic bakery product lies.  We have not explained the biodiversity benefits organic grain production provides, the lower agrochemical pollution of watercourses that are inherent in organic systems.

We have hidden our light under a bushel and the merits of our organic products have been lost on the consumer and so in a time when they are told that organic is expensive and they should be seeking cheaper, rather than better, they have meekly agreed and gone back to conventional alternatives.

We cannot expect the existing bakers, or breakfast cereal producers to communicate to consumers for us as most of them are selling conventional products too.  A company which deals in both organic and conventional products does not worry whether it sells its organic range or its conventional one it makes a margin on both.  If it loses a sale to a rival brand it will act: if consumers move between its organic and conventional products it won't.

Within the organic sector we must learn from the lessons of this downturn and take more responsibility for ensuring that consumers truly understand the benefits of the organic products they are buying. By giving consumers strong clear messages about the benefits of organic products we will make them more resistant to changing their buying habits when perceptions are challenged as they have been recently.

Growing Organic Agriculture from Eastern Europe to Central Asia

Could UK organic grain production be set to come under further pressure from imports from low-cost production areas?  A meeting 14th April 2010 in Moldova will seek to promote organic production in Moldova, Ukraine and Armenia.

A previous report produced in 2007 concluded that "the region’s low use of synthetic fertilizers and pesticides and its availability of workers presented good prospects for the growth and export of organic food products to Western Europe".  Given the current poor infrastructure and so transport it is likely to be non-perishable products such as combinable crops that will be produced for the export market.

The import of organic grain covers a lack of domestic production however it is cannot continue be the longer term strategy for the organic sector in the UK as it is not desirable other than as an interim measure whilst domestic supply develops. 

Imported grain has a greater reliance upon finite resources than the use of domestic production due to the greater haulage, shipping and handling involved.

Organic Arable farming provides significant biodiversity benefits to the UK landscape and by importing grain we are effectively exporting these benefits.  It should clearly established that any increase in organic production is undertaken through the proper conversion of existing agricultural land and not the destruction of natural or semi-natural grasslands.  Because such areas have not been farmed and have not had agrochemicals applied should not mean they are suitable for immediate entry into an organic certification process.  

Organic farming systems in the UK are based upon a broader philosophy that the simple exclusion of agrochemicals and it is vital that these principles are upheld in any expansion of organic production proposed by these meetings.  If the products of these systems are to enter the EU market they should be fully equivalent to the EU regulation and adequately certified to maintain the integrity of our certification in the UK.

Do consumers really know about or support the importation of grain?  Should we in the organic sector not be seeking to localise food supply chains and move the point of production as close to the consumer as possible?

-- Press Releases April 2010 - Growing Organic Agriculture from Eastern Europe to Central Asia - United Nations Environment Programme (UNEP) --

New EU Organic Logo

After all the debate, competitions and polls we now know what the new EU organic logo will look like and our friends at Organic Farmers and Growers have produced this very useful guidance on using the logo.  As producers it is perhaps of passing rather than immediate interest but we can expect to start seeing it on our breakfast tables soon as it starts to appear on boxes of cereal and bottle of milk. New EU Organic Logo Labelling Guidance

How can the NFU better support the Organic Sector?

Written nearly a year ago 4 farmers are very positive about the organic market and their choice to farm organically.  Two of those interviewed are Organic Arable members (one of whom, John Pawsey, is a Director) which means we have access to the NFU through this group.  I'm sure Nick & John would be happy to pass on any views you might have about how the NFU could better serve you their organic members and it's good to know that two enthusiatic fellow organic farmers are sitting on this Board ensuring the NFU are getting relevant, informed information about our sector.

NFU Organic Issues Group -British Farmer & Grower