Change Towards Organic Broadacre Agriculture S22
Eco Landuse Systems, 3 Ramage Place, Flynn, ACT, 2615, Australia
|With farmers in many countries moving towards
organic agriculture, questions arise about the effects on agriculture in general. In this
paper the aim is to analyse the effects of a move toward organic agriculture, using
Australia as an example. Aspects of farming examined include: input use (such as
fertilisers, pesticides, fuel, land); total production of different enterprises; and
returns to individual producers and the total agricultural sector.
To assess the impact of the widespread adoption of organic methods, Australian broadacre agriculture is divided into several regions. A representation of a conventionally managed farm in different regions in the wheat-sheep zone is constructed from published data. An average, as opposedto a typical farm, is modelled (for the years 1991-92 to 1993-94). At present only one state (New South Wales) is included, although it is the intention to include all states at a later stage. A series of linear programming models are employed. Using data from a survey of organic farms, models of organic farms corresponding to the conventionalfarm models were constructed for each region. The organic farm models reflected differences in input use, rotations, yields and premium prices. Changes in output are directly related to the survey-based estimates for rotational requirements and yield performance. As a key parameter, a range of values for price responsiveness to changing quantities reduced (priceelasticities of demand) is included.
The results indicate that, as an increasing proportion of farmers adopt organic agricultural methods, input use and output changes. Input use decreases depending on the input, with a large drop in pesticide use, and lesser effects on labour and fuel. Some of the demand for fertilisers used in conventional agriculture changes to nutrients allowed in organic farming. With a change of 30 per cent of farmers towards organic farming, there will be a decrease in area cropped of almost 20 per cent. This reflects the greater use of pasture in organic rotations. With negligible adoption rates of organic management practices, the net farm cash income for organic farmers is 12 per cent below that of conventional farmers. However, when 30 per cent of farmers are organic this increases to just under 20 per cent. This reflects the lower premium available when the organic market is flooded. On a regional level, the difference between the incomes in the two situations is 3.4 per cent. The increased income of the many conventional farmers due to a slight increase in some of the product prices is partly responsible for this low figure. In absolute terms this amounts to a cost of $32.3 million in New South Wales. This cost to the sector from a move to organic farming should be considered in the light of comparative non-cash costs (some of which, such as depreciation of machinery and equipment, was lower on the surveyed organic than conventional farms), and negative environmental externalities. The key implication of the study so far is that the widespread adoption oforganic farming would appear to involve only a relatively minor loss in income, especially on a regional level. To confirm this, more research is required to assess the responsiveness of organic prices to increases inproduction.
Wynen, E. (1989), Sustainable and Conventional Agriculture: An EconomicAnalysis of Australian Cereal-Livestock Farming. PhD-thesis, La Trobe University.
The relevant data are also available in the following publication: Wynen (1990), 'Sustainable and Conventional Agriculture in South-EasternAustralia: A Comparison', Economics Research Report, No. 90.1, School of Economics and Commerce, La Trobe University, Bundoora, 3083, Australia.
(Note: A final report is to be published under the title: 'Impact onAustralian Broadacre Agriculture of Widespread Adoption of OrganicFarming', and will be obtainable from the Centre for Resource and Environmental Studies, Australian National University, Canberra, 0200,Australia.) Dr Els Wynen CAMBIA Center for the Application of Molecular Biology to International Agriculture GPO Box 3200 Canberra ACT 2601, Australia tel (office): +61 6 246 5302, fax (office): +61 6 2465303 Internet: email@example.com