Efficiency in organic farming
Alvincz, József – Kolta,i Judit Petra
Keywords: organic farming, employed staff, gross production value, cost, efficiency
With the rising livings standards, healthy eating increasingly becomes a priority. At the same time, the surplus of agricultural products prompts farmers to seek ways to distinguish themselves from their competitors. Thus, a group of agricultural businesses can earn their entire or partial livelihood out of organic farming. The area of land used for organic farming, as well as the number of organic farms has significantly dropped since 2005. This is because a portion of the farmers joined various other integrated programmes, due to better conditions and higher aid amounts.
The different types of farms do not appear to be significantly different in terms of land size. This does not contradict the fact that as organic farms often apply more extensive farming practices, they are frequently larger in land size. The reverse of this causal relationship is also true. Our findings indicate that on average, organic farming required 7-27% more employees annually, per 100 ha agricultural land, in years 2006 and 2007. The costs of organic farming, on average, were 30-40% lower than the costs of traditional farming in the years and for the businesses covered by our survey. Due to the lower average rates of production and the gradual decrease in average sales prices, the net sales revenue for organic farms run as sole proprietorships or as partnerships was lower than for traditional farms, even though agricultural aid was intended to offset this deficit.
The profitability parameters of organic farms run as sole proprietorships improved as the farms used the existing grant opportunities, the demand for quality products grew, sales channels were created (marketplace for organic produce, direct sale by producers), and the weather was more favourable. On the other hand, organic farms run as partnerships turned a loss in 2006. This was mainly due to a reduction in net sales revenue.
In the current situation, a possible solution would be for organic farms to strengthen and improve their market position by forming vertical alliances and by establishing or expanding processing facilities to add more value to their products.