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Understanding the Costs and Risks of Conversion to Organic Production Systems

MAF Technical Paper No. 2002/1

Prepared for MAF Policy

ISBN No: 0-478-07656-8
ISSN No: 1171-4662

January 2002

Contents

• Project Team
• Acknowledgements
• Disclaimer
• Executive Summary
• 1. Introduction
• 2. Method
  • 2.1 Industry workshops
  • 2.2 Output of workshops
  • 2.3 Financial analysis
  • Output of analysis
• 3. Results & Analysis
  • 3.1 Sheep & beef sector
    • 3.1.1.Prioritisation of issues
    • 3.1.2 Hawkes Bay summer moist sheep and beef model
    • 3.1.3 Financial outcomes from the modelling
    • 3.1.4 Comparison with other sheep and beef systems
    • 3.1.5 Risks and the impact of risk on financial performance
    • 3.2 Deer
      • 3.2.1 Prioritisation of issues
      • 3.2.2 South Island deer model
      • 3.2.3 Assumptions for conversion to organic production
      • 3.2.4 Financial outcomes from the organic model
      • 3.2.5 Comparison with other deer systems
      • 3.2.6 Risks and the impact of risk on financial performance
    • 3.3 Arable
      • 3.3.1 Prioritisation of issues
      • 3.3.2 Canterbury arable farming model
      • 3.3.3 Financial outcomes from the model
      • 3.3.4 Comparison with other arable systems
      • 3.3.5 Risks and the impact of risk on financial performance
    • 3.4 Dairying
      • 3.4.1 Prioritisation of issues
      • 3.4.2 Waikato/Bay of Plenty dairy farming model
      • 3.4.3 Assumptions for conversion to organic production
      • 3.4.4 Financial outcomes from the model
      • 3.4.5 Comparison with other dairy systems
      • 3.4.6 Risks and the impact of risk on financial performance
    • 3.5 Similarities & differences between sectors
      • 3.5.1 Technical challenges
      • 3.5.2 Infrastructure and industry
    • 3.6 Research gaps
      • 3.6.1 Soils: fertility, nutrients, biological and physical management
      • 3.6.2 Gastro-intestinal parasites
      • 3.6.3 Lungworm
      • 3.6.4 Mastitis
      • 3.6.5 Weeds
      • 3.6.6 Systems function and management
      • 3.6.7 Skills, knowledge and access to information
    • 3.7 Environmental impact (implications for widespread adoption)
      • 3.7.1 Infrastructure and resources
      • 3.7.2 Production systems
      • 3.7.3 Environmental impact
• 4. Conclusions
• 5. References
• PDF Version

Tables

• Table 1 Technical constraints identified by the Focus Group, and their relative importance to conversion to organic sheep and beef production
• Table 2 Infrastructure and industry – Constraints emphasised by the Focus Group, and their relative importance in conversions to organic sheep and beef production.
• Table 3 Differences in stock on hand
• Table 4 Other differences from the MAF base model
• Table 5 Differences in cost structure between the MAF base model and the organic production model
• Table 6 Financial outcome for the MAF base model and the organic farming systems under various scenarios
• Table 7 Constraints and their relative importance to conversion to organic deer production, as identified by the Focus Group, are listed below
• Table 8 Model in summary 1999/2000
• Table 9 Key parameters of the Model
• Table 10 Assumptions for conversion to organic production
• Table 11 Key financial indicators of the MAF base and organic models
• Table 12 Technical constraints identified by the Focus Group, and their relative importance in conversion to organic arable production
• Table 13 Infrastructure and industry - Constraints identified by the Focus Group, and their relative importance in conversion to organic arable production
• Table 14 Area of crop grown (ha)
• Table 15 Prices for conventional and organic crops
• Table 16 Summary of the livestock policy on the MAF base and organic arable systems
• Table 17 Assumptions for conversion to organic production
• Table 18 Key financial indicators of the MAF base and organic models
• Table 19 Constraints identified by the focus group and their relative importance to conversion to organic dairy production
• Table 20 Key parameters of the model
• Table 21 Assumptions for conversion to organic production
• Table 22 Gross farm revenue
• Table 23 Infrastructure, resources: implications of widespread adoption of organic farming
• Table 24 Production systems: implications of widespread adoption of organic farming
• Table 25 Environment: implications of widespread adoption of organic farming

Figures

• Figure 1 The effect of premium and the percentage of lambs* finished on economic farm surplus (EFS) in an organic sheep and beef farming system
• Figure 2 Relative importance of each technical issue for the four farming systems. The further the shaded area reaches towards the end of the arm, the greater the importance of the issue
• Figure 3 Relative importance of each infrastructure and industry issue for the four farming systems. The further the shaded area reaches towards the end of the arm, the greater the importance of the issue

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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