Ecological farming can be more profitable than conventional, says new report

A recent report by the government think tank France Stratégie argues the profitability of more environmentally friendly farms and proposes a review of the methods of allocating CAP subsidies to encourage a green transition in farming. EURACTIV France reports.

The report said greener farms were found to be both ecologically and economically viable, concluding that the so-called ‘agroecological’ model is “profitable in the medium-term” and organic farms are even more profitable than their conventional counterparts.

Agroecology is an integrated approach to farming whereby the study of ecological processes is applied to agricultural production systems.

Agroecological techniques encompass a range of nature-inspired practices such as crop diversification, cover cropping, and hedge planting.

In doing so, agroecological systems work to optimise the use of natural resources while reducing the need for synthetic inputs of pesticides, antibiotics and fertilisers as much as possible.

“Agroecology is complicated from a technical point of view,” Julien Fosse, one of the authors of the report, told EURACTIV France.

“It calls for agronomy and diversification practices. It also imposes, in a certain number of cases, variations in yields over a number of years that can be significant,” said Fosse.

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However, agroecology holds the potential to counter the major challenges in agriculture today, the report suggests.

“We tend to reduce climate change to drought,” said Fosse. “But many other problems will arise as a result. Viruses, bacteria and parasites will develop […] with milder winters, meaning fewer pests will thus be eradicated,” he added.

“By using hardier and more resistant varieties, by diversifying on-farm production, by strengthening the biological auxiliaries that facilitate the fight against this or that insect, by creating crop associations that will allow the combined growth of two plants that require less water, it is possible to improve ecological resilience,” Fosse emphasised.

Whether member states will take up this issue remains to be seen. However, in France, the term agroecology has already made its way into the political lexicon, with agriculture Minister Julien Denormandie announcing his support for an “agroecological transition”.

Agrifood agenda: CAP reform and organics uptake

With the EU’s new food policy launched this spring, policymakers will now turn their attention back to the long-delayed reform of the Common Agricultural Policy (CAP), the staple of the bloc’s farming industry and the biggest item in its budget.

Bio and economic performance

By dissecting economic data from scientific literature and simulating a farm model, researchers found that “agroecological farms generally have better medium-term economic results than conventional farms.”

This was also found to be true for organic farming.

The majority of the 41,600 farms and two million hectares currently under organic cultivation were found to be better off financially after switching to organic cultivation than their conventional counterparts, according to the think tank.

The model suggests that a farm that switched from conventional to organic farming would see its direct profit margin, excluding government support, increase by an average of 25% after the transition.

These figures vary from one sector to another, with the wine-growing sector found to benefit the most.

Based on data published by France’s National Institute for Statistics and Economic Studies (INSEE) in 2017, the report concludes that an organic winegrower can expect to obtain nearly €6,000 of gross operating surplus per hectare, excluding Common Agricultural Policy (CAP) subsidies, while conventional winegrowers can hope to gain just under €3,500.

This considerable difference can be attributed to “the selling price of organic products, which is much higher than for the conventional ones,” Fosse added.

Although market figures for the gardening and “dairy cattle” sectors are lower, organic production in these areas was also found to be more favourable.

Encouraging uptake

To encourage farmers to turn to greener agriculture, France Stratégie recommends that “public aid allocated to farms – particularly from the Common Agricultural Policy – should be proportionate to farmers’ efforts to reduce their impact on the environment.”

The think tank also suggests that a “bonus-malus” system be introduced, remunerating positive actions that help preserve biodiversity, while taxing negative approaches, such as the use of fertilisers and pesticides.

The taxes could then be reallocated “to finance the transition of farms”, according to the think-tank.

However, according to Pierre-Marie Aubert, researcher and coordinator of the European Agriculture Initiative at the Institute for Sustainable Development and International Relations (IDDRI), it is unlikely that agroecological labels and certifications will play a large role in this green transition.

This is because, in order to meet demanding standards, organic farming relies on a significant price difference compared to conventional farming.

However, if ‘agroecology’ becomes the norm, this price differential will no longer be justified.

“At present, we have a very segmented market, with low-end, high-end, niche products, etc. And everyone is doing pretty much the same,” according to Aubert.

“In this market context, labels and certifications are, therefore, not necessarily vectors of transition, but can, on the contrary, promote the status quo,” he added.

[Edited by Natasha Foote]

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