Can Wales be 30% organic by 2030?

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1 Can Wales be 30% organic by 2030? 1

2 Purpose of this paper The primary purpose of this paper is to argue: 1. That the Welsh Government needs to reinstate targets for the growth of organic farming as part of its response to the challenge of leaving the European Union. 2. That Wales has an agricultural economy well placed to increase land under organic farming. 3. That an increase in organic farming can be a significant part of delivering the ambition of public goods set out in the Welsh Government s consultation Brexit and our land. 4. That organic farming can meet many of our objectives under the Well-being of Future Generations Act. I do not rehearse the many arguments in favour of organic farming but examine it as a policy response to the need to respond creatively to the challenges of leaving the European Union. The need for an organic target of 30% by 2030 Organic farming is in decline in Wales. Land under organic farming or conversion peaked at 125,400 hectares in 2009 but has declined 35% since then. There are a number of reasons for this, the impact of the credit crunch and wage deflation since then has undoubtedly depressed the market, but also the political attention moved on to other land issues such as climate change. It is curious however that during a similar period organic farming in the rest of the EU has grown. Between 2012 and 2016 land under organic farming increased by almost a fifth and is expected to continue to grow. It is time however to re-evaluate the future of organic farming in Wales. We are faced with a major shake-up of farm support and investment following the decision to leave the European Union. Moving down the value chain, for a predominately dairy and red meat grassland farm economy, would be disastrous for us. Other countries can produce milk, beef and lamb cheaper than Wales. Indeed, there is a very real risk that the UK government will open up our markets to such produce and undercut our own producers. Our raison d etre is to keep or even enhance our high welfare and environmental standards. This wish is reflected broadly in the Welsh Government s consultation on Brexit and our land. That consultation proposes paying farmers only for public goods. This does not include food production. Plaid Cymru is of the view that the production of wholesome, sustainable food for our citizens can be a public good in itself. If done correctly. I also believe that organic farming is something which Wales can now specialise in in order to meet a growth market and provide a viable future for our farmers rather than a free market, low welfare, low standards message of despair. It is clear that our farming, food production and marketing infrastructure is primarily designed to meet the needs of our nearest neighbours. There is increasing demand there for organic farming. We have a Welsh Government ambition to marry sustainable land use to food production. A considerable effort to expand organic farming in Wales would meet this aim and prove a viable future for our family farms. I propose that a target of 30% of Welsh farm land under organic production by 2030 would be both realistic and appropriate for the challenges that face us. I welcome comments and responses. 2

3 What are the current organic targets in Wales? In 1999 a target was set by the Welsh Assembly to have 10% of farmland in Wales either certified as organic, or under active conversion to organic by 2005 (Organic Action Plan, 1999). This target was not reached, with only 3.8% of land being organic in 2003 (although this could still be considered an achievement if we consider that in 1998 only 0.3% of Welsh farmland was organic). The second Organic Action Plan for Wales was an attempt to implement lessons learnt from the first plan, for the years , this time with a target of 10-15% of Welsh farmland certified organic, or under conversion. This target was also not reached (the highest percentage achieved was 6.75% in 2009, before the figures started to go into decline). The Organic Action Plans were developed and managed by the now defunct Welsh Development Agency. As the WDA met its demise in 2006, the second OAP never reached report stage, so conclusions were never published and since 2010 when the second OAP came to an end, the Welsh Government has had no targets for organic farmland in Wales. In 2010 the Organic Farming Conversion Scheme 2011 was brought in, but grants were much lower than the level of the OAP s, and there was no target for conversions. During the five year period in which the OFCS was extant, organic farmland in Wales decreased from 122,700 ha (6.6%) to 82,900 ha (4.5%). The years of greatest decline were 2013 and 2015, though the introduction of the Glastir Organic scheme does seem to have arrested that decline. Between 2014 and 2016 it was possible to apply for the Glastir Organic scheme, a five year contract available for farmers wishing to convert and maintain land to organic standards, though the Welsh Government attached no targets for conversions or maintenance. Farmers were paid per hectare to convert land to organic, and per hectare to maintain the land once converted. Three categories of payment existed, depending on the usage of the land, with land suitable for arable receiving the greatest amount, and unenclosed uplands and coastal marsh receiving the least. Unlike the Pillar 1 and Pillar 2 payments available on the BSP, where money is awarded for owning land, payment of the Glastir funds depended on being an active farmer. It appears that there are currently no subsidies offered by the Welsh Government to incentivise conversion to, or maintenance of, organic land, or the supply of organic produce. Clearly had the aims of the earlier organic conversion programmes been met, Wales would currently have a minimum of 15% of land under organic farming and presumably would have been moving even further along that trajectory. What is the current state of organic farming in Wales? Figures released by DEFRA for 2017 show that out of a total agricultural area of 1,687,000 ha, Wales had 78,800 ha certified organic (4.7%) and 7,300 ha under conversion (0.4%), giving a combined figure of 86,100 ha (5.1%). This is an increase over the 2016 figures of 81,500 ha (4.9%). Given that the Glastir Organic scheme has accepted no new applications since November 2016, there appears to be no funding available to help farmers who want to convert to organic. 3

4 How does Wales fare in comparison to other nations? In 2017 Wales had a higher percentage of organic land than any other nation in the UK, 5.1% compared to the UK average of 2.9%. The upturn in organic farming across the UK which is evidenced in the DEFRA figures (when comparing 2017 to 2016) is largely the responsibility of Wales, where organic farmland increased by 4600 ha. In England, the increase was 3800 ha, Scotland gained 1100 ha of organic land, and Northern Ireland remained unchanged. Although Wales compares well in the UK, it does not compare well to other EU nations. Using figures from 2016, the UK is 25th of 28 nations, and taking Wales s own score into consideration would place us roughly the same level as Poland in 20th. Eighteen EU nations had over 5% of their Utilised Agricultural Area certified organic, seven nations over 10%, and Austria leading the way with 21% of their UAA certified organic. The 2016 average across the EU was 6.7%, with organic areas growing by almost 20% between 2012 and 2016, when Wales figures were in decline. It appears that new targets for organic conversions are few. Germany has a target of 20% of UAA organic by 2030 (currently around 7%, 13th in the EU). Austria hit its target of 20% by 2010, but has no new target to meet. France was aiming to double organic farmland from 1 million hectares in 2012 to 2 million hectares by the end of 2017, but by 2016 only 1.5 million hectares were organic, and it seems likely that the target was missed. It would appear that Wales could take advantage of the growth in the EU organic market with hard, ambitious targets and a marketing campaign that plays on our strengths as a sustainable farming nation with a fantastic environmental and welfare story. What would the additional benefits be? Farm incomes in Wales are generally low. Total farm income at 102 per hectare is the lowest in the UK. We are the most exposed to trade barriers or tariffs in the event that the UK does not remain, de facto, in the customs union and single market. There is evidence that organic farming can provide additional income. The Organic Research Centre s analysis of farm income concluded: the analysis of 2014/15 data showed that organic farms achieved higher or similar profitability to comparable conventional farms, and organic LFA Cattle & Sheep farms profitability was statistically higher than conventional farms Organic production may be particularly appropriate for upland, mainly sheep, farming in Wales. This is the sector most exposed to the threats of Brexit but also a sector that has great potential to achieve the wider public goods advocated by Welsh Government such as landscape, woodland creation, water quality and biodiversity. Hill farming is capital intensive and has low asset turns. Adding value is the best way to address this. Organic upland production would probably mean lower volumes, but this could actually prove as, if not more, profitable. Innovative work by Chris Clark of Nethergill, on similar upland farms in England, has shown that at even around 60% of current stocking rates the actual profitability of the farm remains the same. In such a scenario, organic production which could also add to the selling price, looks attractive. But the capital intensive costs would need support from government, which is precisely where Brexit and our land can be directed. 4

5 Obstacles Both of the OAPs issued from failed to meet their objectives. If we want to set realistic targets for the future, we need to understand the reasons for this failure. Though Brexit does muddy the waters. One of the main problems encountered during the first OAP was the oversupply of organic products in the marketplace, particularly dairy. Several methods were proposed in the second OAP for alleviating this oversupply. Firstly, there was to be an increased focus on marketing organic Welsh produce, both inside and outside of Wales. As supply was outstripping demand, this was seen as a key method of redressing the balance. It was also believed that alongside improved marketing, better education of the public regarding the benefits of organic produce was required to ensure a greater demand. How can the target be achieved? An ambitious target of 30% by 2030 would entail more than this however. Primarily it would require significant investment by the Welsh Government. Plaid Cymru is making the case for the continuation of some basic income for active farmers. This is not currently proposed in Brexit and our land but the other proposals in the consultation do provide a route for organic conversion. A new capital fund targeted at organic conversion would be required. This could be a combination of the resilience scheme proposed in Brexit and our land and soft capital investment underpinned by the Welsh Government s financial transaction capital. It would need a strong marketing campaign, primarily in our previous markets in the EU (Welsh lamb is still here and now it s even better ). It would also mean a greater take up of organic produce within Wales and the UK. Procurement, such as school and hospital meals, is key to this as well as using organics as the sustainable face of Welsh food for visitors and hospitality. There needs therefore to be a strategic marketing campaign aimed at selling organic Welsh produce abroad and in the rest of the UK. The UK was the third biggest market for organic produce in 2015, which means that Wales could still find a large, accessible market for organic goods, even post-brexit. The marketing strategy should not only be for the purpose of exporting organic produce, but also as a means to encourage organic food-tourism. The same applies within Wales, but there should also be policies in Wales allowing for greater education about what benefits organic farming can deliver. The education programme will need to be coordinated and jointly delivered by departments responsible for agriculture and rural development, economic development, education and training, environment, food, health, public administration, and tourism. Education should focus on the environmental, health, and animal welfare benefits of organic farming. Furthermore, the Welsh Government could, outwith EU rules, encourage or require public bodies in Wales to source a certain proportion of its food from Welsh organic producers. This would guarantee a constant market for Welsh organic produce from the entire public sector. The French government for example put a requirement in place in 2013 that the public sector had to source 20% of its food organically as a way to hit its target of doubling organics before Such a circular approach to food, nutrition, health and sustainability would meet the objectives set out in the Well-being of Future Generations Act. 5

6 Further reading Welsh Organic Food Industry Working Group (1999). Welsh Organic Food Sector: A Strategic Action Plan. Available at Welsh Development Agency (2004). Second Organic Action Plan for Wales Available at Welsh Development Agency (2003). Organic Farming in Wales Available at org/10811/1/5yrcompeng.pdf Research Institute of Organic Agriculture (2017) Organic Farming and Market Development in Europe and the European Union. Available at Institute of Organic Agriculture (2016). Organic In Europe: Prospects and Developments. Available at DEFRA (2018). Organic Farming Statistics Available at government/uploads/system/uploads/attachment_data/file/707613/organics-statsnotice-17may18.pdf DEFRA (2017). Organic Farming Statistics Available at government/uploads/system/uploads/attachment_data/file/614552/organics-statsnotice-18may17.pdf 6