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Dependency of organic farms on direct payments in selected EU member states: Today and tomorrow

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  • Offermann, Frank
  • Nieberg, Hiltrud
  • Zander, Katrin

Abstract

This paper examines the development of the role of government support in the financial situation of organic farms in selected Western and Eastern European countries, contrasting dependency on direct payments with that of conventional farms and assessing the impact of foreseeable changes in the political and economic environment. The results show that direct payments play an important role in the financial viability of organic farms in both Western and Eastern European countries. The level of specific support for organic farming is put into perspective, as other support payments and market returns contribute larger shares to total farm revenue in all the countries analysed. Modelling analyses show that support payments will continue to play an important role in the profitability of organic farms in Western Europe after implementation of the 2003 reform of Common Agricultural Policy in the EU. For organic farmers in Eastern European countries, the importance of support payments increases strongly with EU accession, as first pillar payments are introduced and environmental payments are expanded significantly.

Suggested Citation

  • Offermann, Frank & Nieberg, Hiltrud & Zander, Katrin, 2009. "Dependency of organic farms on direct payments in selected EU member states: Today and tomorrow," Food Policy, Elsevier, vol. 34(3), pages 273-279, June.
    • Handle: RePEc:eee:jfpoli:v:34:y:2009:i:3:p:273-279
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    References listed on IDEAS

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    1. Stephan Hubertus Gay & Frank Offermann, 2006. "Comparing support for organic and conventional farming in the European Union using an adjusted Producer Support Estimate," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 33(1), pages 31-48, March.
    2. Harvey, David R., 2003. "Policy Dependency And Reform: Economic Gains Versus Political Pains," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25865, International Association of Agricultural Economists.
    3. Brosig, Stephan & Hockmann, Heinrich (ed.), 2005. "How effective is the invisible hand? Agricultural and food markets in Central and Eastern Europe," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 31, number 93018, September.
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