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Economic viability of organic farming in Germany under changed agricultural policy framework conditions

Project


Project code: 2806OE224
Contract period: 01.10.2007 - 31.12.2010
Budget: 186,132 Euro
Purpose of research: Applied research

Organic farming in Europe shows a very dynamic development. In the past 15 years, the organically farmed land area in Europe increased more than ten-fold. Whether in the future a significantly larger number of farms will convert to organic farming so that the politically set goals can be achieved depends above all on the economic viability of organic farming. The Luxemburg Reform changes the agricultural policy framework for organic farms dramatically. In addition, the level of the area based organic payments is reduced in most federal states after 2007. It can be assumed that organic farming support will continue to be discussed controversially. In addition, the future of first pillar payments is increasingly discussed, too (among other things, the topic of increased modulation). Against the background of serious changes in the framework conditions of organic farming, the project aims at calculating the impact of agricultural policy changes on income and evaluating alternative support policies, under the assumption of different scenarios. The quantitative analyses of the reform impacts and different support schemes are based on data of the German Farm Accountancy Data Network. The modelling of the reform impacts are carried out with the comparative-static programming model EU FARMIS. Additionally, organic farmers will be surveyed on the economic situation of the farm, the effects of the agricultural reform and the importance of the direct payments (including organic payments) to augment the modelling. Through a working group accompanying the research, comprised of responsible national and state government representatives as well as diverse actors in the organic food industry, a regular discussion on the support policy shall be initiated.

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