Economic analysis of conversion strategies for stockless organic production

In response to the Curry Report, the U.K. Government's Organic Action Plan aims to increase the area of organic production. In addition, Common Agricultural Policy (CAP) reform will provide an incentive for farmers to become more market-led and examine alternative production possibilities. However, the two-year conversion period represents a barrier to organic production. In a stockless system the typical conversion strategy is a red clover (Trifolium pratense L.) ryegrass (Lolium sp. L.) green manure, attracting both Area Aid Payments (AAP) and Organic Farming Scheme (OFS) subsidies. Six alternative strategies to this green manure were tested in a replicated randomized block field experiment. Gross margin analysis of the conversion strategies in the presence and absence of AAP and OFS payments are presented. Sensitivity analysis of crop yields and prices indicates the robustness of the gross margin analysis. Where contracts to supply red clover seed can be obtained, growing clover seed in year 1 of conversion followed by a clover green manure in year 2 provides the highest mean annual gross margin, measured over the two-year conversion period and the first organic wheat (Triticum aestivum L.) crop. In the absence of a clover seed contract the two-year red clover-ryegrass green manure provides the highest mean annual gross margin, and is therefore likely to remain a popular conversion strategy. This holds given the decoupling (absence) of AAPs due the enhanced yield of the first organic wheat crop compared with more exploitative conversion strategies. Other strategies that may be appropriate include oats (Avena sativa L.) followed by beans (Vicia faba L.), however a change in policy on acceptable organic conversion crops would be required to enable this strategy to be considered.