Introducción

advantage for organic farming with respect to conventional and integrated farming as well.

The implementation of the RDP in Marche region has increased the level of support for organic farming with respect to the previous Council Regulation (EC) 2078/92 regime, with the exception of sunflower and fodder crops (Table 5-30). The lower premium for fodder crops is

justified by the necessity to correct the fact that in Italy more than 50% of organic land was dedicated to pastures and fodder crops, even if no livestock was present on farm. For sunflower the reason why premiums have been reduced could not be identified.

Table 5-30: Premiums for organic farming before and after the implementation of Marche RDP (regional averages €/ha)

Crop 2078/92 1257/99 1257/99 / 2078/92 Cereals excluding Maize 185 188 2%

Maize 185 235 27%

Proteins 275 393 43%

Sunflower 185 122 -34%

Horticultural 275 560 103%

Alternated forage (for rotation)1 _{185 139 -25%}

Meadows and pastures1 _{275 26 -91%}

Fruits 671 780 16%

Viticulture 568 758 33%

Olive 330 584 77%

1 _{data do not consider livestock farms}

Source: Zanoli (2002)

Though organic farming is receiving an increasing specific support in RDP, it must be noticed that if we compare organic support with the estimated income loss due to the switch from conventional to organic farming, in some cases premiums can not be considered a sufficient compensation. Table 5-31 shows the results of a simulation of the effects in terms of income per hectare of conversion to organic, based on FADN data for representative conventional and organic farms.

Table 5-31: Impact of conversion on revenues of farms in Marche (1999)

Crop Estimated income loss due to conversion to organic without org. payments (€/ha)

Relative advantage organic /conventional (€/ha) including organic payments Cereals excluding Maize 145 43

Maize 196 39

Proteins 369 24

Sunflower 78 44

Horticultural 2,615 -2,055

Alternated forage (for rotation)1 _{129 10}

Meadows and pastures1 _{10 15}

Fruits 698 82

Viticulture 868 -110

Olive 698 -115

1 _{data do not consider livestock farms}

108

Though the organic sample is very small and not representative, results are nevertheless interesting. In particular, organic vegetables and fruit (including wine) seem still to receive insufficient compensation, though they represent crops whose demand is higher than supply. Furthermore, they are crops that could represent an interesting option for the

agricultural sector of Marche, given the characteristics of the territory and the presence of consolidated wine production. The insufficient compensation under RDP for horticulture crops is determined by the ceilings that Regione Marche has in fixing the payments: organic fruit production receive the highest possible payment, and a further increase would be available only through government aids.

A further investigation based on “2002 FADN Database for Monitoring” shows a comparison of the overall support (i.e. total CAP and RDP payments) between organic and non organic farms (Table 5-32); note that non organic farms also include farms who receive payments for Sub- measure F1, i.e. agri-environmental measures for lower impact and integrated farming.

Table 5-32: Average total payment level for organic and non organic FADN farms in Marche, year 2002

Description of farms uptake of organic conversion Total payments (€) per farm Total payments (€) per ha Total payments as % of Gross Income Average total payments as % of Net Income Average RDP payments as % of Net Income Non organic 8,348 336 32% 63% 4%

Totally or partially organic

and in conversion 15,036 481 39% 69% 23% Of which:

Partially organic, in

conversion 17,862 678 54% 93% 43% Partially organic, converted 16,589 391 39% 74% 16%

Partially organic converted

and in conversion 17,733 426 34% 56% 9% Totally organic, converted 7,960 429 28% 53% 22%

Source: INEA (2003)

Though the FADN database is not statistically representative, and covers only 88 organic farms, both converted and in conversion, the results show that organic farms receive on average higher per hectare total payments than non organic farms, with the exception of the category of totally organic that have still a part of UAA in conversion. It is also to point out that fully converted organic farms, despite the higher level of per hectare payment, show an incidence of payments with respect to gross farm income that is lower than non organic farms, due to the considerably higher gross income they obtain. Also, the share of net

income due to RDP payment is considerably higher. Note that for non organic farms RDP payments cover just 4% of net income vs. 23% of organic farms, showing again the favourite treatment of organic farming in the Marche accompanying measures regulation.

A further analysis limited to arable crops due to lack of more general data shows how CAP payments and RDP subsidies for organic crop may influence organic and conventional “average” farm in Marche. In Table 5-33 payments for the average Marche’s organic farm refer to the highest available CAP payments and payments for maintenance of organic farming, (i. e. payments referring to plain and hill areas) and are

compared with the maximum CAP payments for the same areas available for the average Marche’s conventional farm. Note that data refer only to basic per hectare payments, hence excluding both possible integrations coming from the application of the non productive investments

payments for organic farms (see Table 5-33), extra payments for specific farm location, and all the other possible payments RDP measures payments, which of course can be considered only case-specifically. Also, the unavailability of data on geographical farms location does not allow to consider the effects of LFA payments.

Table 5-33: Maximum average payments for conventional and organic “average” farm: arable crops

Average Organic Farm Average conv. farm CAP

payments Organic payments (RDP) Total CAP Payments Durum wheat 128 107 235 520 Wheat 2.055 696 2.751 348 Spelt 25 21 45 - Barley 168 141 309 124 Rye 42 35 78 13 Maize 152 77 229 120 Industrial crops 408 152 560 335 Fodder crops 2.351 1.969 4.319 900 Total payment per farm 5.327 3.197 8.525 2.360 Total per ha 352 211 564 299 Source: Gambelli (2003) based on ISTA data

Data show a total average payment per farm for arable crops

considerably higher for the organic case: this is due both to scale factors (the average farm size is 15 ha for organic and 8 for conventional) and to structural factors. In fact, the different land use structure, strongly characterised by durum wheat production in the organic farm

110

determines high payments due to durum wheat extra payments of 344 /ha. This aspect is confirmed by per hectare payments that are higher for organic also at the CAP payment level. The difference of course increase when considering the organic payment level, that take the difference with respect to conventional per hectare payment to 265 €.

5.5.3

Conclusions and recommendations

5.5.3.1 Relative attractiveness of Marche Rural Development Plan measures for