Thursday, January 21, 2010

Converting to Organic Farming: the cold hard cash

update:
for a list of the Teagasc organic training courses, which start this week, click here

Despite the recession, despite having 20 billion less to play with, both the grant aid and indeed the direct payments for the Organic Farming Scheme have been re-introduced.

What's equally significant is the fact that they have been introduced at the same levels they were at previously.

In the context of government coffers being especially low, unemployment being especially high, and a deflationary economy for almost 12 months, this is a major coup for the organic sector.

(Photo by Stephen Mosel)

The rates of pay mean that a farmer with the Irish average of 32 hectares receives nearly �7000 for the first two years of conversion. After that, the rate halves.

The specific rates of payment are as follows: �212 per hectare (ha) in conversion, from 3 to 55 ha, and a further �30 per ha for every ha above 55 ha claimed.

Full organic status: �106 per ha, from 3 to 55 ha, with �15 per ha for every ha above 55 claimed.

Horticultural payments start at �283 per ha for in conversion holdings under 6ha, and �142 per ha for full organic status.

The rates are the same as non-horticultural payments after this i.e. �212 per ha up to 55 ha and so on.

In expectation of a surge of interest, the Department has laid down some specific tasks for the prospective organic farmer.

Farmers and growers new to the Scheme must sign a five year contract, do an approved Teagasc course and prepare a business plan.

"At a time when funds are limited and we have to ensure value for money," Minister Sargent, minister with responsibility for organic farming, said."These changes in the Scheme are designed to ensure that the farmers joining it are those who have most to offer to the growth of the organic sector so that it can meet the increasing demand from consumers for organic produce."

Not only that, reading the details of the Departmental information on the Organic Farming Scheme, it is clear that if the scheme is over subscribed, the Department will select the most promising candidates only.

In other words, there is no guarantee that just because you want to go organic, the Department will allow you.

After the closing date for applications, 15 May 2010, decisions will be made �on the number of applicants that will be accepted into the scheme� according to the Department.

Grant aid has also been re-introduced. This had been suspended for a longer period of time, due to over subscription. It had proved especially popular, and indeed was growing in popularity up to its July 2009 suspension.

The number of successful applications increased from 82 in 2007 to 123 in 2009, an increase of 50%.

Expenditure under the schemes went from �594,000 in 2007 to �1.5 million in 2009, an increase of over 150%.

�176,845 (29.7%) went to two organic processors and �417,155 (70.3%) went to 80 organic producers, from the 2007 total of �594,000 in grant aid to registered organic operators.

In 2009, the Organic Unit's grant aid payments of �1,500,000 was broken down between payment of �873,060 (58.2%) to 7 organic processors and �626,940 (41.8%) to a total of 116 organic producers.

The on-farm scheme provides grant aid of 40% of the cost up to a maximum grant of �60,000. For off-farm investments, the maximum grant is �500,000.

In announcing the return of the Organic Farming Scheme, the minister also reaffirmed his commitment to the 5% land area organic farming target for 2012.

With limited government coffers, the reaffirmation of the 5% target in January 2010 is significant. The target came at the beginning of the current government term in 2007, when the economic landscape could not have been different.

The opportunity would have been there, with declining state revenues and a deep recession, to claim inability to pay for 5% of farmland to be organic at present. Instead, the target was reaffirmed.

All told, these commitments auger well for the organic sector.

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