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Support for Organic Farming

Total Number of Organic Farmers in Scotland

2.1 The figures in paragraphs 2.3 to 2.12 below, and Tables 2 to 5, refer to land and agreements in the Organic Aid Scheme ( OAS). The statistics in the following paragraph reflect the total number of organic farmers in Scotland including those outwith the OAS. The figures are compiled by Defra and based on certifying bodies' membership and inspections.

2.2 As at 1 January 2006 there were 595 producers and 197 processors and/or importers in Scotland, which is a slight decrease in producers, but increase in processors and importers since the publication of the last Organic Annual Report. The land in conversion is 16,224 hectares and the fully organic land is 231,206 hectares. The total of in conversion and fully organic land in Scotland has decreased by over 100,000 hectares on the previous year and this is largely due to a number of large hill farmers completing their OAS agreements and choosing to cease organic production due to lack of market premium and increased costs. It is worth noting, however, that the amount of land in conversion has marginally increased and this would have increased further through 2006 as applications under the OAS 2006 received approval. Also, Scotland has nearly as much land being farmed organically as the whole of England, with some 4.5% of agricultural land in Scotland being farmed organically, compared with 3% in England, and a UK average of 3.6%.

Changes to the Organic Aid Scheme

2.3 The payment rates for all agri-environment schemes including the OAS were reviewed following the recent CAP Reform. The review was necessary to avoid double funding, as a number of the agri-environment scheme payment rates included an element to compensate for CAP subsidy foregone as a result of undertaking the agri-environment scheme management. The review also gave an opportunity to assess the payment rates to ensure they continued to reflect the benefits derived from organic farming and provided the right level of support and encouragement to farmers.

2.4 The revised payment rates came into force on 23 December 2005 and these increases apply to payments due in 2006 and onwards for all scheme applicants who joined the scheme in 2003 or later. The revised rates, shown in Table 1, were mostly increased to reflect the costs involved in organic farming and improve support available. These increases were as much as fourfold in the maintenance scheme with some rates increasing from £14 per hectare per annum to £60 per hectare per annum.

2.5 Another change that was introduced for the 2006 application round was the eligibility of applicants with less than five years to run on their lease. Previously applicants had to have responsibility for, and control over, agricultural production on the land included in the application form for the full five years of the agreement. As of 2006, where the tenancy agreement or management contract has less than five years to run, but is for at least 365 days, an application is eligible providing the owner and applicant jointly assume the obligations of the agreement.

TABLE 1: THE ORGANIC AID SCHEME RATES AS OF 23 DECEMBER 2005

Number of Organic Aid Scheme Agreements in Place

2.6 The number of OAS agreements increased substantially in the period between
31 March 1999 and 31 March 2003, with a large number of hill farmers joining the scheme at this time. The reduced number of agreements in 2005 and 2006 reflects the majority of these producers reaching the end of their five-year agreements.

2.7 Detail of the number of agreements in force each year is given in Table 2 below. In August 2006 the ranking thresholds were announced for the 2006 application round, and a further 162 applications were successful (not shown in Table 2), which will increase the total number of agreements to 554.

TABLE 2: NUMBER OF ORGANIC AID SCHEME AGREEMENTS IN FORCE AS AT 31 MARCH EACH YEAR

¹ This includes 384 Conversion agreements and 69 Maintenance agreements.
² This figure is from 31 August 06 to take account of the approvals for the 2005 applicants which were delayed due to the payment rate review. It includes 276 Conversion agreements and 108 Maintenance agreements (it does not include approvals for the 2006 application round - see para 2.7).

Expenditure

2.8 Expenditure on the OAS rose from £1.2 million in 1999-2000 to £5.5 million in 2002-03. Expenditure for 2005-06 was £2.5 million. As in Table 2, this pattern of expenditure reflects the large number of farmers who joined the scheme between 1999 and 2003, many of whom finished their five-year Organic Aid Scheme agreements in 2004 and 2005, the front loading of payment rates in years 1 and 2, along with the low level of applications from 2002 to 2004. The recent increases in payment rates will reflect in the annual expenditure but due to the nature of the scheme this will take a couple of years to feed into these figures. Expenditure for 2006-07 is predicted to be about £3.5 million.

TABLE 3: EXPENDITURE ON THE ORGANIC AID SCHEME AS AT 31 MARCH EACH YEAR (£k)

Land Covered by the Organic Aid Scheme

2.9 Table 4 details the hectares under agreement at each year. Approvals for the 2006 scheme were issued from September 2006 and, providing all the applications go ahead as scheduled, the estimate of land covered by the conversion and maintenance scheme by these applications is 78,170 hectares. This will give an estimated total hectarage under the scheme of 204,916, split into 146,674 hectares rough grazing, 28,044 hectares improved grassland, 28,433 hectares arable and 1,765 hectares fruit and vegetable.

2.10 Changes introduced to the scheme in 2004 were targeted towards attracting low ground conversion, with a view to these areas comprising 30% of Scotland's organic area by 2007. The 2005 and 2006 figures demonstrate a reduction in land covered by the scheme. This reflects a number of farmers leaving the scheme (but not necessarily ceasing organic farming) after completing their five-year OAS conversion agreements. The proportion of good quality land, based on the estimated figures given in paragraph 2.9 above, has risen to 28%. This is a significant improvement from the estimated 15% good quality land in 2003 when the Organic Action Plan was published.

TABLE 4: HECTARES UNDER ORGANIC AID SCHEME AGREEMENTS AS AT 31 MARCH EACH YEAR

¹ These figure is from 31 August 06 to take account of the approvals for the 2005 applicants which were delayed due to the payment rate review (the table does not include approvals for the 2006 round - see para 2.9).

2.11 In the current Scottish Rural Development Plan (2000-2006) the Scottish Executive will have supported, through the OAS, the conversion of some 180,000 hectares of land to organic farming. Approximately 80,000 hectares of organic land has also been supported through the maintenance element of the OAS. This is expected to have, and continue to deliver a wide range of environmental benefits, along with allowing farmers to diversify and take advantage of the opportunities that organic farming can provide.

2.12 2006 saw the highest number of applications since the introduction of discretionary applications in 2001. The increase in OAS rates, along with the recent growth in the market, led to a threefold increase in the number of applications compared with 2005. Due to financial constraints it was not possible to repeat the very high approval levels achieved in the past. This is the first year that the ranking threshold has been set to take account of financial limits. However, the number of approvals was more than in previous years and the value of these (£11.7 million) was also significantly higher.

TABLE 5: APPLICANTS FOR ORGANIC AID SCHEME

¹ The number approved includes 59 Conversion applications and 78 Maintenance applications.
² The number approved includes 58 Conversion applications and 44 Maintenance applications.
³ The number approved includes 104 Conversion applications and 58 Maintenance applications.

The Future of the Organic Aid Scheme

2.13 The Organic Aid Scheme is part of the Scottish Rural Development Plan ( SRDP) 2000-2006, and as the SRDP ended on 31 December 2006, the current scheme has now closed to new applicants. Future support will be delivered under Land Management Contracts, and support measures to replace the OAS are being developed.

2.14 The OAS Technical Working Group, which is made up of a range of stakeholders, has been reconvened to ensure that the measures are effectively targeted. A major area of work will be to revisit the ranking questions to ensure they continue to target support where it is most needed for the development of the sector. To help inform this exercise and to try to avoid the disappointment caused by the 2006 round of both OAS and the Rural Stewardship Scheme, Ministers have brought forward a planned review of the agri-environment schemes. A key objective of the review will be a fundamental consideration of funding principles.

2.15 The new Scottish Rural Development Programme for the period 2007-13 must be approved by Brussels prior to UK legislation being approved by the Scottish Parliament to provide a legal basis for the new measures; this is expected to take place during 2007. Organic aid is only one of a number of schemes that are covered by the new Programme and it is hoped that the first round of applications will take place in autumn 2007.

SAC Advisory Activity

2.16 In Scotland, the Scottish Agricultural College ( SAC) provides SEERAD funded advice for farmers considering conversion to organic, and also to farmers who have already converted. From April 2005 until March 2006 SEERAD provided £232,000 for advisory activities including telephone advice (including the SAC Organic Helpline, 01224 711072), farm walks and technical meetings based on a network of three demonstration farms and other commercial organic farms, technical advisory publications, and the SAC organic farming website ( http://www.sac.ac.uk/organic-farming ). This programme also includes the SAC Organic Market Link project, the objective of which is to improve the flow of supply and demand information in the organic sector.

2.17 The SAC Advisory Activity programme is offered through a group of 20 organic advisers located at SAC's network of advisory offices, backed up by a Senior Organic Farming Specialist (David Younie), an Organic Market Link Coordinator (Caroline Bayliss) and a group of subject specialists. For more detailed individually tailored advice, SAC offers a charged consultancy service to producers.

2.18 Between April 1998 and March 2006, SAC dealt with a total of over 10,250 enquiries from Scottish farmers, and has organised and/or presented talks at around 250 farmers meetings/farm walks on organic farming in Scotland, with approximately 8100 attendees. Advisory activity from April 2005 to March 2006 is shown in Table 6.

TABLE 6: SAC ORGANIC FARMING ADVISORY ACTIVITY BETWEEN 1 APRIL 2005 TO 31 MARCH 2006

2.19 The number of advisory enquiries dealt with by SAC increased by 32% over the previous year, but there was an increase of 111% in the three-monthly period from
1 January to 31 March 2006, just prior to the deadline for applications to the Organic Aid Scheme. This upsurge in enquiries came from farmers who were considering extensifying production and converting to organic following the introduction of the Single Farm Payment. These farmers were mostly mixed arable/livestock farms.

2.20 SAC provide support for SEERAD policy staff, on both a formal and an ad hoc basis. They provide representation on the SEERAD Organic Stakeholder Group, the OAS Technical Working Group and the Organic Stakeholder Marketing Group. There are also SAC representatives on Advisory Committee on Organic Standards ( ACOS) and two of the ACOS sub-committees.

Organic Producer Events and Demonstration Farms

2.21 The Executive has a commitment not only to promote sustainable organic stewardship to farmers but also to improve the public perception of organic farming, particularly through producer events and demonstration farms.

2.22 SEERAD provides funding to SAC for the organisation of farm walks and seminars for producers; a list of these from 2005-06 is given at Table 7. Meetings are based both on SAC's network of three commercial demonstration farms, including its own organic farm at Craibstone near Aberdeen, and other commercial organic farms. The aim of this programme of meetings is to help existing organic producers to improve technical efficiency and marketing, and to provide farmers who are considering converting with an opportunity to find out more about the practicalities of organic farming and to study commercial organic farms in practice. It is clear that this method of communication, focusing primarily on practical issues, is particularly valued by both types of producer, as indicated by the high level of satisfaction recorded in event evaluation forms.

TABLE 7: SAC PROGRAMME OF TECHNICAL MEETINGS IN 2005-06

2.23 In addition to organising these SAC producer meetings, the SEERAD funding also enables SAC staff to provide technical input at meetings of local organic producer groups and at technical events organised by Soil Association and SOPA. SAC also assisted SEERAD in the organisation and delivery of the farm walk and seminar for the Organic Producers Forum in Perthshire in September 2006. The SAC Organic Market Link Coordinator (see paragraph 3.17) organised an Organic Food Trail and Organic Food Tasting at the Royal Highland Show in 2005, to link with the seminar listed above. The Organic Food Trail was repeated in 2006.

2.24 In the run up to the 2006 OAS deadline, SAC ran four one-day participative training courses for farmers considering converting. These courses, partly commercially funded by producers themselves and partially supported by the European Social Fund, were held in Edinburgh, Aberdeen, Inverness and Kirkwall. Because of their participative nature, numbers were deliberately restricted, but 50 producers benefited from this intensive training. SAC also offers training through an introductory CD-based distance learning training course and a part-time postgraduate diploma/ MSc in organic farming.

2.25 The Soil Association Scotland has organised and hosted a number of producer events over the past year covering a range of topics. The Aberdeenshire Organic Gathering in June 2005 took around 45 participants on visits to three farms and included both a discussion forum and an evening social to encourage networking. Other popular events for organic producers included horticulture days in Fife and on Skye and a technical event funded by Scottish Food and Drink on 'Lamb finishing to meet seasonal demand'.

2.26 SOPA and SAC held a joint producer conference and farm walk in February 2006 on the topic of Organic Farming - Principles, Practicalities and Profits. The morning conference, at the Belmont Arms, Meigle, included organic arable, beef, sheep and egg producers describing their experiences of organic farming. The farm walk was at East Mains, Auchterhouse, Dundee (by kind permission of Mr John D Skea), which is a mixed farm with sucklers, finishing beef, breeding ewes and lamb finishing, finishing pigs, vegetables and potatoes and is one of SAC's organic demonstration farms.

2.27 QMS ran a butchery day on March 2006 in partnership with Soil Association Scotland. It was aimed at producers interested in preparing meat for direct sale and included a practical demonstration of seam butchery as a way of getting maximum value from a carcass.

2.28 SOPA held four regional producer meetings in early October 2006 which included talks about certification and the paper work involved, from existing organic producers plus speakers from the market place including Dovecote Park, MacIntosh Donald and Dunbia. The meetings were held in Duns, Dumfries, Dufftown and Crieff; they were attended by producers considering converting to organic production, producers in first and second year conversion and existing organic producers.

2.29 Soil Association Certification Ltd held a training event on 4 October which aimed to give farmers considering conversion to organic a better understanding of the practicalities involved. The Thinking of Going Organic? event was held at Jamesfield Organic Centre, Perthshire. The morning covered key principles, the organic market, making an application and the grant scheme. The afternoon provided practical enterprise workshops, with attendees having access to beef, sheep, arable and horticultural producers, along with technical staff with in-depth knowledge of pigs and poultry. Certification staff were available to answer standards and application questions, as were industry representatives from feed, seed, marketing and poultry companies. The day was a great success with good feedback from all 39 attendees.

Fig 1. The SEERAD Organic Producers Forum discussion groups

Organic Producers Forum

2.30 In support of Organic Fortnight in September 2006 SEERAD hosted an Organic Producers Forum. This is the third year that SEERAD have held such an event, and as before SAC assisted in its organisation and delivery. The theme of this year's forum was 'Adding Value in the Scottish Organic Sector' and was attended by approximately 40 delegates from throughout Scotland, ranging from small-scale organic producers to key stakeholders.

2.31 This was an all-day event with the first part held at the Birnam Arts and Conference centre in Perthshire, where there were presentations from a wide range of organic producers, SAC, Soil Association and the retail trade. There were also a number of group discussions based on the theme of the forum.

2.32 The final part of the day was a farm walk at Rotmell Farm, situated above the Tay valley at the southern edge of Atholl Estate between Dunkeld and Ballinluig. This is a family farm with beef and sheep that have also just recently diversified into poultry layers. The day was rounded off with an excellent barbecue supplied by Rotmell Farm and SAC.

2.33 Feedback provided by attendees suggests that the forum was very successful and provided a useful opportunity for a positive exchange of views.

Fig 2. The SEERAD Organic Producers Forum farm walk

Royal Highland Show Organic Activities

2.34 During the Royal Highland Show ( RHS) in 2006, SAC, on behalf of SEERAD and in association with other partners, organised several organic events. The theme adopted by SAC at the 2006 RHS was Integrating Farming, Environment & Food Quality. This comprised an organic farming seminar, food tasting session and the organic trail.

2.35 The 'Organic Trail' identified the show exhibitors who were supplying organic food and/or drink and those providing organic services. The third annual RHS Organic Trail in 2006 was once again well supported; by 34 organic exhibitors. Each exhibitor displayed a large green and tartan rosette and handed out flyers to consumers to allow them to find other organic businesses. Feedback from the RHS Organic Trail participants has been positive to date and all hope to participate in next year's event.

2.36 The seminar entitled Organic Farming & Food: for a better future? was held on Friday, 23 June. Thirty-five participants attended the seminar which comprised three short presentations. Potential financial benefits at farm level (David Younie, SAC), Potential environmental & food quality benefits: the evidence (Christine Watson, SAC) and Benefits and disbenefits: The farmer's perspective (David Finlay, Cream O'Gallowa y). Feedback from the seminar participants was very positive.

2.37 The food tasting A Taste of Scottish Local Food was well received and between 35-40 participants enjoyed a selection of local food including beer, yogurt drinks, jam, salmon and beef. Participants were heard to comment " it is great to see farmers using their imagination" and "I had no idea there was such a good selection of local food available".

2.38 At the 2005 RHSSAC had also organised a series of two seminars and an organic food tasting which was held in the SAC pavilion. The seminars were entitled Organic Farming and Food - what's it all about' and Food for Life - Scotland's answer to Jamie's School Dinners. The first seminar in particular was very well attended and there was very positive feedback from attendees regarding both seminars.

2.39 SOPA held an organic reception in conjunction with SFQC at the RHS on Thursday, 22 June 2006. A very distinguished group of members, suppliers, buyers and dignitaries assembled at the SFQC stand to sample organic canapés, beautiful organic cheese from Connage Highland Dairy and organic beer (Black Isle Brewery) and wine.

2.40 John Hamilton ( SOPA Chairman), Stewart Jamieson ( SOPA Vice Chairman) and David Whiteford ( SFQC Chairman) all took the opportunity to inform the Minister for the Environment and Rural Development, Ross Finnie, how well the organic market in Scotland is developing and the good demand from supermarkets for Scottish organic produce. It was also impressed on the Minister the importance of continuing to fund OAS applicants, so that sufficient supply is available to meet the increasing demand for organic produce.

Fig 3. Ross Finnie visiting the SOPA/ SFQC stand at the Royal Highland Show

2.41 Organisation changes to the SOPA scheme were announced at the Royal Highland Show and are as follows:

• As of 1 April 2006 SOPA transferred all their operations to SFQC.
• SOPA continues to exist as a producer organisation, with a Board that retains sovereignty over its business but now contracts all functions to SFQC.
• SOPA therefore now employs no staff and has no offices.
• Previously SFQC had been contracted to provide farm certification services while SOPA carried out its own producer service activity and related PR and development activity.
• SOPA's membership endorsed the move having been consulted by post and then at the AGM in June.

2.42 The Soil Association Scotland marquee at the RHS attracts a growing interest from conventional farmers as well as existing organic producers. A team of technical staff was on duty to answer queries and a wide range of information sheets were available. There were two networking events in the form of open receptions on the Thursday (cheese and wine) and Friday (beer and beef). SA Scotland also ran stands at Agriscot November 2005 and Scotsheep June 2006.

2.43 The Soil Association Scotland stand in the food hall of the RHS is designed to promote organic food to members of the public and offers artisan organic producers space to offer free tastings and sell their product direct to consumers. A similar stand was run at the 'Big Tent' festival of stewardship at Falkland in Fife.

BBC Radio 4 Food and Farming Awards

2.44 Cream o' Galloway won the BBC Radio 4 Food and Farming award for 'Farmer of the Year' in November 2006. Established in 1994 by David and Wilma Finlay, Cream o' Galloway uses organic milk from a herd of Ayrshire dairy cows to produce 30 flavours of luxury ice cream and frozen yogurt. They also operate a visitor attraction with a farm shop and nature trails and have over 60,000 visitors each year. The competition, based on nominations made by the public, includes the 'Farmer of the Year' award which is given to someone who has risen to the challenges of farming in the 21st century and is an inspiration to anyone interested in food production and the countryside. Wilma Finlay said "We have established three inter-related business operating together in the ethical food and tourism markets. We want all aspects of the farm, ice-cream production and our visitor attraction to be sustainable."

Fig 4. David and Wilma Finlay - BBC Radio 4's 'Farmers of the Year'

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