The Scottish Government

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Research and Publications

4.1 The Scottish Executive, over the last 18 months, has funded a range of research in relation to organic food and farming. Research has included a report estimating the market penetration of home-grown Scottish organic food, an evaluation of a pilot scheme to encourage local suppliers to supply food to schools, and a report on Scotland's soil resource - current state and threats. Further information on these first two reports can be found below.

4.2 There are also two major pieces of relevant research which are being taken forward as part of the new SEERAD research strategy under the programme entitled 'Environment: land use and rural stewardship'. One is within the Farming Systems work package, which covers a broad spectrum of systems including organics and low input agriculture. The range of work to be covered in this programme of research is yet to be finally agreed, but organic systems are likely to be included. The cost of the work package is more than £4 million over 5 years. The second sits within the Sustainable Crop Systems work package which includes research on the development of resilient crop rotations for organic farming.

4.3 A number of other projects have been completed or are underway:

• Scottish Natural Heritage funded a review of the evidence for the potential for organic agriculture to provide delivery of natural heritage objectives in Scotland. The project was led by SAC with SOPA, British Trust for Ornithology, Centre for Ecology and Hydrology, Elm Farm Research Centre and Organic Centre Wales. The literature suggests that there will be a greater difference in organic and conventional systems in lowland, however organic practices suggest that organic farming may also help improve the environment in the Scottish uplands.

• Defra LINK is funding a number of organic related projects with a Scottish component:
• • Improving Phosphorus Supply in Organic Farming (co-financed by SEERAD) - the project aims to improve the effectiveness of phosphorus use from phosphate rock in organic farming.
  • Sustainable Organic Wheat Production - the project is looking to use an ecological approach to analyse the interactions of a range of key variables in organic wheat production.
  • Development of Nutritional Regimes for Rearing Organic Laying Stock - (co-financed by SEERAD) this project is to look at alternative sources of nutrients to enable pullets to be reared economically under organic standards, while maintaining or improving the health and welfare of the birds.
• Defra funded:
  • The welfare of dairy cows in organic milk production systems - the primary aim of this project is to provide data that will allow an objective assessment of the potential pros and cons of organic dairy production for cow welfare.

Market Share of Home-Grown Scottish Organic Produce

4.3 When the Organic Action Plan was published in 2003, Scottish produce accounted for only about 35% of retail sales of organic produce that could be produced in Scotland, and a target was set to create the conditions so that Scottish farmers can meet at least 70% of this market. The Scottish Executive commissioned the Soil Association to provide a market penetration report to provide an up-to-date snapshot of the market. The research was designed to identify the level of market penetration of indigenous Scottish products and to identify strategies for increasing organic sales in line with the targets set in the Action Plan. The full report can be found at http://www.scotland.gov.uk/Publications/2006/02/08094741/0.

4.4 The report shows that Scottish farmers now produce enough to satisfy 70% of the market for indigenous organic produce and that, while it is difficult to calculate a precise figure due to the low level of traceability within the UK-wide supply system, they have certainly increased the actual market penetration level from 35% to 50% over the last 2 years. This has been achieved at the same time as making a significant input to the wider UK and international markets in key sectors.

4.5 The report discusses each product in turn and provides an estimate of market penetration. In many sectors Scottish organic produce supplies the majority of the Scottish market; estimated market penetration levels are particularly high for liquid milk, table birds, lamb, beef and aquaculture. Other sectors are estimated to have a lower market penetration, often because processing and distribution facilities are complicated and/or outwith Scotland, for example the arable sector, making it very difficult to estimate the level of produce that is returned to Scotland for sale. However, some sectors, such as eggs and horticulture, have a lower penetration estimate because domestic demand outstrips supply, which highlights opportunities to Scottish producers. Figure 6 below gives the individual results for each sector; these results were then analysed against consumer purchases to give an overall market penetration estimate.

Fig 6. Estimated market penetration of indigenous organic produce in Scotland 2005 ¹

* Diary includes processed products and liquid milk. The liquid milk alone has a market penetration of 100%.
** Pork is at zero because it is not possible to calculate how much Scottish produced pork is returned for sale in Scotland.

4.6 There are some weaknesses in our organic industry. The report, for example, points to a shortage of meat and dairy processing facilities in Scotland, and to production shortages in fruit that can be grown in Scotland. Action has already been taken to address these problems - for example, through our Processing and Marketing Grant Schemes and by extending the Organic Aid Scheme to cover fruit growing. However, we will continue to work with stakeholders to consider what more needs to be done.

4.7 It was found that accurate penetration was difficult to ascertain in a food supply system with a low level of traceability where provenance is lost. This means that without changes in the supply system to maintain the provenance of Scottish organic produce it will be extremely difficult to demonstrate any improvement in the penetration figures given. This would require structures and resources to be put in place, particularly by processors and retailers, who are unlikely to be willing to incur such costs unless there is a clear benefit for them.

Local Food and Public Procurement

4.8 The Scottish Executive and East Ayrshire Council commissioned an evaluation of a local food procurement scheme in 2005. The Council ran an initial pilot in August 2004 serving one primary school and in 2005 this pilot was expanded to serve 11 primary schools (the project is discussed in more detail at paragraphs 3.29 and 3.30). The targets established by the Soil Association's Food for Life Initiative were used and one includes the need to source 30% of food from certified organic sources. The objective of the SEERAD funded research was to look at how the food procurement model was working in practice for all parties in the food supply chain.

4.9 The report was published in August 2006 and can be accessed on the Scottish Executive website at http://www.scotland.gov.uk/Resource/Doc/138163/0034389.pdf. The findings showed that in the 11 schools involved in the pilot scheme, the average daily number of pupils taking school meals increased overall from 50.3% in 2004 to 52.7% in 2005. The cost of a meal also rose from 54.5p to 71.9p per meal due in part to organic sourcing. The 'localness' of suppliers is highly rated by schools. The findings outlined that the perception is that organic is important but was a secondary driver to sourcing local produce.

4.10 The overall view was that the extra cost of supplying food sourced locally is often justified and that the link between school, community and environment is important. It also highlighted that many producers do not compete for public contracts as they perceive they will be unsuccessful. Producers need to be ready to meet the requirements of contracts if they are to be successful in competing for contracts.

4.11 There are other procurement initiatives ongoing throughout Scotland. The aim of this research is to provide data that may be of wider use.

Research Priorities

4.12 The ACOS (Advisory Committee on Organic Standards) Research and Development Sub-Committee published a report in June 2006 looking at the priorities for publicly funded research in support of the UK organic food and farming industries. The Committee gathered stakeholder views through workshops, and the outputs from these were considered by the Committee in the wider context of the UK organic farming industry, Government policy and past and ongoing research. The results were then divided into a number of research themes, along with a sub-report on knowledge transfer issues. The Organic Stakeholder Group are due to consider the recommendations given in this report which may inform future priorities for research in Scotland. The report can be accessed through the Defra website at http://www.defra.gov.uk/farm/organic/policy/research/index.htm#acos.

Advisory Publications

4.13 SAC continues to maintain and update regularly its Organic Conversion Information Pack, which contains a range of useful information for farmers considering converting to organic production. Technical articles on organic farming are published in SAC Advisory Newsletters, Agri-Business News, and in the technical press ( e.g.Scottish Farmer). In addition, SAC staff regularly contribute technical articles to the Soil Association Organic Farming magazine and to the SOPA Newsletter. Table 8 shows the articles that were published during 2005-06.

TABLE 8. MAGAZINE ARTICLES PUBLISHED BY SAC STAFF, APRIL 2005 TO SEPTEMBER 2006

4.14 The SAC organic farming website ( www.sac.ac.uk/organic-farming) provides a range of technical information on organic farming. It contains a 'News and Events' section, a section on 'What is Organic Farming?', a section on 'Converting to Organic Farming' including a step-by-step guide to converting, and a section on the range of SEERAD-funded 'Free Advice' available from SAC, including the downloadable contents of the SAC Conversion Information Pack and Organic Market Link Newsletters.

4.15 SOPA continues to produce regular newsletters, updates and technical leaflets for members of the organic sector. The SOPA website acts as a valuable information source for available livestock, cereals and grazing along with regular news and events here in Scotland, www.sopa.org.uk.

4.16 SOPA remains committed to the Scottish Sheep Scab Initiative ( SSSI) and is involved with all technical meetings on the implications of an outbreak of avian influenza on organic poultry production in Scotland.

4.17 The Soil Association's Organic Farming magazine is an important vehicle for knowledge transfer to the sector and is read by organic and non-organic farmers alike. It includes a section of Scottish news, features and opinion as well as regular technical features contributed by the SAC. The Soil Association also produces a wide range of fact sheets, briefing papers and technical guides, many of which are available free of charge via the website www.soilassociationscotland.org and the Soil Association annual Organic Market Report is the primary source of information about the development of the UK market. Soil Association Scotland provides an enquiry service to farmers, and also to food processors, shops and restaurants seeking organic produce.

4.18 The Soil Association has around 1,200 members in Scotland who receive the influential magazine Living Earth, along with a Scottish supplement Organic Scotland. Soil Association Scotland also offers a telephone and email information service to the public and produces consumer guides such as a listing of all the organic vegetable box schemes in Scotland.

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