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SUPPORT FOR THE CONVERSION TO AND MAINTENANCE OF ORGANIC FARMING (Rural Priorities)

Article 36(a)(iv)

Measure code (214)

Rationale for Intervention

Scientific evidence shows that there are significant biodiversity, pollution control, energy efficiency and soil protection benefits associated with organic farming methods. In recognition of this, the European Action Plan for Organic Food and Farming (Action 6) " strongly recommends Member States to make full use within their rural development programmes of the instruments available to support organic farming....".

Organic farming also delivers benefits under Axis 1, in that it adds value to agricultural products by requiring adherence to strict production standards, and Axis 3, in that it helps to diversify the rural economy and create more employment opportunities.

Organic standards are higher than the Good Agricultural and Environmental Conditions ( GAEC) to which all farmers in receipt of the Single Farm Payment ( SFP) must adhere. These higher standards, which include maximum stocking densities to prevent overgrazing and poaching as well as restricted or prohibited use of chemicals such as pesticides and fertilizers, are enforced by the Organic Certification Bodies through annual inspections and certification. The aid will play a valuable role in helping to protect and enhance the environment as well as assisting producers to meet consumer demand for organic products.

The costs of converting to and maintaining organic status present a barrier to further expansion of the organic sector. Financial support to meet these costs can help to ensure that the benefits of organic production are more widely secured.

Objectives

Organic farming contributes directly to the Strategic Plan for Scotland ( enhancing rural landscapes and the natural heritage) under Axis 2 by addressing the following strategic outcomes:

• Scotland's natural resources (including farmland and forestry) conserved or enhanced for the long term, with biodiversity as an integral component of actions across rural Scotland;
• land management practices that protect and enhance water and soil quality;
• well treated and healthy farm animals;
• climate change mitigation; and
• reduce emissions of pollutants to air.

Scope and actions

We will support organic farming in the same way as other land-based businesses under Axes I and III (for example, with access to funding for vocational training and diversification). Organic farmers will also have access, on the same basis as other land managers, to other measures under Axis II (except where such support undermines or replicates support under the organic measure described below).

In addition, a dedicated organic measure will provide support to farmers converting to organic farming or continuing to farm organically and managing their land in environmentally beneficial ways. This measure will be available to farmers and crofters throughout Scotland and will have two operations: an organic conversion option and an organic maintenance option.

Description and justification of the different types of commitments, based on their expected environmental impact in relation to environmental needs and priorities

The organic farming measure will offer grant support to farmers either converting to or maintaining organic farming methods. This support will consist of annual hectarage payments over a period of 5 years plus certain capital costs incurred in converting to organic farming. For conversion agreements, support will be based on a commitment to convert the land to organic standards to gain full organic certification, and then maintain that certification for the remainder of the 5-year agreement. Support for maintenance agreements will be based on continuing to farm organically and maintaining organic certification throughout the 5-year period of the agreement. The level of grant payment will vary according to the type of land involved (whether arable land; improved grassland; unimproved grassland; or land in fruit and vegetable production).

A farmer is not obliged to convert the entire holding but the area involved must comprise at least 1 hectare and constitute a sustainable production unit. Farmers will, however, be encouraged, by improving the chance of their application being successful, to enter the entire holding into the measure. They will also be able to opt for a staged conversion, in which parcels of land are entered into the measure over a period not exceeding 5 years.

Support will be discretionary and limited to maximum hectarages per application, to ensure that the potential benefits can be spread across Scotland and that smaller producers are not discriminated against.

During the 5-year period for which payments are made, as well as maintaining his/her organic certification, a farmer must also complete a series of environmental prescriptions. The precise prescriptions will vary according to the type and location of the land involved, but will include the following as appropriate:

• the retention and management of heathland and other grassland of conservation value;
• the retention and management of traditional farm boundaries;
• the retention and management of copses and woodlands;
• the retention and maintenance of streams, ponds and wetlands; and
• restrictions on both the application of manures and ditch maintenance.

Methodology and agronomic assumptions and parameters

The grant payment rates are based on compensating for income foregone by conventional farmers when they convert to organic farming and maintain their organic status over subsequent years. The main component of income foregone is the change in gross margin, but the calculation also includes the costs of organic certification. The calculations cover four types of conversion: arable to mixed arable/beef; improved grassland; land in fruit and vegetable production; and unimproved grassland/rough grazing.

The data for comparing gross margins of conventional and organic farms were obtained from the Scottish Agricultural College's Farm Management Handbook and the 2007 Organic Farm Management Handbook, and weighted mean figures were then calculated using headage or area values (as appropriate) from the agricultural census. Organic certification costs were obtained from organic certification bodies.

Agri-environment Baseline

Amounts of support

Based on these calculations, the table below illustrates the amount of support provided to farmers for converting (where the initial costs are higher) and maintaining organic farming over a typical five year agreement. The annual payment rates available for maintaining organic farming for farmers who have already completed conversion will be equal to maintenance rates for years 3 to 5 for each type of land.

A minimum of €730 per annum per IACS business per management option (conversion or maintenance) applies. The minimum amount applies irrespective of the land area.

Farmers will also be able to apply for grant support towards the cost of capital items and works associated with conversion to organic status, according to the table of standard costs for capital items applying to all agri-environment measures (see measure 5.3.2.1.6).

Indicators and targets

This measure will be monitored on the basis of the number of farmers and crofters converting to organic farming and continuing to farm organically after conversion. To ensure that they are farming in accordance with the environmentally friendly principles of organic farming, farmers and crofters will have to maintain their organic certification throughout the period of participation in the measure.

In early 2006 Scotland had 595 organic producers and 247,930 hectares under organic conversion or maintenance. Over the period of this Scotland Rural Development Programme, we will aim to increase these figures in line with the outcome of the review of our Organic Action Plan.

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