Our figure of the month 08/2021: Organic farming
The German government's climate strategy aims to double the share of organic farming in Germany from 10.3% today (2020) to 20% in 2030. This is intended to reduce greenhouse gas emissions from this sector. Between 0.4 and 1.2 million metric tons of CO2 equivalents can be saved annually in this way. In order for the share of organic farming to double by 2030, it would therefore still have to grow by an average of 1 percentage point per year over the next 10 years.
A look at the development of organic farming in recent years shows a very positive trend. Since 2015, the share of organic agriculture in total agriculture has been steadily increasing by about 0.8 percentage points. Before 2015, the share of organic farming grew by only about 0.2% points. The stronger growth in recent years is accompanied by a higher profit margin of organic farming. Since 2015, the profit per hectare of organically farmed land has averaged 726 euros. In comparison, the profit per hectare for conventional farming in the same period is 664 euros. In addition to the share of organic farming, the figure also shows the profit ratio to conventional farming (ratio of profit per hectare of land area). Between 2011 and 2014, organic farming made on average about 22% less profit per hectare; since 2015, organic farming made on average 11% more profit per hectare, even if the profit in conventional farming was slightly higher than in organic farming in 2018 and 2020. If a trend of higher organic farming profit margins settles in the coming years, it is not unlikely that organic farming will continue to grow steadily and achieve growth rates of 1% points or even more. The jump in profits of organic farming from 2015 is also justified by support programs of the federal government. In view of the development in recent years, the goal of doubling the share of organic farming by 2030 seems achievable. Especially if organic farming is supported by further subsidy programs.
However, the growth of organic farming is also accompanied by costs. Compared to conventional farming, the yield per hectare is in some cases drastically lower. At the same time, prices for organically grown goods are significantly higher. On average over the past 10 years, organic farming has been able to yield just under half the wheat yield per hectare of farmland compared to conventional farming – while prices have been 176% higher. Similar yield and price ratios result for the cultivation of barley. For potatoes, the price difference is greatest with 338% higher prices for organic farming, with 34% less yield. Sugar beets are also slightly more than twice as expensive, but yield only 13.4% less. Overall, the increasing share of organic farming can save CO2, but the price and yield ratio also shows that new challenges are emerging.
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