Comparison of the productivity and profitability of organic and conventional farms in the New Zealand sheep/beef and kiwifruit sectors 2002/03 to 2007/08.

Organic industries world-wide have been expanding rapidly over the past decade but there has been comparatively little recent discussion of the relative financial performance of organic and conventional farming systems. If organic agriculture is to contribute to improved environmental and economic outcomes in New Zealand in future, this in an issue of considerable importance to farmers considering organic conversion. The Agriculture Research Group on Sustainability (ARGOS) has been examining the sustainability of organic and conventional land-use systems in New Zealand, by monitoring the comparative performance of these production systems with respect to a wide range of environmental, social, economic and management parameters over the last seven years. Financial data from matched clusters of sheep/beef farms from the east coast of the South Island and clusters of kiwifruit orchards, mainly located in the Bay of Plenty, have been analysed on their own and in conjunction with social data to identify differences in farm financial performance. In this paper a brief summary of international conclusions on relative organic profitability precedes the description of the results of the first six years’ ARGOS monitoring of farm financial performance in the sheep/beef and kiwifruit sectors. The results show that, while there are some significant differences in farm costs and revenues between farming systems within a sector, there is greater variability in the “bottom-line” indicators of profitability within farming systems than between them and few conclusions can be drawn about relative profitability. Analysis of the data suggests that the characteristics of individual farmers may have more influence on farm financial outcomes than the management systems they adopt