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Report from the Bichel Committee - Organic Scenarios for Denmark

9. Discussion and perspectives

In the foregoing four chapters, 100% restructuring of the agricultural sector for organic production has been described and analysed with respect to agriculture (chapter 5), environment and health (section 6), economics and employment (chapter 7), and legal aspects (chapter 8). The main focus has thus been on agriculture, nature and economics, whereas local, social and institutional aspects have not been considered to the same extent. The analyses show that 100% organic farming would mean a very extensive and radical change in Danish agriculture compared with today – a change that would have major consequences for the derivative industries and the Danish economy. The changes would be so immense that a long time perspective (30 years) and a number of assumptions are necessary simply to be able to describe a coherent 100% organic scenario. The assumptions in question can be regarded as parameters that can be discussed and that will determine whether an organic scenario can be achieved.

The purpose of this section is to focus on the main parameters and, on that basis, discuss the perspectives of organic farming for Danish society.

9.1 Identification and discussion of main parameters

One vital parameter for both the national economy and the impact on the environment is the size and composition of the primary production. The analyses show that milk and beef production could be maintained largely unchanged in a 100% organic scenario. The size of pig and poultry production would depend on the production of grain and the import of feed. Plant production would in all circumstances be considerably reduced as a natural consequence of the big reduction in the use of plant nutrients and plant protection products. The size of the plant production and the size of the import of feed are therefore two very important parameters.

9.1.1 Size of plant production

Plant production depends on

The size of plant production would depend particularly on the following:

	sufficient quantities of manure being available
	the manure being uniformly distributed over the whole country
	importation of potassium fertiliser
	production of sufficient seed of the necessary quality
	technology and productivity

- manure

With the present waste handling and waste treatment technology in Denmark, manure would be the main source of plant nutrients. It is therefore assumed that this resource would be approximately uniformly distributed over the whole country. The amount of manure has a positive effect on plant production, but the supply is relatively low in the scenarios, even with the biggest livestock population (0.9 l.u./hectare). The yield would therefore clearly be limited by the allocation of nitrogen (table 5.5). On the other hand, the environmental impact from nitrogen leaching would be smaller (table 6.1).

- potassium

The analyses also show that potassium could become a yield-limiting nutrient, particularly on coarse, sandy soil and, in the longer term, on other types of soil. It is therefore assumed that a certain amount of potassium could be imported (see section 5.7). According to the current national rules, permission to apply highly soluble potassium fertiliser depends on acceptance of the need by the Danish Plant Directorate, while the cultivation rules of the National Organisation for Organic Farming do not allow such application. The application of sparingly soluble potassium is permitted. It is also assumed that sufficient seed of the necessary quality could be produced.

- and an improved yield level

The importance of technology and productivity is illustrated by means of scenarios with an improved yield level. The effect is relatively big and means, for example, that pig and poultry production could be maintained almost unchanged simply with 15-25% import of feed (see table 5.3). One of the arguments for including an improved yield level is that, with 100% organic production, there would be considerably greater focus on and demand for plants than in present-day organic farming, where the main focus is on milk production (see also section 5.2).

9.1.2 Import of feed

Import of feed is a vital parameter for maintaining the present livestock production and associated manure in the organic scenarios. The current rules for organic farming permit the use of a certain amount of conventional feed (15% in the case of cattle and 25% in the case of pigs and poultry). There is also already a rather considerable import of organically produced grain.

Livestock production

The agronomic conditions (chapter 5) and the economic analyses (chapter 7) both speak in favour of maintaining livestock production through importation of a suitable quantity of feed. The legal aspects (chapter 8) point in the same direction, whereas some of the environmental and health analyses point in the opposite direction (chapter 6). The present average livestock population in Denmark (0.9 l.u./ha) appears to provide a good basis for establishing a harmonious and diversified organic production.

depends on importing feed

However, there are grounds to expect the present rules for use of conventional feed to be considerably tightened. The Danish need for imported feed with livestock production maintained would in such case have to be fully covered by organically produced imported feed. It has not been clarified how the foreign exporters of organic feed could achieve balance with respect to nutrients so that they would be able to maintain a larger export of organic feed to Denmark in the longer term. It is therefore uncertain whether it would be possible in the long term to maintain the amount of pork exported from 100% organic farms in Denmark (see also section 9.3.1).

and thus on
- rules
- and a market

A significant change in Denmark's livestock population in the event of 100% conversion to organic production would depend particularly on:

	legislation and rules on self-sufficiency in feed and requirements concerning the proportion of organic feed
	a market and the right economic conditions for animal and plant products.

9.1.3 Consumer preferences

The economic analyses show that, with unchanged consumer preferences, restructuring for 100% organic production would impair the national economy in step with the lower primary production. The value of the environmental benefits of a 100% organic agricultural sector – as far as it has been possible to value them in this analysis – would be lower than the cost to society of a total restructuring, assuming unchanged consumer preferences. If, on the other hand, it is assumed that foreign consumers change their preferences to the benefit of Danish organic products, corresponding to price premiums on the export markets of 10% on milk and 20% on pork, the impact on the national economy would be considerably smaller. Danish consumers' preferences, on the other hand, have not been valued in the economic analyses (see section 7.2).

However, for a change in consumer preferences and a market trend towards more organic farming, the consumers would have to compose their consumption on the basis of other values than purely material ones, including preference for the organic form of production. Studies from 1998 showed a considerable preference for organic products, in that 68% of Danish families were found to be willing to pay more for organic products. Of this percentage, 39% were willing to pay up to 10% more, 18% were willing to pay up to 30% more and 5% were willing to pay right up to 50% more (Ministry of Food, Agriculture and Fisheries 1999).

9.1.4 Discussion

Interpretation and form of production

and preference for organic production

A complete assessment of the analyses shows that the main parameters can be broken down into two groups concerning:

1. the organic form of production, which in turn depends on the interpretation of organic farming’s basic concept, including legislation and rules on imports and self-sufficiency in fertiliser and feed.
2. society’s interest in and the consumers’ preference for the organic form of production.

are related to

The legal and economic analyses show that compulsory conversion implemented by law and/or a general ban on the use of specific ancillary substances is not a realistic option. Restructuring for organic production would thus have to be based on society's interest in, and the consumers' preference for, the organic form of production and organically produced food products. Society's interest would depend on whether organic farming could produce food products in a more sustainable way than conventional farming and the ability of conventional farmers to change their production in a more sustainable direction.

the national economy

The economic analyses in chapter 7 show that society would suffer loss as a consequence of the lower production and productivity. However, the loss would depend on the interpretation of organic farming because that would influence the size of the production. On the other hand, it has been found extremely difficult to value and quantify the environmental benefits. The cost-benefit analysis is therefore encumbered with uncertainty.

- and with the principles on which organic farming is based

A number of analyses have shown that most Danish consumers prefer organic products. There are thus several factors that make it relevant to examine in greater detail how ideas and principles from the philosophy on which the organic movement is based could be used to contribute to a sustainable development of society.

9.2 The precautionary principle and organic farming

Organic farming stems from a different perception of nature from conventional farming. The perception of nature and of the relationship between nature and society determines how society makes decisions that have consequences for nature and the environment. This applies particularly to decisions concerning farming, because farmers administer large parts of the countryside. In this connection, the precautionary principle is playing an increasingly vital role.

9.2.1 Precaution and prevention

Precautionary principle is practised by

The precautionary principle was first used legislatively in 1976 in Germany. According to this principle, our responsibility to future generations dictates that we must preserve the natural foundation for life and avoid irreversible damage to it. The principle is implemented in practice by (translated from Boehmer-Christiansen 1994):

	early identification of risks through extensive research
	acting against potential, irreversible damage before having scientific proof
	reducing emissions of pollutants and promoting cleaner technologies.

- prevention of damage

With this principle, the focus is on thinking about how damage to the natural environment can be avoided so that society does not subsequently have to combat the consequences of environmentally and economically inappropriate actions.

Risk and uncertainty

The precautionary principle can be viewed in relation to current economic decision theory, which distinguishes between decisions under risk and under uncertainty. Traditionally, one distinguishes between risk and uncertainty, using risk about outcomes that can be described by a statistical probability distribution and uncertainty about outcomes where the probability is not known – or where the outcome space cannot be delimited. Uncertainty is thus an expression of the uncertain and unknown consequences that a given decision may have, and that we cannot quantify (for amplification, see Danish Environmental Protection Agency 1999c, Dubgaard & Christensen 1999 and Ingemann 1999a). The precautionary principle must be regarded as an attempt to operationalise this uncertainty.

Risk assessment of pesticides

In the case of pesticides, risk assessment is based mainly on experimental data, the toxicity and other environmentally relevant properties being measured in laboratory conditions, field trials and similar. However, knowledge based on experience from monitoring environment and health has gained increasing importance in the last few years – particularly since the initiation of an extensive groundwater monitoring programme. Even so, approval of new pesticides can only to a very limited extent be based on knowledge gained in that way because there is usually a considerable time span between use of a pesticide and measurable effects in the form of groundwater pollution or illness. (See also Danish Environmental Protection Agency 1999b).

- does not take account of uncertainty and ignorance

From the mid-1990s, the authorities were able to prove that some pesticides occurred in the groundwater. That came as a surprise to many people. The risk assessment on which approval of the pesticides in question had been based did not foresee the possibility of leaching to the groundwater. This example shows that assessing risks on the basis of existing knowledge is not enough to avoid the undesirable consequences that lie concealed in uncertainty and ignorance. It has, for example, since been documented that, even in clayey soil, pesticides can leach relatively quickly down to the groundwater through cracks and fissures from the Ice Age, and a number of research projects have been initiated to remedy the lack of knowledge in this area. It should be noted that it is difficult to relate finds of pesticides in the groundwater to specific uses of land (Danish Environmental Protection Agency 1999b).

- not everything can be investigated

Although the authorisation procedure now requires investigation of a far larger number of risk factors than previously, there will always be some uncertainty in connection with the use of pesticides. For one thing, for financial and ethical reasons, it is not always possible to investigate all physical and biological factors that might affect the behaviour of pesticides in nature and their effect on people. Using animal tests, one can derive statistical probabilities of a rat getting cancer when it is exposed to different dosages of a pesticide. However, to transfer such a result to a risk assessment for humans, one has to make assumptions that cannot be thoroughly tested because experiments with humans are excluded. Furthermore, in principle, there will always be a probability that a given pesticide has effects that cannot be envisaged at all today – the outcome space cannot be delimited. A risk assessment can therefore never be complete – it will always be encumbered with some degree of uncertainty and lack of knowledge.

Zero-value limit as precautionary principle

Up to the present time, Danish policy on pesticide authorisation has included the precautionary principle. A number of substances have thus been banned on the basis of a so-called zero-value limit because they have been detected in the groundwater (Danish Environmental Protection Agency 1999b). The limit value has been set on the principle that the substances are undesirable in the environment rather than on the basis of proven harm to the environment or health. However, it can be held that even using the zero-value limit, there is some uncertainty about the decision because, as mentioned above, it can and often does take a long time from use of a pesticide until it is detected in the groundwater. Some groups thus believe that it is only a question of time and better analytical methods before largely all pesticides are detected in the groundwater. Conversely, other groups assert that the zero-value limit is set arbitrarily, without any relationship with any adverse or possible effects that the substance may have on, for example, yield and farm economy.

When the damage has been done

Owing to the time span between the use of a pesticide and measurable effects in the form of, for example, groundwater pollution, it is usually difficult to return to the original state, when decisions are based on the zero-value limit. The closure of waterworks we see today is due to the sins of the past, and we can do nothing to change them. Future losses as a consequence of earlier use of pesticides cannot be prevented by stopping the use of pesticides today. This also means that the value of banning pesticides in Denmark does not take account of the harmful effects that are on the way and that these harmful effects can therefore not be included in an economic cost-benefit analysis of the consequences of switching to organic farming (Dubgaard 1999a).

Risky technologies may have unforeseen consequences

A similar example is the use of antibiotic growth promoters in conventional farming up to the present time. The consequences of this use cannot form part of the basis for regulating the use of these substances before they have been proven, and by the time a relationship between growth promoters and the development of resistance in the environment has been established, the resistance has developed. In this connection, Ingemann (1999a) differentiates between risky technologies and error-friendly technologies, where error-friendly technologies and their external effects are clearer and permit retreat. Another example of a technology that can have unforeseeable and perhaps irreversible effects is the use of genetically modified organisms. And we know that heavy metals can cause irreversible effects in connection with, for example, mineral fertiliser and recirculation of nutrients.

Scientific knowledge is perceived as imperfect information

The choice of policy therefore depends on the decision-maker's assessment of uncertainly determined – and perhaps partially irreversible – harmful effects. As will be seen from Dubgaard and Christensen (1999), empirical research in risk perceptions and behaviour shows that it can be difficult to explain people's assessment of risk factors on the basis of the assumptions concerning rationality used in conventional economic theory. One reason for this may be that people regard scientifically based estimates of the probability of harm as imperfect information. Where that is the case there may be a safety premium in the form of willingness to pay to avoid the uncertainty. The safety premium can make a crucial difference to the result of a cost-benefit analysis based on expert estimates of risks and a similar analysis based on people's subjective probabilities. If a safety premium does exist, it means that complete removal of uncertainty – for example, by completely avoiding the use of pesticides – may be preferable to the reduction of the risk that can be achieved through risk assessments. This may explain the consumers' willingness to pay price premiums for organic food products, even though scientific assessments indicate that the risk of conventional food products is minimal.

Preferences cover more than just utility value

In this connection it is relevant, as a supplement to the precautionary principle, to mention the principle of sustainability, which states that sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. The consumers' preferences may thus reflect an attitude to uncertainty about risky technologies, since those preferences vary and can cover far more than utility value in the narrow sense of the word. Another approach to economic assessment of the consequences of a major switch to organic farming than the socioeconomic costs is therefore an economic valuation that seeks to measure people's preferences (see, for example, Beckmann et al. 1999).

is important when limits are being set

The above examples show that when one is talking about nature – about nature's ability to ensure human health and welfare – and the importance of human decisions in that connection, there is a need for theories that can handle uncertainty and ignorance. The precautionary principle also provides grounds for research to increase our knowledge about the consequences of the decisions taken by society, with particular emphasis on the irreversible and unforeseeable changes. For a more detailed discussion of the relationship between the precautionary principle and sustainability, see Ingemann (1999a) and Alrøe (1999). The precautionary principle, our lack of knowledge about nature and the consequences of our actions in relation to nature, and the sustainability principle are all important when setting limits on human impacts on nature through farming. In continuation of this, how different groups of people would set those limits depends on their perception of nature.

9.2.2 Perception of nature

Different perceptions of nature

Figure 9.1 illustrates different perceptions of nature. With the perception of nature as robust, it is assumed that almost everything can be substituted with low long-term costs, mainly as a consequence of an anticipated technological development. With the perception of nature as tolerant, it is held, in accordance with, for example the "environmental space" approach, that there are certain limits to how much nature can be exploited, the resources that can be substituted and the extent to which an adverse environmental impact (pollution) can continue without serious consequences. With the perception of nature as fragile, it is held that almost no human activity can be carried on without serious consequences, while the last attitude: "Who cares?", is simply an expression of indifference to nature.

Figure 9.1
Illustration of different perception of nature (Arler 1998, based on Schwartz & Thompson).

(Figure text:
skrøbelig natur = fragile nature
tolerant natur = tolerant nature
robust natur = robust nature
who cares?)

- and limits to intervention in nature

With the different perceptions of nature shown in figure 9, it is obvious that groups with different perceptions of nature will set different limits on man's intervention in nature. At the same time, it should be noted that, although the figure shows fundamentally different perceptions of nature, the perception of nature among different groups in society is constantly changing.

Since the middle of the 1990s, economists have been trying to derive criteria for what can be described as sustainable development. According to Dubgaard et al. (in prep.), the positions today can be divided into varying degrees of "weak" and "strong" perceptions of sustainability. The weakest version corresponds to the robust perception of nature in figure 9.1. It is assumed that it will always be possible to compensate for exhausting natural resources and for environmental impairment with produced capital goods. The sustainability of the development is measured by a single economic indicator: the value of society's total capital, which must not fall over time. The price of this simplicity is an assumption that all natural resources and environmental goods can (easily) be replaced by produced goods.

- but "mainstream" environmental economists

A modern technological society like Denmark and thus also conventional farming are rooted in the robust perception of nature. However, in the last few years, mainstream environmental economists have shifted away from the idealised assumption concerning substitutability by introducing sustainability restrictions that require compliance with physically and biologically determined minimum standards.

In a report from 1998, the Economic Council thus differentiates between different types of capital, including natural capital, and sees it as an important task to identify critical lower limits for nature's life-supporting functions – so-called "critical natural capital" (Economic Council 1998). Critical natural capital such as key ecological processes and species must be preserved in order to ensure the stability of ecosystems and the systems' capacity for regeneration. For resources of this type, the principle of economic optimisation must give way to a precautionary principle. However, most (mainstream) economists maintain that one must at the same time apply a proportionality principle that ensures that the cost to society does not become "unreasonably" big. The economic mainstream has thus moved away from "robust nature" towards "tolerant nature" (figure 9.1).

Ecological economists make even greater requirements concerning sustainability. They assume that ecosystems generally develop non-linearly and in discontinuous hops. They also believe that man has already increased economic activity beyond what can be regarded as sustainable in the long term. Under the strong sustainability criterion of ecological economics, economic analysis is subject to ecological principles. The role of economic theory is then reduced to "cost-effectiveness" analyses of different strategies to achieve a predetermined standard for environmental and natural resources. This perception can be said to correspond to "fragile nature" in figure 9.1 or to a "tolerant nature" that comes under too much pressure and thus becomes fragile.

- make it less simple

With the introduction of stronger sustainability assumptions, not only ecological economists but also mainstream economists are approaching ecological science. The "price" is the loss of the weak sustainability principle's analytical simplicity and simple "policy recommendations". That means that prior to an economic analysis of sustainability strategies, one has to set up ecological, technological and ethical assumptions for which economic theory has no scientifically based suggestions. Conversely, the ecological and technological sciences have no suggestions about how general, social prioritisation is to take place. Here, economists can make a contribution in the form of the necessary analytical tools.

With the ecological perception of nature

Organic farming stemmed from the perception of nature as fragile, which gave rise to the original organic movement. Today, however, most of the organic movement has moved towards a perception of nature as tolerant to a varying extent (figure 9.1). The organic farming movement's perception of nature is described in greater detail below on the basis of Action plan II (Ministry of Food, Agriculture and Fisheries 1999). The organic associations in the Nordic countries describe organic farming as follows:

- environmentally foreign substances are not permitted

The use of industrially produced pesticides and other environmentally foreign substances, including genetically modified organisms, is generally not permitted in organic farming. The risk of pesticides occurring in food products, drinking water and the environment can thereby be excluded. This exclusion can be regarded as a different and more far-reaching precautionary principle than risk assessment and the setting of zero-value limits (see section 9.2.1), on which the use of pesticides in conventional farming is based.

Nature constitutes an entirety

The rationale behind organic farming has its foundation in the ecology's view of the interaction between man and nature, which is a central part of the ideology of organic farming. As can be seen from the quote, organic farming is based on a view that nature comprises an entirety to which man is morally obliged to show consideration, both because it has an intrinsic value and because a more self-sufficient agro-ecosystem can be created by using nature's own regulating mechanisms. Agriculture is, in principle, always intervention in the natural ecosystem, but the intervention can be more or less at variance with nature. Soil preparation is thus regarded as a less "unnatural" intervention than the use of environmentally foreign substances. Nature is perceived as a very complex, coherent system, for which reason man does not always have sufficient knowledge to grasp the consequences of various specific actions. Damage to nature and the environment can therefore be ultimately harmful to man.

with man as an integral part of it

The difference from other forms of farming lies mainly in the belief that, for precautionary reasons, one must take a conservative attitude to intervention and changes in the original interaction between nature and man. The reason for this is that we ourselves – or coming generations – could be affected by adverse consequences that we cannot visualise in advance. This is thus an anthropocentric view of our ethical consideration in our interaction with nature that is based on man as an integral part of nature.

- and technology with unforeseeable consequences is rejected

The difference between the attitude of conventional farming and organic farming to the use of, for example, pesticides, growth promoters and genetically modified organisms can be illustrated by two opposing approaches to new technology. One approach is to use a new technology in the first instance in view of the new possibilities and then to limit its use in the event of unforeseen and unacceptable consequences. The other approach is to reject new technology in the first instance in view of the unforeseeable consequences and only to accept its use if further research and development of the technology manage to cast light on the possible consequences.

However, the trend in recent years has shown that society and conventional farmers are also increasingly rejecting new technology in advance. In Denmark and in the EU, the use of growth hormones as a means of stimulating milk production has been rejected.

9.3 Organic farming's possibility of contributing to a sustainable form of food production

The changes in the perception of nature necessitate some amplification of the rationale and basic principles of organic and conventional production. It has been explained in the foregoing sections how the two forms of production originate from different perceptions of nature. In extension of that, it can be argued that the two forms of production are also based on different perceptions of how sustainable agricultural production should be organised.

9.3.1 Sustainability in farming

Two fundamental perceptions of sustainability

The American philosopher Paul B. Thompson has written several books on a sustainable development in agriculture and on the perceptions of different groups of a sustainable development. Thompson (1997) argues that there are two basically different perceptions of a sustainable development:

	resource sufficiency
	functional integrity.

- resource sufficiency and

The basic idea behind "resource sufficiency" is relatively simple, the main focus being on the relationship between input and output in the systems under consideration. This means, for example, that yield should be considered not only in relation to ancillaries, but also in relation to, say, nitrogen leaching and CO₂ emission. The focus is not, on the other hand, on the internal properties of the system itself. The systems that are most productive are thus the most sustainable. This perception has been very dominant in modern, conventional farming.

- functional integrity

The idea behind "functional integrity" is somewhat more complicated, the main focus here being on the system's internal properties, e.g. the system's ability to reproduce itself and to survive in the long term. The basic view is that the system is vulnerable and that there are some fundamental elements in the system that are reproduced over time in a way or at a rate that depends on the condition of the system at an earlier point of time. For example, the genetic properties of livestock and crops determine the next generation of livestock and crops, and the fertility of the soil at a given point of time determines the production of the crops at a later point of time. In functional integrity, the natural environment is generally seen as an inseparable part of society's sustainability.

With its focus on the vulnerability and internal properties of the system, and with its recognition of our limited knowledge, functional integrity has much in common with the perception of nature as fragile. This perception is the basis of at any rate the more original ideas in the organic movement. A detailed analysis of the sustainability concept in connection with organic farming is given in Alrøe & Kristensen (1999).

The resource sufficiency line of thought can be seen as an extension of the production and efficiency view that predominated in agriculture until the mid-1980s. The focus is expanded from covering only the product itself to also covering environmental parameters. According to neoclassical economic theory, the so-called externalities (= environmental impacts) can be internalised by means of green taxes, so the production can now be optimised, also taking account of the externalities. The form of production known as "integrated production" and the legislation on nitrogen emission are examples of the resource sufficiency approach. The agricultural sector has also done much on its own initiative to spread the resource sufficiency approach in farming – for example, through the booklet "Good farming year 2000" (Danish Agricultural Advisory Service 1996). The last few years have also seen the start of some advisory and R&D projects that will contribute to a sustainable development in accordance with the resource sufficiency philosophy. All these initiatives will doubtless ensure effective solution of recognised environmental problems while at the same time taking account of production. On the other hand, one cannot, for good reasons, expect account to be taken of as yet unrecognised environmental problems.

In organic farming and other low input forms of farming, the focus is more on the system's internal properties than on external efficiency. The systems are often less vulnerable because their production is to a great extent based on diversity and internal properties. The lower dependence on external resources and greater focus on the system's own reproducibility increase the system's sustainability as understood in functional integrity. As a consequence of the perception of nature and increased focus on the system's vulnerability, it can be assumed that the system will in itself prevent environmental and health problems. However, the lack of focus on the external effectiveness of the system means that these forms of operation are not necessarily effective from the point of view of resource sufficiency and that the size of the production is typically smaller. This analysis of 100% organic farming indeed shows that production is considerably smaller than in present-day farming (see chapter 5).

Conversion costs in step with the market

All else being equal, the costs per produced unit would therefore be higher with the organic form of production. The increase in costs would be intensified if the rate of restructuring were accelerated beyond the market potential. That is due to the big conversion costs that could arise because of the adaptation of livestock housing systems and the dispersal of livestock production in connection with accelerated conversion. With a market-adjusted rate of conversion, such extra costs could be avoided. Organic food products therefore depend on price premiums or on society's support for the form of production. However, there are limits to the extra cost that can be accepted. In step with increasing conversion to organic production, there would therefore be a growing wish for increased efficiency and more efficient use of resources in organic farming as well. If, at the same time, more knowledge were built up on the basis of organic cultivation principles, it can be assumed that it would become possible to increase efficiency without diminishing the system's functional integrity or abandoning the preventive approach to environmental and health problems.

Both organic and conventional farming are thus working towards a sustainable development, but from different perceptions of the concept of sustainability. The question is now whether the organic methods of production can be made more efficient without abandoning the perception of sustainability on which organic farming is based.

9.3.2 Challenges for organic farming

The use of conventional feed
- would be limited or perhaps banned altogether

An example of an area in which there is a need for development, is the requirements concerning the degree of self-sufficiency in feed and manure in organic farming. Today, organic farmers are allowed to use 15% conventionally produced feed for cattle and 25% for pigs and poultry. They are also allowed to purchase up to 25% of the crop-specific nitrogen standard in the form of conventional manure. However, these rules are under discussion and have already been tightened (in 1999), with a 5% reduction in the amount of conventional feed that may be used (to max. 10% and 20%, respectively, of the feed need). At EU level, a proposal has been put forward to ban the use of conventionally produced feed altogether. The rationale behind the tightening of the rules is that it is in practice possible to produce without the use of conventional feed.

The tighter rules are of only minor importance as long as only a small proportion of farms in an area are organic and there is surplus manure in the area. If there were a large proportion of organic farms and there were not surplus manure in the area, other sources of nutrients would be needed in the long term to make up for export and loss of nutrients and maintain a sustainable plant production. The analysis in chapter 5 shows that imported feed would be an important source of nutrients. In principle, it has not been decided whether the imported feed should be organic or conventional feed. The main point is that there must be equilibrium in the long term, and the ideal solution would be a return of the nutrients from towns. In the short term, however, it is hardly realistic to envisage a change in waste treatment in towns, and one can thus discuss what would be the best solution from an organic point of view:

Export and loss of nutrients would have to be made up for in one of several ways

	to buy the nutrients in the form of conventional manure (as suggested by the EU legislation)
	to buy conventionally produced feed
	to buy organically produced feed
	to buy mineral fertiliser.

Other questions of principle

Besides the problem of nutrients (section 9.1.2), the analyses in this report have indicated other questions of principle in a 100% organic agricultural sector:

	should the organic rules be more stringent in Denmark than in other countries, with the possible consequence that the consumers buy, for example, foreign organic apples instead of Danish ones?
	what role could and should conventional production play in the production of seed and breeding stock for organic production?
	how does one assess whether it is acceptable to use specific technologies in organic farming?
	how should one prioritise between the input of manpower, the consumption of fossil fuels and the production of biomass for energy purposes?
	how can organic farming be made more efficient without going against its basic values?

Development of organic farming
-basic principles
- and institutional network

Continued conversion depends on organic farming being able to develop into a more competitive and at the same time sustainable form of production by dealing with the challenges facing it. However, this requires a general debate concerning the rules governing organic cultivation with a view to achieving greater local and global sustainability. Michelsen & Kølster (1998) have analysed different aspects of organic farming. The analysis shows that the organic movement and organic farmers in Denmark cover a very broad spectrum. There is thus a good possibility of a positive development, but also a risk of the basic organic principles being diluted. Ingemann (1999b) has analysed Danish agriculture's institutional network and its potential for organic restructuring. The analysis shows that organic farming is integrated in the institutional network. There is a big potential for coordination in the case of primary and secondary producers and the whole of the technology chain. On the other hand, it is more difficult to discern a similar network in the case of distribution and consumers.

9.3.3 Development perspectives

Market-driven conversion and government regulation

It will be seen from section 7.5 that a market-driven conversion can be regarded as relevant and desirable from a direct economic point of view. However, it is at the same time stressed that agriculture's impact on the common environment constitutes a basis for government regulation. In this connection, a politically promoted acceleration of the conversion, using, for example, tax and grant instruments and public procurement policy, can be justified by referring to the positive effects of organic farming. From this it follows that the development perspectives depend both on market economic factors and political decisions.

The development trend for Danish agriculture

This is underlined still further by the fact that, in the last few decades, the whole of Danish agricultural production has been included in an extensive regulatory and support system, which means that the present level of production and the present production methods cannot be taken as an expression of a result of market economic development trends. Similarly, the direction in which the agricultural sector develops in the future is expected to be a result of interaction between market economic factors and agricultural policy regimes. The perspectives therefore depend partly on the development of the market, partly on the initiatives promoted by the Danish agricultural sector's decision-makers in connection with the sector's future development strategy, and partly on political decisions concerning the agricultural policy of the future, both nationally and internationally.

- is influenced by sustainability and values

Reflection on the future development of organic farming puts the focus on sustainability and similar "soft" values (Abrahamsen & Ingemann 1998 and Ingemann 1999a). These values affect the individual demand for organic food products and political decisions about promoting environmentally sound, animal-friendly production systems through agricultural policy measures. Continued high prioritisation of this focus means that the environmental and animal-ethical effects of organic production methods will increasingly influence both market-based demand and political decisions. That will imply powerful incentives for further development and application of such production systems.

However, it should be remembered here that other environmentally sound, animal-friendly production systems have also been developed, although organic farming is the only one that is based on a clear and internationally recognised concept for which international production, certification and marketing structures have been developed. For this reason it must be assumed that a continued positive trend under the "sustainability" banner will enable continued expansion of organic food production. However, that depends on the organic form of production continuing to develop as an alternative to other forms of agriculture, so that there is a basis for the consumers' preference for organic food products.

According to Action Plan II, organic production must be developed in step with the wishes of society

At the beginning of February 1999, the Danish Ministry of Food, Agriculture and Fisheries presented a plan for promotion of organic farming in Denmark, the so-called Action Plan II, the title of which is "Økologi i Udvikling"(Developments in Organic Farming). It is thus proposed that the organic form of production be developed in step with society’s needs and wishes. In that connection, consumer demand is regarded as a powerful motivator. There are therefore clear indications that the development is already in progress in Denmark.

Forecast for restructuring 2000, projected to 2008

In Action Plan II, a projection is given for the conversion to organic production up to the year 2002. On the basis of this projection, 300,000 ha will have been converted by the year 2002, with a rate of increase of about 50,000 ha per year. Projecting this trend with the same rate of increase gives 600,000 ha in 2008 converted to organic farming. The action plan also presents an analysis of the potential for restructuring within different types of farming. The analysis shows that the potential converters account for a total of 1,236,000 ha. For one third of these, increased cooperation between different types of farms would be required (Table 9.1). Folkmann (1999b) has investigated the possibilities for conversion to organic production up to the year 2008 and finds a similar potential.

and barriers to conversion

There can, however, be other barriers than purely structural ones to conversion to organic production, such as personal and educational barriers (Folkmann 1999b). Personal barriers can, for example, arise from different perceptions of nature (cf. section 9.2.2). However, the increasing conversion in recent years has shown that such barriers are not static, and it can therefore be assumed that the trend will gradually overcome them.

Table 9.1
Acreage at present farms that are potential converters to organic production, with a breakdown between two types of soil (1000 ha) (based on the Ministry of Food, Agriculture and Fisheries 1999)

Distribution of potential converters

On the basis of the Action Plan II's forecasts, two scenarios have been set up for possible distributions of converted farms 1998-2008 without assuming structural changes. In the first scenario, it is mainly dairy farms that are converted. It is assumed that there is an equal distribution between the two densities and that, for every ha converted at dairy farms with 1-1.6 l.u./ha, ½ ha from the arable farms is used through farm cooperation (table 9.2). In the second scenario, the conversion of potential converters is assumed to be equally distributed between the three different types of farm (table 9.3).

Table 9.2
Converted 1998-2008, mainly dairy farms (1000 ha)

Table 9.3
Converted 1998-2008, equally distributed conversion (1000 ha)

Further projection of the forecast to 2018

A scenario has also been set up in which Action Plan II's forecasts are projected a further 10 years to 2018, with the same rate of conversion and an equal distribution between potential converters. This gives a total of 1,100,000 ha converted to organic production 20 years hence. This figure is based on an assumption of utilisation of most of the acreage of the present potential converters (table 9.1). Structural changes in connection with the establishment of cooperation between dairy farms and arable farms are also assumed, but not changes in the production of special crops etc. Table 9.4 shows the distribution of the converted farms 1998-2018.

Table 9.4
Converted 1998-2018, equally distributed conversion (1000 ha)

Effect of the development on the use of pesticides

Continued conversion to organic production would result in a reduction in the average consumption of pesticides. The Sub-committee on Agriculture's report on phasing out the use of pesticides gives the treatment frequency in present production. Table 9.5 in the present report gives the average treatment frequency in different types of farm after the development of conversion to organic production described above. It will be seen that conversion of 500,00 ha up to the year 2008 would result in a reduction of 14-18% in the treatment frequency.

Table 9.5
Average treatment frequencies (TFI) after a projected conversion to organic production 10 to 20 years hence (according to Danish Environmental Protection Agency.1999a)

Look Here!

However, the development perspectives for organic farming cannot be regarded solely as a question of farmers' desire to convert and consumers' desire for organic products, and it has to be borne in mind that food production is part of an extensive network from soil to table and vice versa (Ingemann 1999b). This network comprises the products' route from the farmer's soil, through the processing companies and the wholesalers and retailers, to the consumer's table. It also comprises a wide range of research and development institutions, which provide the necessary technology, and advisory institutions, which ensure that the farmers are informed about the technological and economic possibilities and perspectives.

Communication

The communication between all these levels is important – and particularly important in the case of organic food products because the consumers must be confident that all levels of the production process proceed in accordance with the requirements for organic production. It has been stated that this confidence can be achieved through nearness or certification. By nearness, we mean that the producers are located physically close to the consumers, and this strategy is therefore assumed to be most suitable for small enterprises. These enterprises can at the same time function as a dynamic, development-oriented underwood that attracts the most motivated and creative producers. Conversely, the large companies can act as "battering rams" on the export markets and form the basis for production of organic products that can directly substitute conventional products. Such companies must primarily base themselves on certification, which means that the consumers' confidence will depend on the effectiveness of the control system. All studies show that there is already great public confidence in the government Ø-label (Organic label) in Denmark (Ministry of Food, Agriculture and Fisheries 1999).

A massive conversion, including making use of the possibilities of reaping the benefits of early establishment on major export markets would require extensive input by the network outlined above, and the players would have to agree on such a strategy and be motivated to pursue it.

The development is also influenced by the international development

Lastly, it should be noted that the development of organic farming will also be influenced by international agricultural and trade policy. In this connection, steps have been taken in the WTO towards uncoupling government subsidisation and volume of production. In the EU debate on agricultural policy, there is a call for discontinuation of surplus production and for subsidisation elements to be linked to rural district development and the promotion of environment-friendly production systems. The analyses in this report show that the organic form of production would result in a fall in primary production (see chapter 5).

- and by subsidisation schemes

The trend in international subsidisation schemes could mean that organic production systems become economically more attractive, both nationally and at farm level – particularly if the organic form of production manages better than it has done so far to use its potential for contributing to the development of rural districts (cf. Michelsen & Kølster 1998). From the point of view of the national economy and the government finances, promoting organic farming through subsidies would not necessarily imply increased expenditure if it were done by reallocating existing agricultural subsidies and if the resulting production resulted in an economic return of the same magnitude as the hitherto subsidised production.

9.4 Summary and conclusion

The organic scenarios used in this report are based on a number of assumptions that can be discussed in connection with the perspectives for organic farming in Denmark. The main assumptions can be divided into two groups, as follows:

Interpretation and form of production

and preference for organic production

1. the organic form of production, which in turn depends on the interpretation of organic farming’s basic concept, including legislation and rules on imports and self-sufficiency in fertiliser and feed.
2. society’s interest in and the consumers’ preference for the organic form of production.

is related to the precautionary principle

The trend in organic production has hitherto been based extensively on changes in consumer preferences to the benefit of organic products. This change in consumer preferences may be connected with a conscious or unconscious use of a preventive or precautionary principle based on the consumers’ experiences with the use of new technology in farming.

sustainability

Involvement of the precautionary principle is bound up with a perception of nature as more or less fragile and acceptance of man as an integral part of nature. In the form of the concept "sustainability", this insight has gained a big foothold in the national debate.

and perception of nature

Organic farming is based on a different perception of nature than the one that has dominated in conventional farming. This difference in the perception of nature leads to a different approach to food production and prevention of environmental problems. Seen in this way, organic farming will do more to prevent environmental problems than conventional farming. However, the level of production and productivity are lower. Organic food production would therefore involve higher production costs. However, it is estimated that it would be possible to improve the efficiency of organic farming in the long run. A condition for this is, however, that organic farmers want a development in which the rules are generally up for debate but naturally with proper respect for organic farming’s values.

The socioeconomic analyses in section 7 show that the costs of compulsory 100% conversion are high. If one instead allowed demand and the price mechanism to govern the rate of conversion, there would be no guarantee as to how much would be converted, but it can be assumed that the conversion that did take place would improve society’s welfare. That is because, according to current economic theory, a market-driven change is synonymous both with a more effective resource allocation in society and with the consumers, through their change of preference, individually assigning the "right" value to organic food products, corresponding to their willingness to pay. Since the change would be linked to beneficial environmental effects, it would not need to be based on market forces alone, to improve society's welfare.

Government regulation and changed subsidy schemes increase conversion

It follows from the above that the impact on the common environment from agriculture constitutes grounds for government regulation and that increasing the rate of conversion may be warranted. In continuation of that, the trends in international agricultural and trade policy will be of importance. For example, the current trends point in the direction of unlinking subsidy and production quantity and towards higher prioritisation of environmental objectives. These perspectives may imply incentives for a continued expansion of organic food production.

As far as the market perspectives are concerned, continued high prioritisation of the environment and animal welfare is presumed to lead to continued growth in the demand for organic food products. The reason why this prioritisation is assumed to be primarily addressed to organic food products is that only organic farming is based on a clear and internationally recognised concept.

if the players agree

All in all, it follows that the development perspectives will depend on market conditions and political decisions. In addition to that, however, it must again be stressed that the development perspectives also depend on whether the relevant players agree on and are motivated for a conversion of the extensive network of companies and institutions of which agriculture is a part.

and reduce the use of pesticides

With respect to society’s current desire for a reduction in the use of pesticides, organic farming offers an obvious option. If the development continues as hitherto, about 20% can be expected to have been converted by the year 2008, which will result in a 14-18% reduction in the average treatment frequency compared with present practice. As long as there is a market prepared to pay a price premium for organic products, that will be the socioeconomically cheapest solution.

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