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Can Organics Produce Profits?
MADISON, WI, OCTOBER 29, 2007 -- While most farmers recognize the need to protect natural resources, management decisions are often driven by concern for economic survival. The words organic and profit usually clash, but new research shows they can be compatible. The results of the study are published in the November-December 2007 issue of Agronomy Journal.
Farmers can increase profitability by reducing production costs. Reducing tillage and increasing crop diversity can reduce production costs by decreasing fuel and labor use, and decreasing use of fertilizer and pesticide inputs. Profitability might also be increased by increasing crop revenues. Organic cropping systems could potentially increase crop revenues due to price premiums offered for certified organic crops. However, crop revenues also depend on crop yields, so crop productivity is important for any cropping system to be profitable.
An interdisciplinary team of scientists from the USDA-ARS and the University of Florida evaluated crop yields and economic costs and returns during a four-year transition to a range of cropping system alternatives near Morris, MN. The research team, led by David Archer, compared 16 different cropping system treatments.
Yields of corn, soybean, and wheat were more than 15% lower when using organic versus the highest yielding conventional practices.
"This was likely due, at least in part, to higher weed pressures that emerged in the organic treatments compared to the conventional treatments," explains Frank Forcella, USDA-ARS, North Central Soil Conservation Research Lab., Morris, MN, a research agronomist who evaluated weed populations as part of the study.
As a result, without organic price premiums, there were significant reductions in short-term profitability of organic systems compared with conventional systems. However, with typical organic price premiums, profits for several organic cropping system alternatives were competitive with conventional systems. Within conventional systems, no significant differences in profits were detected for tillage and rotation alternatives, suggesting no economic barriers to adoption of greater crop diversity and less tillage in the short term.
Research is ongoing to study the long-term performance of the alternative cropping systems including the greenhouse gas emissions, nitrogen cycling, and soil carbon effects of the cropping system treatments, and to evaluate the long-term economic viability of these systems.
Agronomy Journal is the flagship journal of the American Society of Agronomy. Articles convey original research in agriculture, natural resources, soil science, crop science, agroclimatology, agronomic modeling, production agriculture, and instrumentation.