Economic Performance of Organic Farms in Selected European Countries: Situation, Development and DeterminantsThis paper gives an overview of the financial performance of organic farms in selected European countries and investigates the main factors influencing the profitability of the conversion to organic farming. To assess the relative performance of organic farms profits per ha UAA and profits per family work unit as well as several factors influencing the profitability were analysed and compared to the respective figures of conventional reference farms. For the interpretation of the results, it should be borne in mind that the quality and availability of data is varying between countries. >ZZ>The analysis shows that organic farming has been an economically interesting alternative in many European countries even though yields were generally significantly lower. One of the main determinants of profitability is the realisation of higher farm gate prices. Premium prices could generally be realised for crop products, while for livestock products marketing was often more difficult. The development of the Common Agricultural Policy has all in all proved to be favourable for organic farming. The introduction of the support payments for organic land within the agri-environmental programs, the conversion of price support measures to area based compensation schemes as well as the payments for set-aside land have increased the relative profitability of extensive farming systems. Especially organic arable farms have been benefiting from these developments.The development of profits in organic and comparable conventional farms is remarkably similar. This indicates that independent from the current system external factors are influencing both farming systems in very much the same way. The implementation of the Agenda 2000 and the political activities of some European governments will further improve the framework for organic farming. A key factor in the future development of organic farming in the number of consumers willing to pay a price premium for organic products.
