Files
Abstract
The financial performance of organic and conventional farming is highly influenced
by the EU direct payment policy. While organic farms receive considerable support from agrienvironmental
programmes, the design of the first pillar put organic farming at a disadvantage
in the past. The 2003 CAP reform has changed this situation particularly by decoupling direct
payments and reducing price support. This paper has therefore the aim to identify and assess
the impact of the CAP reform on the relative profitability and production structure of organic
farms in Germany. The statistical analysis of FADN data from the years 2003/04 and 2006/07
suggests that differences in payments from the first pillar decreased, affecting positively the
relative profitability of organic farms. A survey among German organic farmers revealed
however that only a minority attributes substantial changes in profits to the CAP reform and
decoupling, respectively. The outcomes of this investigation suggest that organic farmers still
require more specific information and advice in order to use the new possibilities given
through decoupling.