1. Organic farming development in the Czech Republic Research Institute of Agricultural Economics (VUZE)‏ Andrea Hrabalová Pavla Wollmuthová Summer Academy, 16 June 2008

2. My Background to this talk Since about 2002 scientific studies on European organic farming policy, mostly funded by the European Commission ( EUCEEOFP 2002 – 2005, ORGAP 2006- 2008 ) Involvement as advisor and expert in designing and guiding Czech organic farming policy (Action plan, OF Scheme within AEMs) Responsible for providing statistics about OF development in CZ (for MoA - Eurostat)

3. Content OF development in CZ (1997-2007) Inspection and certification system Action Plan for OF development Area payment scheme for OF (€/ha) Other policy instruments supporting OF SWOT Analysis Data sources

4. OF development in CZ (1997-2007) 19971998200020032004200520062007 Total organic area (ha) 20 23971 621165 699254 995263 299254 982281 535315 581 Total no. of organic farms 2113485638108368299631 318 Share of total organic area in total UAA (%) 0,471,673,865,976,165,986,617,35 Share of organic farms (%) 0,580,961,542,272,362,572,873,93 Share of area in conversion (%) nd 402320111416 Average size of organic farm (ha) 96206294315 308292239 Average size of conventional farm (ha) 118 117120121132127128

5. OF development in CZ (1997-2007)

6. Size structure of enterprises in organic farming, 2006 Size groups of organic farms according to area (ha) Number of organic farms Area (ha) Total% % 0 až 5545,7105,50,04 5 až 10384,02810,10 10 až 5021422,86 018,32,19 50 až 10016417,412 005,14,36 100 až 50029030,970 113,125,48 500 až 100011512,284 772,330,81 1000 až 2000535,673 597,526,75 2000 a více121,328 243,410,27

7. Milestones of OF development 1990Subsidies for OF, based on investments approach,were provided by the MoA, available until 1992 1993“Methodological Instruction of the MoA for Organic Farming No. 655/93-340” became effective as a first national directive, inspection and certification system was established and state label “BIO – Organic Farming Product” was introduced 1998Renewal of state support for OF within support for non- productive functions of agriculture 2001Act No. 242/2000 on Organic Farming came into force and the MoA entrusted KEZ o.p.s. with inspection and certification 2003Action plan for OF was approved by the MoA and by the Government in 2004 2004State support for OF was implemented as a part of AEMs within new HRDP 2005Act No. 553/2005 (amended Act 242/2000) came into force to omit all provisions which are duplicated in EU regulations 2007 “Organic Farming and Organic Food Program” was approved by the Government and launched in 2008

8. Inspection and certification system inspection and certification system can be described as a mixture of state and private system ( MoA represents a state side to private inspection bodies ); the first inspection and certification system was started in 1993; since 1999, KEZ o.p.s. ( Inspection of Organic Farming, publicly beneficial company ), has been authorised to carry out OF inspection in CZ; in 2003, KEZ o.p.s. was granted IFOAM accreditation;  in 2006, two adittional organisations started to operate in CZ:  ABCERT GmbH  Biokont CZ, Ltd.

9. Action Plan of the Czech Republic for the development of Organic Farming by 2010 to achieve by 2010 an approx. 10% share of organic farming in the total agricultural land; main priorities are divided into 6 topics:  1. Relation between OF, environment and animal welfare  2. Strengthening customer confidence – promotion  3. Processing and marketing  4. Ability to do business and financial viability  5. Research, education, consulting  6. Policy tools and solutions

10. Action Plan for OF development although the AP is considered as the main national strategic document for OF development, its implementation is not systematically supported by the state and was poorly implemented to ensure the AP implementation, the “Organic Farming and Organic Food Program” was designed as a concrete measure which details the tasks of the AP. ( The program was approved by the Government and launched in 2008 with annual support around CZK 10 million ).  The Program’s main goals are:  Improving consumer confidence in OF by promotional activities,  Promoting consumer awareness by their use in the public food service,  Support for the production of organic foods,  Support for the marketing of organic foods,  Research, education and advisory services for OF.

11. State support for OF- history the first support for OF was provided from 1990 till 1992, the renewal of government payments to OF was in 1998 and they were part of a government regulation concerning support of non- productive functions of agriculture:  in 1998-2000: the aid was provided in the form of direct payments based on a system of points and the value of one point depended on total budget and number of hectares applying for support;  since 2001: Regulation 505/2000 was valid with a fixed amount of money per hectare of organic area;  in 2002 and 2003: amended Regulation 500/2001 came in force but the payments remained the same. in period 2004-2006, OF was supported within AEMs in the Horizontal Rural Development Plan (HRDP) through the Decree No. 242/2004 and its amendments, since 2007, OF scheme is included in AEMs within the framework of new Rural Development Plan designed according EU Regulation 1698/2005 (EAFRD) for the period 2007-2013.

12. Area payment scheme for OF (€/ha) * The growth calculated in CZK 1998 1999- 2000 2001- 2003 2004- 2006 2007- 2013Growth (%) IIIIIIIVVIV/ IIIV/ IVV/ IV* Arable crops60 6311015575%41%21% Grassland603031347110%109%78% Permanent crops6090110381849246%123%91% Vegetables60 110344564213%64%40% Herbs/spices60 63344564446%64%40% total support for OF (1000 €)1 3162 5027 26610 73317 96748%67%x average payment (€ / ha) 552534476638%40%x uptake (%)3460848187-3%7%x

13. Land use structure in OF and CF OF2001200220032004200520062007 Arable crops 19 16419 53619 63719 69420 76623 47830 580 Grassland 195 633211 924231 683235 379209 956232 190258 079 Permanent crops 9638989281 1708201 1961 591 Others 2 3542 7782 7477 05623 44024 67125 331 Total 218 114235 136254 995263 299254 982281 535315 581

14. Area payment scheme for OF the main policy instrument supporting OF ( since 1998 ) despite of the lowest payment level (45% of arable land) – grassland cover more than 80% of the organic area and differ from the structure of the overall farming, where the share of grassland is only about 23% the reason is supposed to be found in:  low risk and costs of converting grassland in marginal regions  no clear political decision on OF purpose – Is an increase in production of organic products OR maintenance of countryside the main goal?

15. Policy instruments – focused on processing of organic products no special economic measures focused on OF (absence of loans and subsidies and viable concept); some preference for organic farmers was used within the Farming Operational Programme in period 2004-2006; keeping the advantageous allowances for organic farmers and organic food producers in some measures within the new RDP (2007-2013): Axis I  modernizing agricultural holdings (27 / 15 points)  increasing the added value of basic agricultural and forestry production (20 + 15/7 points)  support of young farmers (27 / 15 points) Axis III  diversification in non-agricultural activities (15 / 10 points)  support of tourism (15 / 10 points)

16. Policy instruments – focused on organic farming promotion and marketing the advertising campaign project titled “The Promotion of Organic Farming and its Products – Natural Riches” approved by EU (for period 2008 – 2010); the international conference “Bioacademy – European summer conference in OF in Lednice (since 2001); various traditional events: the Barták Cup, the “Czech Organic Product Food of the Year”, the “Favorite Czech Organic Product of the Year” and newly the “September – Organic Food Month (since 2002 / latter 2005); participation in fairs: at the trade fair BioFach and national the Earth Provider in České Budějovice, the Salima and G+H trade fair in Brno, the fair Wine and Spirits and newly Biostyl in Prague (mainly since 2005); the educational promotional campaign “Organic Living – Get to Know Organic Farming and Organic Foods” (in 2007); the marketing survey about awareness of organic farming and organic foodstuffs provided by GfK Prague (in 2006); group of seminars „distribution and marketing in OF“, welfare in OF, processing and marketing in OF, etc. (in 2005 and 2006)

17. Policy instruments –focused on research, education and consultation introduction of support title for advisory service in the area of OF conversion as one of three preference themes supported by the state up to 80% (since 2004); incorporation of OF into the research themes in the framework of the NAZV (National Agency for Agricultural Research) and into the research programme for the agrarian sector for the period 2007- 2012 (since 2005); offer of numerous trainings, courses, and excursions, creation of a network of model organic farms, realization of “Organic goes to school” project etc. within the network of Agri-Environmental Information and Advisory Centres supported by the Operational Programme – Human Resources Development (2006-02/2008); contribution for publications (textbooks for OF, practical handbooks, methodological papers (significantly since 2004); realization of research databank in OF (since 2005)

18. SWOT Analysis 1/2 Strengths:Weaknesses:  existence of appropriate legal framework corresponding to EU legislation, accepted standards;  political will to support OF (OF scheme within AEMs);  well established inspection and certification system;  powerful organic farmers’ association PRO-BIO;  recognized logo “BIO” for organic products;  agreed AP  low amount of organic production considering the high share of OF in UAA;  underdeveloped processing of organic products and complicated legislation regulating organic processing;  lack of support for market development and low level of market organisation;  non-existence of OF promotion (public is not familiar with benefits of OF, logo etc.) (partly improved);  insufficient support of research, education and consultation focused on OF (improved).

19. SWOT Analysis 2/2 Opportunities:Threats:  advantageous allowances for organic farmers and processors under the new RDP;  increasing consumer demand for organic products and great potential of growth in organic food consumption;  launched Organic Farming and Organic Food Program (followed on AP);  increased organic assortments by conventional retailers and massive campaigns promoting their own brands of organic food;  increased demand for some organic raw materials from producers of organic foodstuffs.  growing share of imported organic food;  refusal of conventional farmers to organic farming;  stagnation in the development of processing and a decrease in the number of on-farm processors;  too high price premium for organic food due to low level of distribution infrastructure / cooperation among vertical market actors;  low consumers awareness and knowledge of OF and its products (partly improved).

20. Data sources YEARBOOK 2006 - ORGANIC FARMING IN THE CZECH REPUBLIC, Bioinstitut, o.p.s., www.bioinstitut.cz YEARBOOK 2007 - ORGANIC FARMING IN THE CZECH REPUBLIC, Bioinstitut, o.p.s., www.bioinstitut.cz Horizonatl Rural Development Plan (2004-2006) Rural Development Programme of the Czech Republic (2007-2013) Action Plan of the Czech Republic for the development of Organic Farming by 2010 EU Project EUCEEOFP - “Further Development of Organic Farming Policy in Europe with particular emphasis on EU Enlargement”