DS Consulting

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The rise and fall of Organic Farming in Greece

In June 2004, the European Commission, responding to the growing expansion of Organic Farming in European Union, proceeded into adopting a European Action Plan aiming at the establishment, reinforcement and development of the Organic Market. The policy paper consisted of 21 agenda points – actions for the Member States and indirect payments to farmers were included, although not clear enough (as with every policy document). During the same year, the Greek Ministry of Agriculture had a plan for developing Organic farming in Greece. The first thing to do, if you want to get the job done, is to spend money . So, the plan was this: Give money to farmers and the whole sector will blossom like a rose.

The first and last thing they have done, was to introduce a new subsidy program for farmers converting to Organic farming whilst at the time most of the direct payments for conventional farming had already come to an end. A new “el Dorado” has risen for farmers and the opportunity wasn’t missed.

Organic Farming in Greece was representing less than 0,8% of whole agricultural land at the time (1991 – 2003) and at the end of 2006 the percentage rose at 4%!!! But with no other policy actions to back up the rise, farmers were only converting to Organic Farming for the money. Most of them only knew that Organic Farming means “no chemicals” and  “Consultants” were only filling in applications for subsidies.

A new business arose…

Legions of farmers converted to Organic Farming, but there was something missing: they were in dire need of auxiliary services in order to handle the paperwork so this was the awakening of the “consultants” and of course room for new Certification Bodies.

Consultants are basically agronomists who scarcely set foot in a farm and their core business is to scan any possible subsidy program that can fit their clients (farmers).

Until 2006 there were only 3 Certification Bodies in Greece for Organic Products, but at the end of 2009 the number rose up to 11. Organic certification is compulsory, by EU regulation so even if one converts only for receiving the subsidy, he is still obligated to submit his unit in the Control System.  So the rational for opening a new CB was this: Since farmers are obligated to enter the Control System, there will always be a lot of work. And if subsidy programs open once a year, there’s a lot of money for a lot of people. Is this sustainable? Apparently not!

The unpredictable factor…

By gathering flocks of farmers, with no expectations besides getting the subsidy money, the Consultants obtained negotiating power because the farmers only knew them (as immediate partners) and did not expect anything from Certification Bodies apart from getting the certificate on time to collect the subsidy and paying the lowest possible certification cost. So, consultants started to bargain hard with Certification Bodies for the lion’s share and certification costs began to drop. Certification Bodies were not satisfied with this turn but thought that they will get fresh income every year from the new subscribers. So, rules may have changed but eventually no harm done.

But things did not proceed as planned in the first place…

Which brings us to where we are today: In the middle of the worst financial crisis Greece has ever faced, the Government cannot in many regions pay subsidies. Farmers, until they get the older payments, do not pay both consultants and Certification Bodies. No new subsidy programs were opened since 2006 and the first big program (2004) has already come to an end, because it lasted for 5 years. So the first group of farmers from 2004 has absolutely no motivation for staying in the Organic Control System and more than 3.000 producers are expected to quit within the year. Two more subsidy programs will end by 2012 and more than 16.000 organic farmers are expected to walk out, the same easy way they initially walked in. Certification Bodies do not have cash flow and therefore how do we expect them to do their job right? Consultants are looking for alternatives and farmers are looking for a new good business. Leaving us with the Ministry of Rural Development and Food (it was renamed in the meantime) which missed the chance for “rural development” and cannot secure “food”.

Bottom line: there was no plan after all…