SLI-Paper 2003:5

Ecological farming – profitable for the farmer?

Authors: Håkan Rosenqvist 

The purpose of this report is to compare the profitability of ecological and conventional farms with comparable external conditions, i.e. to try to isolate the effect of ecologically oriented farms and conventional farms respectively. The estimations are carried out at the farm level. Costs for land and constructions have not been regarded in the profitability comparisons. Prices and costs concern the year 1999 and support concerns the level of the environmental support programme for the period 2000-2006.  

The analysis shows that ecological farms are more profitable than conventional farms within the same production area. This is valid for both milk and plant farms in all considered regions. For both areas of production, the profitability advantage of ecological farms is most pronounced in the most advantageous agricultural districts.

The high relative profitability of ecological farms in the south of Sweden is explained by the high price premium on ecological dairy products. When the harvest is high, a high price premium means more than when the harvest is low, which also positively affects dairy farms in these areas. In relative terms, the price premium on ecological products is much lower for dairy than for vegetable products. The good profitability of ecological animal keeping therefore depends more on societal support of ecological farming than is the case for ecological vegetable production.


Håkan Rosenqvist

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