How Profitable is Sustainable Farming?

Let's check out the Market Access and Demands!

Farmers are pushed to be sustainable in order to keep their businesses alive. Many regulations and laws have been created to change the situation in the farming sector, from production to maintenance and manufacturing. Farmers need to adapt to the latest trends and regulations, and often, their efforts will cost them money.

Still, this change is moving forward for the good of our environment, saving our planet. As farmers, we need to be able to cooperate in vision to keep our earth in good condition for a long time. This article will cover the profitability, market access, and consumer demand for sustainable farming.

Before we get deeper, let's agree to the same vision: sustainable farming will bring us more profits, or at least the same amount as the one we used before, while keeping our planet in good condition for a long time, making it possible to gain more profit in a longer period.

Get Deeper with Sustainable Farming

Sustainable farming, often called "sustainable agriculture," covers a wide range of practices, aiming to produce food in an environmentally friendly, economically viable, and socially responsible way. In simple terms, sustainable farming is an approach that seeks to balance the need for food production with the preservation of environmental quality and social equity. This includes methods such as crop rotation, organic farming, and agroecology, prioritizing biodiversity and soil health, and reducing the reliance on synthetic inputs. There are a lot of methods that can be used to achieve sustainable farming. We can generally address energy flows, nutrient cycling, and population-regulating mechanisms while keeping the system resilient.

We understand the definition of sustainable farming, but what is the difference?

Sustainable farming practices are designed to enhance agricultural productivity while minimizing environmental impacts and promoting social equity. One of the primary sustainable farming practices is organic farming, which avoids synthetic fertilizers and pesticides in favor of natural alternatives. Studies have shown that organic farming systems generally exhibit lower nitrogen losses and reduced risks associated with chemical inputs than conventional systems, leading to higher biodiversity. While organic farming may incur higher initial costs due to labor-intensive practices and lower yields, it often results in higher long-term profitability through premium pricing and reduced input costs.

Profitability in Sustainable Farming

One of the biggest questions is how profitable sustainable farming can be.

We won't be talking about numbers here because they will vary based on our location, production scale, and the tools we use. The first thing is that sustainable farming yields long-term savings and offers opportunities for premium pricing.

Farmers may face higher upfront costs for initial investments in transforming to sustainable practices. In the long term, we can lower the inputs over time, such as healthier soil needs fewer amendments. Cultivating different crops at the field/farm can reduce the need for pesticides and offer higher security and resilience to the farmer (diversification of the income sources). This is also important in case the farmer produces the feel for his/her livestock.

Several farms in Indonesia have demonstrated profitability, showing that organic fields can yield similar or even higher profits than the conventional time being by serving premium products with the aim of green products and being environmentally friendly.

Market Access and Demand

In the vast and quickly changing world, consumer interest can change rapidly. As for now, the market is on the good side of sustainable farming, and farmers need to ensure that this is not just a movement; let's make it a tradition, a culture, and a way of gathering our food. Regulation to enter the market access varies in every region, and that's why we will be talking about the general requirements in order to stand a chance above all the competitors, especially those who are using conventional methods. The first thing is certification, from USDA Organic, Fair Trade, or local certification such as GLI, SBC, or Ecolabel in Indonesia, it depends on the farmer's budget and scale, the better you have, the best it could get. The reason behind this certification is they often fetch higher prices and appeal to a broader consumer base, creating a solid return on the certification investment.

Governmental programs can also be a better way to access the market. At the same time, they often order in a big order to give subsidies for society, ensuring significant profits for a short time. If farmers can secure the trends and demands, most of the market share is locked in sustainable farming. One thing to consider is the transformation cost, where the government often gives subsidies to the farmers to encourage sustainable farming to save the soil quality, water quality, or the health of the surrounding environment. Sustainable farming products have gained a lot of popularity among consumers. The reason behind this increase is the consumer's food safety concerns, health consciousness, and environmental concerns as their motives in purchasing organic food products. The demand for better organic products will follow when the consumer's knowledge arises. Based on these opportunities and threats, Farmers should utilize this situation to be quick and change their production methods in order to maintain their business in the farming and food industries.

References:

Velten, S., Leventon, J., Jager, N. W., & Newig, J. (2015). What is sustainable agriculture? A systematic review. Sustainability, 7(6), 7833-7865. https://doi.org/10.3390/su7067833

Helfenstein, J., Diogo, V., Bürgi, M., Verburg, P. H., Schüpbach, B., Szerencsits, E., … & Herzog, F. (2022). An approach for comparing agricultural development to societal visions. Agronomy for Sustainable Development, 42(1). https://doi.org/10.1007/s13593-021-00739-3

Pretty, J. (2007). Agricultural sustainability: concepts, principles, and evidence. Philosophical Transactions of the Royal Society B: Biological Sciences, 363(1491), 447-465. https://doi.org/10.1098/rstb.2007.2163

Tuomisto, H. L., Hodge, I., Riordan, P., & Macdonald, D. W. (2012). Does organic farming reduce environmental impacts? – a meta-analysis of European research. Journal of Environmental Management, 112, 309-320. https://doi.org/10.1016/j.jenvman.2012.08.018

Sgroi, F., Candela, M., Trapani, A. M. D., Foderà, M., Squatrito, R., Testa, R., … & Tudisca, S. (2015). Economic and financial comparison between organic and conventional farming in Sicilian lemon orchards. Sustainability, 7(1), 947-961.https://doi.org/10.3390/su7010947

Acee-Eke, Beatrice & Ikegwuru, Mac-Kingsley. (2020). Consumers' Demand for Organic Food Products and Purchase Intentions: Empirical Evidence from a Consumer Survey in Nigeria. Management and Marketing. 13. 1-18.

Further reading