What are the commercial and financial barriers associated with Walloon livestock farms transitioning to an organic label?

Abstract

Due to uncertain geopolitical times, Europe needs to strike a balance between food security, environmental protection but also farmer frustration. Recent upheavals of farmers indicate that the central European, and notably the Walloon agricultural sector is under pressure. A gap in the literature presents the opportunity to explore, through a fresh lens, the commercial and financial challenges encountered by Walloon livestock farmers in order to provide new leverage points for stakeholders. A qualitative approach, complemented by a qualitative part, was used. First, semi-structured interviews of agricultural macro-actors (n=3) and a financial analysis on a database (n=585) provided by the Walloon Direction de l’Analyse Economique have been utilized to complement the literature and to narrow down the theory to the Walloon context. Then, semi-structured interviews of (mostly) organic farmers (n=12) were conducted in order to get insights on the matter. The findings indicate the following barriers: Structural limitations (revenue ceilings, farm autonomy and cost management requirement), limited production flexibility, difficulties to pass on costs and lacking organic premia, the transition period (lower yields, no price premia and higher costs), distribution channels (conventional preferences, distances, access and requirements of consistent supply), various negative demand impacts (demand shift to local, local/organic confusion, expensive image and reputation damage from supermarkets), market homogeneity and competitiveness, a significant knowledge gap of organic farm management (including commercial and financial sides), lack of advisors, administrative burden and lack of guidance of control bodies, inconsistent rule enforcement (leading to a competitive disadvantage versus foreign organic products), uncertain and hostile environment (big farm industries, frequent policy changes, governmental strife). To strengthen the organic Walloon sector’s resilience, these challenges need to be addressed and could unlock substantial growth but will require coordination across various stakeholders in order to sustain a long-term pathway towards equitable, environmentally responsible regional food systems.