The Financial Aspect of Growing Organic Wine Grapes in the Vredendal District

Confusion still exists regarding the meaning of the organic production system. It can be defined as a holistic production system which enhances the agricultural eco-system by prohibiting the use of synthetic production mediums. It focuses on the improvement of soil fertility and the protection of the environment. The environmental advantages by themselves are not reason enough for farmers to adopt organic practices. The financial implication of organic agriculture in comparison with conventional practices is very important. It does not matter how ecologically advantegeous organic farming is, if a farming system does not show sufficient profit for the farmer to stay in business in a free market, an organic system will not be adopted. Ecological agriculture tends to have slightly lower yields, but production costs also tend to be lower during full production, due to the reduced use of purchased inputs. The net income (gross margin) from organic and conventional practices is thought to be comparable, although either can be advantageous under specific conditions. Many South African producers are interested in the organic production practices of wine grapes. Some of the producers are already busy converting their vineyards to organic practices. An important question relating to the organic production of wine grapes, is the cost associated with the practice. Research had been undertaken by Coetzee, of the farm Vaalpan, in the Vanrhynsdorp district, near Vredendal, South Africa. The farm is 12 hectares in extent of which 3 hectares are under the production of organic wine grapes. The purpose of the research was to compare the financial issues relating to conventional and organic practices. The results had shown that the price of the wine grapes and specially the price premium of organic wine, would determine whether the organic production of wine grapes was financially viable, as the production was lower and the production costs were higher.