Sustained pressure by the National Farmers' Union has achieved a significant victory that could help farmers who lost out under the Organic Farming Scheme's (OFS) six-month conversion rule.

Defra has acknowledged that the way in which the rule operated to exclude some producers from the OFS was unfair.

This follows a legal challenge by a producer, funded and supported by evidence from the NFU. The producer has been offered a 'without-prejudice' settlement. And Defra has agreed to compensate other producers who fall into the same category.

Robert Madge of the NFU's legal department said: 'In the first half of 2000, when the OFS was closed to new entrants, many producers registered as being in conversion. They had every expectation of receiving support when the OFS re-opened, but in the event were denied financial help by an arbitrary deadline.

'The NFU felt strongly that this issue should not go unchallenged. It is important that schemes devised by Defra are clear and fair. ' Defra's lawyers will be contacting affected producers as soon as the out-of-court settlement has been formally accepted. The NFU believes dozens of organic producers could be involved.