Useful Papers

 

Production

Greater consumer awareness of environmental issues and food scares, such as mad cow disease, have increased the demand for organic food. Demand for organic foods has increased at a faster rate than supply, resulting in organic foods being priced above conventional products. The lure of a price premium has driven the uptake of organic framing. Organic farming is practiced in more than 120 countries, covering 31-million hectares, managed under 633,891 farms. The majority of organic production is located in the EU. Other regions that are aggressively building up their organic production capabilities are the US and China. For more information about the dispersion of organic farming and the type of crops grown in certain regions, refer to the following studies:

http://orgprints.org/10506/01/willer-yussefi-2007-p1-44.pdf

http://orgprints.org/5161/02/willer-yussefi-2005-world-of-organic.pdf

http://orgprints.org/2997/02/yussefi_2006_world-of-organic.pdf

http://orgprints.org/4297/

Consumption

In 2005 it was estimated that global consumption of organic products was worth approximately US$33-billion of which fresh organic produce comprised approximately 60% to 90% of total consumption (Willer & Yussefi, 2007:11). Consumers' demand for organic food stems from a change in consumers' value system, affecting their preferences (so-called ‘emotional' factors), combined with an increase in disposable income. Given these factors it is not surprising that the largest markets for organic produce is in the EU (15) countries, in particular Germany, the UK and France, and the US. The market for organic food is growing in Asia, but off a low base.

For concise information about a range of markets:

http://orgprints.org/7255/01/sahota-2006-global-market.pdf

http://orgprints.org/2997/02/yussefi_2006_world-of-organic.pdf

http://www.rirdc.gov.au/reports/ORG/06-061.pdf

For a comprehensive report on the EU:

http://www.intracen.org/mds/sectors/organic/summary2.htm

http://www.cbi.nl/marketinfo/cbi/?action=showDetails&id=639

For information about the American market:

http://www.fas.usda.gov/agx/organics/USMarketProfileOrganicFoodFeb2005.pdf

http://www.intracen.org/Organics/documents/us-market.pdf

Trade

Trade data do not distinguish between organically and conventionally farmed goods; as a result one must extrapolate trends from numerous data sets. This process is subjective and thus prone to errors. Research indicates that monetary trade in fresh organic fruit and vegetables is greater than other food categories. A stylised fact emerging from various data (production, consumption and trade statistics) is that trade in organic products has a ‘North-South' trade pattern. Northern hemisphere countries are the largest producers and consumers of organic products. As a result, the majority of domestic production is consumed by the local population, which limits their propensity to export these goods. Consumers' demand for organic products in southern hemisphere countries falls below their farmers' production levels. The price premium placed on organic products and insufficient local demand have lured farmers from developing countries to grow and ship these products to developed countries.

 

Regulations: Non-Tariff Barriers

A host of non-tariff barriers is placed on agricultural products, starting from the type of farming inputs used and the chemicals used to fumigate products through to packaging requirements. In the case of organic produce the most important non-tariff barrier is the right to label one's good as a certified organic product. Consumers from developed countries, such as the EU, Japan and the US, prefer to buy domestic farmers' products compared to exactly the same product grown by a foreign producer, especially one from a developing country. Consumers' hesitation to purchase organic products grown by foreign farmers is because they distrust these products' authenticity. The implication is that products produced by farmers in developing countries must carry an internationally accredited organic label to be competitive.

General certification standards:

http://orgprints.org/7259/01/huber-2006-certification.pdf

http://www2.gtz.de/dokumente/bib/02-5121.pdf.

Information about the EU:

http://europa.eu.int/eur-lex/en/consleg/main/1991/en_1991R2092_index.html or http://www.organic-europe.net/europe_eu/default.%20asp#2092

For further information, visit the USDA's Agricultural Marketing Service/National Organic Program website at www.ams.usda.gov/nop  or http://www.ams.usda.gov/nop/indexIE.htm

Detailed information about Japan's organic certification rules can be downloaded at: http://www.maff.go.jp/soshiki/syokuhin/hinshitu/e_label/index.htm

www.maff.go.jp/soshiki/syokuhin/hinshitu/organic/eng_yuki_top.htm

 

Way forward

 

Farmers in SADC countries are particularly well suited to grow organic products. Apart from traditional factors such as abundant land and cheap labour which are generally touted as the region's competitive advantage, farmers enjoy a more pervasive advantage. The market for organic products in most developing countries is entering into its growth phase and consumption is greater than production. This has pushed up the price of an organic product compared to its conventional alternative. This price premium has encouraged farmers in developed countries to pursue organic farming but the conversion period takes three years. Farms in SADC are classified as ‘virgin land' and as such the conversion period is one year. This gives SADC farmers a considerable head start, which will be extremely useful to skim off excess price premiums before additional supply enters into the market. Furthermore, organic farming has the potential to be a more productive farming method for small-scale farmers as they are not reliant on expensive chemicals which are difficult to obtain.

For information about successful African exporters, refer to the following articles: http://www.fao.org/docrep/004/Y1669E/y1669e00.HTM%20on%20June%202007.

http://www.grolink.se/epopa/Publications/Org%20Prod%20and%20Exp%20TZ-03.pdf

http://www.grolink.se/epopa/Publications/FAO%20manual.q.pdf

http://www.unep-unctad.org/cbtf/events/arusha/Report%20of%20IBD_OA%20January%2006.pdf

http://www.grolink.se/epopa/Publications/Market-studies/SA%20OMS.pdf

www.unep.ch/etb/pdf/cbtfOA_study_text.pdf

Exporters Guide:

http://www.grolink.se/epopa/Publications/EPOPA%20Organic%20Exporter%20Guide%2006.pdf

Market opportunities for developing countries:

http://www.unctad.org/trade_env/test1/publications/organic.pdf?docid=4502%2B%22ItemID=2068)

Associations and useful contacts:

http://www.ifoam.org/     

The International Federation of Organic Agriculture Movements (IFOAM) is a grassroots and democratic organisation that currently unites 750 member organisations in 108 countries.

http://www.organicafrica2008.com/         

BioFach is the largest organic trade fair in the world.

Ecocert-Afrisco (PTY) Ltd          

Ecocert-Afrisco is a certification agency offering EU, NOP, JAS, Demeter International, Bio Suisse, Naturland and South African-specific (NDA) certification.

Visit www.afrisco.net or e-mail afrisco@global.co.za.

Organic Agricultural Association of South Africa (OAASA)

Visit http://www.oaasa.co.za/ or e-mail enquiries@oaasa.co.za

Perishable Products Export Control Board           

Visit www.ppecb.com.

For more information also refer to:

  • http://www.intracen.org/mds/sectors/organic/summary2.htm.
    At this site you can read a summary of the publication ‘Organic Food and Beverages: World Supply and Major European Markets'. The book analyses the major import and export marketplaces for products from organic agriculture.