Growth of organics

The global market for organic produce continues to grow at greater than 25% per annum. Most of this growth is in Europe, but North America and Asia (especially Japan, Singapore, Malaysia and Korea) are also important.

England leads the industry growth, with a reported 40% per annum growth over the last few years, largely in response to multiple food issues in the media, including BSE, Salmonella, Listeria and Foot and Mouth Disease, amongst others. Since BSE was discovered in Germany just over 18 months ago, it is believed the organic market in that country is also growing at greater than 30% p.a.

Many countries in Europe now have targets of at least ten percent of agriculture to be organic by 2010. Sweden, Denmark and Germany are examples of countries that have stated goals for organic conversion. These countries have generous conversion assistance packages for farmers too. In some countries subsidies for conversion to organic agriculture is replacing "set aside" and other forms of rural financial support. The organic subsidies are more popular, as they keep farmers in production, with sustainability and food supply benefits flowing back to the community.

Wide range of organic good now available in retail stores
Wide range of organic good now available in retail stores

Some features of this rapid growth in the market are:

  • Broadening of the market into almost all commodity types. The organic meat market for instance, is developing very rapidly.

  • Rapid expansion into tropical countries, mainly for export to Europe and North America. This market includes the traditional organic and fair trade products, especially coffee, cocoa, tea and bananas, but also rice, coconut products (oil, cream and desiccated), spices (pepper, ginger etc), prawns and other products.

  • Rapid expansion in the old iron curtain countries, such as Poland and Lithuania, and in Balkan countries.

  • Continuing growth of the fibre industry, especially cotton. This is also largely from developing world sources (Egypt, Turkey etc), but also from the USA.

  • The entry of China into the organic market. The full impact of this market is yet to be revealed. Major products include soybean and cotton, but also a variety of fresh and processed produce.

  • Many more processed products, including canned and freeze dried vegetable and fruit, dairy products (ice-cream, yogurt etc) and prepared whole meals (e.g. lasagna, pizza, canned and frozen casseroles etc)

  • Wine, beer and even spirits (gin, whisky etc). In Britain there are certified pubs with organic drinks, including mixers, and organic meals

  • Supermarkets are now challenging traditional organic retailers with a much larger share of the market.

    Inevitably some of this growth is controversial. For instance there is now a wide range of soft drink, breakfast cereals and confectionary. What is the effect of this on perception of the organic industry? Should we have organic snap, crackle and pop cereals? From one perspective why not? Why should allergic children not have access to chocolate rice bubbles without harmful residues or additives and why shouldn't the cacao producers receive the benefits from organic growing methods and fair price? On the other hand what will the public make of an industry that espouses health and sells organic potato chips, chocolate bars and smarties?

    These and other factors have to be addressed within the context of a rapidly expanding industry. The certifiers and standard setters no longer control this growth, which is now largely driven by food manufacturers and retailers. For instance there is a very rapidly expanding market for "organic cosmetics", whereas there are very few standards for such (the UK Soil Association very recently released theirs).

    The Australian organic industry is following a similar trend, with rates of growth are around 25% per annum. Recent growth in South Australian producers include a new factory and dairy foods export by Paris Creek BD Farm, large areas of pastoral land certified for OBE (export beef) and the continuing success of organic viticulture.

  • Choice of organic cereals
    Choice of organic cereals

    Australian exporters are now faced with many opportunities, but also stiff competition, especially from Argentina and Chile. Some of the best opportunities are:

  • Meat to Japan and to Europe (although the short term market opportunities in Europe have yet to prove their sustainability when the BSA scare dies down)

  • Wine to Sweden, Japan and Europe

  • Oilseed and vegetable oils to Europe and Sweden

  • Any processed product including dried fruit, fruit juice and freeze dried vegetables (but competition from Turkey and South America, especially Argentine is strong)

  • Whole meals, which may often escape tariff restrictions. For instance exporting meat into Europe is bureaucratically slightly easier since BSE, but whole meals, such as meat pies are a very significant opportunity because they are value added, with increased value per weight and volume, and escape the tariffs.

    Organic standards continue to change in response to growth within the industry, expansion of organic certification into less economically developed countries, maturing consumer perceptions and expectations and technological advances. The International Federation of Organic Agriculture Movements (IFOAM) is recognised by ISO and by governments as the international standard setting organization for organics. IFOAM works closely with FAO in the revision and expansion of the CODEX Organic Standard. The World Board of IFOAM and the IFOAM Standards Committee have both signalled an intention to strengthen the biodiversity and environmental management aspects of the standards. This is consistent with the long-held view within the organic movement that organic standards are much more than a negative list of products that organic growers may not use (eg synthetic fertilisers and pesticides). The international organic movement continues to believe that positive environmental management, humane treatment of animals and fair trade are equally important, though less widely appreciated aspects of organic growing.

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