Organics hampered by mixed standards

A plethora of standards worldwide is hampering trade in the organic sector.

A report published on Wednesday by Organic Monitor warns that too much red tape is becoming a real burden. “The global organic food market is being divided in terms of standards,” said Organic Monitor director Amarjit Sahota. “The three major trading blocks - Europe, North America and Asia - have separate sets of organic standards. The lack of harmonisation between them is impeding global trade.

“As a consequence, many organic food producers are facing production difficulties and excess bureaucracy. Some growers in Asia, for example, are planting two different plots for the European and North American markets. It is causing a lot of problems and is not cost efficient.”

Research by Organic Monitor also shows that demand is outpacing supply with a number of regions reporting supply shortages. Undersupply is most evident in the North American region but several European countries are also experiencing supply shortages this year as consumer demand for organic foods has escalated.

Universally, fruit and vegetables are the most popular organic products. The category comprises a third of global revenues. Fresh produce lines such as apples, oranges, carrots and potatoes are typical entry points for consumers buying organic products.

Organic Monitor found that a disparity is occurring between organic food production and consumption. Most sales of organic foods are in affluent countries because of the price premium. Consumers in Switzerland, the US and Singapore are the highest spenders on organic foods in their respective regions, and the UK rates above the $44 per capita annual spend in Europe at $50.

However, the largest increases in organic food production are in developing countries. Latin America, Asia and Africa have reported triple-digit growth in organic farmland since 2000, whereas double-digit growth has been observed in other regions.

According to Sahota, Thailand is showing very promising growth in organic fruit and vegetable production and China has massive unrealised potential.

With Europe and North America generating over 90 per cent of sales, production in other regions is mainly export-geared. “Over-concentration of demand could put the global organic food industry in a fragile condition,” said Sahota. “Sluggish growth rates in one or both regions could close up markets for many producers.” He advises producers in developing countries to start developing internal markets.