When looking at the growth of the worldwide organics phenomenon, it seems appropriate to begin at home and see how the UK has been performing. The UK is now the world’s third largest market for organics after the US and Germany.
This sector is growing faster than any other within the food and drinks industry, and in the year ending March 2003 it generated a record £1 billion in sales, an increase of 10 per cent on the previous year. Within this, sales through farmers’ markets, farm shops and box schemes jumped 28 per cent to £93.3m, and those through independent retailers rose by 10 per cent to £101m. Such developments were to the detriment of multiple sales, which saw their share of the total market drop to 81 per cent.
The area under organic management has stabilised at around 726,000 hectares. There was a 12 per cent leap to 7,084ha in horticulture, of which potatoes held a 26 per cent share, fruit 25 per cent, green vegetables 20 per cent and roots 12 per cent. So where else in Europe is displaying an impressive growth rate?
Italy is a world leader in organics, accounting for approximately 25 per cent of the EU total. There has been a rise in the number farms to around 56,000. Approximately half of Italy’s organic production is exported, while the domestic market for organics was worth e232m in 2002 and is expanding by around 20 per cent year-on-year.
Organic farming has become a greater priority in Spain. In 2002 there was a 37 per cent jump in organic areas to more than 665,000ha. The position has been strengthened by government support for land conversion, the introduction of a strategic plan for 2004/6 and improved assistance from regional administrations. Up to 75 per cent of production across the range is destined for export with France, the UK, the Netherlands, Scandinavia and Germany big customers.
Germany ranks as the EU’s third largest organic producer, after Italy and Spain and it expects 20 per cent of agriculture to be organic by 2010. There has been expansion at retail level with organics now representing 2.3 per cent of all foods sales, with a value of e3bn.
There are high hopes in France that the nation could become Europe’s biggest producer of organic foods by 2010. It has already set a target of 1mha under organic production by 2005. The home market is benefiting as well with an increase in sales of around 20 per cent annually.
The Netherlands organic targets seem a distant dream at the moment. The expansion rate eased back to a disappointing eight per cent in 2002, compared to 25 per cent in the late 1990s. However, expansion is being boosted by a e9m media campaign financed by, in part, the Ministry of Agriculture and aimed at boosting sales and consumption. The market is expected to represent five per cent of the overall spend by the end of 2004.
The Scandinavian nations are continuing to see developments in organics. Sweden is confident that organic farming will account for 20 per cent of total agricultural land by 2005 and 30 per cent by 2010. Much has been achieved by EU funding, government support and the introduction of various agri-environment programmes. More growers are expected to look at the potential offered by exports. At this stage the UK, Denmark and the Netherlands are viewed as prime destinations.
Denmark is continuing to strengthen its profile and positioning as a valuable producer of organics. There has been a steady expansion at retail level with the market now accounting for around six per cent of all food turnover.
In Norway organic farming is tipped to account for 10 per cent of total agricultural land by 2009. Most production across the range is absorbed by the domestic market, with very little exported.
Finland is another country which has been aided by government subsidies. Horticulture is playing a significant role in the organics sector. Glasshouse production was responsible for six per cent of the certified total of which tomatoes and cucumbers represented 49 per cent and 36 per cent respectively.
Elsewhere, Portugal has seen organic farming rise by a phenomenal rate since the mid 1990s. In 2002 there was a 15 per cent increase in the number of farms to 1,059. Most of the production across the range was exported, the bulk going to other EU countries, and the remainder reaching the US.
In the US organic retail sales are forecast to generate $20bn by 2005. An upward trend has been fuelled by the introduction of a national standard implemented in October 2002. California is the biggest producer of fruit and vegetables. Gains are also being made in Minnesota, Wisconsin and Montana year-on-year.
In South America, Argentina is seeing rapid growth in organics. Exports have been expanding by around 30 per cent annually and are forecast to more than double to 60,000t by 2006. Production has also been rising by around 25 per cent a year.
Brazil is also seeing growth. In 2002 there was a doubling of the number of farms involved in organics to more than 13,000. At the same time there was also an increase in output to around 300,000t.
Chile is Latin America’s third largest producer after Argentina and Brazil. In 2002 alone, this involved more than 273,000ha, currently fruit and vegetables account for 40 per cent of production.
Australia’s organic industry is expected to generate (Aus) $1bn by 2006. In parallel with this, the area under organic management is forecast to rise to 890,000ha.
Meanwhile, New Zealand under its national strategy expects organic sales currently worth (NZ) $140m to be worth (NZ) $1bn by 2013. Exports are forecast to generate (NZ) $290m by 2004 and (NZ) $500m by 2006. However, challenges remain, as organic produce and conventionally-grown are getting closer while there remains a shortage of certified organic land to meet requirements.
In the Far East, China has the capability to become a world leader in economics. The Chinese government aims to raise the output of environmentally-friendly food including organics to 45mt by 2005. The long-term outlook is positive with the country’s goal to improve self-sufficiency and double exports. Though there are constraints with limited investment in modern post-harvest facilities.
Japan is the largest market for organic foods in the Asia-Pacific region, and in the top four globally. Total sales are tipped to reach (US) $55-75bn by 2007 of which imports are likely to account for the lion’s share. Even so, Japanese production is on the ascent. The industry still faces difficulties stemming from a fragmented production base and strict rules governing certification.
There are also developments among emerging European nations. In the Czech Republic organic farming has risen at an exponential rate and accounts for more than five per cent of total agricultural land. In 2002 fruit production covered 3,500ha. Most output is channeled to the domestic market.
Estonia, although currently small-scale, is seen as having long-term potential in organic farming. Production is being boosted by the introduction of various agri-environmental programmes and a proactive stance by the Estonian Organic Farming Foundation.
Lithuanian organic farming is still in its early stages of development, accounting for just 0.2 per cent of total agricultural land, but it has been targeted for programmed expansion. Considerable progress has been made in recent years. In 2002, the number of certified farms leapt 26 per cent and cropping area 27 per cent. The main movers have been and continue to be apples, carrots, onions and beetroot all of which are absorbed by the domestic market.
Finally, Poland, where the area under organic management is forecast to double by 2009 and the number of farms is expected to jump to 10,000. The home market absorbs the bulk of production though more growers are looking at the opportunities presented by exports, both fresh and processed. Attention is focusing on strawberries, the bulk of which are being targeted at the Netherlands, Germany and the UK.
No comments yet