Organic Agriculture


Current Issues

Organic Agriculture

E-Brief: Online Only issued Date 20 June 2002

Els Wynen, Analysis and Policy
Foreign Affairs, Defence and Trade Group

Definition

The concept of organic may mean different things to different people. Standards are therefore needed to convey to producers rules to which they need to adhere in their production system. As organic agriculture is a process, consumers cannot know at the point of sale whether products are organic. Standards show the consumer what is meant when the word organic is used. Those producers who have been found to be producing according to those standards can be certified and use a logo to show that they are organic.

Australia

In Australia, the different private organic certification organisations developed their own standards in the 1980s. In the early 1990s they started to cooperate in the Organic Producers Advisory Committee (advising the Commonwealth Minister of Agriculture) under the auspices of the Australian Quarantine and Inspection Service (AQIS). This occurred at that time as the need for more order in the export market became apparent, especially in the light of moves within the EU to legislate the importation of organic produce. A National Standard was adopted in 1992 and updated in 1998. It is currently under review.

AQIS accredits seven private certification organisations. The two main certifying organisations are the Biological Farmers of Australia (BFA) and the National Association of Sustainable Agriculture, Australia (NASAA). An Agricultural Note by the Victorian Department of Natural Resources and Environment was devoted to the topic of certification in Australia.

One of the priorities of the organic sector has been to legalise the word 'organic' within Australia so that only certified organic products can be sold on the domestic market. However, this has still not been accomplished. Apart from the legal side for domestic producers, the lack of domestic standards in Australia has implications for imports of non-certified organic produce in Australia. Under WTO-rules countries cannot refuse the import of produce on the basis of rules to which domestic production is not subject. In the absence of domestic standards and a compliance scheme, there is no basis to refuse imports marked as organic , but not guaranteed in any other way.

For Australia to be able to export products labelled organic it needs to have standards at least as strict as those in the countries to which it exports. Australia s standards and compliance system was compared with that of its major trading partners - EU, USA and Japan - in a report published by the Rural Industries Research and Development Corporation (RIRDC) in 2001.

The international scene

The International Federation of Organic Agriculture Movements (IFOAM) was established in 1972. In the days when organic agriculture was not fashionable and organic agriculture was the domain of private individuals and organisations, IFOAM perceived the need for standard harmonisation to facilitate international trade. The IFOAM standards were the basis for the European Union (EU) standards. The EU standards were adopted in 1992 for plants and processing and extended in 2000 to include animals. Each EU member state is required to appoint an organisation that is responsible for certified organic produce exported from that country. This means that the government can appoint an organisation that accredits other organisations to certify. The EU has an overview, somewhat dated but still giving a picture of the diverse possibilities of the situation regarding standards and certification organisations in individual EU countries. The EU also has rules for implementing imports from third countries into the EU.

The USA s standards have only recently been adopted.

The Japanese Ministry of Agriculture recently issued the Japan Agricultural Standards (JAS) which set out mandatory organic labelling requirements, organic production standards and third-party certification procedures. These came into full effect from April 2001.

The UN has also developed international standards. Codex alimentarius developed organic standards, which can be used in international dispute settlements.

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Information on Organic Agriculture

Reliable data on organic agriculture on land use, production, sales and prices are extremely difficult to obtain, as few organisations collect this information on a regular basis. The available data are those that are easiest to collect via organisations that service organic agriculture specifically, such as data on the number of certified growers, area under organic farming, or production either farm gate or retail. Internationally, the Organic Centre Wales, at the University of Aberystwyth, was one of the first organisations to collect data on organic farming, and has focussed particularly on the number of organic farmers and area farmed organically.

A very recent study about the situation in the world, entitled `Organic Agriculture Worldwide 2002 Statistics and Future Prospects , was published by Yussefi and Willer (2002). It includes data on Australia. More extensive data on individual European countries can be found on the Organic-Europe website. This includes information on agriculture in general; history and development of organic agriculture; development of organic land use and production; organisations; standards and certification; state regulations; implementation of council regulation (EC) no. 2092/91; state support; policy initiatives; implementation of Agenda 2000; training; advisory service; research situation; challenges and outlook.

The International Trade Centre (UNCTAD/WTO) provides estimates of values of the organic markets and of the expected growth rates. Detailed data for the USA are provided by the US Department of Agriculture (USDA). The USDA also provides insights in the situation in a number of other countries. An extensive analysis (1) of the market in European countries was commissioned by the European Commission, and published in 1999. The Commission has also published a list of projects in organic farming funded or co-funded by the Commission.

In Australia, some studies (2) were carried out to assess the state of organic agriculture. Hassall and Associates studied the market for Australian produce in 1990 and in 1995. More recently, the market potential for some agricultural products was examined by the WA Department of Agriculture. The most recent figures for farm gate and retail values of organic agriculture in Australia pertain to 2000-2001. This report also shows the breakdown on the importance of the different organic industries in Australia.

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Production and Financial Results

When discussing organic agriculture, it is often claimed that this form of management system cannot compete with conventional farming, and is therefore doomed to remain a fringe industry.

By far the most authoritative book (3) comparing organic and conventional farming systems from an economic perspective was published in 1994, and provides an excellent picture of the economic situation on organic farms. It contains a collection of studies on the production and financial outcomes of established organic farms and those in conversion under a variety of conditions all over the world, including Australia. A more recent study (5) has been undertaken since this time, but was centred on Europe only. The findings of a long-term Swiss study comparing conventional agricultural practice with organic agriculture were reported in Science in May 2002.

In Australia, economic analysis has been carried out on broadacre (cereal-livestock) and dairy farms. The first of the broadacre studies was carried out for the 1985-86 season for all organic farmers in South-eastern Australia. In 2001 a second survey was conducted, and a comparison between 5 pairs of farmers for the cropping season 1999-2000 was made. The same paper also compared the results of the mid-1980s and late-1990s.

Conversion to organic farming is generally recognised as needing special attention. Problems and possibilities, as seen by seven broadacre farmers in Australia, were recorded and analysed in 1992 and appeared abridged in the popular press.

If more than a few farmers change management systems, the results for those farmers may be different than if many change. The reason is that, with widespread adoption, prices of inputs and outputs may-be affected, therewith changing net returns to farming. For that reason studies are undertaken to model the likely effect of a comprehensive change. Some of those are included in the 1994 study mentioned above. A study in Australia about the effect of 30 per cent of broadacre farmers converting to organic management, and one in Denmark, assuming that 80 per cent of farmers would convert, were summarised and compared in 'Organic Agriculture: A growth industry?'

A number of the issues raised in these different studies were combined in one publication.

The second industry for which the production and financial data were analysed in Australia was dairy. See 'Bio-Dynamic and Conventional Irrigated Dairy Farming in Australia : an Economic Analysis'.

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The situation in Australia

The Organic Federation of Australia is the umbrella organisation for organic agriculture in Australia.

State Departments of Agriculture

Queensland Department of Primary Industry, with its links to other studies:

NSW Agriculture

Victoria Natural Resources and Environment

Tasmania Department of Primary Industries, Water and Environment

Links

Many links to:

  • consumer bodies
  • organic producers and producer groups
  • certifying groups
  • media

Australian success story

  • OBE-beef
    Tells the story of how a group of beef producers pulled together to create a unique product which the Japanese market now asks for by name.

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Policies

Policy options for governments are usually seen as pertaining to the areas of certification and market promotion, aid at the farm conversion stage, and research and development. A number of countries also consider subsidising established organic farms as a good investment, as environmental costs are decreased compared with the continuation of conventional management practices.

General

One country which has seen extensive government involvement is Denmark. The Danish Directorate for Development (within the Danish Ministry of Food, Agriculture and Fisheries), has developed several action plans, the second in 1999.

In 2001, Denmark organised a conference to put in place a European Action Plan to encourage organic agriculture in Europe. A declaration to that effect was signed by 13 European countries in May.

Certification and market promotion

Government assistance to market promotion within a European context was analysed with EU funding by Michelsen, J., Hamm, U., Wynen, E. and Roth, E. 1999. (1)

Subsidies for organic farms

EU subsidies are provided as part of a suite of agri-environmental measures. Some member states also provide support for conversion and ongoing organic production. A comprehensive analysis (4) of government support in the European Union was provided as part of the earlier mentioned EU series of publications. An analysis of subsidies in the United States was undertaken by the University of Georgia.

Research and Development

It has been argued that organic agriculture is a different paradigm from conventional farming, which has implications for research. Funding for research into organic agriculture production is starting to pick up and policies on research needs have been the focus of attention more in the last few years than ever before. In 1997, the Regional Office for Europe (REU) in the UN Food and Agriculture Organization (FAO) undertook a basic review of past work done in this area, and analysed in which area of organic farming research had been lacking in the past, and could best be conducted in the future. This was followed up with a report, 'Research Methodologies in Organic Farming', including on-farm participatory research.

During 1998-99, a series of reports, Organic Farming in Europe: Economics and Policy
Stuttgart-Hohenheim 2001
(was published with EU funding. Specifically on research, Lampkin et al. (1998) (4) detailed funding for organic agriculture in 18 European countries, and summarised and analysed research needs expressed in other publications.

In 1999 a paper was published setting out the principles according to which research in organic agriculture can be conducted most efficiently. This paper includes an analysis of actual research topics and funding in Europe, the USA and Australia.

In Australia, most of the funding for research in organic agriculture is allocated by RIRDC. See the RIRDC Research Program. Free Organic Produce Research Reports can be downloaded from the RIRDC website. One of these publications researched the contributions organic farmers make to the obligatory research and development funds in Australia, and the funding they receive in relevant projects.

At present, a Cooperative Research Centre for Australian Organic Systems (CRC) is proposed.

Research organisations on organic agriculture:

The International Federation of Organic Agriculture Movements (IFOAM) holds biennial conferences at which many scientific papers are presented. The 14th Organic World Congress will be held in Canada in August 2002.

1. Michelsen, J., Hamm, U., Wynen, E. and Roth, E. 1999, 'The European market for organic products: growth and development', Organic Farming in Europe: Economics and Policy,Vol. 7, University of Hohenheim, Stuttgart.
2. Hassall and Associates (1990) The Market for Australian Produced Organic Food, Rural Industries Research and development Corporation, Canberra.
3. Hassall and Associates (1995): 'The Market of Organic Produce in Australia', Sydney.
4. Lampkin, N., Foster, C., Padel, S. and Midmore, P. (1999), 'The policy and regulatory environment for organic farming in Europe'. Report supported by the Commission of the European Communities, Agriculture and Fisheries: Organic Farming in Europe: Economics and Policy, Vol. 1, September.
5. Offermann, F. and Nieberg, H. (2000), 'Economic performance of organic farms in Europe'. Organic Farming in Europe: Economics and Policy, Vol. 5, University of Hohenheim, Stuttgart.

 

 

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