Organic Industry News: EU, U.S., China, India

From From left: Agricultural ministers Renate Knast (Germany), Ritt Bjerregaard (Denmark) and Margareta Winberg (Sweden) at the presentation of the Copenhagen Declaration at the European Conference – Organic Food and Farming

On May 11, Agriculture ministers from 12 European countries signed the Copenhagen Declaration – it calls for the development of a European action plan for organic farming and food to be created over the next two years. Denmark’s agriculture ministry calls it a breakthrough for the European organic movement. Signatories to the Declaration are Denmark, Germany, Austria, Sweden, the Netherlands, the UK, Ireland and Greece, plus non-EU members Estonia, Lithuania, Norway and Switzerland.

The Declaration acknowledges the important role organic food production can play in addressing food issues such as the safety of genetically modified foods, mad cow disease, dioxin in animal feeds, and foot and mouth disease in cattle and sheep. It notes that organic food is becoming a major opportunity for European food producers in light of the “growing consumer interest in certified organic products.” [sorry this link is no longer available]In the UK, organic food prices dropped dramatically in recent months, spurred by record sales last year. Supermarket chain Tesco reports that the number of organic food customers tripled over the last year, driving sales higher by 70 percent. Asda, a grocery chain owned by Wal-Mart, is cutting the price on 100 organic goods by 18 percent. On the other hand, Iceland Supermarket pulled back on the bold new policy it announced in June 2000 – it would sell only organic vegetables. By the end of year, overall store sales were down, a new CEO took over, and organic produce was cut back.

Worldwatch reports that over 7 million hectares – an area about the size of South Carolina – are devoted to organic food and fiber production worldwide. Farmers in 130 countries produce organically grown food. In the U.S., .2 percent of cropland is certified organic, compared with nearly 10 percent in several European nations. Globally, customers spend $22 billion a year on organic products. The authors of another study conclude that at least nine million farmers use sustainable agriculture practices on 29 million hectares. (“Feeding the World with Sustainable Agriculture,” by Jules Pretty and Rachel Hine of University of Sussex, UK).

China hosts 750 organic producers (1360 different products) as of 1999, up from only 127 in 1990, according to figures from TradeOrganex.com. According to the Organic Farming Research Foundation there are 7,800 certified organic farmers in the U.S., an 18% increase from 1999. Turkey has taken over the number one spot from the U.S. as the world’s leading producer of organic cotton (Pesticides Trust, UK). The leading countries are Turkey (41%) U.S. (13%), Uganda, followed by Tanzania, Senegal and Egypt (16% combined), India (8%), and Peru (4%).

The Battle of the Teas

Darjeeling Tea Country

Tea is one of the largest and fastest growing organic product categories. India dominates the organic tea market, but China’s capacity is growing rapidly. Europe, and Germany in particular, is strictly regulating chemical residues on tea, leading the Chinese to enter the organic market. Says KS David, managing director of Goodricke Group Limited, India’s largest organic tea producer, “You know once China decides to do something, they follow it up pretty fast. The saving grace for Indian exporters is that conversion to organic farming on virgin lands takes time.” Yunnan, China’s largest tea-growing province, is investing $750,000 annually over the next five years in a 7000-acre organic tea plantation.

Nepal also recently entered the organic tea market, and because of its relatively low cost of production, it is less expensive than similar quality Indian teas. India’s organic tea comes from Darjeeling, home to organic farming for the past 15 years. Organic Darjeeling tea now constitutes about 10 per cent of the area’s total tea output, says David. Lower prices for organic tea translates into less organic farming in Darjeeling. All the area’s organic tea is exported – it is too costly for Indian residents.

In the U.S., the new USDA Organic Standard entered into effect in late April. Although the federal government’s new seal won’t appear in supermarkets for about a year, U.S. organic growers are scrambling to get their products certified.
Under the new system, the USDA will accredit certifying organizations (they verify that growers, processors and handlers comply with organic standards). There are 58 certifiers in the U.S. – most work in one state or region. Harriet Behar, a certifier and organic farmer in Wisconsin believes that although the Federal certifying process adds another layer of bureaucracy and costs, it will benefit the industry. “Finally we’ll be consistent in what ‘organic’ means. Now, many states have no organic law, so it can be used in any way.” She believes the industry will benefit from increased efficiencies and volume in organic markets.