Current Development of Organic Movement Worldwide
With increase awareness in health and environment among consumers, more large scale and targeted marketing promotions, and better support from different governments worldwide, organic activities have extended from small groups of health-conscious and idealistic individuals to various sectors in the society and entered the mainstream consumption pattern and living style. When compared with the sluggish development of the overall food market, the sales of organic products have drawn attention from the business sector and governments due to considerable growth in recent years.
Organic Agricultural Production
In the world, some 100 countries, including developed and developing ones, have been practicing organic farming to a certain extent and the area under organic management is growing continuously. According to a survey report released by IFOAM in 2003 (11), about 23 million hectares are managed organically worldwide, including 10.5 million hectares in Australia and 3.2 million in Argentina. However, it should be noted that most of the organic land area in these two countries is extensive grazing land and that the actual global organic land area dedicated to arable land is less than a half of the total figure.
Globally speaking, 10.6 hectares of organic land distributed in Oceania, 5 million in European countries, 4.7 million hectares in Latin America, 1.5 million hectares in North America, while Asia and Africa have 600,000 and 200,000 hectares respectively.
For the percentage of land area under organic management, Liechtenstein topped the list (17.0%), followed by Austria (11.3%) and Switzerland (9.7%). China has 0.06% land area managed organically while African state Malawi is at the bottom (0.01%) among countries with such statistics. Nevertheless, the figures in many places, particularly developing countries, are not complete, so that the above statistics are more or less estimation.
International Trade Centre (ITC) has released its estimation on global organic trade (12). For the past decade, organic food sales have been growing by 20 to 25 % annually. The retail sales of organic food in the largest markets in the world (16 European countries, the US and Japan) amounted to US$16 billion in 2000 and increased to US$19 billion in 2001. Considerable development was seen when compared with the figure of US$10 billion in 1997. It was anticipated that the global figures would reach US$23 to 25 billion globally (23 European countries, the US, Canada, Japan and Oceania) in 2003 and US$29 to 31 billion in 2005.
The US has the largest and fast growing organic market in the world, the sales amounted to US$9.5 billion in 2001 and the growth rate ranged between 15 to 20% in the past few years. It is estimated that the sales figure would reach US$11 to 13 billion in 2003.
According to ITC’s estimation, annual sales of organic food might grow between 10 to 40 % over the medium term. In other words, organic food retail sales might expand from 2% in 2000 to 10% share in major markers in a few years’ time (13)
However, global sales of organic food still represent a very small market share. It is estimated that the retail sales of organic food and beverage in the world (Europe, North America, Japan and Oceania) in 2003 would only share 0.5% ( Japan, Oceania and Ireland) to 3.7% ( Switzerland) of total food sales (14). In terms of the types of food, organic fresh fruit sales are about 3 to 5 % in developed countries, while that in vegetable sales is estimated to reach 10% in the UK and Switzerland (15). Despite the relatively small share, from the other side of the coin, it shows that the sales of such products would have a considerable growth in the long term.
The types of organic products have been expanded from crops (grains, vegetables, fruit and herbs) to animal products such as meat, milk, fish and honey. Many other processed organic food (e.g. oil, sugar, sweets, desserts, bread, wine, food additives and etc.) have entered the markets now. There are also non-food organic items including animal feed, cotton, hemp, natural pesticides and repellent, cut flower, potted flower, leather, wood and wood products, as well as the ingredients of some cosmetics and cleansing agents (16). With all these items, organic products could almost cover all aspects of life.
International Trade Centre
The International Trade Centre (ITC) is the technical cooperation agency of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO) for operational, enterprise-oriented aspects of trade development. ITC supports developing and transition economies, and particularly their business sector, in their efforts to realize their full potential for developing exports and improving import operations.
Modes of sales
The sales of organic products are more diversified than conventional products. Some common modes of sales include farmers’ markets, farm-stalls, community-supported agriculture system, health food shops, specialized shops or eateries. Supermarkets in many developed countries have got involved in organic marketing in view of the market potential of these products in recent years and the trend has moved forward rapidly. However, the importance of supermarkets varies in different countries, for instance, in the UK, Switzerland and Denmark, an estimation of 70% of all organic fruit and vegetables are sold through supermarkets but the figures of Germany, the Netherlands and France only range between 20-30%. (15)
Nevertheless, the percentage of sales of organic products by supermarkets has been increasing. It is undeniable that the promotion and extended networks do enhance the exposure of organic products and thus have positive impact on the expansion of market. It also paves the way for organic product to move into the mainstream consumption habit.
The ITC market survey has observed some trends which could be served as reference for Hong Kong (15):
- More consumers have confidence in local rather than imported organic products;
- Existence of small supermarkets which only sell fully organic products;
- Provision of organic products with biodegradable packaging;
- More convenience organic food (e.g. pre-packed organic salads);
- Sales through the internet, often combined with boxes schemes, are growing in importance;
- Public canteens and catering buy more organic food.
Food safety becomes an importance concern of consumers due to infamous food issues frequently occurred in the conventional agricultural system. Those who have chosen organic food are also worried about contamination or accidents. That is the reason why people have developed some kinds of guarantee systems for organic food, i.e. standards and certification for organic products. These are further enhanced by accreditation systems which ensure that all systems could work together to attain a minimum guaranteed level.
Such systems were operated by civilian organizations in the 1980s. They set production or operation standards, conduced inspections and issued certificates. In the 1990s, governments began to get involved in the matter by setting standards, defining organic products while inspection and certification were handled by accredited organizations. 43 countries have already established their own organic standards and certification systems and 12 are under the drafting stage (11).
Several international organizations, including the IFOAM (17), Codex Alimentarius Commission (18) and the EU (19), have formulated some multinational standards as a means to coordinate different ones in different countries. The IFOAM is a non-governmental body with 750 members organizations from 100 countries while Codex Alimentarius Commission, a body set up by FAO and WHO, is responsible for setting food standards. These three sets of international standards are common in general with a few variations.
As mentioned earlier, accreditation systems have been established in addition to certification systems. These systems are either set up by governments in order to ensure the standard of certification systems, or developed to facilitate international trade. As a result, our food enters a control mechanism which had never appeared in history. One might feel lucky that our food is under such strict monitoring systems, but might also feel sad that our food need such systems nowadays.
Organic Movement in China
Though China’s organic movement is still at its initial stage, the future is indeed encouraging. Certified organic agricultural land area increased from 450 hectares to 4,000 hectares between 1995 and the end of 1997. Another 10,000 hectares of wild collection area has also been certified organic. The business turnover of organic products in China has experienced a 10-fold increase in recent years, amounted to US $6 million in 1997/98 (16). About two third of all provinces and autonomous regions have been involved in organic activities of different levels, with the eastern part of the country has the fastest development.
In 1992, the Chinese Ministry of Agriculture established the Green Food Development Centre which certified food under two grades – the “A Grade Green Food” (which allows the use of limited and specified agrochemicals at safe levels) and the “AA Grade Green Food” (which is quite close to organic food). 48 farms were certified as “AA grade” by the end of 2001. The State Environmental Protection Administration of China established the Organic Food Development Centre in 1994. The Center provides certification service and assists international organizations to certify organic product in the country. Before 1999, more than 95% of the certified organic products of China were exported. However, food safety issues have become a growing concern in recent years, resulting in a rapid growth of the domestic organic food market. It is estimated that the share of organic products in China’s food market sales might rise to 2% in the coming few years (11).
Although it seems that the demand and supply of organic products are both growing on a forward trend, a long-term growth of organic movement would much depend on the support by governments.
As mentioned above, governments could intervene through regulating organic certification systems as a means to ensure quality and credibility. Governments’ involvement could also arouse attention to organic products and their labels. It might have positive impacts on the popularization of these products.
Many European Union (EU) governments have been providing financial assistance in the conversion of conventional farms to organic ones. For examples, the UK increased its budget of the Organic Farming Scheme to support conversion to organic agriculture by 50% (20 million pounds per year) for 2001-2002 (20). Many European governments have also mapped out action plans and growth targets for the development of organic agriculture. The Netherlands and Norway aim to have 10 % of agricultural land converted to organic in 2010. The UK aims at increasing total organic area to 30 % and domestic organic food retail sales to 20%. Though such goals might not be fully attained due to various unexpected and uncontrollable factors, the overall organic arable land in EU countries might reach 25% in 2030 (13) according to the current development and their objectives.
No matter how fast the organic movement goes, a clear direction would undoubtedly benefit a persistent development trend. Such clear goals might also draw attention in the society and hence could be observed as a form of recognition and publicity for organic products.
In fact, the fundamental elements for long-term development are research and training. However, insufficient resource was put in such aspects in all countries. For example, the UK only allocates 1.2% of its agricultural development funding for organic farming per year (20), which would set a limit to the development of organic farming in the long run.
Globally speaking, it appears that organic production and markets are developing on a track of forward direction, official concerns have been given in different countries and places, including Hong Kong and it seems that organic is on a way with good prospect. However, more efforts should still be put in a couple of areas before organic way of life could take roots in the mainstream lifestyle of most people – locally, it need more improvements in technical know-how on organic farming and the development of stable markets; internationally, there is the need to establish a strong and reliable certification and monitoring system which provide a favourable background for further expansion of organic activities.