December 2004 from BIOFACH (Germany) <biofach_greentrade@nuernbergmesse.de>

* BioFach 2005: Marked growth for worldwide organic industry

* Market report: Informed consumers buy healthy alternatives

The international organic industry focuses on Nürnberg (Nurenberg, Germany) every year in February. Around 1,900 exhibitors - two-thirds from abroad - and 30,000 trade buyers meet at BioFach, the World Organic Trade Fair, in the Exhibition Centre Nuremberg from 24-27.02.2005. Brazil as Country of the Year will ensure the right mood during the four days of the exhibition this time round. The distinctly enlarged range of organic wines is presented in its own hall for the first time by some 250 suppliers of wine, sparkling wine and champagne. The necessary background information at the biggest organic wine exhibition is provided by the Wine Forum in the centre of the hall, and there are naturally plenty of opportunities for tasting.

With some 200 exhibitors of high-quality natural cosmetic and body care products, BioFach is also the most important international trade fair for natural personal care and the recognized show of products from the world's market leaders.

According to estimates by the London-based marketing and consulting company Organic Monitor, worldwide organic sales are growing by 5 to 7 % in 2004.

Assuming sales of 25 milliard US $ in 2003, this means about 26.5 milliard US $ for 2004. Amarjit Sahota of Organic Monitor: "The highest growth rates are currently to be seen in North America, whereas most West European countries are registering a rather low growth rate of up to 5 %. There is also high percentage growth in the Asia-Pacific region, Latin America and Eastern Europe, but from a lower starting basis." The European market is the largest single market after the USA. Germany with around 3.1 milliard EUR sales (ZMP, Bonn) is the leader in Europe.

The extension of the range of organic products offered by the retail trade and the opening of more organic supermarkets will also ensure regular growth throughout Europe in the coming years. Publicly discussed topics like genetic engineering, the use of pesticides and fair trade cause more and more informed consumers to reach for healthy alternatives.

Gerald A. Herrmann, Executive Director of the International Federation of Organic Agriculture Movements (IFOAM), rates the present situation in organic agriculture as thoroughly positive: "We detect strong increases in sales in all markets at the moment. Growing consumer awareness and the effective organic agriculture development programmes in many countries are preparing the ground. If it is possible to achieve a permanent practical synthesis of international trade and local or regional supply, the growth will continue."

The worldwide area of organically farmed land at the beginning of 2004 was 24 million hectares. The lion's share of this is pasture in Australia (10 million ha) and Argentina (3 million ha), which is used for livestock production. Italy follows in third place with over a million hectares, then the USA with just under a million hectares. Data on the worldwide development of organic agriculture is published regularly by the International Federation of Organic Agriculture Movements (IFOAM) and meanwhile includes 98 countries in the world. The latest figures will be presented by IFOAM, SÖL (Ecology and Agriculture Foundation, Germany) and FiBL (Research Institute of Organic Agriculture, Switzerland) at BioFach 2005.

A comparison of continents shows that 5.5 million ha of agricultural land in Europe are farmed using environment-friendly and sustainable organic methods. This compares with 1.5 million ha in North America incl. Canada and 5.8 million ha in South America. 880,000 ha are farmed organically in Asia and 320,000 ha in Africa, but ecological methods of farming are also clearly gaining ground here. The production is not only exported to the industrial countries, but domestic markets are also developing to an increasing extent. Marketing here is via conventional trading multiples, weekly markets, delivery services, food co-operatives and farm shops.

Specialized shops that previously traded mainly in herbs and health products or newly opened shops are also taking over the sale of organically produced food. Although the population in aspiring metropolitan areas as in China, India, Brazil or Eastern Europe certainly has other problems, organic is playing an increasing role. "The development of organic agriculture in the developing countries was frequently induced by the demand in the industrial countries - and the products were then exported.

What we are experiencing now is that many markets like those in India, for example, are becoming independent and serve the growing demand in their own country", says Dr. Helga Willer of FiBL. Willer forecasts that this growing demand will also ensure worldwide growth in organic agriculture in the coming years.

Brazil: Enormous growth rates in organic agriculture

Brazil, the Country of the Year at BioFach 2005, can be considered as an example of rapid growth. 276,000 ha were certified in 2001 and around three times as much in 2003, namely 800,000 ha. This is a little more than in Germany. Added to this is the share of organic production that is not certified by official bodies for cost reasons, according to the IFOAM report "The World of Organic Agriculture 2004". The number of organic producers, most of whom are small farmers, is estimated at 14,000. The sales value of Brazilian organic production in 2003 was some 200 million US $. Compared with other Latin American countries, the sales channels in Brazil and Argentina are the best organized. Weekly markets are becoming more and more popular in the conurbations in the south of Brazil. At the largest of these markets in Porto Allegre, over 300 farmers sell their products every week. Producer-consumer associations, the so-called CSA (La Comunidad Sustenta a la Agricultura), are also being increasingly set up.

Preparations for a growing awareness of organic products have been in progress for almost two decades, e.g. farmers' delivery services that supply individual consumers in the cities.

Twelve Brazilian and nine international certification bodies keep an eye on organic agriculture to make sure it really is "organic" if the label says "organic". In spite of a growing domestic market, the major part of Latin American production goes for export - and is naturally also well represented at BioFach: coffee, bananas, cocoa, sugar, exotic fruits from the tropical region of the continent, corn, soya and meat from the southern regions.

The German organic market remains exciting

Germany, the most important European organic market, is noticing a definite upturn in the second half of 2004. The causes of the new growth in demand are varied. The discussion on the use of genetically modified products certainly promotes the purchase of foods that are healthy and "safe".

Consumers who are concerned about their health also want to exclude the acceptable risk of pesticide residues by buying organic food. Reports of high pesticide values in fruit and vegetables shock consumers at regular intervals. These started in the spring with alarming news about strawberries and peppers and continued in the autumn with grapes containing pesticide pollution 14 times above the legal limits in some cases. As uncertain customers are very bad for the food business, Aldi took the necessary steps in Holland in 2004 and scrapped conventional grapes and introduced organic grapes.

The organic farming area in Germany grew by 5.3 % in 2003 to reach 735,000 ha. There are currently 16,500 organic farms in Germany, which farm 4.3 % of the agricultural area using ecological methods and are checked regularly for compliance with the directives. Brandenburg has the largest organic share with 9 % of the agricultural area.

The number of companies - producers, processors, importers - increased to a total of 20,367, according to information from the German Ministry of Agriculture. Processing firms and importers increased particularly strongly by 11 %. However, one drop of bitterness is holding back development: The producer prices dropped for some products, which led to furious protests by the farmers and some even gave up organic farming. Especially in the case of milk, the prices paid by the dairies for both organic and conventional milk do not cover costs and are regarded as the cause of the predicament.

Fat children: Healthy, organic food can help

The obesity of large groups of the population is increasingly attracting attention and not only among health politicians. The German Consumer Minister Renate Künast has now taken up the subject and launched the "Platform for Nutrition and Exercise" at the end of September 2004. The aim is to promote a healthy style of nutrition that prevents the situation where every fifth child is too fat and every twelfth child is even abnormally fat (adiposity).

The issue of overweight is the subject of public discussion in the USA, where this problem has existed for a long time, and in many other countries. In England, for example, not only is a healthy diet with lots of fruit and vegetables recommended, but conversion to organic food as well. Actions of this kind can develop into driving forces to push demand in the future, if they are properly designed. The discussion on the use of organic food in school and hospital canteens is growing. There are promising approaches in this direction in the four large territorial states Germany, Great Britain, France and Italy, of which Italy has made the most progress. An Italian law stipulates that organic products must be used, so that hundreds of Italian school canteens use at least some organic food for cooking. The 360 municipal nursery schools in Vienna also back organic food. Since last year, 30,000 children a day are served a lunch menu in which about half the ingredients come from organic farming.

Organic + TransFair - an unbeatable alliance

More and more food comes from organic production and is also sold by fair trade. This is shown, for example, by the growing range of products with the standard TransFair logo for Europe. The non-profit-making association TransFair was founded in Germany 16 years ago with the aim of encouraging disadvantaged producers in Africa, Asia and Latin America to improve their living and working conditions. TransFair products are not only offered in the organic retail trade. Edeka is to stock fair trade organic bananas in future, with a target of one million kilograms of TransFair bananas. Mangos, grapes and avocados are to follow. This commitment pays off: Edeka's turnover for organic fruit and vegetables rose by 30 % in the first half of 2004.

The third Germany-wide "Fair Week" in autumn 2004 included 1,000 individual events. There is still a lot to do, however: For example, with a market share of only 1 % for fair trade coffee, improvements are certainly possible. Every German spends only 0.63 EUR a year on TransFair products.

This figure is as much as 1.50 EUR in Austria and even 14 EUR in Switzerland. The high figure in Switzerland is due primarily to the great commitment of the Coop Switzerland multiple, which strongly supports organic products, organic textiles, natural livestock production and fair trade.

organicconsumers.org