Organic Farming and Food: An Industry Overview
Dive into the European market to learn more about consumer-driven motives for choosing organic foods and the core challenges the industry is currently tackling.
In 2019, organic agriculture is a booming global industry. From human health and environmental protection, rising consumer awareness about these issues is pin-pointed as a key growth driver. As demand increases, the sector continues to grapple with challenges in numerous areas, including transparency, regulations, structures, and costs. This overview examines the intricacies of the organic farming and food industry in the European landscape today.
The Food and Agriculture Organization of the United Nations (FAO)/World Health Organization (WHO) Codex Alimentarius Commission (1999) defines organic agriculture as: “A holistic production management system which promotes and enhances agro-ecosystem health, including biodiversity, biological cycles, and soil biological activity.”1 This encompasses the use of “agronomic, biological, and mechanical methods, as opposed to using synthetic materials, to fulfil any specific function within the system.” Hence, contrary to conventional agricultural practices where pesticides and chemical substances remain the norm, the approach is to work collaboratively with the environment when cultivating plants and livestock. In the EU, these practices are carefully monitored throughout the supply chain, and strict regulations2 extend from the sourcing of seeds and animal feed to the handling, storing and importing of produce.
Facts and figures
Over the past twenty years, the Research Institute of Organic Agriculture FiBL and IFOAM - Organics International has carefully monitored and documented the steady rise in the global supply and demand for organic foods, drinks, textiles, cosmetics, and more in The World of Organic Agriculture.3 This comprehensive series of ongoing studies unveils that organic agriculture is currently prevalent in 181 countries worldwide. The statistics go on to show that, in 2017, the organic food market of the United States was valued at 45.2 billion US dollars and the European market at 39.6 billion US dollars. Though these two regions alone account for 90% of global revenue, their combined landmass only comprises around 25% of organic crops worldwide. In the European Union, FiBL and IFOAM estimate these figures at approximately 12.8 million hectares, 5.7 hectares of which are accounted for by Spain, Italy, and France alone. With a 15.5% rise in organic imports to the EU, regions such as Asia, Oceania, Latin America, and Africa continue to play a significant role in shaping the local landscape. Meanwhile, Germany spearheads European trade as the region’s largest importer of organic products. It simultaneously boasts the second-largest market for organic foods in the world, valued at 1’040 million euros. However, in the realms of per capita consumption, at 122 euros per capita Germany only comes in 8th, while Switzerland, Denmark, and Sweden make up the top of the tier at 288, 278, and 237 euros per capita, respectively.
The cause: consumer awareness
But what factors are driving these numbers? Where is this continuous rise in the demand for organic foods coming from? The answer to this lies, at least in part, in rising consumer awareness. In 2017, TIME.com pointed a finger at the use of synthetic pesticides and artificial fertilisers in crops.4 The article reiterates scientists’ claims that rising antibiotic resistance in humans directly correlates to the use of antibiotics in conventional livestock. The article goes on to link the use of synthetic growth hormones in animals to a rise in cancer risk in humans. Furthermore, it reveals that chemical substances present in conventionally farmed foods may be contributing to traces of carcinogens found in humans. The same holds true for possible developmental delays in infants, neurological disorders in children, and problems in reproductive systems of adult males. While studies of this nature continue to cast a shadow on conventional foods, an increasing number of researchers are beginning to shine a spotlight on the possible health benefits of consuming organic foods. Citing the British Journal of Nutrition, the same article highlights that organic meat and milk contains up to 50% more fatty acids than non-organic counterparts. In January 2019, the global scientific journal Medical News published findings organic fruits and vegetables boast higher levels of Vitamin C, carotenoids, and phenolic compounds than their conventional counterparts.5 A 2016 study initiated by the European Parliament outlines the complexities concerning correlation and causation when researching the nutritional benefits of organic food consumption.6 Many of these points still remain a matter of debate in scientific communities. There is, however, an overall consensus that the pesticides and chemicals used in conventional agriculture are detrimental to human health. Hence, eating organic is indeed a healthier option.
The plight of chemicals
In organic agriculture, FAO emphasizes the importance of proactively working with the environment to maintain a healthy balance in our planet’s ecosystem. It highlights sustainability, soil, water, air and climate change, genetically modified organisms (GMOs), as well as ecological services as the key pillars of this approach.7 At the other end of the scale, agrochemical corporations such as Monsanto continue to blatantly deny claims that their herbicides and pesticides are potentially harmful to human health, animal health, and the environment. Thankfully, consumers are beginning to fight back, and governments are increasingly intervening.8 The EU only recently passed a law banning Chlorothalonil, a fungicide that prevents mildew and mould on crops.9 Nevertheless, this is merely a small drop in the bucket as the Guardian reveals that Chlorothalonil is “the most-used pesticide in the UK...and the most popular fungicide in the US”. The EU carefully regulates all active substances in a three-step process10 and provides access to these regulations in a public database.11 But the sheer volume of substances circulating the market makes it virtually impossible for consumers to make well-informed choices when purchasing conventional foods. Thus, it is up to businesses and individuals to use their purchasing power to choose consciously and opt for organics.
Price vs. true cost
For the most part, the price tag attached to organic foods is notably higher than that of its non-organic counterparts, and consumers often wonder why it is more expensive. The Food and Agriculture Organization of the United Nations (FAO) attributes this to production volumes: “Organic food supply is limited as compared to demand. Greater labour inputs per unit of output and greater diversity of enterprises means economies of scale cannot be achieved. Post-harvest handling of relatively small quantities of organic foods results in higher costs because of the mandatory segregation of organic and conventional produce, especially for processing and transportation.”12 The FAO also underlines that organic farmers invest significantly more resources in environmental protection, animal welfare, minimising health risks, and securing fair wages. Balance Small Business points out further costs that drive up the prices in the organic industry—the additional time requirements for tending to crops, the cost of certification, farmers’ need for continuous education, the resources required for small-scale marketing, the avoidance of cheap synthetics, unfair distribution of subsidies, and last, but certainly not least, a lack of consumer awareness about the ‘true cost’ of foods.13 As a result, for many individuals, the final price tag attached to organically farmed foods remains a financial barrier.
Organic certifications and seals
Almost every country has its own organic regulatory bodies and seals*.14 To increase transparency and trust, in 2012, the European Commission introduced a law making the EU Organic logo mandatory for all organic products and foods produced in member states.15 To be eligible for this certification, foods must contain a minimum of 95% organic ingredients, while the other 5% underly a series of strict conditions. With the demand for regional and local foods also on the rise, seals such as Germany’s Bio-Siegel, issued by the Federal Ministry for Food, Agriculture and Consumer Protection (BMEL), are gaining traction amongst businesses and consumers alike. In Germany, farmers and producers of organic foods have the option of adding the Bio-Siegel to their EU Organic logo—permitted they are already compliant with the EU’s regulations.16 This gives them the opportunity to highlight their regionality and thereby increase their market appeal. According to the BMEL, as of April this year, a total of 5,277 users (businesses) in Germany have placed the seal on 87,843 foods and products to date.
In the United Kingdom, on the other hand, the food and farming charity Soil Association is the nation’s leading certification body accredited with certifying 70% of all organic products. The Soil Association grants UK-based farms and businesses the option of attaining EU-equivalent licensees for those wishing to meet EU trade regulations. In a nation where 45 million pounds are spent on organic products every week, the government recently added the promise of a “Green Brexit” to their list of political goals.17, 18 The Soil Association, along with a panel of reputable farmers, academics and NGOs, remains cautious of this claim: “Farmers are frustrated with inflexible farming policy. The answers are less clear, but many in the room agreed that the UK cannot continue in the same vein if we are to address the urgent issues of climate change, wildlife decline and diet-related poor health.”19 This also sheds light on the fact that the benefits of and motivations for organic farming are not only consumer-led, but also driven by motivations on the side of farmers and producers.
In response to the rapid growth of the European organic foods market as well as the challenges that ensue, a new set of laws will take into effect on 1 January 2021.20 The ultimate aim is to strengthen controls, increase consumer trust, simplify processes for small farms to switching to organic, standardise imports, and increase organic foods in the market overall. How this law will impact market structures, growth, and transparency remains to be seen.
*Note from the editors: At foodcircle our imports of processed organic oils and dried foods are certified by ABCERT, one of the first and most trusted organic inspection bodies in Germany. Our certificate is available here. Our entire product portfolio can be viewed here.