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Product and Market Development

ORGANIC FOOD AND BEVERAGES:

WORLD SUPPLY
AND MAJOR EUROPEAN MARKETS

ITC
INTERNATIONAL TRADE CENTRE
UNCTAD CNUCED

ORGANIC FOOD AND BEVERAGES: WORLD SUPPLY AND MAJOR EUROPEAN MARKETS

ITC
INTERNATIONAL TRADE CENTRE
UNCTAD CNUCED

GENEVA 1999

ii

International Trade Centre UNCTAD/WTO

Abstract for trade information services


1999 SITC 0 ORG

INTERNATIONAL TRADE CENTRE UNCTAD/WTO Organic food and beverages: world supply and major European markets Geneva: ITC, 1999. xiv, 271 p. Market study of organic food and beverages in Denmark, France, Germany, Netherlands, Sweden, Switzerland, and UK explains nature of organic agriculture and identifies products that can be grown organically and sold commercially to build up profitable export markets for developing countries; provides information on quality requirements with particular reference to certification and labelling systems and procedures; gives comments and data on world trade, identifying major producing countries and import markets; outlines market requirements and characteristics in countries under review; examines distribution channels and identifies major importers, retail organizations and selected institutions. Subject descriptors: food, beverages, agricultural products. English, French, Spanish Palais des Nations, 1211 Geneva 10, Switzerland (Free to developing countries)

The Government of Denmark financed the preparation of this study.

The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the International Trade Centre UNCTAD/WTO concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Mention of firm names and commercial products does not imply the endorsement of ITC. The opinions expressed in this study are those of the authors and their contacts in the trade and do not necessarily reflect the views of ITC.

ITC encourages the reprinting and translation of its publications to achieve wider dissemination. Short extracts may be freely reproduced, with due acknowledgement of the source. Permission should be requested for more extensive reproduction or translation. A copy of the reprinted or translated material should be sent to ITC.

ITC/P12.E/PMD/MDS/99-VII

ISBN 92-9137-115-7

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Acknowledgements

Main contributors Rudy Kortbech-Olesen, Senior Market Development Adviser, ITC, and coordinator and joint principal author of this study, is responsible for ITC's trade promotion and development activities in processed fruits and vegetables, and fish and fishery products. He is also the ITC focal point for organic products. Mr Kortbech-Olesen wrote the introduction and the chapters on world trade and market characteristics, Denmark and Switzerland. Carol H. Haest, joint principal author, works for Haest Consultancy for the Organic Industry, Belgium, is a former treasurer of the International Federation of Organic Agriculture Movements (IFOAM) and is the current coordinator of the World Organic Supermarketing Club (WOSC). He wrote the chapters on the world supply situation and Germany, and provided guidance and assistance in the preparation of the study. Birthe Thode Jacobsen, joint principal author, is a Denmark-based independent consultant specializing in environmental and agricultural economics. She has worked with the Food and Agriculture Organization of the United Nations (FAO) for several years. She wrote the chapters on organic farming and the certification of organic products, and contributed to the chapter on the world supply situation. Joy Pakenham-Walsh, joint principal author and technical editor, is a Netherlands-based independent consultant whose clients have included the Centre for the Promotion of Imports from developing countries (CBI), Rotterdam. She wrote the chapter on the Netherlands and contributed to the chapter on world trade and market characteristics.

Collaborating authors and consultants Dorothee Doswald-Kuhlmann, a food engineer in the Swiss private sector, has several years' experience in the technical and commercial aspects of the food industry. She contributed to the chapter on Switzerland. Peter Fuchs, of Fox Research AB in Sweden, specializes in the Nordic food sector. His clients have included the Swedish International Development Cooperation Agency (SIDA), the Swedish Ministry of Industry and Trade, and the private sector. He wrote the chapter on Sweden. David Jones, of David Jones & Associates, United Kingdom, has carried out a number of assignments for ITC, other United Nations organizations, the European Commission and the private sector over the years. He wrote the chapter on the United Kingdom. Jean Muller, of Jean Muller Consultants Internationaux, France, has worked for various clients, including the French Government, ITC and the private sector. He wrote the chapter on France.

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A large number of persons from all over the world, including the following, have contributed to the study in one way or another: Rainer Bchi, IMO, Switzerland; Bernward Geier, IFOAM, Germany; Thomas B. Harding, AgriSystems International United States; Torben Laursen FDB, Denmark; Otto Schmid, Research Institute of , Organic Agriculture, Switzerland; and Conrad Thimm, consultant, Germany. Leni Sutcliffe edited the study. Carmelita Endaya and Isabel Droste Montgomery were responsible for desktop publishing and assisted in copy-editing.

Contents

Acknowledgements Note Tables

iii xiii xi

PART I BASIC CONCEPTS


INTRODUCTION AND GENERAL SUMMARY
Background Product description and scope of the study Objectives of the study Summary of market opportunities for developing countries
Chapter 1

3 3 3 3 4

ORGANIC FARMING
Concepts Standards and certification Practical obstacles and constraints to conversion in developing countries
Chapter 2

6 6 7 7

CERTIFICATION
Introduction What is certification of organic food products? Certification procedures Accreditation Standards: development and application IFOAM Demeter International eV Codex Alimentarius Commission World Trade Organization International Organization for Standardization CEN and CENELEC Regulations in major markets European Union Other markets

9 9 9 10 11 11 11 12 12 12 13 13 14 14 17

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Certification in exporting countries Certification by local bodies Certification under partnerships between local and international bodies Certification by a local branch of an international certification body Certification by international bodies Some types of certification arrangements Subcontracting Grower groups Setting up a certification programme The long-term possibility Annexes I. Basic concepts II. MAFF consolidated version of EC Regulation

17 17 18 18 19 19 19 19 20 20

21 22

PART II GLOBAL OVERVIEW: TRADE AND SUPPLY


Chapter 3

51

OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS


Introduction Target markets Denmark France Germany Netherlands Sweden Switzerland United Kingdom Other major markets Market segments The retail sector Food processing industry Catering and institutional sector Distribution channels Importers, processors, repackers Food manufacturers Retail trade Fair trade Market access Organic certification and food laws Customs duties Sources of information Trade fairs FAOs contribution to organic agriculture
Chapter 4

53 53 55 55 55 55 56 57 57 58 58 59 59 59 60 60 60 60 61 61 62 62 63 63 64 65

WORLD SUPPLY BY GEOGRAPHICAL REGION AND BY COUNTRY


Introduction Africa Asia

67 67 68 79

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Oceania Europe The Americas (excluding NAFTA countries) NAFTA countries


Chapter 5

88 90 112 125

WORLD SUPPLY BY PRODUCT GROUP


Animal products Meat, dairy products, eggs Honey Fish Vegetable products Vegetables, roots and tubers Fruits and nuts Cocoa, coffee, tea and mat Cereals Oil-seeds and oleaginous fruits Prepared foodstuffs Vegetable oils and fats Sugars and sugar confectionery Preparations of vegetables, nuts and other parts of plants Alcoholic beverages Food additives Other processed food products Miscellaneous products Feedstuff Cotton Natural pesticides and repellents Other non-food products

133 133 133 133 133 133 133 134 134 135 135 136 136 136 136 136 136 137 137 137 137 137 137

PART III MAJOR MARKETS


Chapter 6

139

DENMARK
Introduction Supply and demand Production Market size Import and market requirements by major product group Fresh fruits and vegetables Dried fruits and nuts, seeds and kernels Processed fruits and vegetables Grains, flour and bakery products Coffee, tea and cocoa Herbs and spices Sweeteners Dried legumes/pulses Oil-seeds and oils, starch, soy Other food and beverage products Animal feed Market characteristics

141 141 141 141 142 143 143 143 143 144 144 144 144 145 145 145 145 145

viii

Market segments Consumer habits and product preferences Sales promotion and advertising Market access Customs duties Food laws and regulations Distribution channels Agents, importers, repackers, processors Food and beverage manufacturers Retail organizations Catering and institutional trade Market prospects Annex Denmark: selected addresses
Chapter 7

145 145 146 146 146 147 147 147 148 148 149 149 151

FRANCE
Introduction Supply and demand Domestic production Retail sales Market characteristics Consumer patterns Product and market requirements Market access Regulations on organic foods Certification Distribution channels Retail structure Processors/packers and wholesalers Imports Future trends Competition, prices and margins Prospects and opportunities Overall prospects Specific market opportunities Annexes I. France: selected addresses II. Individual import authorizations for organic food products originating in third countries in 1997 III. Commercial organic products sold in 1997
Chapter 8

154 154 154 154 156 157 157 159 160 160 161 161 161 162 163 163 163 164 164 165

167 171 173

GERMANY
Organic farming: historical development Supply and demand Domestic production Retail sales Imports and exports Market characteristics Consumer categories

176 176 176 176 178 178 180 180

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Consumer confusion about organic products The generic bio-label Purchasing organic foods: the criteria used Fair trade and its relationship with organics Market segmentation Market requirements Importers requirements Competition and prices Organic certification and food laws and regulations EU Regulation 2092/91 Organic certification for the German market Harmonization of EU food laws Permissible agricultural ingredients of non-organic origin Distribution channels Traders, importers, packers, processors and wholesalers Food manufacturers Specialist organic retail outlets Natural food shops (Naturkostlden) and organic supermarkets Farm shops, food boxes and other direct selling methods Reform shops Other specialist outlets; catering Major retail chains Summary and market prospects Annexes I. Germany: selected addresses II. List of approved ingredients of non-organic origin

181 181 181 182 184 184 185 185 187 187 187 187 188 188 188 189 190 190 191 191 191 191 193

195 198

Chapter 9

THE NETHERLANDS
Supply and demand Domestic production Imports Exports Retail sales Market characteristics Consumer behaviour Market segments and end-users Market requirements Fresh fruits and vegetables Processed fruit and vegetables Dried fruits and edible nuts Grains, cereals, pulses and seeds Importers requirements Competition and prices Food laws and regulations Distribution channels Traders, importers, packers, processors Wholesalers Retail outlets Food manufacturers Prospects

199 199 199 200 201 201 203 203 205 206 206 207 207 208 210 211 212 212 212 213 214 215 215

Annexes I. Netherlands: selected addresses II. Countries in which SKAL carries out organic inspection services III. Specifications of Euroherb Bio BV IV. Tradin: certified organic products traded
Chapter 10

216 218 219 221

SWEDEN
Introduction Supply and demand Domestic production Exports Imports Market requirements by major product group Fresh fruits and vegetables Processed fruits and vegetables Cereal and bakery products Coffee and tea Vegetable oils, vinegar, and condiments, spices and herbs Sugar and syrup Beverages Other product groups Market characteristics Market segments Market trends Sales promotion and marketing Market access Food laws Swedish control organizations Distribution channels Integrated retail and wholesale groups Market prospects Annex Sweden: selected addresses
Chapter 11

222 222 222 222 224 224 225 225 226 227 228 228 228 228 229 230 230 230 230 231 231 231 232 232 235 236

SWITZERLAND
Supply and demand Production Market size Import and market requirements by major product group General Fresh fruits and vegetables Dried fruits and nuts Processed fruits and vegetables Cereals, flour and bakery products Coffee, tea and cocoa Herbs and spices Sugar and sweeteners Oil products Dairy products

240 240 240 240 241 241 241 241 241 242 242 242 242 242 242

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Other food products Market characteristics Consumer habits Promotion and advertising Market access Customs duties and restrictions Food laws and regulations Distribution channels Importers and agents Food industry Retail trade Catering Market prospects Annex Switzerland: selected addresses

242 242 242 243 243 243 243 244 244 244 244 246 246 248

Chapter 12

UNITED KINGDOM
Introduction Supply and demand Retail sales Imports Domestic production Market characteristics and requirements Market characteristics Food laws and regulations Distribution channels Importers, traders and wholesalers The retail sector Processors and food manufacturers Market prospects Annexes I. United Kingdom: selected addresses II. Source countries of a sample of organic products seen at one supermarket outlet in London, March 1998 III. List of organic products sold by one supermarket (Waitrose), March 1998
SELECTED BIBLIOGRAPHY

251 251 251 251 252 252 253 253 258 259 259 259 262 262

264 266 267

269

Tables

3.1 3.2 4.1 7.1 7.2 8.1 8.2 8.3

World markets for organic food and beverages, 1997 European markets: percentage shares of retailers in organic food sales, 1997 Europe (EU and EFTA): organic agriculture in figures France: organic livestock and livestock products, 1995 and 1996 France: imports of organic products from non-EU countries, 1993-1997 Germany: number of farms and areas under organic farming, 1 January 1998 Germany: AGL member organizations, 1 January 1999 Germany: sales of organic foods, by product group

53 61 91 155 156 177 177 179

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8.4 8.5 10.1 10.2

Germany: turnover of the organic trade, by main distribution channel, 1997 Germany: major food retailers and their involvement in organic food sales Sweden: consumption of organic foods, by volume and by value, 1997 Sweden: market for processed fruits and vegetables, by quantity and by value, 1997

184 192 223 226

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Note

The geographical groupings of countries used in this study follow the practice of the United Nations Statistics Division. The groupings are used for the sake of convenience and are not intended to express a judgement about the stage reached by a particular country or area in the development process. Unless otherwise specified, all references to dollars ($) are to United States dollars, and all references to tons are to metric tons. The term billion denotes 1 thousand million. The following abbreviations and acronyms are used: AGL Arbeitsgemeinschaft kologischer Landbau (Federation of Organic Agricultural Associations, Germany) BCS ko-Garantie GmbH (Germany) Centre for the Promotion of Imports from developing countries (Netherlands) European Committee for Standardization European Committee for Electrotechnical Standardization Marketing Agency for Agrarian Products (Germany) Danish Import Promotion Office for Products from Developing Countries European Communities/European Commission European Economic Community European Free Trade Association European Standard European Union Food and Agriculture Organization of the United Nations Fair Trade Labelling Organization International Farm Verified Organic (United States) General Agreement on Tariffs and Trade Genetically modified organism(s) Generalized System of Preferences

BCS CBI CEN CENELEC CMA DIPO EC EEC EFTA EN EU FAO FLO FVO GATT GMO(s) GSP

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GTZ HS IAF ICM IEC IFOAM IMO INAC IOAS ISO ITC KRAV LDC(s) NAFTA NASAA NGO(s) OCIA OF&G OGBA OIA OSEC QIA RELACC SITC UNCED UNCTAD USDA VAT WHO WTO

German Agency for Technical Cooperation Harmonized Commodity Description and Coding System International Accreditation Forum Integrated crop management International Electrotechnical Commission International Federation of Organic Agriculture Movements Institut fr Marktkologie (Germany and Switzerland) International Nutrition and Agriculture Certification (Germany) International Organic Accreditation Service International Organization for Standardization International Trade Centre UNCTAD/WTO Swedish Organic Agriculture Association Least developed country(ies) North American Free Trade Agreement National Association for Sustainable Agriculture Australia Non-governmental organization(s) Organic Crop Improvement Association (United States) Organic Farmers & Growers Ltd (United Kingdom) Organic Growers and Buyers Association (United States) Organizacin Internacional Agropecuaria (Argentina) Office suisse dexpansion commerciale (Swiss Office for Trade Promotion) Quality Assurance International (United States) Red Latinoamericana de Comercializacin Comunitaria Standard International Trade Classification United Nations Conference on Environment and Development United Nations Conference on Trade and Development United States Department of Agriculture Value-added tax World Health Organization World Trade Organization

Part I

BASIC CONCEPTS

INTRODUCTION AND GENERAL SUMMARY

Background
In recent years, global awareness of health and environmental issues has been growing, and sustainability has become the key word in discussions on economic development, particularly in rela tion to devel oping coun tries. The ever- growing number of health and environmentally concerned consumers, mainly in the industrialized countries of Western Europe, North America, Japan and Australia, is at the root of this development. The inter na tional com mu nity is becoming more and more con scious of these issues, and gov ern ment poli cies in industrialized as well as developing countries increasingly encourage organic and other forms of sustainableagriculture. This study endeavours to fill an information gap among decision makers at government and non-government levels by providing comprehensive information on the markets for organic products, the supply situa tion world wide and cer ti fi ca tion of organic origin. As this study emphasizes again and again, certification is nec es sary for suc cess in world trade.

Product description and scope of the study


This study deals with organic food and bever ages, as defined in chapter 1. Organic prod ucts are currently not classified separately under the Standard International Trade Classification (SITC) and the Harmonized Commodity Description and Coding System (HS), both of which group organic products together with conventional products. For example, organic fruits and vege ta bles are covered by the SITC and HS head ings for fruits and vege ta bles. In prin ciple, the study covers the whole range of food and beverage products. However, some items like meat and dairy prod ucts are taken up very briefly, and others like fish and fishery products are referred to only occa sion ally. The iden ti fi ca tion of the prin cipal product groups being traded in organic form, in particular those that can be exported by developing coun tries, is a major pur pose of this study.

Objectives of the study


The ultimate purpose of this study is to help developing countries in their efforts to improve the utilization of their agricultural resources and to increase and diver sify their exports. The infor ma tion provided is therefore intended to enable these coun tries, and their farmers and other enter prises, to modify their pro duc tion and mar keting activi ties so as to be better able to exploit existing and potential export oppor tu ni ties for organic prod ucts. The study should also help them improve their bargaining position vis--vis importers and other commercial partners. The spe cific aims of the study are to:
q

Explain what organic agriculture is and which products can be considered organic products in a commercial sense (i.e. certified organic);

CHAPTER 1 INTRODUCTION AND GENERAL SUMMARY

Provide an understanding of what certification is, why it is necessary and what it entails; explain what needs to be done in developing countries;
q

programmes, specifically in the formulation of production and export policies;


q

Present an overview of world trade in organic products, and identify major producing/exporting countries and import markets, describing their main characteristics;
q

Individual enterprises whether farmers, processors, exporters or importers involved in the organic trade;
q

Identify products that are or can be grown organically and sold commercially with a view to building up profitable export markets;
q

Individuals and organizations preparing or evaluating investment proposals for organic farming, processing facilities, joint ventures and similar projects;
q

Provide market information on quality requirements, with special reference to required certification/labelling systems and procedures;
q

International organizations (such as the Food and Agri cul ture Organi za tion of the United Nations FAO), development banks and non-governmental organizations (NGOs) involved in organic produc tion and trade;
q

Provide a better understanding of the structure, compe ti tion and pricing in the markets surveyed;
q

Examine distribution channels and identify major agents and importers, industrial end-users, retail organizations, and other organizations and associations. This study is expected to be of assistance to the following target audiences:
q

Trade associations in exporting and importing countries, export promotion bodies, chambers of commerce, and member organizations and associates of the International Federation of Organic Agriculture Movements (IFOAM). The study has been designed as a practical tool for use in training courses, seminars, workshops, marketing tours, etc., whether organized by the International Trade Centre UNCTAD/WTO (ITC), other organizations or by producers/exporters themselves.

Government agencies and ministries concerned with organic agriculture and trade development

Summary of market opportunities for developing countries


With retail sales of organic food and beverages reaching an estimated $11 billion in the seven markets covered by this survey (Denmark, France, Germany, the Netherlands, Sweden, Switzerland, Sweden, the United Kingdom) and in Austria, Italy, the United States of America and Japan in 1997, trade in organic foodstuff has become an important global agribusiness. Preliminary estimates for 1998 indicate retail sales in these markets of $13 billion to $13.5 billion. The organic trade is of particular interest in a development context because of the spectacular growth that has taken place in recent years, with growth rates of between 5% and 40% expected over the medium term, depending on the market in question. It should be noted that the continuous growth in the organic sector is all the more remarkable since overall food sales is experiencing either slow growth or stagnation. There are good reasons to conclude that the market for organic food and beverages is growing rapidly in most countries in Western Europe, North America, Japan and Australia. Expansion is also taking place in a few developing countries though at a slower pace. The currently small share of organic products in the food and beverage trade in all these markets indicates a large long-term potential. Expectations of growth are underpinned not only by strong and increasing consumer awareness of health and environmental issues, but also by the more goal-oriented and aggressive marketing and promotion being undertaken by the major retail groups. Product development and innovations in packaging by food processors and manufacturers, as well as supportive government policy in many countries, will also push up world demand.

CHAPTER 1 INTRODUCTION AND GENERAL SUMMARY

It seems clear at least in the short to medium term that an insuf fi cient supply of organic prod ucts will be the main problem rather than lack of demand. Though domestic production is growing rapidly in many markets, demand appears to be expanding even faster. This opens up opportunities for exporters in devel oping coun tries, not only for those already in the business but also for others who would like to start production. A review of the world supply situation shows that more than 130 coun tries produce certi fied organic food and bever ages in commer cial quan ti ties, including at least 65 developing countries of which about 15 are least devel oped (LDCs). Produc tion also exists in most transition economies. It should be noted that interest in promoting organic agri cul ture in devel oping as well as devel oped coun tries is rising. Although the overall picture looks highly posi tive, a number of potential risk factors should be borne in mind when evaluating future developments in the organic food business. For example, occasional oversupply of a given product may not only have imme diate but also more long- term nega tive effects. Furthermore, other forms of environmentally friendly and sustainable agriculture are likely to result in increased compe ti tion in the future. Reduced price premiums for organic produce and insuf fi cient profitability among farmers and other operators are also factors to reckon with. Unfa vour able press (e.g. fraud) and scare stories, whether justified or not, cannot be excluded either. Developing countries produce a wide range of organic products and many are doing relatively well. However, most of them suffer from a number of constraints, such as the lack of technical know-how (e.g. on production methods), lack of storage and processing facilities, poor logistics, inadequate

market information (for example on which products to grow, which markets and distribution channels to choose, the competition, market access) and insufficient financing. Certification is a major problem that they share with producers in developed countries. Importers, food manufacturers, retail organizations and consumers need a guarantee of organic origin. In other words, the organic trade faces a number of challenges in the future. On bal ance, how ever, there is no doubt that the world mar kets for organic food and bev er ages will con tinue to offer developing countries profitable export opportunities. All of the major markets under review offer good prospects for suppliers of organic products that are not produced domestically: examples are coffee, tea, cocoa, spices, tropical fruits and vege ta bles and citrus fruits. However, there are also very good pros pects for sev eral prod ucts that are pro duced in the main mar kets them selves. Such oppor tu ni ties exist not only for off-season produce (such as fruits and vegetables), but also for many other products like in-season fruits (e.g. apple and pears) and vegetables, cane sugar, grains, cereals, pulses and seeds, for the simple reason that the rap idly growing demand in most mar kets cannot be met by local sup plies, at least in the short and medium term. To succeed in building up an export trade in organic prod ucts, exporters will find that careful selec tion of target markets and distribution channels is of the utmost impor tance. A strong and reli able rela tion ship with an importer/distributor in the target markets is an absolute must in establishing a profitable business. Finally, supportive government policies as well as assistance from the international community are other neces sary elements.

Chapter 1 ORGANIC FARMING

Concepts
The con cept of organic farming is based on a holistic view point, meaning that nature is per ceived to be more than just the sepa rate indi vidual ele ments into which it may be split. Its principles are found in ecology, a sci ence con cerned with the inter re la tion ship of living organ isms and their envi ron ments. In prac tical terms, this means that organic farmers obtain their inspi ra tion and learn from natural eco-systems. Farmers try to imitate at farm level basic characteristics of relevant eco-systems, for instance by working towards the maximal use and recycling of on-farm resources (fodder, manure, organic waste, etc.). Organic farming differs from industrialized agri cul ture in that in the latter, bio logical sys tems are to a larger extent replaced by tech nical sys tems. For instance, the diversified rotation of crops, with its biological significance, is often supplanted by monocultural practices giving rise to the need to use pesticides and artificial fertilizers, and organic manure is often exchanged for artificial fertilizers. The con cept of organic farming also covers eco nomic and social aspects of agri cul tural pro duc tion, local as well as global. In organic farming, the aim is to support and strengthen biological processes without recourse to technical remedies such as synthetic fertilizers and pes ti cides and the geneti c modi fi ca tion of organ isms; hence, the approach to the con trol of weeds, pests and dis eases is pri marily pre ven tive. Organic farming is based on the enhance ment of the structure and the fertility of the soil, a balanced choice of crops, and the implementation of diversified crop rotation systems. The number of ani mals kept on the farm and the avail able land area are cor re lated so that farm units can cover their need for feed and soil nutri ents from within the system. Among its key char ac ter is tics are the use of organic mate rials to main tain organic matter and nutri ents in the soil (including green manure), nitrogen-fixing plants, pest- resistant plant varie ties, soil man age ment techniques such as mulching and the use of fallow periods, various cropping systems (including intercropping) and agro for estry. (Agro for estry con sists of land-use systems in which woody perennials are grown in association with crops and/or livestock.) Organic farming gives due consideration to animal welfare and the use of manual, mechanical and thermic weeding. Organic farming merges traditional and respectful views on nature with modern scientific insights. It encompasses several farming methods and approaches. For instance, research carried out by Mller and Rusch in the first half of this cen tury has been adapted and further developed by one of Germany's largest organic farmers associations (Bioland; see chapter 8). The Soil Asso cia tion in the United Kingdom (see chapter 12) has its roots in the work of Albert Howard and Eve Balfour which focuses on soil fer tility and health. Biodynamic agriculture (a contracted translation of the German biologisch-dynamische Landwirtschaft) is yet another approach; it is based on anthro po sophy and the ideas for mu lated in the 1920s by the Aus trian Rudolf Steiner. The maintenance and furtherance of life- processes in the soil, and in nature in gen eral, as well as the harnessing of cosmic energy and other

CHAPTER 1 ORGANIC FARMING

influ ences from the sun, the stars, the moon and other planets, are basic prin ci ples. Bio dy namic agri cul ture advo cates the com bi na tion of animal hus bandry and crop pro duc tion (mixed farming) and it uses com post and biodynamic preparations (naturally occurring plant, animal and mineral materials which are com bined in spe cific recipes) in order to vitalize the soil and to enable it to transmit this vitality to plants and subsequently to animals and human beings. Sowing, cultivation and harvesting are timed according to cosmic rhythms. There are other but not organic approaches which rep re sent alter na tives to high- external- input pro duction systems, and which are more environmentally

friendly but not organic. An example is lowexternal-input sustainable agriculture (LEISA), which is based on the increased use of local resources. A key factor distinguishing LEISA from organic farming is the use of chemical inputs, which is reduced but not elimi nated. Integrated farming systems combine the use of chemical and biological controls. Among the techniques utilized are integrated pest management (IPM), integrated nutrient management (INM) and integrated weed management (IWM). Integrated farming sys tems are seen by some as a com pro mise between organic farming and inten sive con ven tional agriculture.

Standards and certification


The subjects of standards and certification and the forms they have taken worldwide are discussed in greater detail in chapter 2. What is impor tant to point out here is that one of the most significant factors distinguishing organic farming from other concepts of sustainable agriculture is the existence of production standards and certification procedures. Standards have been developed by private asso cia tions, enti tling mem bers to use the respec tive associations organic brands and guarantee labels when mar keting their prod ucts. At least 100 regional or national standards have been developed world wide. Sev eral coun tries are for mu lating or have adopted laws and regu la tions on organic pro duc tion and processing and on certification require ments to con trol the use of labels indi cating organic origin. The cer ti fi ca tion of organic pro duc tion methods is an increasingly important aspect of the international trade in organic products. Most regulations require prod ucts that are labelled organic to be cer ti fied by an inde pendent body, thereby pro viding a guar antee that the goods have indeed been produced according to organic pro duc tion stan dards.

Practical obstacles and constraints to conversion in developing countries


As organic agriculture seems fairly similar to many tra di tional farming sys tems in devel oping coun tries, conversion from these traditional systems and certification may appear to be an obvious thing to aspire to. However, certification is costly and for sub sis tence farmers with small mar ket able sur pluses, it may not be economically feasible. Additionally, many smallholder production systems cause soil deg ra da tion and are not envi ron men tally sus tain able. The adop tion of organic farming tech niques may also be constrained by the lack of know-how and the absence of training and extension facilities. Fur ther more, exper tise on local farming con di tions is a basic require ment and out siders, while they may be conversant with the principles of organic farming, may not have this expertise. Research into these conditions is essential to organic farming: for instance, a cer tain crop ping system may be pref er able in one area, whereas in another area the threat of a cer tain pest would dic tate a dif ferent approach. Uncer tain ties about own er ship and access to land are real obsta cles to con ver sion. Farmers have to be sure that they will be able to benefit from investing, for example, in improved soil fer tility in order to want to make such an invest ment. Dif fi cult access to credit is another factor often impeding initiatives and the imple men ta tion of con ver sion proj ects.

CHAPTER 1 ORGANIC FARMING

Some farmers do have access to finan cial resources and are more likely to con sider con ver sion. How ever, they also have to con tend with mar keting con straints. The market for organic prod ucts is still com para tively small and is mainly concentrated in the European Union, the United States and Japan, making access to both market infor ma tion and the mar kets them selves difficult. The length of the conversion period, normally two to three years, is also a barrier, as prod ucts usu ally cannot be sold as organic during this period. These are some of the direct impediments to conversion by smallholders. However, the issue is wider and more complex. Take the question of the external costs of high-input conventional farming.

These costs, which take such forms as for instance the pol lu tion of drinking water and reduced bio- diversity, are not reflected in the market prices of the prod ucts of con ven tional farming; if they were, these prod ucts would perhaps be less price competitive. Furthermore, some enterprises have an interest in promoting the inputs on which these conventional sys tems are based, and stimu late activi ties pro moting their use, including tech no logical research. Indi vidual small holders are usu ally advised to join or to form coop era tives or other farm ers' groups in order to over come some of the prob lems described above, create the required critical mass, build the nec es sary infrastructure (primary processing and packaging facili ties), cut costs and improve market access.

Chapter 2 CERTIFICATION

Introduction
A tomato has a price in the market place. A tomato claimed to be pro duced in accor dance with organic farming prin ci ples, i.e. an organic tomato, often has a higher price in the same market place. A common way of informing con sumers that cer tain prod ucts are pro duced according to organic pro duc tion prin ci ples, thereby jus ti fying a price pre mium, is the indi ca tion on product labels that the prod ucts are organic. During the last two decades there has been an extraor di nary growth in the use of labels refer ring to the organic origin of products, as well as labels suggesting organic production methods using terms like green and eco-friendly. Until regulations on the label ling of organic prod ucts were imple mented, it was difficult for consumers to know what was meant by the various terms and which production methods had actu ally been used. Simi larly, pro ducers were in for unfair competition in the sense that prod ucts which were organic only to a cer tain degree could be claimed to be organic or environment friendly in various ways and therefore entitled to a price pre mium. Certification is one way of ensuring that products claimed to be organic are actually produced according to organic farming principles. It is thus a way of pro tecting con sumers, pro ducers and traders against the use of mis leading or decep tive labels. It is also a marketing instrument enabling producers to access markets for organic products and obtain premium prices. Finally, it creates transparency, as infor ma tion on cer ti fied pro ducing organi za tions and their prod ucts is nor mally made public.

What is certification of organic food products?


Certification is a procedure for verifying that a product con forms to cer tain stan dards. In the case of organic products, certification is primarily an acknow ledge ment that these prod ucts have been produced according to organic production standards (annex I to this chapter defines the basic prin ci ples of this cer ti fi ca tion). These stan dards may be the standards of pri vate asso cia tions or com pa nies, or of certi fi ca tion bodies, or of the State. Cer ti fi ca tion bodies may use dif ferent pri vate or official stan dards against which to carry out their cer ti fication activities. For instance, organizations of organic pro ducers may estab lish their own stan dards, and set up their own cer ti fi ca tion pro grammes, rules and pro ce dures, and man age ment regu la tions for certifying the conformity of their member farmers and their prod ucts with these stan dards. Some cer ti fi cation bodies do not have their own stan dards, and use official standards. Thus a certification programme may relate to official standards or to private stan dards; however, wherever official regulations are in place, private certification programmes must be designed so that the certified products comply with both the standards of the private organization concerned and with offi cial regu la tions. Once cer ti fied, organic prod ucts are mar keted car rying a certification mark indicating that the products are certified organic. The certification mark attests to

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con for mity with cer tain stan dards and is in itself not a trade mark. However, in most countries the cer ti fi ca tion mark is also reg is tered as a trade mark. A dis tinc tion can be made between pri vate marks (introduced by com pa nies or organic asso cia tions which have adopted certification programmes), marks issued by certification bodies, and national marks designated by governments. Most certification programmes use their own logos; in this way, cer ti fi ca tion also serves to dis tinguish the products of their members or contracted opera tions from those of their com peti tors. For producers to enter a specific market for certified organic products, their products must be produced and certified according to the standards applicable in that market. If the market has State regulations, these regulations must be complied with. In some cases, it may be an advantage to be certified by a certification body with a certification mark that is well known in that market. For a product to be cer ti fied organic, all opera tors in the product chain, including farmers, processors, manufacturers, exporters, importers, wholesalers and retailers must be cer ti fied as acting in con for mity with the standards and regulations of the certification programme concerned. Sometimes different certification bodies certify different operators in the product chain. Certification may be linked to the production of certain products, or it may relate to the operation as such, for instance the fields of a farm. Such differences depend on the certification scheme applied. Once certified, it is the operator who labels the product with the certification mark and it is the producer who is continuously responsible to the certification body and/or the owner of the mark for its correct use. It should be noted that cer ti fi ca tion of organic prod ucts is basi cally the cer ti fi ca tion of a pro duc tion system, as opposed to the certification of a product. It is more complex than product certification because it cannot be based solely on meas ur able product char ac ter is tics.

confirm that production and handling conforms to standards. A certification body may operate its own inspection activities, or inspection may be carried out on its behalf by external inspection bodies. The decision as to whether adequate confidence is provided that production and handling are in conformity with the standards rests with the certification committee. If a certification body has its own standards against which certification is carried out, it may also have a standards setting committee. Certification procedures for the certification of organic products should make it possible to track and control the flow of products from primary production at farm level through each stage of manufacturing right to the final consumer product. Certification is based on a systematic procedure consisting of several steps. The operator, i.e. the farmer, the processor, the trader or whoever is handling the product and needs certification, and a certification body sign a contract, and then the certification body registers the operator. Farmers are required to provide basic information on the farm, such as size of fields, crops, crop rotation, etc. Processors and packers must submit information on recipes, capacities, range of products, operations, etc. The next step is inspection. It may be carried out by an inspection body on behalf of the certification body or by the certification body itself. On-site checks are carried out by inspectors who follow a verification programme. At the level of farms or operators, inspections cover fields and facilities, production practices, inputs and materials used, and records. The findings are presented in a report and submitted for evaluation, normally by a special certification committee representing various areas of competence and different sectors. The third step is certification. If the certification body is confident that the operation is in conformity with the standards against which the inspection and certification are carried out, a certificate will be forwarded to the operator, stating such conformity. The operator will be licensed to use the certificate or mark of certification on its products. The inspection of a certification programme covers agricultural production, processing, trade, labelling and certificates. The key elements of inspection are verification and evaluation. Certification is not a one-time procedure: it is carried out continuously on the basis of ongoing monitoring

Certification procedures
Broadly, the certification process may be split into two parts: inspection (or control) to verify that production and handling are carried out in accordance with the standards against which certification is to be done; and certification to

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and inspection. The cost of certification varies. At the farm level it is generally a fixed amount, calculated from the number of days required for the inspection. For processors and traders there may be a fixed price, as well as a percentage of the commercial value ranging between 0.3% and 1%.

the requirements, it may be awarded accreditation status, meaning that an authoritative body gives formal recognition that the certification body is competent to carry out certification activities. An accreditation contract is signed, which sets out the terms and con di tions for the use of the accredi ta tion status. There is no international regulation on who may or may not carry out accreditation. However, several countries have designated official bodies for the accreditation of certification and inspection bodies. The International Accreditation Forum (IAF) groups together 18 of the worlds 30 accreditation bodies; one of its objectives is to establish the equivalence of its members accreditation programmes on the basis of a multilateral, mutual recognition agreement among them.

Accreditation
The process of cer ti fi ca tion should meet basic cri teria of trans par ency and inde pend ence (freedom from the influ ence of vested inter ests). Cer ti fi ca tion bodies may be evaluated according to their ability to meet such criteria, and this requires an analysis of their cer ti fi ca tion sys tems, including an assess ment of their personnel, standards and their inspection and certification procedures. If a certification body meets

Standards: development and application


Stan dards set the frame for organic farming and processing prac tices and the use of marks and descrip tions in ref er ence to organic pro duc tion methods. Pro duction stan dards and the accom pa nying brands were in the past largely devel oped by organi za tions in the private sector, which also author ized com plying farmer mem bers to use their brands. Over the last decade, standards have increasingly been embodied in public regulations, including laws. These regulations define the conditions for references to organic production methods on product labels. Such standards may set out the principles for organic farming, processing and trade, list prohibited or allowed substances or conduct, and prescribe control and certification measures. There is at present no regulation on organic products applicable worldwide. Different associations, industries or governments may have varying perceptions of how organic products should be defined and certified. Thus, individual brands naming products organic may have disparate standards for organic production and certification behind them. Moreover, diversities in, for instance, climatic, ecological or social conditions, may result in differing production standards. However, the development of standards for organic production and trade in the FAO/WHO Codex Alimentarius Commission is an important step towards a common understanding of what the term implies. The inter na tional trade in organic prod ucts can therefore be quite complex. Many developing countries, mostly exporters, could benefit from increased har monization or an international procedure for estab lishing the equivalence of organic standards. However, standards do exist and are being con tinuously developed at the international level, par ticularly in two forums: IFOAM and the Codex AlimentariusCommission.

IFOAM
The Inter na tional Fed era tion of Organic Agri cul ture Move ments (IFOAM) was estab lished in 1972 as an umbrella organization for national organic agri culture asso cia tions. Mem bers also include cer ti fi ca tion bodies, traders and processors. IFOAM has estab lished inter na tional Basic Stan dards of Organic Agriculture and Food Processing, which provide a frame work for various cer ti fi ca tion pro grammes. The IFOAM standards are updated regularly by the IFOAM Stan dards Com mittee and are approved by the IFOAM General Assembly every second year. IFOAM has consultative status with the European Union (EU) and the Codex Alimentarius Com mission, and a formal liaison status with FAO.

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IFOAM has established an international Accredi tation Programme, which is operated by the Inter national Organic Accredi ta tion Service (IOAS). IOAS is an independent non-profit organization with IFOAM as sole member. IFOAM accreditation is based on com pli ance with its Basic Stan dards and its Accreditation Criteria for Programmes Certifying Organic Agri cul ture and Proc essing. As of mid 1999, 13 cer ti fi ca tion bodies were accred ited by IOAS and 6 were in the process of being accredited. Further infor ma tion on IFOAM is pro vided at its Web page (http://www.ecoweb.dk/ifoam).

Phytosanitary Measures of the World Trade Organization (WTO). Two Codex committees are currently developing standards that are relevant to the international trade in organic products. The first is the Committee on Food Labelling which is establishing guidelines for the production, processing, labelling and marketing of organically produced foods. The Committee on Food Import and Export Inspection and Certification Systems is developing guidelines for food import and export inspection and certification systems. The Committee on Food Labelling met in May 1998 and has submitted standards for vegetable production for the consideration of the Codex Alimentarius Commission in 1999. At its twenty-third session, held at the FAO headquarters in Rome from 28 June to 3 July 1999, the Commission adopted Guidelines on the Production, Processing, Labelling and Marketing of Organically Produced Foods. The Committee on Food Labelling is also developing standards for livestock products, which will be considered by the Commission at a later stage. While the development of Codex guidelines is not a way of establishing equivalency, WTO may refer to these guidelines in its dispute settlement procedures. The significance of the guidelines will depend on the extent to which WTO uses them in this way, as well as on the extent to which governments use them when formulating regulations. The formulation of the Codex guidelines is largely based on European Union regulations on organic food products and IFOAM standards. The guidelines should be of assistance to countries developing regulations on organic food products.

Demeter International eV
Demeter International eV is a worldwide network of 19 international certification bodies in Africa, Australia, Europe and North America. It claims to have more than 3,500 partners in 35 countries, covering 1 million hectares of biodynamically cultivated land. Its internationally recognized mark is registered in over 50 countries. Organic farmers following biodynamic production principles ( chapter 1 for a brief description of see these principles) may be certified against Demeter standards and thereby authorized to label their products with the Demeter mark. Standards are agreed internationally, although there may be some national differences of interpretation. The biodynamic standards are formulated in such a way as to comply with international regulations on organic farming. Demeter International also runs an accreditation programme and assists in the establishment of certification bodies. Further information on Demeter International is pro vided at its Web site (http://www.demeter.net).

Codex Alimentarius Commission


In 1962, the Joint FAO/WHO Food Standards Programme was created in order to protect consumers from health hazards and deception while at the same time facilitating international trade in food products. The Programme operates through an intergovernmental body referred to as the Codex Alimentarius Commission. The work of the Commission aims primarily at the prevention of the use of international standards as technical barriers to the trade in food products. The work of the Commission has been specifically recognized under the Agreement on the Application of Sanitary and

World Trade Organization


WTO administers global trade rules, including rules on technical barriers to trade and on the application of sanitary and phytosanitary measures. It also offers a mechanism for conciliation and dispute settlement. A country exporting organic food products, which is refused access to an importing country's market on grounds that the organic standards applied are not equivalent to the importing country's standards, may refer the issue to WTO if it considers the refusal to be a violation of global trade rules, i.e. based on a technical barrier to trade. WTO may rule against the importing country if the exporting country is found to comply with international standards for organic food

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products, such as those being formulated by the Codex Alimentarius Commission, even if the exporting country does not comply with the more stringent requirements of the importing country. It should be noted that, in gen eral, WTO is opposed to trade restric tions based on pro duc tion and proc essing methods (referred to as PPMs) and some experts are claiming that eco- labelling based on such cri teria are against WTO rules, in particular those of the Agreement on Technical Barriers to Trade. In their view this would apply even to mandatory regulations like Council Regulation (EEC) No. 2092/91 and its amendments.

cer ti fi ca tion body, including those cer ti fying organic food prod ucts. The IFOAM Accredi ta tion Cri teria for Pro grammes Certifying Organic Agriculture and Processing are based on ISO/IEC Guide 65 and are applicable to production certification (but not product certification) within the organic sector. The Demeter Accreditation Program likewise accredits organizations in accor dance with this Guide. Another impor tant guide is ISO/IEC Guide 61:1996, Gen eral require ments for assess ment and accredi tation of certification/registration bodies, which defines require ments for accredi ta tion bodies.

International Organization for Standardization (ISO)


The International Organization for Standardization (ISO), established in 1947, is a worldwide federation of national standards bodies from some 130 countries, one from each country. ISO promotes the development of standardization with a view to facili tating the inter na tional exchange of goods and services, as well as cooperation in the intellectual, scientific, technological and economic spheres. ISO's work results in inter na tional agree ments which are pub lished as Inter na tional Stan dards. ISO covers all technical fields with the exception of electrical and electronic engineering. However, it has not published guides or standards which specifically address organic production. The ISO 9000 series of standards are standards for quality management systems and the ISO 14000 series deals with different aspects of environmental management, including environmental management systems, environmental labelling and the environmental aspects of product standards. The standards do not have any direct implications for the methods and principles applicable to organic food production. The most important guide for organic certification is currently ISO/IEC 1 Guide 65:1996, General requirements for bodies operating product certificationsystems, which estab lishes prin ci ples for cer ti fi ca tion bodies. There is no guide spe cific to the certification of production methods, but Guide 65 provides general guidance for any product

CEN and CENELEC


In the European Union, standardizing bodies at the regional level include the European Committee for Standardization (CEN) and the European Committee for Electrotechnical Standardization (CENELEC). Their members are the national standards bodies of EU member countries as well as the Czech Republic, Iceland, Norway and Switzerland. In addition to formulating their own European standards, these bodies adopt standards issued by international standardizing bodies such as ISO and IEC. CEN and CENELEC have recently jointly published the European Standard (EN) 45011 (1998), General criteria for certification bodies operating product certification. EN 45011 (1998) corresponds to ISO/IEC Guide 65:1996. EN 45011 is based on ISO/IEC Guide 40:1983, General requirements for the acceptance of certification bodies, which was also the basis for the development of ISO/IEC Guide 65. While EN 45011 is not specifically applicable to the certification of production methods, it applies to any certification body operating within EU, including organic certification bodies. As of 1 January 1998, inspection bodies approved by EU must satisfy the requirements laid down in EN 45011. EN 45011 belongs to the 45000 series of standards covering testing, certification and accreditation. Another standard in the series is EN 45010, General requirements for assessment and accreditation of certification/registration bodies, which corresponds to ISO/IEC Guide 61.

IEC is the International Electrotechnical Commission; it cooperates closely with ISO.

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Regulations in major markets


Prior to the establishment of regulations, exporters could legally label products as organic and sell their products in any country. Regulations in the majority of importing countries have introduced a legal equivalence requirement for products marketed as organic in those countries. To date, regulations essentially deal with references to the organic production method on labels. They do not define stan dards for the use of pri vate trade marks or certification marks. This implies that regulations may be sup ple mented by pri vate quality seals based on private standards. Many certification bodies within EU have chosen to keep private standards; some have not. the materials that are authorized for use in soil conditioning, fertilization and plant protection. Annex III lists minimum inspection requirements and Annex VI sets out the requirements for processed foods. If at least 95% of the agricultural ingredients in the product are organic, the product can be labelled organic providing that the remaining 5% of the ingredients are not available from organic production and are listed in Annex VI, Section C. If the product contains between 70% and 95% of organic ingredients (the percentage being based on the weight of the agricultural ingredients), the organic ingredients can be mentioned only in the list of ingredients and the product may not be marketed as an organic product. The Regulation recognizes the variety of terminology used in the different EU member countries (Article 2), for example kologisch in German, biologique in French and, of course, organic in English. The certification mark placed on organic products may be freely chosen. The Regulation is based to a large extent on the IFOAM Basic Standards. Consequently, there are few substantive differences between the two, with some notable exceptions such as the length of conversion periods. Each EU member country has set up an inspection system operated by public inspection authorities, private inspection and/or certification bodies or both. For instance, Denmark and Finland have set up a fully government-run inspection system. Registration and authorization of private certification bodies is carried out by a designated authority in each EU member country and extends only to the work of the certification body within that country. Each year, the European Commission publishes a list of inspection and certification bodies authorized by the various member countries to undertake inspection in indi vidual coun tries 2.

European Union Production and certification


The basic EU regulations on organic food products are set out in Council Regulation (EEC) No. 2092/91 of 24 June 1991 and its amendments. Annex II presents a consolidated version of the Regulation and its amendments. The EU Regulation applies to all processed and unprocessed food products from plants or animals. Until June 1999, standards for organic livestock production were still in draft form and had not been approved. Hence, livestock products were governed only by standards set by private certification bodies and by national regulations in some EU member countries, including Austria, Denmark and France. The administration and enforcement of organic standards are carried out by national authorities. According to Article 5 of the Regulation, the labelling of a product may refer to the organic production method only if the product was produced in accordance with the rules laid down in Article 6 (Rules of Production) and if the producer or importer is subject to the inspection measures laid down in Articles 8 and 9 (Inspection System). Annex I to the Regulation defines the EU principles of organic production at farm level and Annex II cites

Imports
Organic food products originating from non-EU member countries may be imported and marketed

The terminology used in Council Regulation (EEC) No. 2092/91 is inspection, inspection measures, inspection system and so on. However, the term commonly used by the trade is control.

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within EU carrying a label referring to the organic origin of the product, if it is accepted that the products are produced and certified according to procedures equivalent to those of the Union. There are basically two ways of meeting the require ments for equiva lency: a third country may be approved by the European Commission as having standards and inspection measures equivalent to those of EU. The country will then be added to a list of approved countries, the so-called Article 11 list3. Alter na tively, an indi vidual EU member country may authorize an importer to import products from a country not on the Article 11 list into that particular EU member country. Under this provision, the importer should apply to the des ig nated authori ties in the EU member country for an import per mis sion and the application should be accompanied by documentation on the equivalency of standards and con trol meas ures. Literally, Article 11.7 opens up the possibility of a third-country certification body being added to the Article 11 list. However, it is interpreted by some as giving EU certification bodies the possibility of being added to the list and authorized to carry out certification activities in approved third countries. An example is the Netherlands certification body, SKAL: it is approved for certification in Hungary, a country in the Article 11 list.

Each consignment from an approved third country should be accompanied by a certificate, certifying that standards and certification measures are equivalent to those applicable in EU. The certification may be issued only by the approved certification bodies mentioned in the Article 11 list. For example, in Hungary only the Biokontroll Hungria Kht and the SKAL office in that country may issue this certification. It should also be noted that this approval is specific to work in the said third country. With the excep tion of Swit zer land (which oper ates an international verification system), the products included in the Article 11 list must origi nate from the listed country itself. Prod ucts con taining ingre di ents from outside the country are not covered by the Commission approval. An import licence must be obtained for such prod ucts to be mar keted within EU as organic. Countries seeking approval may apply to the EuropeanCommission.

Imports from countries not on the Article 11 list


Until 31 December 2002, organic prod ucts from countries not on the Article 11 list may be imported into EU under import per mits issued by EU member coun tries, pro vided that the importer sub mits docu men ta tion that the prod ucts are pro duced and cer ti fied according to rules equiva lent to those of EU. The bulk of the prod ucts cur rently entering EU are cov ered by indi vidual import per mits, and it is widely believed that the pro vision will be extended beyond 2002. In the frame work of this regime, EU member States have accepted imports from more than 60 coun tries. Import per mits are granted by des ig nated authori ties in each EU member country to spe cific importers and are valid only for those importers and for import entry into that member country. If the importer wants to use another EU member country as an import entry point, a sepa rate per mis sion must be obtained from the latter country. Once imported into an EU member country, the prod ucts may be mar keted freely within EU. Import permits are issued for a certain amount of specific products from specified countries and are valid for defined periods not exceeding 31 December

Article 11 list of third countries


When a third country has established and implemented organic standards, it may apply to the Euro pean Com mis sion for inclu sion in the Article 11 list. The Com mis sion will then evaluate the coun trys organic production standards and its certification measures. These standards should correspond with the standards described in Article 6 of Regulation 2092/91, and certification measures should correspond to the measures described in Articles 8 and 9. An approval may apply to certain product cate go ries, regions or pro duc tion units, as well as to certain certification bodies. It may also refer to cer tain ori gins of the prod ucts. In June 1999, only five countries appeared on the Article 11 list: Argentina, Aus tralia, Hun gary, Israel and Swit zer land.

Article 11 of Regulation 2092/91, which provides for the drawing up of this list by the European Commission, sets out the rules for the importation of organic products into EU as well as the criteria for inclusion on the list.

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2002. The current authorization arrangements for products from third countries are applicable until 31 December 2002. To obtain an import permission in accordance with Article 11.6a, the importer must provide sufficient evi dence that the product is pro duced in accor dance with pro duc tion require ments equiva lent to those laid down in Article 6, that control measures are as effec tive as those set out in Arti cles 8 and 9, and that these control measures are effectively and permanently implemented. As of 1 January 1998, certification bodies must sat isfy the require ments of EN 45011 or those of ISO/IEC Guide 65:1996. Having accepted the evidence, the delegated authority in the importing EU member country issues an import permit. Any change in the grounds on which an import permission is granted will neces si tate a new import permit. For example, if the importer imports the same product from the same country but through another exporter or if certification is carried out by another certification body, a sepa rate import permit will be required. Member countries and even regional authorities implement this provision differently, meaning that different kinds of control measures are accepted as ensuring equivalency to EU regulations. A draft docu ment for guid ance on the imple men ta tion of the pro vi sions for impor ta tion from third coun tries exists, but the document has not been finalized, and the European Commission is currently working on involving cus toms authori ties in con trol meas ures. Equiva lency between pro duc tion methods in EU and the export country is docu mented through the use of certification bodies having standards at least equivalent to those of EU or a certification programme that ensures certification against standards equivalent to those of EU. Because of variations in local conditions some differences in primary production methods between EU and third coun tries are often allowed to a cer tain extent. In gen eral, the cri teria for granting the import licence are shifting away from evaluation at the production level towards approval of the certification arrangements, including the certification bodies. In order to ensure equivalency in the effectiveness of inspection and certification measures, third-country certification bodies must also satisfy the require ments laid down by EN 45011 or by ISO/IEC
4
Commission document 7607/VI/97, Rev. 3.

Guide 65:1996. EU member countries have agreed on common guide lines on how such con for mity can be documented4. According to these guidelines, con for mity can be decided by:
q

Official accreditation bodies designated in the third country or in any EU member country for accreditation of certification and inspection bodies (option 1);
q

The competent authority in the third country (government) (option 2);


q

The competent authority in the EU member country which grants import permits (option 3). In the first instance, the importer must provide docu men tary evi dence that the cer ti fi ca tion body con forms with the require ments of EN 45011 or ISO/IEC Guide 65:1996, and that this con for mity is con firmed by an official accreditation body. The official accreditation body should comply with the requirements for accredi ta tion bodies set out in EN 45010 or ISO/IEC Guide 61. As all European accreditation bodies are expected to be sub ject to inter na tional mutual rec og nition agreements in the near future, selected official accreditation bodies should also preferably join the International Accreditation Forum, under which the implementation of such agree ments is likely. Offi cial accreditation processes require the periodic sur veillance and reassessment of accredited inspection and certificationbodies. The requirement for accreditation by an official accreditation body is particularly significant for cer ti fi ca tion bodies in devel oping coun tries, as it can be quite expensive to obtain such accreditation. Additionally, many countries may not have official accredi ta tion bodies. At this moment, it is not clear whether IFOAM accreditation is acceptable as evidence of the con for mity of a cer ti fi ca tion body with EN 45011 or ISO/IEC Guide 65. IFOAM is not an official accreditation body that can be designated by any third country or EU member country; it is, how ever, applying for mem ber ship of IAF. In the second instance, docu men ta tion showing that a competent authority in the exporting country guarantees conformity of the certification body with the stan dards of EN 45011 or ISO/IEC Guide 65 must be submitted by the importer. Additionally, the

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importer should pro vide suf fi cient evi dence that the accredited certification bodies are subjected to peri odic sur veil lance and reas sess ment according to the require ments of EN 45011 and ISO/IEC Guide 65. In the third instance, the importer must submit all infor ma tion required by the com pe tent authority in the EU member country to enable the latter to decide on compliance with EN 45011 or ISO/IEC Guide 65. Regular surveillance and reassessment of the certification bodies must be made by independent experts or offi cial accredi ta tion bodies des ig nated by the competent authority in the EU member country. How ever, not all com pe tent authori ties in EU member coun tries are ready to imple ment this option. There is a possibility that documentation on IFOAM accredi ta tion can in some cases be accepted as meeting docu men ta tion require ments under this pro vi sion, and some EU member countries may accept evaluations carried out by independent experts. For all import permits granted after 1 January 1998 for combinations of exporting countries and certification bodies not previously assessed by a competent authority in an EU member State, the certification bodies must comply with the requirements of EN 45011 or ISO/IEC Guide 65. For import per mits granted before 31 December 1997 or applications based on previous combinations of exporting countries and certification bodies, a timetable for transitional arrangements was drawn up. Documentation evidencing the compliance of certification bodies with EN 45011 or ISO Guide 65 should have been forwarded to the relevant competent authorities no later than 31 May 1999. The competent authorities in the EU member countries were then to decide which import permits would continue to be valid and which import permits were to be withdrawn.

The above requirement on compliance with EN 45011 and ISO/IEC Guide 65 caused some stir, since it added to the burden on certification bodies in developing countries, as well as implied that importers would have to provide additional docu men ta tion on equiva lency. As has been mentioned earlier, the continuous sur veillance and reassessment of certification bodies is part of the offi cial accredi ta tion process. This sur veillance and reassessment is increasingly replacing supervision as a means of ensuring the effective application of inspection measures. How ever, some member coun tries may in some cases require fur ther evi dence that inspec tion and cer ti fi ca tion activi ties in the third country are permanently and effectively applied. There are no common guide lines on how the related super vi sion is to be car ried out and by whom. The above- mentioned require ments must be ful filled for each export consignment destined for an EU country. In addi tion, the exporter must pres ent to the importer an individual export form indicating the kind and quan tity of goods, the stan dards applied, and the cer ti fi ca tion body pro viding the cer ti fi ca tion. The forms and details required may vary from country to country. The EU member State granting an import authori zation noti fies the Euro pean Com mis sion and the other EU member States and for wards to all of them documentation relevant to the issuance of the import permit.

Other markets
Regulations in non-European markets, such as Australia, Japan, Canada and the United States, are discussed in chapter 4. Regulations in Switzerland are taken up in chapter 11.

Certification in exporting countries


Certification in exporting countries may be carried out by local certification bodies, by international certification entities, or under a partnership arrange ment between these two types of bodies. a certification body appearing on the list should be chosen. For example, for Argen tina, which is on the Article 11 list, the local cer ti fi ca tion bodies Insti tuto Argentino para la Certificacin y Promocin de Productos Agropecuarios Orgnicos srl (Argencert) and Organi za cin Inter na cional Agro pecuaria (OIA) appear in the Article 11 list. They have the approval of SENASA, part of the Argentine Department of

Certification by local bodies


If the exporter wants to enter the European market and the exporting country is on the EU Article 11 list,

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CHAPTER 2 CERTIFICATION

Agriculture, and have partnership agreements with pri vate and gov ern mental cer ti fi ca tion bodies in both Europe and the United States. Argencert is a limited liability company. It has a stan dards com mittee, inspec tors and an inde pendent certification committee. The last-mentioned com mittee con sists of four per sons rep re senting four institutions. Argencert serves several growers, grower groups, processors and traders. Each producer in these groups has a certification agree ment with Argencert and is inspected annu ally. However, as only very few countries and certification bodies are on the Article 11 list, most operators must rely on certification to obtain import permits. Local certification bodies wishing to ensure that their certification will be accepted by EU authorities should either seek official accreditation (option 1, see page 16), or request guarantees from the local authorities that they comply with ISO/IEC Guide 65 (option 2). Such guarantees should be based on legal grounds. However, the services of local certification bodies oper ating in coun tries not on the Article 11 list, which are not officially accredited and whose compliance with ISO/IEC Guide 65 is not guar an teed by the local authorities, may be recognized for the purposes of issuing import permits. This recognition can be obtained through an evalua tion car ried out by an independent expert acceptable in EU (option 3). An example of such a body is Biolatina SAC. Its main office is in Peru, and it has local inspec tion offices in Bolivia, Colombia and Nica ragua. It has devel oped a cer ti fi ca tion pro gramme for Latin America. Its inspection and certification activities are evaluated by an expert approved by a com pe tent authority in Ger many. It is difficult to envisage an export trade in organic products with the EU market based solely on local cer ti fi ca tion and accredi ta tion. Many coun tries do not have accreditation facilities, and the cost of official accreditation can be quite high. Additionally, if EU member countries require further evidence that control measures are being effectively and permanently applied, recourse may have to be made to international bodies or experts. In effect therefore international accreditation and/or international supervision and surveillance are required. In regard to supervision and surveillance, local certification bodies have often established partnerships with international certification bodies or experts carrying out these activities.

Countries that have established and implemented national leg is la tion for the pro duc tion and cer ti fi ca tion of organic products may apply to the European Com mis sion for inclu sion on the Article 11 list.

Certification under partnerships between local and international bodies


Cer ti fi ca tion may be car ried out under a part ner ship between local and international certificationbodies. The part ner ship can take various forms, but often the local bodies carry out the bulk of the activities leading to cer ti fi ca tion, while the inter na tional cer ti fi cation body periodically evaluates the imple men tation of cer ti fi ca tion pro ce dures and some times issues the certificates. This may reduce certification costs for the opera tors while pro viding access to an inter national cer ti fi ca tion mark, as well as strengthen local inspec tion and cer ti fi ca tion capacity. Local inspection entities and international certification bodies may enter into partnership contracts under which the local body car ries out the on-site inspections, writes inspection reports and sub mits them to the inter na tional cer ti fi ca tion body; cer ti fi ca tion is under taken by the inter na tional body. Producers certified this way gain access to the internationalcertificationmark. Full cer ti fi ca tion may also be car ried out locally, the only inter na tional involve ment being super vi sion to ensure that the certification bodies comply with EN 45011 or ISO/IEC Guide 65 stan dards or that con trol measures are being effectively and permanently applied. International super vi sion may be paid for by an aid organi za tion, the local cer ti fi ca tion body and, in some cases, by an importer.

Certification by a local branch of an international certification body


An international certification body may establish branch offices elsewhere. Such offices follow the inspec tion and cer ti fi ca tion pro ce dures of the mother com pany and are fully inte grated into its inter na tional certificationsystem. Several certification bodies operating at the international level have established branch offices in other countries. For example, the Organic Crop Improvement Association, Inc. (OCIA), a United States company, has set up several branch offices in a

CHAPTER 2 CERTIFICATION

19

number of countries, including at the Organic Food Development Center (OFDC) in China. The branch office has its own certification committee and a certification programme, which follows OCIA standards and by-laws. Inspection is carried out by Chinese inspectors approved by OCIA.

international certification bodies may offer cer ti fi ca tion pro grammes ful filling EU require ments. How ever, some opera tors choose Euro pean cer ti fi cation bodies for exports to Europe on the grounds that this will reduce trade dif fi cul ties. Only a minority of the cer ti fi ca tion bodies approved by the various EU member coun tries are active in third coun tries. They include BCS ko Garantie GmbH (Ger many), Ecocert (France), Institut fr Marktkologie or IMO (Swit zer land), KRAV (Sweden), Organic Farmers & Growers Ltd (OF&G, United Kingdom), SKAL (Neth er lands) and Soil Asso cia tion Cer ti fi ca tion Ltd (United Kingdom). Several European certification bodies are active in many African coun tries, as well as in India and Sri Lanka. There are even cases, for instance in India, where one operator is inspected and certified by several international certification bodies, American, Aus tra lian and Euro pean.

Certification by international bodies


An operator may choose to be cer ti fied by an inter national certification body. International certification is likely to be more expen sive than local cer ti fi ca tion, but if no local certificationprogramme is avail able it may be the only solu tion in the short term. For the long term, the establishment of a local certification programme should be considered. The international market pre mium on the product will deter mine whether cer ti fi cation by a for eign cer ti fi ca tion body is fea sible. The cer ti fi ca tion body does not need to be Euro pean for the operator to enter the Euro pean market. Other

Some types of certification arrangements


Subcontracting
Certified opera tors may enter into sub con tracts with other operators to carry out specific operations on their behalf, for instance part of a manufacturing process. The subcontractor may, for example, be a farmers cooperative, a processor or a packer. The certification of such subcontractors is car ried out as part of the certification of the main operators (or licen sees), who pay for the cer ti fi ca tion. Sub con tractors do not have the right to market their pro duc tion with the certification mark, and they may handle organic products only within the coop era tion agreement with the licensee. The cer ti fi ca tion mark may be used only by the licensee. Sub con tracting is quite common in many parts of the world, including Europe. Cer ti fi ca tion based on subcon tracting is also done for instance by Argencert in Argentina. It is often a trader or a processor that is cer ti fied and holds the cer tifi cate and pays for the cost of cer ti fi ca tion. reduction of external inspection through the estab lish ment of an internal con trol mecha nism and common marketing operations for the producers belonging to the system. Grower groups may include small processing units and storage units. Several certification programmes have made special provisions for the certification of smallholders, proj ects and other kinds of coop era tive arrange ments. Provisions for the inspection of such groups often differ from those applied to single opera tors. In general there are two approaches to the certification of a grower group system. Inspection may be directed to part of the grower group, for instance a percentage of the farmers, or it may be directed to the internal control system, i.e. focusing on com piling docu men ta tion on each of the farmers, in- house moni toring system, quan tity con trol, etc. To mention an example, the certification bodies BCS, Bio Latina, Ecocert, IMO, OCIA and SKAL, which are all active in Latin America, carry out certification of grower group systems there. A control programme has been established which basically covers the design and establishment of an internal control system within the producers organizations. This programme provides for documentation on each farmer (production procedures, basic information, management plan, etc.) and internal inspections.

Grower groups
Spe cial inspec tion and cer ti fi ca tion arrange ments can be developed for groups of small producers. In a grower group system, the key elements are the

20

CHAPTER 2 CERTIFICATION

Setting up a certification programme


The long-term possibility
Inspec tion and cer ti fi ca tion can be done locally and, if the appro priate local bodies do not exist, they can be established. The best way forward is to bring together all the parties involved in organic agri culture, including farmers, proc es sors, advo cacy organizations, consumer organizations, environmental organizations, university researchers, agricultural exten sion workers, etc. A com mittee could be established to review the organic standards of gov ernments, certification bodies, the Codex Alimentarius Commission, and the IFOAM Basic Standards. Guide lines for car rying out inspec tion and cer ti fi cation at local level are often available: for instance, offi cial regu la tions (e.g. the Euro pean Council Regula tion (EEC) No. 2092/91 and its amend ments) and the IFOAM criteria for organic certification pro grammes could pro vide valu able infor ma tion. After reviewing inter na tional stan dards and those of other countries, the committee can develop and rec om mend national organic stan dards. These should be consistent with standards in important markets while taking local con di tions into con sid era tion. The committee can also recommend a structure for the certification body. Procedures for inspectors and cer ti fi ca tion should also be estab lished and inspec tors must be trained. After the establishment of the local certification programme, local farmers and processors should be educated about the organic standards and the certification process. When certification has com menced, an appli ca tion for accredi ta tion should be made. Spe cific guide lines for estab lishing local cer ti fi ca tion bodies can be found in the pub li ca tion Building Trust in Organics: A Guide to Setting Up Organic Certification Programmes, written by G. Rundgren and pub lished by IFOAM in 1997. Assis tance can also be obtained from the Inde pendent Organic Inspectors Association, which offers an inspector training course, as well as from other local or inter na tional cer ti fi ca tion bodies, espe cially those that have been accredited or that appear on the EU Article 11 list. For instance, an international certification or accreditation body may provide tuto rial assis tance to local pro fes sionals in inspec tion and certification procedures. The training may sometimes be part of a development project, involving external funding, NGOs and other estab lish ments. After the training, a national organic standards committee may be established, and the trained inspec tors can carry out local inspec tions for the inter na tional partner. This is the first step towards the crea tion of a fully opera tional local pro gramme. To mention one example, the Soil Association Certification Ltd, an officially recognized cer ti fi ca tion body in the United Kingdom linked with The Soil Asso cia tion, has pro vided tuto rial assis tance to Venezuelan professionals in inspection and certificationprocedures.

Annex I

Basic concepts

Accreditation. A pro ce dure by which an authori ta tive body evalu ates and gives a formal rec og ni tion that a cer ti fi ca tion programme is in accordance with the standards of the authori ta tive body. Certificate. Docu ment indi cating that ade quate con fi dence is provided that a product, process or service is in con for mity with a spe cific stan dard. Certification. A procedure by which a third party gives written assur ance that a product, process or service is in conformity with certain stan dards. Cer ti fied organic food prod ucts are food prod ucts that have been veri fied to have been pro duced in accor dance with speci fied stan dards for organic pro duc tion and proc essing. Certificationbody. An organi za tion per forming cer ti fi ca tion. Sometimes referred to as the cer ti fier or the cer ti fi ca tion agency. Certification mark. A mark or symbol indicating that com pli ance with stan dards has been veri fied. Certification programme. A system of rules, procedures and man age ment for car rying out cer ti fi ca tion. One cer ti fica tion body may exe cute sev eral dif ferent cer ti fi ca tion programmes. Some times referred to as a cer ti fi ca tion system. Competent authority. The official government agency having juris dic tion. Con trol, con trol body. Terms com monly used by the trade when refer ring to inspec tion and an inspec tion body. Inspection. An on- site visit to verify that the per form ance of an opera tion is in accor dance with spe cific stan dards of a cer ti fi ca tion pro gramme. Inspec tion body. The body per forming the inspec tion part of cer ti fi ca tion. Where a cer ti fi ca tion body per forms its own inspections, the inspection body is identical to the cer ti fi ca tion body. Some times referred to as the inspec tion agency or the con trol body. Inspector. A person appointed to under take the inspec tion part of a cer ti fi ca tion pro gramme. Licence. A document issued under the rules of a certification programme, by which a certification body

grants a person or body the right to use certificates or cer ti fi ca tion marks for its prod ucts, processes or serv ices in accor dance with the rules of the relevant certification programme. Licensee. An operator that has a license to use a cer ti fi ca tion mark Operator. Anyone carrying out activities covered by a cer ti fi ca tion pro gramme, for instance farmers, proc es sors, handlers. Standards. Docu mented agree ments con taining tech nical speci fi ca tions or other pre cise cri teria to be used con sistently as rules, guidelines or definitions, to ensure that mate rials, prod ucts, processes and serv ices are fit for their pur pose. Stan dards relating to organic food prod ucts are production and/or processing standards describing, pre scribing, allowing or pro hib iting pro ce dures and mate rials, as well as stan dards for cer ti fi ca tion and label ling. Subcontractor. Anyone car rying out activi ties cov ered by a cer ti fi ca tion pro gramme, for instance farmers, proc es sors, han dlers, on behalf of an operator. EN 45010.* A European standard for accreditation devel oped by CEN and CENELEC. EN 45011.* A European standard for certification devel oped by CEN and CENELEC. ISO/IEC Guide 61.* An inter na tional guide to accredi ta tion developed by the international standardization organi za tions ISO and IEC. ISO/IEC Guide 65.* An inter na tional guide to cer ti fi ca tion devel oped by ISO and IEC.

____________________ * The EN 45000 series of standards and their corresponding ISO/IEC Guides lay down general criteria for the operation of testing and calibration laboratories, certification bodies for prod ucts, quality sys tems and per sonnel, inspec tion bodies, and accreditation bodies with the aim of ensuring confidence and reliability in the activities of these bodies. The EN 45000 stan dards are also referred to as har mo nized stan dards.

Annex II

MAFF consolidated version of EC Regulationa/

COUNCIL REGULATION (EEC) No. 2092/91 of 24 June 1991 on organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs (note: substantive changes arising from the latest amending Council Regulation No. 1935/95 are indicated by the use of bold italics)

THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular Article 43 thereof, Having regard to the proposals from the Commission, Having regard to the opinion of the European Parliament, Having regard to the opinion of the Economic and Social Committee, Whereas demand from consumers for organically produced agricultural products and foodstuffs is increasing; whereas a new market for agricultural products is thus being created by this phenomenon; Whereas the market price for such products is higher, while the way in which they are produced involves less intensive use of land; whereas, therefore, in the context of the reorientation of the common agricultural policy, this type of production may contribute towards the attainment of a better balance between supply of, and demand for, agricultural products, the protection of the environment and the conservation of the countryside; Whereas, in response to the rising demand, agricultural products and foodstuffs are being placed on the market with indications stating or implying to purchasers that they have been produced organically or without the use of synthetic chemicals; Whereas some Member States have already adopted rules and inspection arrangements for the use of such indications; Whereas a framework of Community rules on production, labelling and inspection will enable organic farming to be
__________________________________

protected in so far as it will ensure conditions of fair competition between the producers of products bearing such indications and give the market for organic products a more distinctive profile by ensuring transparency at all stages of production and processing, thereby improving the credibility of such products in the eyes of consumers; Whereas organic pro duc tion methods con sti tute a spe cific form of pro duc tion at farm level; whereas, con se quently, it should be pro vided that, on the label ling of proc essed products, indications referring to organic production methods should relate to the ingre di ents obtained by such methods; Whereas, for the implementation of the arrangements concerned, provision should be made for flexible procedures whereby certain technical details or measures may be amended, amplified or further defined in order to take account of experience gained; whereas, within a suitable period, this Regulation will be supplemented by equivalent rules covering livestock production; Whereas, in the interests of the producers and purchasers of products bearing indications referring to organic production methods, the minimum principles which must be complied with in order for products to be presented with such indications should be laid down; Whereas organic production methods entail significant restrictions on the use of fertilizers and pesticides which may have detrimental effects on the environment or result in the presence of residues in agricultural produce; whereas, in this context, practices accepted in the Community when this Regulation is adopted must be complied with in accordance with codes of practice followed in the Community when this Regulation is adopted; whereas, moreover, in the future, the principles governing the authorization of products which may be used in this type of farming must be established;

a/ Source: Ministry of Agriculture, Farming and Fisheries, United Kingdom. Not to be regarded as a definitive legal text.

CHAPTER 2 CERTIFICATION, Annex II

23

Whereas, moreover, organic farming involves varied cultivation practices and limited use of non-synthetic fertilizers and conditioners of low solubility; whereas these practices should be specified and conditions for the use of certain non-synthetic products laid down; Whereas the procedures laid down make possible, if this appears necessary, the addition to Annex I of more specific provisions aimed at avoiding the presence of certain residues of synthetic chemicals from sources other than agriculture (environmental contamination) in the products obtained by such production methods; Whereas, to ensure compliance with the rules on production, all stages of production and marketing should normally be subject to inspection; Whereas all operators producing, preparing, importing or marketing products bearing indications referring to organic production methods must be subject to a regular inspection system, meeting minimum Community requirements and carried out by designated inspection authorities and/or by approved and supervised bodies; whereas provision should be made for a Community indication of inspection to appear on the labelling of the products concerned; (Whereas recitals in amending Reg. No. 1935/95)
Whereas the Commission has received a specific mandate in the framework of Regulation (EEC) No 2092191 to review a number of provisions of that Regulation by 1 July 1994 and to submit any appropriate proposal for revision of that Regulation; Whereas it has become apparent that the provisions, expiring on 1 July 1995 concerning the labelling of agricultural products and foodstuffs containing an ingredient of agricultural origin which was produced by producers converting to organic farming, should be extended in order to permit those producers to valorize the additional cost of their production by an appropriate labelling of their products; Whereas the review of Articles 5, 10 and 11 requested by the Council by 1 July 1994 has shown that a number of technical and drafting amendments in those Articles as well as in certain other provisions are necessary to ensure a proper management and implementation of the Regulation; whereas priority has therefore been given to the establishment of these amended rules and that consequently the establishment of the rules concerning animal production should be postponed for a limited period; Whereas it has become apparent from the review that the provisions concerning the labelling of foodstuffs prepared only partly from ingredients of agricultural origin which were produced according to organic production methods, should be improved in order to permit greater emphasis to be placed on the organically produced component in such foodstuffs; Whereas it has also become apparent that the indication provided for in Annex V should remain optional, but should also, in order to prevent improper use of that

indication, be restricted to sales of prepackaged foodstuffs or direct sales by the producer or preparer to the ultimate consumer, provided that the nature of the product can be identified unambiguously; Whereas it has fur ther more become apparent that propagating material should be obtained from organically grown plants but that a system of dero ga tions is nec essary in order to enable pro ducers to use, during a tran sitional period, conventionally-produced propagating material, where no appropriate organically-produced propa gating mate rial is avail able; Whereas, for the same reasons, it must be permissible for whole seedlings obtained in a conventional manner and intended for planting for plant production to be used for an interim period; Whereas it has become apparent that a number of products which were used before the adoption of Regulation (EEC) No 2092/91 in accordance with the codes of practice of organic farming followed in the Community, have not been included in Annex II of the Regulation; whereas the use of such products should be permitted to the extent that their use is also permitted in conventional agriculture; Whereas it has appeared appropriate to clarify that the inspection system provided for applies also to importers of products from third countries established in the European Union; Whereas Regulation (EEC) No 2092191 should therefore be amended,

HAS ADOPTED THIS REGULATION:

Scope

Article 1 1. This Regulation shall apply to the following products, where such products bear, or are intended to bear, indications referring to organic production methods: (a) unprocessed agricultural crop products; also animals and unprocessed animal products, to the extent that principles of production and specific inspection rules for them are introduced into Annexes I and III; products intended for human consumption composed essentially of one or more ingredients of plant origin; in addition, upon adoption of the provisions concerning livestock production referred to in (a), products intended for human consumption containing ingredients of animal origin.

(b)

2. A proposal concerning the principles and specific measures of control governing organic animal production, non-processed animal products and products intended for human consumption containing ingredients of animal origin shall be submitted by the Commission as soon as possible and before 30 June 1995.

24

CHAPTER 2 CERTIFICATION, Annex II

Article 2 For the purposes of this Regulation a product shall be regarded as bearing indications referring to organic production methods where, in the labelling, advertising material or commercial documents, such a product or its ingredients is described by the indications in use in each Member State suggesting to the purchaser that the product or its ingredients have been obtained in accordance with the rules of production laid down in Article 6 and in particular the following terms, unless such terms are not applied to agricultural products in foodstuffs or clearly have no connection with the method of production: in Spanish: in Danish: in German: in Greek: in English: in French: in Italian: in Dutch: in Portuguese: in Finnish: in Swedish: ecolgico, rkologisk, kologisch, $4@8@(4i`, organic, biologique, biologico, biologisch, biolgico, luonnomukainen ekologisk

5. operator shall mean any natural or legal person who produces, prepares or imports from a third country, with a view to the subsequent marketing thereof, products as referred to in Article 1, or who markets such products; 6. ingredients shall mean the substances, including additives, used in the preparation of the products specified in Article 1 (1) (b), as defined in Article 6 (4) of Directive
79/112/EEC on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs for sale to the ultimate consumer;

7. plant protection products shall mean products as defined in Article 2 (1) of Council Directive 79/117/EEC of 21 December 1978 prohibiting the placing on the market and use of plant protection products containing certain active substances, as last amended by Directive 89/365/EEC; 8. detergents shall mean substances and prepa rations, within the meaning of Council Direc tive 73/404/EEC of 22 November 1973 on the approxi ma tion of the laws of the Member States relating to deter gents, as last amended by Direc tive 86/94/EEC, which are intended to be used for cleaning cer tain prod ucts as referred to in Article 1 (1) (a); 9.
pre-packaged foodstuff shall mean any single item as defined in Article 1 (3) (b) of Directive 79/112/EEC;

Article 3 This regulation shall apply without prejudice to other Community provisions governing the production, preparation, marketing, labelling and inspection of the products specified in Article 1.

10.

list of ingredients" shall mean the list of ingredients referred to in Article 6 of Directive 79/112/EEC.

Labelling Definitions

Article 5

Article 4 1. The labelling and advertising of a product specified in Article 1 (1) (a) may refer to organic production methods only where: (a) such indications show clearly that they relate to a method of agricultural production; the product was produced in accordance with the rules laid down in Article 6 or imported from a third country under the arrangements laid down in Article 11; the product was produced or imported by an operator who is subject to the inspection measures laid down in Articles 8 and 9;
in the case of products prepared after 1 January 1997, the labelling refers to the name and/or the code number of the inspection authority of body to which the operator is subject. Member States shall decide whether to require a reference to the name and/or to the code number and shall notify the Commission accordingly; (deleted)

For the purpose of this Regulation: 1. labelling shall mean any words, particulars, trade marks, brand names, pictorial matter or symbols on any packaging, document, notice, label, board or collar accompanying or referring to a product specified in Article 1; 2. production shall mean the operations on the agricultural holding involved in producing, packaging and initially labelling as products of organic production agricultural products produced on that holding; 3. preparation shall mean the operations of preserving and/or processing of agricultural products, and also packaging and/or alterations made to the labelling
concerning the presentation of the organic production method of the fresh, preserved and/or processed products;

(b)

(c)

(d)

4. marketing" shall mean holding or displaying for sale, offering for sale, selling, delivering or placing on the market in any other form;

2.

CHAPTER 2 CERTIFICATION, Annex II

25

3. The labelling and advertising of a product specified in Article 1 (1) (b) may bear indications referring to organic production methods in the sales description of the product only where: (a) at least 95% of the ingredients of agricultural origin of the product are, or are derived from, products obtained in accordance with the rules laid down in Article 6 or imported from third countries under the arrangements laid down in Article 11; all the other ingredients of agricultural origin of the product are included in Annex VI, Section C or have been provisionally authorized by a Member State in accordance with any implementing measures adopted where appropriate pursuant to paragraph 7; the product contains only substances listed in Annex VI, Section A, as ingredients of nonagricultural origin; the product or its ingredients of agricultural origin, referred to in subparagraph (a), have not been subjected to treatments involving the use of substances not listed in Annex VI, Section B; the product or its ingredients have not been subjected to treatments involving the use of ionizing radiation; the product has been prepared or imported by an operator who is subject to the inspection measures laid down in Articles 8 and 9;
in the case of products prepared after 1 January 1997, the labelling refers to the name and/or the code number of the inspection authority or body to which the operator who has carried out the most recent preparation operation is subject. Member States shall decide whether to require a reference to the name and/or to the code number and shall notify the Commission accordingly.

(b)

a conversion period of at least 12 months before the harvest has been complied with; such indications do not mislead the purchaser of the product regarding its difference from products which satisfy all the requirements of paragraphs 1 or 3.
After 1 January 1996 such indications must take the form of the words product under conversion to organic farming, and must appear in a colour, size and style of lettering which is not more prominent than the sales description of the product; in this indication the words organic farming shall not be more prominent than the words product under conversion to;

(c)

(b)

(d)

(c)

the product contains only one ingredient of agricultural origin;


for products prepared after 1 January 1997, the labelling refers to the name and/or the code number of the inspection authority or body to which the operator who has carried out the most recent production or preparation operation is subject. Member States shall decide whether to require a reference to the name and/or to the code number and shall notify the Commission accordingly.

(e)

(d)

(e)

(f)

5a. Without prejudice to the provisions of paragraph 3, the labelling and advertising of a product as referred to in Article 1 (1) (b) may only bear indications referring to organic production methods where: (a) at least 70% of the ingredients of agricultural origin are, or are derived from, products obtained in accordance with the rules laid down in Article 6 or imported from third countries under the arrangements laid down in Article 11; all the other ingredients of agricultural origin of the product are included in Annex VI, Section C or have been provisionally authorized by a Member State in accordance with any implementation measures adopted where appropriate pursuant to paragraph 7; the indications referring to organic production methods appear in the list of ingredients and only in clear relation to those ingredients obtained according to the rules laid down in Article 6 or imported from third countries under the arrangements laid down in Article 11; they appear in the same colour and with an identical size and style of lettering as the other indications in the list of ingredients. Such indications must also appear in a separate statement set in the same visual field as the sales description and indicating the percentage of the ingredients of agricultural origin or derived therefrom which were obtained in accordance with the rules laid down in Article 6 or were imported from third countries under the arrangements laid down in Article 11. The statement may not appear in a colour, size and style of lettering which is more prominent than the sales description of the product. The statement shall be in the following form: X% of the agricultural ingredients were produced in accordance with the rules of organic production;

(g)

(b)

The indications referring to organic production methods must make it clear that they relate to a method of agricultural production and must be accompanied by a reference to the ingredients of agricultural origin concerned, unless such reference is clearly given in the list of ingredients. 4. Ingredients of agricultural origin may be included in Annex VI, Section C only where it has been shown that such ingredients are of agricultural origin and are not produced in sufficient quantity in the Community in accordance with the rules laid down in Article 6, or cannot
be imported from third countries in accordance with the rules laid down in Article 11.

(c)

5. Products labelled or advertised in accordance with paragraphs 1 or 3 may bear indications referring to conversion to organic production methods, provided that: (a) the requirements referred to in paragraph 1 or paragraph 3 respectively are fully satisfied, with the exception of that concerning the length of the conversion period referred to in paragraph 1 of Annex I;

26

CHAPTER 2 CERTIFICATION, Annex II

(d)

the product contains only substances listed in Annex VI, Section A as ingredients of nonagricultural origin; the product or its ingredients of agricultural origin referred to in subparagraph (a) have not been subjected to treatments involving the use of substances not listed in Annex VI, Section B; the product or its ingre di ents have not been subjected to treat ments involving the use of ion izing radiation; the product has been prepared or imported by an operator who is subject to the inspection measures laid down in Articles 8 and 9; for products prepared after 1 January 1997, the label ling refers to the name and/or the code number of the inspection authority or inspecting body to which the operator who has car ried out the most recent pro duc tion or prepa ra tion opera tion is subject. Member States shall decide whether to require a ref er ence to the name and/or to the code number and shall notify the Com mis sion accord ingly.

Conditions of use and compositional requirements of these ingredients and substances may be specified. Where a Member State considers that a product should be added to the above-mentioned lists or that amendments should be made thereto, it shall ensure that a dossier giving the reasons for the inclusion or the amendments is sent officially to the other Member States and the Commission, which shall present it to the Committee referred to in Article 14. 9.
For the calculation of the percentages referred to in paragraphs 3 and 6, the rules provided for in Articles 6 and 7 of Directive 79/112/EEC shall be applied. 10. In a product as referred to in Article 1 (1), an ingredient obtained according to the rules laid down in Article 6 shall not be present together with the same ingredient not obtained according to those rules.

(e)

(f)

(g)

(h)

11. Before 1 January 1999, the Commission shall review the provisions of this Article and of Article 10 and submit any appropriate proposals for their revision.

6.

During a transitional period expiring on 31 December 1997, the labelling and advertising of a

product as referred to in Article 1 (1) (b) pre pared partly from ingredients not satisfying the requirements in para graph 3 (a) may refer to organic pro duc tion methods pro vided that: (a) at least 50% of the ingredients of agricultural origin satisfy the requirements referred to in paragraph 3 (a); the product satisfies the requirements referred to in paragraph 3 (c), (d), (e) and (f); the indications referring to organic production methods: - appear only in the list of ingredients as provided for in Directive 79/112/EEC, as last amended by Directive 89/395/EEC, - clearly refer to only those ingredients obtained according to the rules referred to in Article 6 or imported under the arrangements laid down in Article 11; (d) the ingredients and their relative levels appear in descending order by weight in the list of ingredients; indications in the list of ingredients appear in the same colour and with an identical size and style of lettering; (c) (b)

Rules of Production

Article 6

(b)

1. The organic production method implies that for the production of products referred to in Article 1 (1) (a) other than seeds and vegetative propagating material: (a) at least the requirements of Annex I and, where appropriate, the detailed rules relating thereto, must be satisfied; only products composed of substances listed in Annexes I and II may be used as plant-protection products, detergents, fertilizers, soil conditioners or
for another purpose where such purpose is specified in Annex II in regard to certain substances. They may be used only under the

(c)

specific conditions laid down in Annexes I and II in so far as the corresponding use is authorized in general agriculture in the Member States concerned in accordance with the relevant Community provisions or national provisions in conformity with Community law;
only seed or vegetative propagating material produced by the organic production method referred to in paragraph 2 is used.

(e)

7. Detailed rules concerning the implementation of this Article may be established according to the procedure laid down in Article 14. 8. Limitative lists of the substances and products referred to in para graph 3 (b), (c) and (d) and para graph 5a (b), (d) and (e) shall be estab lished in Annex VI, Sec tions A, B and C, according to the procedure laid down in Article 14.

2. The organic production method implies that for seeds and vegetative reproductive material, the mother plant in the case of seeds and the parent plant(s) in the case of vegetative propagating material have been produced in accordance with the provisions of subparagraphs (a) and (b) of the previous paragraph for at least one generation or, in the case of perennial crops, two growing seasons.

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27

3(a) By way of derogation from paragraph 1 (c), seeds and vegetative propagating material not obtained by the organic production method may, during a transitional period expiring on 31 December 2000 and with the approval of the competent authority of the Member State, be used in so far as users of such propagating material can show to the satisfaction of the inspection body or authority of the Member State that they were unable to obtain on the market propagating material for an appropriate variety of the species in question and satisfying the requirements of paragraph 2. In that case, propagating material which is not treated with products not listed in Annex II, Section B must be used, if available on the Community market. Member States shall inform the other Member States and the Commission of any authorization granted under this paragraph. (b) The procedure laid down in article 14 may be applied to decide on:

material have demonstrated to the satisfaction of the inspection body or authority of the Member State that they were not able to obtain an appropriate variety of the species in question on the Community market, (b) the seedlings have not been treated, since sowing, with any products other than those listed in Annex II, Sections A and B; the seedlings come from a producer who has accepted an inspection system equivalent to the arrangements laid down in Article 9 and has agreed to apply the restriction in subparagraph (b); this provision shall enter into force on 1 January 1996; after planting, the seedlings must have been cultivated in accordance with the provisions of Article 6 (1) (a) and (b) for a period of at least six weeks before harvesting; the labelling of any product containing ingredients derived from such seedlings may not include the indication referred to in Article 10; without prejudice to any restriction resulting from the procedure referred to in paragraph 4, any authorization granted under this paragraph shall be withdrawn as soon as the shortage comes to an end, and shall expire on 31 December 1997 at the latest.

(c)

(d)

(e) the introduction, before 31 December 2000 of restric tions con cerning the tran si tional measure referred to in subparagraph (a) with regard to certain species and/or types of propagating material and/or the absence of chemical treatment, the maintenance, after 31 December 2000, of the derogation provided for in subparagraph (a) with regard to certain species and/or types of propagating material and with regard to the whole Community or certain parts thereof, the intro duc tion of pro ce dural rules and cri teria concerning the derogation referred to in subparagraph (a) and the information thereon com mu ni cated to the pro fes sional organi za tions concerned, to other Member States and the Commission.

(f)

4(a) Where an authorization as referred to in paragraph 3 has been granted, the Member State shall immediately notify to the other Member States and to the Commission the following information: the date of the authorization, the name of the variety and species concerned, the quantities that are required and the justification for those quantities, the expected period of the shortage, any other information requested Commission or the Member States. by the

4. Before 31 December 1999 the Commission shall review the provisions of this Article, in particular paragraph 1 (c) and paragraph 2 and submit any appropriate proposals with a view to their revision.

Article 6a 1. For the purposes of this Article, seedlings shall mean whole seedlings intended for planting for plant production. 2. The organic production method implies that when producers use seedlings, they have been produced in accordance with Article 6. 3. By way of derogation from paragraph 2 seedlings not obtained by organic production methods may be used during a transitional period expiring on 31 December 1997 in so far as the following conditions are met. (a) the competent authority of the Member State has authorized the use after the user or users of such

4(b) If the infor ma tion sub mitted by any Member State to the Commission and to the Member State which granted the authorization shows that an appro priate variety is avail able during the period of the shortage, the Member State shall consider with drawing the authori za tion or reducing its period of validity, and shall inform the Com mis sion and the other Member States of the meas ures it has taken within 10 days of the date of receipt of the information. 4(c) At the request of a Member State or at the Commissions initiative, the matter shall be submitted for examination to the Committee referred to in Article 14. It may be decided, in accordance with the procedure laid down In Article 14, that the authorization shall be withdrawn or its period of validity amended.

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Article 7 1. Products not authorized at the date of adoption of this Regulation for a purpose indicated in Article 6 (1) (b) may be included in Annex II, provided that the following conditions are satisfied: (a) if they are used for the purpose of plant pest or disease control: - they are essential for the control of a harmful organism or a particular disease for which other biological, cultural, physical or plant breeding alternatives are not available, and - the conditions for their use preclude any direct contact with the seed, the crop or crop products; however, in the case of perennial crops, direct contact may take place, but only outside the growing season of the edible parts (fruits) provided that such application does not indirectly result in the presence of residues of the product in the edible parts, and - their use does not result in, or contribute to, unacceptable effects on, or contamination of, the environment; (b) if they are used for fertilization or soil-conditioning purposes: - they are essential for specific nutrition requirements of crops or specific soil-conditioning purposes which cannot be satisfied by the practices mentioned in Annex I, and - their use does not result in unacceptable effects on the environment or contribute to the contamination thereof.
1(a) The conditions provided for in paragraph 1 shall not apply to products which were in common use before the adoption of this Regulation according to the codes of practice on organic farming followed in the Community.

4. Where a Member State considers that a product should be added to Annex II or that amendments should be made thereto, it shall ensure that a dossier giving the reasons for the inclusion or the amendments is sent officially to the other Member States and the Commission, which shall introduce it to the committee referred to in Article 14.

Inspection system

Article 8

1. Any operator who produces, prepares or imports from a third country products as specified in Article 1 for the purpose of marketing them shall: (a) notify this activity to the competent authority of the Member State in which the activity is carried out; such notification shall include the information specified in Annex IV; submit his undertaking to the inspection system referred to in Article 9.

(b)

2. Member States shall designate an authority or body for the reception of notifications. Member States may provide for the communication of any additional information which they consider to be necessary for effective supervision of the operators concerned. 3. The competent authority shall ensure that an updated list containing the names and addresses of operators subject to the inspection system is made available to interested parties.

Article 9

2. If need be, the following may be specified for any product included in Annex II: - the detailed description of the product, - the conditions of its use and compositional and/or solubility requirements, with regard in particular to the need to ensure for these products a minimal presence of residues on edible parts of the crop and on edible crop products as well as a minimum effect on the environment, - particular labelling requirements for products referred to in Article 1 where such products are obtained with the aid of certain products referred to in Annex II. 3. Amendments to Annex II, concerning either inclusion or cancelling of products as referred to in paragraph 1 or inclusion or amendments of specifications as referred to in paragraph 2, shall be adopted by the Commission in accordance with the procedure laid down in Article 14.

1. Member States shall set up an inspection system operated by one or more designated inspection authorities and/or by approved private bodies to which the operators producing, preparing or importing from third countries products as referred to in Article 1 shall be subject. 2. Member States shall adopt the measures necessary to ensure that an operator who complies with the provisions of this Regulation and pays his contribution to inspection expenses has access to the inspection system. 3. The inspection system shall comprise at least the application of the precautionary and inspection measures specified in Annex III. 4. For the application of the inspection system operated by private bodies, Member States shall designate an authority responsible for the approval and supervision of such bodies. 5. For the approval of a private inspection body, the following shall be taken into account:

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29

(a)

the standard inspection procedure to be followed, containing a detailed description of the inspection measures and precautions which the body undertakes to impose on operators subject to its inspection; the penalties which the body intends to apply where irregularities and/or infringements are found; the availability of appropriate resources in the form of qualified staff, administrative and technical facilities, inspection experience and reliability; the objectivity of the inspection body vis--vis the operators subject to its inspection.

9. The inspection authority and inspection bodies referred to in paragraph 1 shall: (a) ensure that, where an irregularity is found regarding the implementation of Articles 5 and 6 or of the measures referred to in Annex III, the indications provided for in Article 2 referring to the organic production method are removed from the entire lot or production run affected by the irregularity concerned; where a manifest infringement, or an infringement with prolonged effects is found, prohibit the operator concerned from marketing products with indications referring to the organic production method for a period to be agreed with the competent authority of the Member State.

(b)

(c)

(b)

(d)

6. After an inspection body has been approved, the competent authority shall: (a) (b) (c) (d) ensure that the inspections carried out by the inspection body are objective; verify the effectiveness of its inspections; take cognizance of any irregularities and/or infringements found and penalties applied; withdraw approval of the inspection body where it fails to satisfy the requirements referred to in (a) and (b) or no longer fulfils the criteria indicated in paragraph 5 or fails to satisfy the requirements laid down in paragraphs 7, 8, 9 and 11 .

10. The following may be adopted in accordance with the procedure laid down in Article 14: (a) detailed rules concerning the requirements indicated in paragraph 5 and the measures listed in paragraph 6; implementation measures concerning the provisions of paragraph 9.

(b)

6(a) Before 1 January 1996, Member States shall issue a code number to each inspection body or authority approved or designated in accordance with the provisions of this Article. They shall inform the other Member States and the Commission thereof; the Commission shall publish the code numbers in the list referred to in the last subparagraph of Article 15.

11. As from 1 January 1998 and without prejudice to the provisions of paragraphs 5 and 6, approved inspection bodies must satisfy the requirements laid down in the conditions of standard EN 45011 of 26 June 1989.

Indication that products are covered by the inspection scheme

7. The inspection authority and the approved inspection bodies referred to in paragraph 1 shall: (a) ensure that at least the inspection measures and precautions specified in Annex III are applied to undertakings subject to their inspection; not disclose information and data they obtain in their inspection activity to persons other than the person responsible for the undertaking concerned and the competent public authorities. Approved inspection bodies shall: give the competent authority, for inspection purposes, access to their offices and facilities, together with any information and assistance deemed necessary by the competent authority for the fulfilment of its obligations pursuant to this Regulation; send to the competent authority of the Member State by 31 January each year a list of operators subject to their inspection on 31 December of the previous year and present to the said authority a concise annual report. (c)

Article 10

(b)

1. The indication and/or the logo shown in Annex V indicating that products are covered by the specific inspection scheme, may appear on the labelling of products as referred to in Article 1 only where such products: (a) (b) satisfy the requirements of Article 5 (1) or (3); have been subject to the inspection arrangements referred to in Article 9 throughout the production and preparation process;
are sold directly by the producer or preparer to the ultimate consumer in sealed packaging, or placed on the market as pre-packaged foodstuffs; in the case of direct sales by the producer or preparer to the ultimate consumer, the sealed packaging is not required when the labelling enables the product requiring this indication to be identified clearly and unambiguously;

8. (a)

(b)

(d)

show on the labelling the name and/or business


name of the producer, preparer or vendor together with the name or code number of the inspection

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CHAPTER 2 CERTIFICATION, Annex II

authority or body, and any indication required in

accordance with the provisions of the regulations on the labelling of foodstuffs, in accordance with Community legislation. 2. No claim may be made on the label or advertising material that suggests to the purchaser that the indication shown in Annex V constitutes a guarantee of superior organoleptic, nutritional or salubrious quality. 3. The inspection authority and inspection bodies referred to in Article 9 (1) must: (a) ensure that, where an irregularity is found under Articles 5 and 6 or the measures referred to in Annex III, the indication shown in Annex V is removed from the entire lot or production run affected by the irregularity concerned; where a manifest infringement, or an infringement with prolonged effects, is found, withdraw from the operator concerned the right to use the indication shown in Annex V for a period to be agreed with the competent authority of the Member State.

with the procedure laid down in Article 14 and were produced in a region or a production unit and under the inspection of an inspection body specified, where appropriate, in the decision concerning the third country in question; (b) the competent authority or body in the third country has issued a certificate of inspection stating that the lot designated in the certificate: - was obtained within a system of production applying rules equivalent to those laid down in Article 6, and - was subject to a system of inspection recognized as equivalent in accordance with paragraph 2 (b). 2. For the purpose of deciding whether, for certain products as specified in Article 1, a third country may at its request be included in the list referred to in paragraph 1 (a), the following shall be taken into account in particular: (a) the guarantees which the third country can offer, at least in respect of production for export to the Community, as regards the application of rules equivalent to those laid down in Article 6; the effectiveness of the inspection measures applied, which, at least in respect of production for export to the Community, must be equivalent to the inspection measures referred to in Articles 8 and 9 to ensure compliance with the rules referred to in (a).

(b)

4. Rules on withdrawal of the indication shown in Annex V where certain infringements of Articles 5, 6 and 7 or of the requirements and measures in Annex III are detected may be adopted in accordance with the procedure laid down in Article 14.

(b)

General enforcement measures

Article 10a

On the basis of this information, the regions or production units of origin, or the bodies whose inspections are deemed to be equivalent, may be specified in the Commission decision. 3. The certificate referred to in paragraph 1 (b) must: accompany the goods, in the original copy, to the premises of the first consignee; thereafter the importer must keep the certificate at the disposal of the inspection body and/or inspection authority for not less than two years; be drawn up in accordance with procedures and a model to be adopted in accordance with the procedure laid down in Article 14.

1.

Where a Member State finds irregularities or infringements relating to the application of this Regulation in a product coming from another Member State and bearing indications as referred to in Article 2 and/or Annex V it shall inform the Member State which designated the inspection authority or approved the inspection body and the Commission thereby. 2. Member States shall take whatever measures and action are required to prevent fraudulent use of the indications referred to in Article 2 and/or Annex V.

(a)

(b)

4. Detailed rules for the implementation of this Article may be determined according to the procedure referred to in Article 14. 5. When examining a request from a third country, the Commission shall require it to supply all the necessary information; it may also entrust experts with the task of carrying out, under its authority, an on-the-spot examination of the rules of production and inspection measures actually applied in the third country in question. 6. (a) By way of derogation from paragraph 1, the importer(s) in a Member State shall be authorized by the competent authority of the Member State to

Imports from third countries

Article 11

1. Without prejudice to Article 5, products as specified in Article 1 which are imported from a third country may be marketed only where: (a) they originate in a third country appearing in a list to be drawn up by Commission decision in accordance

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31

market until 31 December 2002, products imported from a third country not included in the list referred to in paragraph 1 (a) provided the importer(s) furnish(es) the competent authority of the importing Member State with sufficient evidence that the imported products were manufactured according to production rules equivalent to those laid down in Article 6 and were subject to inspection measures of equivalent effectiveness to those referred to in Articles 8 and 9, and that such inspection measures will be permanently and effectively applied. Such authorization shall be valid only as long as the above-mentioned conditions are shown to be satisfied. It shall expire from the time of the decision
to include a third country in the list referred to in paragraph 1 (a), unless it concerns a product which was produced in a region not specified in the decision referred to in paragraph 1 (a), and which was not examined in the framework of the request submitted by the third country, and only where that third country has agreed to the continuation of the authorization arrangements provided for in this paragraph.

Free movement within the Community

Article 12

Member States may not, on grounds relating to the method of production, to labelling or to the presentation of that method, prohibit or restrict the marketing of products as specified in Article 1 that meet the requirements of this Regulation.

Administrative provisions and implementation

Article 13

The following may be adopted in accordance with the procedure laid down in Article 14: - detailed rules for applying this Regulation, - amendments to Annexes I, II, III, IV and VI, - amendments to Annex V in order to define a
Community logo to accompany or replace the indication that products are covered by the inspection scheme.

(b)

Where a Member State has received sufficient evidence from an importer, it shall forthwith notify to the Commission and the other Member States the third country from which products are imported and supply detailed information on the production and inspection arrangements and the guarantees that they will be permanently and effectively applied. At the request of a Member State or at the Commissions initiative, the matter shall be submitted to the Committee referred to in Article 14 for examination. Should it emerge from this examination that the imported products were not manufactured according to equivalent production rules and/or inspection measures of equivalent effectiveness, the Commission shall request the Member State which granted the authorization to withdraw it. It may be decided, in accordance with the procedure laid down in Article 14, that the imports in question shall be prohibited or that their continuation subject to certain of the import conditions being amended within a given period. The notification referred to in (b) shall not be required where it concerns production and inspection arrangements already notified by another Member State, pursuant to (b), unless significant new evidence is submitted justifying a review of the examination and decision referred to in (c). Before 31 July 1994, the Commission shall reexamine the provisions of paragraph 1 and submit any appropriate proposals for its review.

(c)

Article 14

The Commission shall be assisted by a committee composed of representatives of the Member States and chaired by the representative of the Commission. Where the procedure laid down in this Article is to be followed, the representative of the Commission shall submit to the committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft, within a time limit which the chairman may lay down according to the urgency of the matter. The opinion shall be delivered by the majority laid down in Article 148 (2) of the Treaty. The votes of the representatives of the Member States within the committee shall be weighted in the manner set out in that Article. The chairman shall not vote. The Commission shall adopt the measures envisaged if they are in accordance with the opinion of the committee. If the measures envisaged are not in accordance with the opinion of the committee, or if no opinion is delivered, the Commission shall, without delay, submit to the Council a proposal relating to the measures to be taken. The Council shall act by a qualified majority. If, on the expiry of a period of three months from the date of referral to it the Council has not acted, the proposed measures shall be adopted by the Commission.

(d)

7. The Commission may, in accordance with the procedure laid down in Article 14 at the request of a Member State, approve a third countrys inspection body which has previously been assessed by the Member State concerned and add it to the list referred to in paragraph 1 (a). The Commission shall forward the request to the third country concerned.

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Article 15

3. Article 5, Article 8 (1) and Article 11 (1) shall apply from 1 January 1993. In accordance with the procedure laid down in Article 14, the date of application of Article 11 (1) may be deferred for a specified period for imports from a third country where, following a request by the third country, the stage reached in examining the matter does not permit a decision regarding the inclusion of the country concerned in the list provided for in Article 11 (1) (a) before expiry of the period referred to in the first subparagraph. For the purposes of complying with the conversion period referred to in paragraph 1 of Annex I, the period which has elapsed before the entry into force of this Regulation shall be taken into account where the operator can demonstrate to the satisfaction of the inspection body that during that period he was producing in accordance with the national provisions in force or, failing that, with the recognized international standards for organic production. 4. For 12 months following the entry into force of this Regulation, Member States may, by way of derogation from Article 6 (1), authorize the use in the territory of products containing substances not listed in Annex II, where they consider that the requirements of Article 7 (1) are satisfied. 5. For a period expiring 12 months after the establishment of Annex VI in accordance with Article 5 (7), Member States may continue to authorize, in accordance with their national provisions, the use of substances not listed in the said Annex VI. 6. Each Member State shall inform the other Member States and the Commission of substances authorized pursuant to paragraphs 4 and 5.

Before 1 July each year, Member States shall inform the Commission of measures taken in the preceding year for the implementation of this Regulation and shall communicate in particular: - a list of the operators who, on 31 December of the previous year, had given notification under Article 8 (1) (a) and are subject to the inspection system referred to in Article 9, - a report on supervision pursuant to Article 9 (6). In addition, by 31 March each year, Member States shall inform the Commission of the list of inspection bodies approved on 31 December of the previous year, their legal and operational structure, their standard inspection procedure, their penalty arrangements and, where appropriate, their mark. The Commission shall each year publish, in the C series of the Official Journal of the European Communities, the lists of approved bodies notified to it within the deadlines laid down in the foregoing subparagraph.

Article 16

1. This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. 2. Within nine months of the entry into force of this Regulation, Member States shall implement Articles 8 and 9.

This Regulation shall be binding in its entirety and directly applicable in all Member States. Done in Luxembourg, 24 June 1991

For the Council The President J. C. JUNCKER

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33

ANNEX I PRINCIPLES OF ORGANIC PRODUCTION AT FARM LEVEL

Plants and plant products 1. The principles set out in this Annex must normally have been applied on the parcels during a conversion period of at least two years before sowing or, in the case of perennial crops other than grassland, at least three years before the first harvest of products as referred to in Article 1 (1) (a). The inspection body may, with the approval of the competent authority, decide, in certain cases, to extend or reduce that period, having regard to previous parcel use. In particular, the conversion period may be reduced to the strict minimum by a Member State in situations where the parcels have been treated with a product not included in Annex II, part B as part of a pest or disease control scheme made mandatory by the competent authority of the Member State on its territory or on certain parts of its territory in respect of a specific crop. The reduction in the conversion period must take account of all the following points: the parcels were already converted or undergoing conversion to organic farming, were

the crop being rotated or soil conditioning are not possible by the methods set out under (a) and (b) of the preceding subparagraph. For compost activation, appropriate micro-organism or plant-based preparations may be used. So-called biodynamic preparations from stone meal, farmyard manure or plants may also be used for the purposes covered by this paragraph. 3. Pests, diseases and weeds shall be controlled by a combination of the following measures: choice of appropriate species and varieties, appropriate rotation programme, mechanical cultivation procedures, protection of natural enemies of pests through provisions favourable to them (e.g. hedges, nesting sites, release of predators), flame weeding.

the degradation of the plant protection product concerned must result in an insignificant level of residue in the soil and, where the latter is a perennial crop, in the crop, the Member State concerned must notify the other Member States of its decision concerning the obligation of treatment and also the level of the reduction decided for the conversion period, products of the harvest following treatment may not be sold bearing an indication referring to organic production. 2. The fertility and the biological activity of the soil must be maintained or increased, where appropriate, by: (a) cultivation of legumes, green manures or deep-rooting plants in an appropriate multiannual rotation programme; incorporation in the soil of organic material, composted or not, from holdings producing according to the rules of this Regu la tion. Pending the adop tion of common tech nical rules con cerning organic livestock, production, by-products from live stock farming, such as farm yard manure, may be used if they come from live stock hold ings respecting existing national rules or, in the absence thereof, internationally recognized practices concerning organic live stock pro duc tion.

Only in cases of immediate threat to the crop may recourse be had to products referred to in Annex II. 4. The collection of edible plants and parts thereof, growing naturally in natural areas, forests and agricultural areas, is considered an organic production method provided that: those areas have received no treatments with products other than those referred to in Annex II for a period of three years before the collection. the collection does not affect the stability of the natural habitat or the maintenance of the species in the collection area. *5. For production of mushrooms, substrates may be used, if they are composed only of the following components: 5.1 farmyard manure and animal excrements (including the products referred to in indents 1 to 4 of Annex II, Part A to Regulation (EEC) No 2092/91): (a) either from holdings producing according to the organic production methods; or satisfying the requirements referred to in Annex II, Part A, indents I to 4, of Regulation (EEC) No 2092/91, only up to 25% (*), and only when the product under 5.1 (a) is not available;

(b)

(b)

Other organic or mineral fertilizers, mentioned in Annex II, may be applied only to the extent that adequate nutrition of

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CHAPTER 2 CERTIFICATION, Annex II

5.2 products of agricultural origin, other than those covered under point 5.1 (e.g. straw), from holdings producing according to organic production methods; 5.3 peat not chemically treated,

(*) This percentage is calculated on weight of total components of the substrate (excluding the covering material and any added water) before composting. Animals and animal products Pending the adoption of the proposal referred to in Article 1 (2), and for the purpose of preparation of ingredients referred to in Article 5 (3) (a), animals shall be raised in accordance with the existing national rules, or in the absence thereof, internationally recognized practices concerning organic livestock production.

5.4 wood, not treated with chemical products after felling; 5.5 mineral products of Annex II, Part A to Regulation (EEC) No 2092/91, water and soil.

__________________________________ *This provision shall enter into force on 1 December 1998. By derogation to the provisions under points 5.1 and 5.2 of Annex I, the following may be used during a transitional period expiring on 1 December 2001:

products referred to in point 5.1 (a) of the Annex, not from holdings producing according to the organic production method but satisfying the requirements referred to in Annex II, Part A, indents 1 to 4 of Regulation (EEC) No 2092/91, and/or products referred to in point 5.2 of the Annex, not from holdings producing according to the organic production method, but satisfying, where relevant, the requirements referred to in Annex II, Part A of Regulation (EEC) No 2092/91,

if the products referred to in points 5.1 (a) and 5.2 are not available from holdings producing according to the organic production method and the need is recognized by the inspection authority or body. In such cases, the labelling and advertising shall contain a statement, with the wording Mushrooms cultivated on a substrate from extensive agriculture which is permitted in organic farming during a transitional period. The word organic in this statement, elsewhere on the label and/or on the advertising, shall not be more prominent than the other words of the statement. (Text taken from Article 2 of Commission Regulation 1900/98 of 4 September 1998 - OJ L247/6 of 5/9/98)

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35

ANNEX II A. FERTILIZERS AND SOIL CONDITIONERS

General conditions for all the products: use in accordance with provisions of Annex I, use only in accordance with the provisions of fertilizer legislation applicable within each Member State.

Products authorized exceptionally for use in soil conditioning and fertilization, in accordance with the dispositions of Annex I (2) Name Compound products or products containing only materials listed hereunder: - Farmyard manure Product comprising a mixture of animal excrements and vegetable matter (animal bedding) Need recognized by the inspection body or inspection authority Indication of animal species Coming from extensive husbandry and only in the sense of Article 6 (5) of Council Regulation (EEC) No 2328/91, as last amended by Regulation (EC) No 3669/93 - Dried farmyard manure and dehydrated poultry manure Need recognized by the inspection body or inspection authority Indication of animal species Coming from extensive husbandry and only in the sense of Article 6 (5) of Regulation (EEC) No 2328/91. - Composted animal excrements, including; poultry manure and composted farmyard; manure included - Liquid animal excrements (slurry, urine, etc.) Need recognized by the inspection body or inspection authority Indication of the animal species Factory farming origin forbidden Use after controlled fermentation and/or appropriate dilution Need recognized by the inspection body or inspection authority Indication of animal species Factory farming origin forbidden - Composted household waste Compost of source separated household waste; only vegetable and animal waste; produced in a closed and monitored collection system, accepted by the Member State; maximum concentrations in mg/kg of dry matter: Cadmium: 0,7; Copper: 70; Nickel: 25; Lead: 45; Zinc: 200; Mercury: 0,4; Chromium (total): 70; Chromium (VI): 0 (*) only during a period expiring on 31 March 2002; need recognized by the inspection body or inspection authority. - Peat - Clays (e.g. perlite, vermiculite, etc.) Use limited to horticulture (market gardening, floriculture, arboriculture, nursery) Description, compositional requirements, conditions for use

__________________________________ (*) Limit of determination

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Name - Mushroom culture wastes - Dejecta of worms (vermicompost) and insects - Guano - Composted mixture of vegetable matter - Products or by-products of animal origin as below: - blood meal - hoof meal - horn meal - bone meal or degelatinized bone meal - animal charcoal - fish meal - meat meal - feather, hair and chiquette meal - wool - fur - hair - dairy products - Products and by-products of plant origin for fertilizers (for instance, oil-seed cake meal, cocoa husks, malt culms, etc.) - Seaweeds and seaweeds products

Description, compositional requirements, conditions for use The initial composition of the substrate must be limited to products of the present list

Need recognized by the inspection body or inspection authority Need recognized by the inspection body or inspection authority Need recognized by the inspection body or inspection authority

maximum concentration in mg/kg of dry matter of Chromium (VI): 0 (*)

As far as directly obtained by: (i) physical processes including dehydration, freezing and; grinding; (ii) extraction with water or aqueous acid and/or alkaline solution; (iii) fermentation; need recognized by the inspection body or inspection authority

- Sawdust and wood chips - Composted bark - Wood ash - Soft ground rock phosphate

Wood not chemically treated after felling Wood not chemically treated after felling From wood not chemically treated after felling Product as specified by Council Directive 76/116/EEC, as last amended by Directive 89/284/EEC Cadmium content less than or equal to 90 mg/kg of P205

- Aluminium calcium phosphate

Product as specified by Directive 76/116/EEC, as last amended by Directive 89/284/EEC; Cadmium content less than or equal to 90 mg/kg of P205 Use limited to basic soils (pH > 7.5)

- Basic slag - Crude potassium salt (for instance: kainit, sylvinite, etc.) - Potassium sulphate containing magnesium salt

Need recognized by the inspection body or inspection authority Need recognized by the inspection body or inspection authority Need recognized by the inspection body or inspection authority Derived from crude potassium salt

- Stillage and stillage extract

Ammonium stillage excluded

__________________________________ (*) Limit of determination.

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37

Name - Calcium carbonate of natural origin (for instance: chalk, mart, ground limestone, Breton ameliorant (marl), phosphate chalk) - Magnesium and calcium carbonate of natural origin (for instance: magnesian chalk, ground magnesium limestone, etc.) - Magnesium sulphate (for instance: kieserite) - Calcium chloride solution -

Description, compositional requirements, conditions for use

Only of natural origin Need recognized by the inspection body or inspection authority Foliar treatment of apple trees, after identification of deficit of calcium Need recognized by the inspection body or inspection authority

- Calcium sulphate (gypsum)

Product as specified by Directive 76/116/EEC, as amended by Directive 89/284/EEC Only of natural origin

- Industrial lime from sugar production

Need recognized by the inspection authority or inspection body; only during a period expiring on 31 March 2002.

- Elemental sulphur

Product as specified by Directive 76/116/EEC, as amended by Directive 89/284/EEC Need recognized by the inspection body or inspection authority

- Trace elements

Trace elements included in Directive 89/530/EEC Need recognized by the inspection body or inspection authority

- Sodium chloride

Only mined salt Need recognized by the inspection body or inspection authority

- Stone meal

B. PRODUCTS FOR PLANT PROTECTION

General conditions applicable for all the products composed or containing the following active substances: use in accordance with provisions of Annex I, only in accordance with the specific provisions of the plant protection product legislation applicable within the Member State where the product is used (where relevant (*)). I. Substances of crop or animal origin

Name Azadirachtin extracted from Azadirachta indica. (Neem tree)

Description, compositional requirements, conditions for use Insecticide; Only to be used on mother plants for the production of seeds and on parent plants for the production of other vegetative reproductive material, and on ornamental crops. Pruning agent Insecticide Attractant; Only in authorized applications in combination with other appropriate products of this Annex II, part B.

(*) Beeswax Gelatine (*) Hydrolysed proteins

__________________________________ (*) In certain Member States the products marked with (*) are not considered as plant protection products and are not subject to the provisions of the plant protection products legislation.

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Name Lecithin Extract (aqueous solution) from Nicotiana tabacum

Description, compositional requirements, conditions for use Fungicide Insecticide; Only against aphids in subtropical fruit trees (e.g. oranges, lemons) and tropical crops (e.g. bananas); use only at the start of the vegetation period; Need recognized by the inspection body or inspection authority; Only during a period expiring 31 March 2002.

Plant oils (e.g. mint oil, pine oil, caraway oil) Pyrethrins extracted from Chrysanthemum cinerariaefolium. Quassia extracted from Quassia amara. Rotenone extracted from Derris spp. and Lonchocarpus spp. and Terphrosia spp.

Insecticide, acaricide, fungicide and sprout inhibitor Insecticide Insecticide, repellent Insecticide; Need recognized by the inspection body or inspection authority.

II.

Microorganisms used for biological pest control Name Description, compositional requirements, conditions for use Only products not genetically modified in the meaning of Directive 90/220/EEC (1).

Microorganisms (bacteria, viruses and fungi) e.g. Bacillus thuringensis, Granulosis virus, etc.

Ill.

Substances to be used in traps and/or dispensers

General conditions: - the traps and/or dispensers must prevent the penetration of the substances in the environment and prevent contact of the substances with the crops under cultivation. - the traps must be collected after use and disposed of safely Name (*) Diammonium phosphate Description, compositional requirements, conditions for use Attractant; Only in traps Metaldehyde Molluscicide; Only in traps containing a repellent to higher animal species; Only during a period expiring 31 March 2002. Pheromones Insecticide, attractant; In traps and dispensers Pyrethroids (only deltamethrin or lambdacyhalothrin) Insecticide; Only in traps with specific attractants; Only against Batrocera oleae and Ceratitis capitata wied; Need recognized by the inspection body or inspection authority; Only during a period expiring on 31 March 2002.

__________________________________ (1) OJ No L117, 8.5.1990, p.15. (*) In certain Member States the products marked with (*) are not considered as plant protection products and are not subject to the provisions of the plant protection products legislation.

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Name

Description, compositional requirements, conditions for use

IV.Other substances from traditional use in organic farming Name Copper in the form of copper hydroxide, copper oxychloride, (tribasic) copper sulphate, cuprous oxide (*) Ethylene Fatty acid potassium salt (soft soap) (*) Potassium alum (Kalinite) Lime sulphur (Calcium polysulphide) Paraffin oil Mineral oils Description, compositional requirements, conditions for use Fungicide; only during a period expiring on 31 March 2002; need recognized by the inspection body or inspection authority Degreening bananas Insecticide Prevention of ripening of bananas Fungicide, insecticide, acaricide;only for winter treatments in fruit trees, olive trees and vines Insecticide, acaricide Insecticide, fungicide; Only in fruit trees, vines, olive trees and tropical crops (e.g. bananas); Only during a period expiring on 31 March 2002; Need recognized by the inspection body or inspection authority Potassium permanganate Fungicide, bactericide; only in fruit trees, olive trees and vines (*) Quartz sand Sulphur Repellent Fungicide, acaricide, repellent

C. OTHER PRODUCTS

__________________________________ (*) In certain Member States the products marked with (*) are not considered as plant protection products and are not subject to the provisions of the plant protection products legislation.

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ANNEX III MINIMUM INSPECTION REQUIREMENTS AND PRECAUTIONARY MEASURES UNDER THE INSPECTION SCHEME REFERRED TO IN ARTICLES 8 AND 9

A. Plants and plant products from farm production or collection 1 . Production must take place in a unit the land parcels and production and storage locations of which are clearly separate from those of any other unit not producing in accordance with the rules laid down in this Regulation; processing and/or packaging workshops may form part of the unit, where its activity is limited to processing and packaging of its own agricultural produce. 2. When the inspection arrangements are first implemented, the producer, even where his activity is limited to the collection of wild plants, and the inspection body must draw up: a full description of the unit, showing the storage and production premises and land parcels and/or collection areas and, where applicable, premises where certain processing and/or packaging operations take place, all the practical measures to be taken by the producer at unit-level to ensure compliance with the provisions of this Regulation, and, in case of col lec tion of wild plants, the guar antees given by third par ties, if appro priate where relevant which the pro ducer can pro vide to ensure that the pro vi sions of Annex I, point 4 are sat is fied.

Where the unit processes its own agricultural produce, the accounts must contain the information as referred to in Point B.2. third hyphen of this Annex. 5. Storage, in the unit, of input products other than those the use of which is compatible with Articles 6 (1) (b) and 7 is prohibited. 6. Apart from unannounced inspection visits, the inspection body must make a full physical inspection, at least once a year, of the unit. Samples for testing of products not authorized under this Regulation may be taken. However, such samples must be taken where the use of unauthorized products is suspected. An inspection report must be drawn up after each visit, countersigned by the responsible person of the unit. 7. The producer must give the inspection body, for inspection purposes, access to the storage and production premises and to the parcels of land, as well as to the accounts and relevant supporting documents. He must provide the inspection body with any information deemed necessary for the purposes of the inspection. 8.1 Products as referred to in Article 1 may be transported to other units, including wholesalers and retailers, only in appropriate packaging or containers closed in a manner preventing substitution of the content and provided with a label stating, without prejudice to any other indications required by law: (a) the name and address of the person responsible for the production or preparation of the product, or, where another seller is mentioned, a statement which enables the receiving unit and the inspection body to identify unequivocally the person responsible for the production of the product; the name of the product, in cluding a ref er ence to the organic production method, in accordance with Ar ticle 5.

The description and the measures concerned must be contained in an inspection report countersigned by the producer concerned. In addition, the report must specify: the date of the last application on the parcels and/or collection areas concerned of products the use of which is not compatible with Article 6 (1) (b), an undertaking by the producer to carry out operations in accordance with Articles 5 and 6 and to accept, in the event of infringement, enforcement of the measures referred to in Article 9 (9) and, where relevant, in Article 10 (3).

(b)

8.2 However, the closing of packaging or containers is not required where: (a) transportation is between a producer and another operator who are both subject to the inspection system referred to in Article 9, and the products are accompanied by a document giving the information required under the previous subparagraph.

3. Each year, before the date indicated by the inspection body, the producer must notify the body of its schedule of production of crop products, giving a breakdown by parcel. 4. Written and/or documentary accounts must be kept which enable the inspection body to trace the origin, nature and quantities of all raw materials bought, and the use of such materials; in addition, written or documentary accounts must be kept of the nature, quantities and consignees of all agricultural products sold. Quantities sold directly to the final consumer shall be accounted on a daily basis.

(b)

Where an operator runs several production units in the same area, units in the area producing crops or crop products not covered by Article 1 together with storage premises for input products (such as fertilizers, plant protection products, seed) must also be subject to the inspec tion arrange ments as regards the first sub para graph

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of point 2 and points 3 and 4. Crops of the same variety as those pro duced at the unit referred to in point 1 may not be pro duced at these units. However, producers may derogate from the rule referred to in the last sentence of the preceding subparagraph: (a) in the case of the production of perennial crop products (fruit growing, vines and hops) provided the following conditions are met: 1. the pro duc tion in ques tion forms part of a conversion plan in respect of which the producer gives a firm under taking and which pro vides for the begin ning of the con ver sion of the last part of the area con cerned to organic pro duc tion in the shortest pos sible period which may not in any event exceed a maximum of five years, appropriate measures have been taken to ensure the permanent separation of the products obtained from each unit concerned, the inspection body or authority is notified of the harvest of each of the products concerned at least 48 hours in advance, imme di ately upon com ple tion of the har vest, the producer informs the inspection body or authority of the exact quantities harvested on the units con cerned together with any par ticular dis tin guishing fea tures (such as quality, colour, average weight, etc.) and confirms that the meas ures taken to sepa rate the prod ucts have been applied, the conversion plan and the measures referred to in points 1 and 2 have been approved by the inspection body or authority. This approval must be confirmed each year after the start of the conversion plan;

all the practical measures to be taken at the level of the unit to ensure compliance with this Regulation.

This description and the measures concerned must be contained in an inspection report, countersigned by the responsible person of the unit. In addition, the report must include an undertaking by the operator to perform the operations in such a way as to comply with Article 5 and to accept, in the event of infringement, the enforcement of the measures referred to in Article 9 (9) and, where relevant, in Article 10 (3). 2. Written accounts must be kept enabling the inspection body to trace: the origin, nature and quantities of agricultural products as referred to in Article 1 which have been delivered to the unit, the nature, quantities and consignees of products as referred to in Article 1 which have left the unit, any other infor ma tion, such as the origin, nature and quantities of ingredients, additives and manu facturing aids deliv ered to the unit and the com po si tion of processed products, that is required by the inspection body for the pur poses of proper inspec tion of the opera tions.

2.

3.

4.

3. Where products not referred to in Article 1 are also processed, packaged or stored in the unit concerned: the unit must have separate areas within the premises for the storage of products as referred to in Article 1, before and after the operations, operations must be carried out continuously until the complete run has been dealt with, separated by place or time from similar operations performed on products not covered by Article 1, if such operations are not carried out frequently, they must be announced in advance, with a deadline agreed on with the inspection body, every measure must be taken to ensure identification of lots and to avoid mixtures with products not obtained in accordance with the rules laid down in this Regulation.

5.

(b)

in the case of areas intended for agricultural research agreed by the Member States competent authorities, provided that conditions 2, 3 and 4 and the relevant part of condition 5 referred to in (a) are met; in the case of production of seed, vegetative propagating material and transplants, provided that conditions 2, 3 and 4 and the relevant part of condition 5 referred to in (a) are met.

(c)

B. Processing and packaging units for plant products and foodstuffs composed essentially of plant products 1. When the inspection arrangements are first implemented, the producer and inspection body must draw up: a full description of the unit, showing the facilities used for the processing, packaging and storage of agricultural products before and after the operations concerning them,

4. Apart from unannounced inspection visits, the inspection body must make a full physical inspection, at least once a year, of the unit. Samples for testing of products not authorized under this Regulation may be taken. However, they must be taken where the use of unauthorized products is suspected. An inspection report must be drawn up after each visit countersigned by the person responsible for the unit inspected. 5. The operator must give the inspection body, for inspection purposes, access to the unit and to the written accounts and relevant supporting documents. He must provide the inspection body with any information necessary for the purposes of the inspection.

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6. Products as referred to in Article 1 may be transported to other units, including wholesalers and retailers, only in appropriate packaging or containers closed in a manner preventing substitution of the content and provided with a label stating, without prejudice to any other indications required by law: (a) the name and address of the person responsible for the production or preparation of the product, or, where another seller is mentioned, a statement which enables the receiving unit and the inspection body to identify unequivocally the person responsible for the preparation of the product; the name of the product, including a reference to the organic production method according to the relevant provisions of Article 5.

2. Written accounts must be kept enabling the inspection body to trace for each lot of products referred to in Article 1, imported from a third country: the origin, nature and quantity of the lot concerned, and on request by the inspection body, any details on the transport arrangement from the exporter in the third country to the importers premises or storage facilities; the nature, quantities and consignees of the lot concerned, and on request by the inspection body, and details on the transport arrangements from the importers premises or storage facilities to the consignees.

(b)

On receipt of a product as referred to in Article 1, the operator shall check the closing of the packaging or container where it is required and the presence of the indications referred to in the previous paragraph, in point A.8.1 or in point C.8. The result of this verification shall be explicitly mentioned in the accounts referred to in point B.2. Where the check leaves any doubt that the product concerned came from an operator subject to the inspection system provided for in Article 9, it may only be put into processing or packaging after elimination of that doubt, unless it is placed on the market without indication referring to the organic production method.

3. The importer shall inform the inspection body of each imported consignment into the Community, giving any details this body or authority may require, such as a copy of the inspection certificate for the importation of organic products. When the products concerned are circulating in a Member State or region other than the one where the inspection body is approved for inspection, that body may pass the information to a body, approved for inspection in that Member State or region, for on-the-spot inspection of the imported consignment. 4. Where imported products referred to in Article 1 are stored in storage facilities where also other agricultural products or foodstuffs are processed, packaged or stored: the products as referred to in Article 1 must be kept separate from the other agricultural products and/or foodstuffs; every measure must be taken to ensure identification of lots and to avoid mixtures with products not obtained in accordance with the rules laid down in this Regulation.

C. Importers of plant products and foodstuffs composed essentially of plant products from third countries 1. When the in spec tion ar range ments are first im plemented, the im porter and in spec tion body must draw up: a full description of the importers premises and of his import activities, indicating as far as possible the points of entry of the products into the Community and any other facilities the importer intends to use for the storage of the imported products; all the practical measures to be taken by the importer to ensure compliance with this Regulation.

5. Apart from unannounced inspection visits, the inspection body must make a full physical inspection, at least once a year, of the importers premises and, where relevant, of a selection of the other storage facilities which the importer uses. The inspection body shall inspect the written accounts mentioned in point C.2 and the certificates referred to in Article 11 (1) (b) and (3). Samples for testing of substances not authorized under this Regulation may be taken. However, they must be taken where the use of unauthorized substances is suspected. An inspection report must be drawn up after each visit, countersigned by the person responsible for the unit inspected. 6. The importer must, for inspection purposes, give the inspection body access to his premises and to the written accounts and relevant supporting documents, in particular any import certificates. He must provide the inspection body with any information necessary for the purposes of the inspection. 7. Products as referred to in Article 1 shall be imported from a third country in appropriate packaging or containers, closed in a manner preventing substitution of the content and provided with identification of the exporter

This description and the measures concerned must be contained in an inspection report, countersigned by the importer. In addition, the report must include an undertaking by the importer to per form the import opera tions in such a way as to comply with the provisions of Article 11 and to accept, in the event of infringe ment, the enforce ment of the meas ures referred to in Article 9 (9); to ensure that any storage facilities that the importer will use are open to inspection, to be carried out either by the inspection body or, when these storage facilities are situated in another Member State or region, by an inspection body approved for inspection in that Member State or region.

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and with any other marks and numbers serving to identify the lot with the inspection certificate. On receipt of a product as referred to in Article 1, imported from a third country, the operator shall check the closing of the pack aging or con tainer and the cor re spon dence of the identification of the lot with the certificate referred to in Article 11 (1) (b) or a similar cer tifi cate where required by the authori ties under any arrange ments adopted under Article 11 (6). The result of this veri fi ca tion shall be explic itly mentioned in the accounts referred to in point C.2. Where the check leaves any doubt as to the origin of the product from a third country or from an exporter in a third country not accepted under Article 11, the product may be put on the market, or proc essed or pack aged, only after such doubt has been dis pelled, unless it is placed on the market without indi ca tion of the organic pro duc tion method.

8. Products referred to in Article 1 may be transported to other units, including wholesalers and retailers, only in appropriate packaging or containers closed in a manner preventing substitution of the content and provided with a label stating, without prejudice to any other indications required by law: (a) the name and address of the importer of the product, or a statement which enables the receiving unit and the inspection body to identify unequivocally the importer of the product; the name of the product, including a reference to the organic production method under Article 5.

(b)

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ANNEX IV INFORMATION TO BE NOTIFIED AS PROVIDED IN ARTICLE 8 (1) (a)

(a) (b) (c) (d)

Name and address of operator Location of premises and, where appropriate, parcels (land register data) where operations are carried out Nature of operations and products Undertaking by the operator to carry out the operations in accordance with Articles 5, 6, 7 and/or 11

(e) In the case of an agricultural holding, the date on which the producer ceased to apply products the use of which is not compatible with Articles 6 (1) (6) and 7 on the parcels concerned (f) The name of the approved body to which the operator entrusted inspection of his undertaking, where the Member State has implemented the inspection system by approving such bodies

ANNEX V INDICATION THAT PRODUCTS ARE COVERED BY THE INSPECTION SCHEME

The indication that a product is covered by the inspection scheme must be shown in the same language or languages as used for the labelling. ES: Agricultura Biolgica - Sistema de control CEE DK: qkologisk Landbrug - EF Kontrolordning D: kologische Agrarwirtschaft - EWG-Kontrollsystem, or Biologische Agrarwirtschaft - EWG-Kontrollsystem

GR: $4@8@(4i0 'gCOD(4" EL@J0:" +8,(P@L EOK EN: Organic Farming - EEC Control System F: I: Agriculture biologique - Systme de contrle CEE Agricoltura Biologica - Regime di controllo CEE

NL: Biologische landbouw - EEG-controlesysteem P: Fl: S: Agricultura Biolgica - Systema de Controlo CEE Luonnonmukainen maataloustuotanto - ETY:n Ekologiskt jordbruk - EEG-kontrollsystem. valvontaj rjestelm/Ekologiskt jordbruk - EEG-Kontrollsystem

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ANNEX VI INTRODUCTION

For the purposes of this Annex, the following definitions will apply: 1. ingredients: substances as defined in Article 4 of this Regulation under the restrictions as referred to in Article 6 (4) of Council Directive 79/112/EEC of 18 December 1978 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs for sale to the ultimate consumer. 2. (a) ingredients of agricultural origin: single agricultural products and products derived therefrom by appropriate washing, cleaning, thermic and/or mechanical processes and/or by physical processes having the effect of reducing the moisture content of the product; also, products derived from the products mentioned under (a) by other processes used in food proc essing, unless these prod ucts are con sid ered food addi tives or fla vour ings as defined under points 5 or 7 here under.

5. food additives: substances as defined in Article 1 (1) and (2) of Directive 89/107/EEC and covered by that Directive or by a comprehensive Directive as referred to in Article 3(1) of Directive 89/107/EEC; 6. carriers, including carrier solvents: food additives used to dissolve, dilute, disperse or otherwise physically modify a food additive without altering its technological function in order to facilitate its handling, application or use; 7. flavouring: substances and products as defined in Article 1 (2) of Council Directive 88/388/EEC of 22 June 1988 on the approximation of the laws of the Member States relating to flavourings for use in foodstuffs and to source materials for their production, and covered by that Directive.

(b)

GENERAL PRINCIPLES Sections A, B and C cover the ingredients and processing aids which may be used in the preparation of foodstuffs composed essentially of one or more ingredients of plant origin, referred to in Article 1 (1) (b) of this Regulation, with the exception of wines. Not with standing ref er ence to any ingre dient in Sec tions A and C or any proc essing aid in Sec tion B, any ingre dient or such proc essing aid shall be used only in accor dance with relevant Community legislation and/or national leg is la tion com patible with the Treaty and, in the absence thereof, in accordance with the principles of good manufacturing practice for foodstuffs. In particular additives shall be used according to the provisions of Direc tive 89/107/EEC and, where rele vant, those of any com pre hen sive Direc tive as referred to in Article 3 (1) of Directive 89/107/EEC; flavourings shall be used according to the pro vi sions of Direc tive 88/388/EEC and sol vents according to the pro vi sions of Council Direc tive 88/344/EEC of 13 June 1988 on the approxi ma tion of the laws of the Member States on extrac tion sol vents used in the pro duc tion of food stuffs and food ingre di ents.

3. ingredients of non-agricultural origin: ingredients other than ingredients of agricultural origin and belonging to at least one of the following categories: 3.1 food additives, including carriers for food additives, as defined under points 5 and 6 hereunder; 3.2 3.3 3.4 3.5 flavourings, as defined under point 7 hereunder; water and salt; micro-organism preparations; minerals (including trace elements) and vitamins.

4. proc essing aids: sub stances as defined in Article 1 (3) (a) of Council Direc tive 89/107/EEC on the approxi ma tion of the laws of the Member States concerning food additives authorized for use in foodstuffs intended for human consumption;

SECTION A

INGREDIENTS OF NON-AGRICULTURAL ORIGIN (REFERRED TO IN ARTICLE 5 (3) (B) OF REGULATION (EEC) NO. 2092/91):

A.1. Food additives, including carriers Name E E E E E E E E 170 270 290 296 300 306 322 330 Calcium carbonates Lactic acid Carbondioxide Malic acid Ascorbic acid Tocopherol-rich extract Lecithins Citric acid Specific conditions anti-oxydant in fats and oils -

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E 333 E 334 E 335 E 336 E 341(i) E 400 E 401 E 402 E 406 E 407 E 410 E 412 E 413 E 414 E 415 E 416 E 440 (i) E 500 E 501 E 503 E 504 E 516 E 524 E 998 E 941 E 948

Calcium citrates Tartaric acid Sodium tartrate Potassium tartrate Monocalciumphosphate Alginic acid Sodium alginate Potassium alginate Agar Carrageenan Locust beam gum Guar gum Tragacanth gum Arabic gum Xanthan Karaga gum Pectin Sodiumcarbonates Potassiumcarbonates Ammoniumcarbonates Magnesiumcarbonates Calcium sulphate Sodiumhydroxide Argon Nitrogen Oxygen

raising agent for self raising flour . carrier surface treatment of Lugengeback -

A.2. Flavourings within the meaning of Directive 88/388/EEC Substances and products as defined in Article 1 (2) (b) (i) and 1 (2) (c) of Directive 88/388/EEC labelled as natural flavouring substances or natural flavouring preparations, according to Article 9 (1) (d) and (2) of that Directive. A.3. Water and salt Drinking water Salt (with sodium chloride or potassium chloride as basic components), generally used in food processing. A.4. Micro-organism preparations (i) Any preparations of micro-organisms normally used in food processing, with the exception of micro-organisms genetically modified within the meaning of Article 2 (2) of Directive 90/220/EEC;

(ii) Micro-organisms genetically modified within the meaning of Article 2 (2) of Directive 90/220/EEC; if they have been included according to the decision procedure of Article 14. A.5. Minerals (trace elements included), vitamins, aminoacids and other nitrogen compounds Minerals (trace elements included), vitamins, aminoacids and other nitrogen compounds, only authorized as far as their use is legally required in the foodstuffs in which they are incorporated

SECTION B PROCESSING AIDS AND OTHER PRODUCTS WHICH MAY BE USED FOR PROCESSING OF ORGANICALLY PRODUCED INGREDIENTS OF AGRICULTURAL ORIGIN, REFERRED TO IN ARTICLE 5(3)(C) OF REGULATION (EEC) NO. 2092/91 Name Water Calcium chloride Calcium carbonate Calcium hydroxide Calcium sulphate Specific conditions coagulation agent coagulation agent

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Magnesium chloride (or nigari) Potassium carbonate Sodium carbonate Citric acid Sodium hydroxide

Sulphuric acid Carbon dioxide Nitrogen Ethanol Tannic acid Egg white albumen Casein Gelatin Isinglass Vegetable oils Silicon dioxide gel or colloidal solution Activated carbon Talc Bentonite Kaolin Diatomaceous earth Perlite Hazelnut shells Rice meal Beeswax Carnauba wax

coagulation agent drying of grapes sugar production oil production and hydrolysis of starch sugar production oil production from rape seed (Brassica spp) only during a period expiring on 31 March 2002 sugar production solvent filtration aid greasing, releasing or anti-foaming agent releasing agent releasing agent

Preparations of micro-organisms and enzymes: (i) Any preparations of micro-organisms and enzymes normally used as processing aids in food processing, with the exception of micro-organisms genetically modified within the meaning of Article 2 (2) of Directive 90/220/EEC; Micro-organisms genetically modified within the meaning of Article 2 (2) of Directive 90/220/EEC: If they have been included hereunder according to the decision procedure of Article 14.

(ii)

SECTION C

INGREDIENTS OF AGRICULTURAL ORIGIN WHICH HAVE NOT BEEN PRODUCED ORGANICALLY, REFERRED TO IN ARTICLE 5(4) OF REGULATION (EEC) No 2092/91 *

C.1.

Unprocessed vegetable products as well as products derived therefrom by processes referred to under definition 2(a): Edible fruits, nuts and seeds: Malpighia punicifolia Quercus spp Anacardium occidentale Acuminata Trigonella foenum-graecum Ribes uva-crispa Passiflora edulis Carica papaya Pinus pinea Rubus idaeus Ribes rubrum

C.1.1.

Acerola Acorns Cashew nuts Cola nuts Cola Fenugreek Gooseberries Maracujas (passion fruit) Papayas Pine kernels Raspberries (dried) Red currants (dried)

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C.1.2.

Edible spices and herbs: Allspice Cardamom Cinnamon Clove Ginger Horseradish seeds Lesser galanga Watercress herb Pimenta dioica Fructus cardamomi (minoris) (malabariensis) Elettaria cardamomum Cinnamomum zeylanicum Syzygium aromaticum Zingiber officinale Armoracia rusticana Alpinia officinarum Nasturtium officinale

C.1.3.

Miscellaneous: Algae, including seaweed

C.2. C.2.1.

Vegetable products, processed by processes as referred to under definition 2(b): Fats and oils whether or not refined, but not chemically modified, derived from plants other than: Cocoa Coco Olive Sunflower Theobroma cacao Cocos nucifera Olea europaea Helianthus annuus

C.2.2.

Sugars; starch; other products from cereals and tubers: Beet sugar Fructose Rice paper Starch from rice and waxy maize

C.2.3.

Miscellaneous: Curry composed of: - Coriander Coriandrum sativum - Mustard Sinapis alba - Fennel Foeniculum vulgare - Ginger Zingiber officinale Pea protein Pisum spp Rum: only obtained from cane sugar juice

C.3.

Animal products: Aquatic organisms, not originating from aquaculture Buttermilk powder Gelatin Honey Lactose Whey powder herasuola

* The following products may be used under the same conditions as products listed in Section C of Annex VI to Regulation (EEC) No
2092/91 until 31 January 2000 apricot concentrate (Prunus armeniaca), elderberry concentrate (Sambucus nigra), mangoes (Mangifera indica), strawberry (Fragaria vesca) as dried powder or concentrate, five-spice powder composed of: fennel (Foeniculum vulgare), clove (Syzygium aromaticum), ginger (Zingiber officinale), aniseed (Pimpinella anisum) and cinnamon (Cinnamonum zeylanicum), coco fat, cocoa fat and starches produced from cereals and tubers, not chemically modified.

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Appendix A to MAFF consolidated version of EC Regulation 2092/91

CHECKLIST OF RELEVANT AMENDING REGULATIONS TO ORGANIC REGULATION 2092/91

Commission Regulation (EEC) No. 1535/92 of 15 June 1992. Amends Annexes I and III. Official Journal L 162, 16.6.92. Council Regulation (EEC) No. 2083/92 of 14 July 1992. Adds Article 11 (6). Official Journal L 208, 24.7.92. Commission Regulation (EEC) No. 207/93 of 29 January 1993. Defines the content of Annex VI. Official Journal L 25, 2.2.93. Commission Regulation (EEC) No. 2608/93 of 23 September 1993. Amends Annexes I, II and III. Official Journal L 239, 24.9.93. Commission Regulation (EEC) No. 468/94 of 2 March 1994. Amends Annex VI. Official Journal L 59, 3.3.94. Commission Regulation (EEC) No. 2381/94 of 30 September 1994. Amends Annex II, Part A.Official Journal L 255, 1.10.94. Commission Regulation (EEC) No. 1201/95 of 29 May 1995. Amends Annex VI, Section C. Official Journal L 119, 30.5.95. Commission Regulation (EEC) No. 1202/95 of 29 May 1995. Amends Annexes I and III. Official Journal L 119, 30.5.95. Council Regulation (EEC) No. 1935/95 of 22 June 1995. General updating of main text (no changes to Annexes). Official Journal L 186, 5.8.95. Commission Regulation (EC) No 418/96 of 7 March 1996. Amends Annex VI. Official Journal L 59/10, 8.3.96. Commission Regulation (EC) No 1488/97 of 29 July 1997. Amends Annex II and Annex VI. Official Journal L 202/14, 30.7.97. Commission Regulation (EEC) No 1900/98 of 4 September 1998. Amends Annex I. Official Journal L 247/6, 5.9.98. Commission Regulation (EEC) No 330/1999 of 12 February 1999. Amends Annex VI. Official Journal L 40/25, 13.2.99.

Part II

GLOBAL OVERVIEW: TRADE AND SUPPLY

Chapter 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

Introduction
The world trade in organic prod ucts is domi nated by Europe (mainly the European Union countries and Switzerland), the United States and Japan, though there are smaller but interesting markets in many other coun tries, including a few devel oping ones. As there are no offi cial trade sta tis tics, it is impos sible to give a complete picture of the inter na tional organic trade. In all mar kets, the sector forms an inte gral part of the overall food and beverage trade, because organic products are sold to consumers within the normal assort ment of super mar kets and other gro cery outlets, as well as by specialized channels like organic and natural food shops, street mar kets, farm shops and box schemes. Retail sales of organic foods in these three major market areas were estimated at nearly $11 bil lion in 1997 and pre limi nary estimates for 1998 indicate that the total may have risen to over $13 billion. Germany is by far the largest market in Europe, accounting for over one third of total sales. The other main mar kets in terms of absolute consumption are France, United Kingdom, the Netherlands, Switzerland, Denmark and Italy (in Italy supplies are mainly of domestic origin). Some other markets, like Austria and Sweden, are smaller in abso lute terms, but their per capita consumption of organic foods is rising rap idly. Table 3.1 gives an overview of the esti mated size of the major world mar kets for organic food and bev er ages in 1997. Demand for organic food varies considerably from country to country
Table 3.1

within Europe, ranging from a very small percentage of total food spending in the more southern regions to a much higher proportion in northern and central Europe, especially in Austria, Denmark and Swit zer land. The share of organic foods as a seg ment of the grocery market is increasing but typically accounts for only between 1% and 1.5% of total spending on food. Recent market research has shown that consumer demand is growing rapidly in most major mar kets, and that the share of organic foods is expected to reach 5% - 10% of total food sales in some countries by the year 2005. All markets, except Germany, project a growth rate of consumption in
World markets for organic food and beverages, 1997 Approximate retail sales (US$ million)
1 800 720 450 350 350 300 110 750 225 200 5 255 4 200 1 000 10 455 1.25 20-30

Market
Germany France United Kingdom Netherlands Switzerland Denmark Sweden Italy Austria Other Europe a/ Total, Europe United States Japan TOTAL

% of total food sales


1.2 0.5 0.4 1 2.0 2.5 0.6 0.6 2

Expected growth rate (%) over the medium term


5-10 20 25-35 10-15 20-30 30-40 30-40 20 10-15

Source: Compiled by ITC. a/ Belgium, Finland, Greece, Ireland, Portugal, Spain, Norway.

54

CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

excess of 10% per annum in the medium term and certain markets (Switzerland, Denmark, Sweden, United Kingdom) fore cast rates of over 25%. In the 1970s and early 1980s the devel op ment of the organic food market in northern European countries was stimu lated by growing con sumer interest in health and nutri tion and an increasing aware ness of the need to pre serve nature and the envi ron ment. Small groups of dedi cated con sumers, who were willing to pay signifi cantly higher prices for organi cally pro duced food, took the lead and demand was also stimulated by media interest, up and coming environmental movements and green political par ties, food scan dals (such as those which arose over bovine spongiform encepha lo pathy or BSE, por cine pest, dioxin con tamination) and con tro ver sies posed by the use of genetically modified organisms or GMOs, which further moti vated peo ples search for healthy food. How ever, in most mar kets, with the excep tion of Den mark and Swit zer land, organic food remained a very small niche product in the total gro cery trade until the mid 1990s, when a larger segment of consumers though less willing to pay high prices became the dominant factor in the organic market. The expe ri ences of individual mar kets dif fered but, in gen eral, sev eral major fac tors con trib uted to this lack of devel op ment:
q q

building marketing structures, including consumer and pro ducer advi sory serv ices and pro mo tion. However, in Germany, for example, more funding has gone directly to farmers. Consumption, particularly of organic dairy pro duce, grain, vege ta bles and fruit, has been stimulated by more consistent availability and, very importantly, by the resulting lower price premiums. Second, the mainstream supermarket trade has committed itself to the organic trade, not only by stocking organic products, but also by making it a serious objective to promote a complete range of organic grocery products among their customers. In gen eral, Euro pean con sumers do a high pro por tion of their house hold shop ping at super mar kets and overall demand for organic products in the mid 1990s grew fastest in coun tries where the large com mer cial chains were most active in pro moting organic prod ucts. This is high lighted by the situa tion in Den mark and, since 1995, by the growing organic sales and the rapidly increasing market share of supermarket groups in Austria, France, Germany, the Netherlands, Sweden, Swit zer land and the United Kingdom. The third factor has been the uniform standards for organic food pro duc tion and label ling and for organic certification which were introduced throughout the European Union by Council Regulation (EEC) 2092/91. However, though the Directive covers the whole of the European Union, national organic labelling schemes continue to differ from country to country. In markets like Belgium, Denmark, the Netherlands and Sweden, certified organic quality is presented to consumers by a single logo which they recognize as a guarantee. In France, until the intro duc tion of the national AB logo, the pro lif era tion of individual logos was particularly confusing. In Germany, whether or not the logo koprfzeichen, launched in early 1999, will become a genuine national organic symbol will largely depend on how it is man aged. In the larger and more dynamic organic mar kets, the demand and supply situa tion for fresh foods has been the major contributor to growth. However, because the organic food trade aims to mirror the con ventional gro cery trade, there is growing demand for all food and bev erage prod ucts. Sup plies are first sought locally, then subsequently from nearby European sources. How ever, a huge variety of prod ucts, which cannot be grown within the community or are not avail able through the year, are bought in from worldwide sources, including many devel oping coun tries.

High prices;

Unavailability of supply owing to the insufficient involvement of farmers and food processors;
q

Limited participation of the supermarkets or the mainstream grocery trade;


q

Lack of consumer confidence in organic quality.

In the 1990s the rates of devel op ment of organic food sales in individual European markets have varied dramatically. Three key positive factors have influ enced prog ress, though their effect has dif fered from country to country. First, under EU and national (organic) agriculture policies, financial support for converting to, and main taining, organic farming has increased sub stantially, which has stimu lated the supply of organic produce in nearly all Euro pean coun tries. The policy is far more marketing-oriented in some coun tries than in others, so that in coun tries like Aus tria, Den mark and the Netherlands, funding has gone not only to farmers in the form of hec tare pre miums but also for

CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

55

Target markets
Denmark
With a population of just over 5 million people, Denmark is a fairly small market for most food and beverages. However, total sales of organic food and beverages were estimated at about $300 million (excluding value-added tax or VAT) in 1997, corresponding to 2.5% of the total retail market for foodstuffs. This places Denmark in the top league among world markets, as far as per capita consumption of organic foodstuffs is concerned. Fur ther more, it should be noted that con sump tion has been growing rapidly in recent years. Organic prod ucts are believed to have reached 3.5% - 4% of total food and bev erage sales in 1998, or a value of approxi mately $500 mil lion. There are strong indi ca tions that the Danish organic food market will con tinue to expand for a con sid erable number of years. First, consumer interest in healthy food and environmentally friendly products continues to grow and more people are purchasing organic prod ucts. Second, the major retailers are promoting organic foodstuffs quite aggressively, pri marily through heavy advertising and competitive pricing. For example, FDB (Coop Denmark), the largest food retailing group, which con trols about one third of national food sales, has set ambitious sales tar gets for spe cific organic prod ucts (as a per centage of total sales of a given item) to be reached by a certain target year. Third, Danish farmers as well as food manufacturers are increasingly becoming aware of the opportunities that exist in satisfying consumer expectations. Finally, current government policy aims at promoting production and consumption of organic food stuffs. Sources in both trade and industry are con fi dently pre dicting that organic prod ucts will reach about 10% of total food sales by the year 2005. It should also be noted that the Ministry of Food, Agri cul ture and Fish eries has just issued (in January 1999) its Action Plan II for the fur ther devel op ment of organic farming and trade in Den mark during the period 1999-2003 and beyond. of the sector into the overall food market is low. According to trade sources, the retail market amounted to about $725 mil lion in 1997, equiva lent to just under 0.5% of total food sales. Retail sales are believed to have exceeded $800 mil lion in 1998 and the cur rent growth rate is esti mated at around 20%. Despite the importance of France as a major agricultural producer and a significant food and bev erage exporter, organic farming has failed to keep pace both with demand from the domestic market and with the accelerated rate of conversion in neighbouring European markets. In 1997 organic agriculture accounted for only 0.3% of the usage of total farm land in France, com pared with over 7% in Austria and Switzerland and 2% in Germany. However, government policy is in place to support and pro mote more rapid devel op ment over the next few years and the number of organic farmers in the country is targeted to rise from 4,500 at the end of 1997 to about 25,000 by the year 2005. It is also sig nifi cant that organic proc essing is increasing and that some major French food manufacturers have launched organic product lines. The growing involvement of major retail organi za tions in organic food sales is expected to have a highly posi tive effect on total con sump tion, because it will increase the expo sure and avail ability of organic products to occasional buyers. These new customers do most of their house hold shop ping at super mar kets and hypermarkets and expect to be able to buy the same wide range of organic foodstuff that they have been used to pur chasing in con ven tional quality. France is an impor tant exporter of organic fresh fruits and vegetables, cereals, wine, eggs and poultry. However, because of the relatively small scale of pro duc tion and growing domestic demand, there is a great need for imports of both pro duce which cannot be grown in France and products of which local sup plies are insuf fi cient to meet demand. Imports of organic foods from out side the Euro pean Union have grown rap idly over the last five years. It is cer tain that France will con tinue to be an impor tant market, not least for devel oping coun tries.

France Germany
Although France, with its population of over 58 mil lion, is one of the largest mar kets for organic foods in Europe, per capita con sump tion and the pene tra tion Ger many is the largest market in Europe for organic foods and the second largest in the world after the

56

CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

United States. Sales totalled about $1,800 mil lion in 1997 and were expected to reach over $2,000 mil lion in 1998. However, this figure corresponds to only about 1.2% of total German food sales and a fairly low per capita con sump tion for the huge popu la tion of 82 million. The market is unlikely to continue performing at the double-digit growth rates of the past 10 years or so, but trade sources are confident that organic sales will rise in the medium term at about 5% - 10% annu ally. The most sig nifi cant seg ments of demand for organic foods are for fresh fruit and vegetables, dairy prod ucts, bread and bakery prod ucts, and baby food. Together these account for nearly two thirds of total consumption. Conversion to organic agriculture in Ger many has accel er ated rap idly in recent years, with the organi cally farmed area expanding from 45,000 hectares in 1989 to 350,000 hectares in 1997. This huge expan sion has meant that Ger many has become largely self- sufficient in many basic food items (like cereals, vegetables, milk and meat) and that price levels for cer tain key prod ucts are fal ling because of over supply and keen com pe ti tion. Until recently, retail distribution was controlled largely by natural food shops, reform shops, farm shops and other direct selling outlets; supermarkets were slow to enter the market. Although most major German supermarket chains now carry organic produce they have been slower than many of their Euro pean coun ter parts to make a clear com mit ment to marketing a fuller organic assortment. A further negative influence on overall organic spending has been con fu sion in the minds of con sumers about the true meaning of organic and the fact that to date the German organic movement has not found a suc cessful way of com mu ni cating its mes sage to the population as a whole, though a common logo (ko prfzeichen) was intro duced in early 1999. Ger many is by far the largest importer in Europe and imports a wide assortment of organic products. The key sources of imports are France, Italy, Spain, the Neth er lands, eastern Europe, the United States, Turkey and other Mediterranean countries and countries in Latin America. The rising levels of organic pro duc tion in eastern Ger many and in nearby eastern Europe have partly shifted the emphasis of the import trade in the five years to 1998 away from France and Italy, and new sup pliers are increas ingly sig nifi cant. It should be noted that German consumers are amongst the most critical in Europe and, in their food

purchasing, consumers are motivated, not only by organic origin, but also by freshness, taste, good presentation, local farm sourcing and the perceived environmental friendliness of products and their pack aging. Some organic traders and other sup pliers have become somewhat discouraged by the slow progress of market devel op ment and exporters from developing countries are finding it increasingly difficult to pene trate the German market because of growing competition and the extremely strict standards required. It is necessary to take a much more pro fes sional approach than in the past. Nonetheless, a number of positive aspects of the German market should not be ignored, for example, a strong aware ness of envi ron mental and health issues, con sumer interest in organic con ven ience food, and the new national logo for organic prod ucts. Of spe cial interest to devel oping coun tries is the Pro trade/GTZsponsored Green Trade Net inter na tional data base on organic prod ucts, which pro vides market infor ma tion and links exporters in these coun tries with importers in Germany and elsewhere. (GTZ stands for Deut sche Gesellschaft fr Technische Zusam menar beit or the Ger many Agency for Tech nical Coop era tion.)

Netherlands
Con sump tion of organic food stuff accounts for only a small share in total grocery expenditure in the Neth er lands. It is esti mated that the sector was worth around $350 mil lion at retail prices in 1997. This was equivalent to about 1% of the total grocery market, which is small compared with some European mar kets. The major fac tors lim iting growth until the mid 1990s have been:
q

High prices. Netherlands consumers spend a smaller percentage of their disposable income on food than their EU neighbours and price is a key influence on expenditure on grocery products.
q

The marginal level of involvement of the mainstream grocery trade. Most supermarkets carried until recently only a very small range of organic products. However, 1996 marked a turning point in the Netherlands organic trade: retail sales increased by 3% - 5% in that year and most esti mates agree that the rate of increase accel er ated to between 10% and 15% in 1997, a trend that has continued since. Positive developments have included the expansion of local supply and more efficient distribution of dairy and

CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

57

vegetable produce, rationalization of wholesale dis tri bu tion to the spe cialist shops, which still play a key role in retail sales, and intensified government initiatives to stimulate both organic production and consumption. Perhaps the key change has been increased penetration into supermarkets and their uptake of new organic product ranges. The domi nant food retailer Albert Heijn launched its own brand for its organic assortment in early 1998, which is expected to have a strong positive effect on overall sales. Future growth will depend strongly on the rate of expansion by super mar kets into a fuller range of products and on the ability of suppliers to offer organic produce to consumers at prices they are prepared to pay. Retail sales are believed to have reached about $425 mil lion in 1998. In spite of the com para tively small domestic con sumption of organic food, the Neth er lands is a major European and global trader in organic food and bev er ages. The country exports domestically produced fresh vegetables, dairy products and processed organic foods, but it has a far greater role in importing, proc essing and repacking bulk organic foods from world wide sources for re- export to most Euro pean mar kets. Fresh fruits and vege ta bles, grain and cereals, coffee, dried fruits and nuts, tea, and spices and herbs are particu larly impor tant re- export prod ucts. A large part of the bulk organic food stuffs imported into Europe from developing countries is handled by Netherlands traders. Moreover, the Neth er lands organic inspec tion authority SKAL is one of the most impor tant Euro pean certification organizations, operating organic inspec tion serv ices in over 30 coun tries.

self- sufficient in organic dairy prod ucts, meat, bread cereals and sugar. At present about 20% of organic food require ments are imported, but this is expected to increase as demand grows for a fuller range of prod ucts. The most impor tant imports are fresh fruits and vegetables, and green coffee. (Sweden has the highest per capita con sump tion of coffee in the world and all coffee roasters offer organic varieties.) The other main import groups are dried fruits and vegetables, packaged food, and raw materials and ingredients (especially cereals, spices, herbs, vegetable oils and fats) for the domestic food industry, which has a share of about 80% in total manu fac tured food con sump tion. Concern for the envi ron ment is a key moti va tion for Swedish buyers of organic foods, but price pre miums have been a major bar rier to market expan sion. Consumption is concentrated in the metropolitan areas. Scar city and irregular avail ability have also been problems for the sector, but the supply situation is improving and this is expected to have a favourable downward impact on price premiums. Another posi tive factor for the overall market is that the three largest super market chains in Sweden have recently set ambitious tar gets for organic foods which, if imple mented, could increase the cur rent market size four- or five fold. Trade experts are confidently predicting that organic foods could account for 4% - 5% of total Swedish food con sump tion within a few years.

Switzerland
Though a small country with a population of only 7 mil lion, Swit zer land is one of the pio neers in the devel op ment of organic agri cul ture, which it started as early as the 1930s. Organic farming is well devel oped and accounted for an esti mated 8% of total agricultural land in 1998. Market penetration of organic food is among the highest in the world. Though organic prod ucts have long been sold at the farm gate and through other direct out lets and later on through organic shops, the market began to grow seriously only after 1993 when the big supermarket chain, Coop started to market organic food, fol lowed by another large super market chain, Migros, in 1996. Sales have since increased strongly. The retail market for certified organic food was estimated at between Sw F 500 million and Sw F 520 million in 1997, corresponding to roughly 2% of the total food market. Sales in 1998 of organic food and bev er ages can be esti mated at about Sw F 560 mil lion to Sw F 580 mil lion.

Sweden
Consumption of organic food and beverages accounted for about 0.6% of total retail gro cery sales in Sweden in 1997 and was valued at an esti mated $110 million (excluding value-added tax). Demand has increased significantly in recent years and there has been a problem in coping with the growth in requirements. The most significant sectors of demand are dairy products and fresh vegetables, which together account for over two thirds of total organic sales. By 1997 Sweden had about 3,000 organic farms, on 118,000 hectares of land, certified by the national organic certification authority KRAV. The certified area made up 3.4% of all agricultural land. Government policy aims to increase this percentage substantially over the next several years. Domestic production ensures that Sweden is more or less

58

CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

Overall, the market for organic food products is expected to grow strongly over the next few years. This will be due to the con sum ers posi tive atti tude towards health food and naturally and ethically produced food; increased supplies as more farmers go into organic farming (conversion to organic farming is being sup ported by the Gov ern ment); and more aggressive marketing by major supermarket chains. The import rate is in general comparatively low as market access is dif fi cult, mainly owing to the predominance of privately controlled labels and strict requirements. For various reasons, the Swiss market is likely to remain a difficult one for exporters. Nevertheless, it is an important market that should not be ignored by developing countries. Products with the best opportunities are those that cannot be grown in Switzerland, e.g. coffee, tea and cocoa, citrus and tropical fruits, rice, millet, durum wheat, spices, nuts and dried fruit. Other products, e.g. off-season fruits and vegetables, and products in short supply may also find open ings in the market.

large size of the average British farm makes con ver sion more dif fi cult. The main organic out puts are dairy prod ucts, meat, eggs and cereals. The small number of powerful multiple chains, which control 70% of food retailing in the United Kingdom, has played a sig nifi cant role in the (lack of) development of the organic trade. Despite a long history of involvement in the organic trade, their activity has been marked by periods of enthusiastic devel op ment fol lowed by with drawals from han dling organic pro duce. When organic prod ucts were sold, the price differentials were frequently so high as to restrict demand. Fur ther more, although most groups saw organic foods as a potential growth area, they found the problems of ensuring reliability and continuity of supply, meeting quality requirements and offering competitive pricing too difficult to overcome. Most of the major chains, particularly Sains burys, Wai trose, Safeway and Tesco, are now becoming increas ingly com mitted to expanding their range of prod ucts and their sales of organic foods. It should be noted, however, that organic foods can expect to face competition in the British as well as other markets from ICM (integrated crop management/sustainableagriculture). The British organic market is highly dependent on imports, which are estimated to have a share of about 70% of the total market. About half of the imports are sourced in other Euro pean coun tries, but as much as one third of the total is sup plied from devel oping coun tries. Owing to the small scale of local production and the projected future growth of the market, the United Kingdom should be one of the key target markets for pro spec tive sup pliers of organic food stuffs.

United Kingdom
While the United Kingdom is one of the larger markets for organic foods in Europe, growth in consumption has been disappointing until recently. Total retail sales in 1997 amounted to an estimated $450 million, only 0.4% of the overall grocery market. Despite the fact that the country has been a major con tributor to the for mu la tion of EU organic stan dards and cer ti fi ca tion pro ce dures, it has lagged seriously behind in its own market development. Prospects for the coming years appear to be much brighter: sales nearly doubled between 1995 and 1997 and the trade optimistically forecasts that the retail value of the organic market could be as high as $10 bil lion within 10 years, which would rep re sent a market share of about 10%. Fruits and vegetables account for about 45% of total organic consumption, followed by cereals, meat and dairy products. Domestic organic agriculture has not developed quickly: in 1997 there were only 1,200 units using 75,000 hec tares or about 0.4% of the total avail able farm land. It is the trade view that the Gov ern ment is not yet truly committed to organic production. The level of assistance to farmers converting to organic methods is less than half that given to farmers in most other EU countries. Moreover, the comparatively

Other major markets


The United States market for organic food and bev er ages was valued at an esti mated $4,200 mil lion in 1997, up from about $2,800 million in 1995. In 1998, trade sources expected the years sales to reach $5,000 mil lion. Growth rates of at least 10% - 15% are antici pated. Little infor ma tion is avail able on the Japa nese market, but according to some sources, the market probably amounted to as much as $1,000 mil lion-$1,200 mil lion in 1997 and is growing rap idly. Retail sales in 1998 are believed to have been in the range of $1,300 mil lion $1,500 million. Additional information on these and other mar kets is given in chapter 4 on the world supply situation.

CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

59

Market segments
From the point of view of exporters in developing countries, the most important market segment in European markets is the food processing and repacking sector, because virtually all imported organic food and bev er ages con sist of fresh pro duce or raw mate rial which needs some form of repacking or proc essing before it can be offered for sale to the consumer. Most markets focus strongly on primary processing but, as demand for organic products grows and the con sumer increas ingly expects to buy organic alternatives to conventional food stuffs, secon dary proc essing and food manu fac turing, not only by spe cial ized organic firms but also by major mul tina tional food com pa nies, are gradu ally taking off. Although it is difficult to make clear distinctions between sectors, the organic trade in individual European markets can be broadly divided into the three seg ments dis cussed below: the retail sector, the food processing industry, and the catering and insti tu tional sector. and Sweden, the dairy sector has been a major force in the recent fast growth of organic food sales. Fresh fruits and vege ta bles are a sig nifi cant product group in all markets: the rapidly growing demand for produce supplied from local sources has gradually given rise to increasing demand for the organic coun ter parts of the full range of fruits and vege ta bles available from conventional agriculture. This is possibly the product group which offers the best overall export opportunities for developing country producers. Other important product groups include cereals, cocoa, coffee and tea, dried fruits and nuts, herbs and spices, fats, oils and derived prod ucts, and sugar.

Food processing industry


Until recently the organic food proc essing industry in most European markets concentrated mainly on primary processing and repacking of agricultural produce into a form suitable for sale to consumers, and on sec on dary proc essing into a lim ited range of manufactured food products. This manufacturing was carried out largely by specialist organic food producers and their output was sold mainly on the domestic market. The one exception is the Neth er lands, which plays a major role as a gateway into EU mar kets for imports from out side the Union. The country is a major trader in organic foods and is thought to re-export up to 80% of all imports of primary produce (especially cereals, coffee and tea, fresh fruits and vegetables, herbs and spices, nuts, oil-seeds, pulses) and at least 50% of domestically manufactured packaged foods to other European markets. The sig nifi cance of the food industry as an end- user of organic raw mate rials is now growing fast because consumers, both local and in export markets, are looking for an assort ment of proc essed foods similar to that avail able from con ven tional pro duc tion. There is increasing demand for convenience foods and ready meals. A key devel op ment in recent years has been the expanding involvement of the mainstream gro cery trade in the sector and the growing number of main stream proc es sors which are adding organics to their factory production lines. Many of the new registrations of organic production units are for organic departments of conventional food companies, rather than new specialist organic

The retail sector


The retail trade is ulti mately the main outlet for organic foods in all Euro pean mar kets, but within the sector the roles played by the major mul tiple super mar kets and by specialist organic outlets vary considerably from country to country. Whereas in Denmark, France, Sweden, Switzerland and the United Kingdom the supermarkets dominate consumer sales, in other coun tries, par ticu larly Ger many and the Neth er lands, the spe cialist organic shops still hold the largest share. In all mar kets, espe cially since 1995, the main stream gro cery trade has been increasing its involvement in the sector, and most leading super market groups now carry a range of organic food and bev er ages. How ever, there are still significant variations in the level of commitment of the large multiples to spreading the organic mes sage and to stra te gi cally mar keting a full organic assortment. Because of the pow erful posi tion of these organizations in overall food retailing, their policy has and will continue to have a strong direct influence on overall sales growth in each individual market. Organic food sales are dominated in most European mar kets by dairy prod ucts, fresh fruits and vege ta bles, cereals and cereal-based products. In a number of mar kets, espe cially Aus tria, Den mark, the Neth er lands

60

CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

businesses. Among multinationals Heinz stands out as a com mitted manu fac turer of organic food; others which are already pro ducing organic product ranges are still hesi tant about their level of com mit ment. The degree of processing carried out by food manufacturers varies considerably according to the product group. The following list indicates major uses:
q

Honey: mainly for consumer use (table honey); also for bakeries.
q

Oil- seeds: mainly indus trial (marga rine, cooking oil, bread); some consumer snack foods.
q

Processed fruits and vegetables: largely into fruit and vegetable juices, frozen and canned produce, conserves, pulp, pures, soups, pizzas, baby food, fruit yoghurts and desserts.
q

Coffee and tea: mainly retail; small but growing catering and institutional use.
q

Dried fruits: mainly for the bakery trade, but also for muesli, consumer snacks and fruit yoghurts.
q

Pulses: mainly consumer packing for the retail trade, but also for bread spreads and convenience foods. Soy has numerous uses in virtually all food sectors, e.g. drinks, desserts, tofu, vegetable burgers.

Edible nuts: mainly for industrial use in peanut butter, other nut pastes, sauces, bakery products, snacks, muesli.
q

Catering and institutional sector


The catering and institutional use of organic foods has com menced in some Euro pean mar kets but has not developed extensively to date. In Denmark, Germany, Italy, the Netherlands and Sweden, some municipal and other public bodies have started to require offi cial insti tu tions like schools, hos pi tals, old peoples homes, universities and administrative offices to offer organic menus and organic coffee and tea in their canteens. Restaurants specializing in organic foods are increasing in number. Some air line companies, e.g. Lufthansa and, in particular, Swis sair, offer organic on- flight meals.

Fresh fruits and vegetables: primarily for direct consumer consumption.


q

Grains, cereals, rice: bread and bakery products, muesli, rice cakes and cereal-based drinks; consumer packs for retail sale; animal feed.
q

Herbs and spices: both retail and industrial (soups, ready meals, etc.), with the latter segment growing in comparative importance.

Distribution channels
Importers, processors, repackers
The most usual form of distribution for imported organic foods is through a specialized importer and/or a processor/packer, then to a wholesaler or direct to the retail outlet, which makes the final sale to the consumer. However, the functional distinctions between different types of distribution channel are often not clear because many companies undertake various levels of interim processing and repacking, according to the type of product and the end-use. In each market and for each of the major product groups a few specialized organic traders tend to dominate imports and these com pa nies are the key (poten tial) cus tomers for for eign exporters. They import on their own account and sell to packers, proc es sors and food manufacturers. Direct sales from foreign exporters to the central pur chasing units of retail chain stores are still rare but are likely to be of growing interest to the mul ti ples as their organic volumes and their uptake of new organic products increases. There is a growing tendency towards sourcing supplies more globally and devel oping part ner ships at all levels.

Food manufacturers
Food manufacturers tend to obtain their imported sup plies either direct from importers or from spe cialized (European) repackers/processors, which can provide requirements according to the manu facturers speci fi ca tions and ensure con ti nuity of supply. For logis tical, food safety and envi ron mental rea sons they usually prefer to buy from domestic or nearby

CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

61

European sources. They do not often import direct from out side Europe, though it is likely that this will increase, especially as more conventional food manu fac turers begin to set up organic product lines.

Retail trade
The distributionstructure for organic foods has been one of the key deter mi nants of the rate of prog ress of retail sales in indi vidual Euro pean mar kets. The clear commitment of multiple supermarket groups to marketing a full organic assortment has had a direct influ ence on the rap idly rising growth rate of mar kets such as Aus tria, Den mark, Swit zer land and, recently, the United Kingdom and other markets. Product identification, strong merchandising, improved assortment and regular stocking have helped super mar kets to draw many new organic cus tomers. As the stores expand the variety of prod ucts stocked, people who tend to do a large part of their grocery shopping in a single outlet and who have only been occa sional users of organic foods gradu ally increase their purchases. Moreover, the growing availability of supply and more efficient distribution of larger quantities help to lower the price premiums for organic food to levels more accept able to con sumers.

In the above- mentioned coun tries super mar kets now have a domi nant share in organic food sales, whereas in markets like Germany and the Netherlands spe cialist organic outlets have played a larger role. In recent years these shops have tended to con soli date in order to meet increasing com pe ti tion from the major multiples, and some spe cialist organic super mar kets have started to emerge. Some coun tries, which tra dition ally had a health food market seg ment, still sell a certain proportion of organic food through this channel, but the importance of these outlets has declined. One key reason is that they tend to have a limited range of fresh produce, which is the main product group behind the cur rent faster growth rate in organic food sales. European consumers also buy organic foods direct from farms and at organic markets. A highly significant development over recent years has been the organic food box subscription schemes run by farm out lets and fruit and vege table traders in some European markets. Germany now has between 250 and 300 schemes, primarily for fresh fruits and vege ta bles but some offer a larger choice of fruits and beverages. Box schemes are also growing in popularity in the United Kingdom and the Netherlands. Several systems for ordering via the Internet have also started oper ating.

Table 3.2

European markets: percentage shares of retailers in organic food sales, 1997 Multiple retailers
70 40 25 20 90 60 65

Fair trade
Fair trade organizations have become an important distribution channel for organic products in Europe, par ticu larly in Ger many, Swit zer land and the Neth er lands, but also in a number of other markets. The primary concern of the fair trade movement is the social and eco nomic situa tion of farmers and producers in the South rather than organic agriculture as an ideal, but the two movements are tending to converge, as both con tribute to genuine sus tain ability. Fair trade distribution is of great consequence for a number of product groups from developing countries, especially bananas, cocoa, coffee, honey and tea.

Market
Denmark France Germany Netherlands Sweden Switzerland United Kingdom

Specialist shops a/
15 30 45 75 5 30 17.5

Other b/
15 30 20 5 5 10 17.5

Source: Trade estimates. a/ Specialist organic food stores, Reform shops, natural/health food shops, dietetic shops, etc. b/ Direct farm sales, organic markets, box schemes, catering, etc.

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CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

Market access
Organic certification and food laws
Uniform standards for organic food production and labelling throughout the European Union were established with the promulgation of Council Regulation (EEC) 2092/91 of 24 June 1991. This regu la tion and sub se quent amend ments estab lish the main rules for organic production, processing and importing, including inspection, record keeping, labelling and marketing. The use of the term organic, or its equivalent in different national lan guages, for label ling and adver tising food pro duce is now limited in the European Union to products obtained according to the principles of production and the rules of proc essing defined in the Regu la tion. In principle, organic products which have been imported into one EU country can be freely sold throughout the Union, although labelling inspection schemes do still demand dif ferent stan dards in some indi vidual mar kets. Each EU country is responsible for appointing its own con trol organi za tion and has some flexi bility in interpreting and enforcing the Regulation, which only sets down minimum requirements for certification. It should be noted that the actual stan dards required by cer ti fi ca tion organi za tions and importers can be much more stringent than these minimum require ments. Prod ucts from third (non-EU) coun tries can be sold as organic only when it has been dem on strated that they are from a country whose organic farming rules are equiva lent to those of the Union as laid down in the Regulation. Certification must be carried out by a rec og nized inspec tion body, either a national authority in the country con cerned whose equiva lence has been approved according to Regulation 2092/91 or by an EU inspectorate which operates internationally, like Eco cert, SKAL, KRAV or BCS.

GOLDEN RULES FOR THE EXPORTER OF ORGANIC PRODUCTS


q

Your products must be organically certifiable and meet the legal and market requirements (hygiene, weight, size, ripeness, colour, packing and other technical specifications) of the importing country. You m ust make sure you know the rules and are aware of all requirements and that your products are produced, stored, processed, packed and labelled accordingly. Unless you have a way, either directly or through your group or cooperative, for marketing and selling your products to the final customer, you will need an exporter and/or an importer. Make sure that the chosen exporters are competent, trustworthy and solvent. They must defend your best interests at all times and you must be able to build a lasting partnership with them. Likewise, importers must have a sound understanding of your potential as well as your limits and must be ready and able to communicate with you on a continuous basis. Make sure that you communicate with your trading partners (exporters and importers) adequately yourself. Nothing is more frustrating for trading partners than not to be informed about your situation, especially on product availability, and not to receive prompt replies to their requests for information. Make sure you build up expertise on foreign markets. Is there any need for your product? Where? When (which season)? Who are the target customers? What are the price levels? Are there limitations to imports? Your exporters and importers can help with this but you should also use other sources to obtain independent market information. Possible sources (see pp. 63-4) include the GreenTrade Net, fair trade organizations, chambers of commerce, and other organizations, including NGOs, in your own country. Do not speculate on prices. Set an adequate price level through open communication with your exporters and with importers, allowing for reasonable profits for all, as befits partners. Work as much as possible in collaboration with other producers in a cooperative or other group relationship. Working together can mean producing marketable quantities at better prices, better assortments, and improved post-harvest treatment, processing, packaging, storage, transportation and administration. It may also help to cut the costs of certification and participation in foreign trade shows. Exporting can be profitable business, but do not ignore building up a national market, whatever the problems and hindrances. Be creative and innovative!

q q

CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

63

Exporters of all types of food and bev erage prod ucts to European countries must also comply with the increasingly strict EU regulations on food safety and hygiene, nutri tional infor ma tion, addi tives, packaging and label ling.

Customs duties
The external trade of all EU member countries is governed by common regulations and trading agree ments. Once the required duties have been paid on goods imported from out side EU into a spe cific EU

market, these goods can be cir cu lated throughout the Union without further customs formalities. Some imports are subject to quantitative and other restrictions. Most products from the Asian, Car ib bean and Pacific States asso ci ated with EU and from least devel oped coun tries are exempt from duty. For other developing countries, GSP (Generalized System of Preferences) agreements may lower applicable customs tariffs. In accordance with EU commitments under the WTO Agreement, EUs average tariff levels will be lowered considerably over the next few years.

Sources of information
A major purpose of this study is to help fill the information gap that exists in most developing countries which export or are planning to export organic prod ucts. With the aim of maxi mizing export earn ings, it is abso lutely vital that the exporter obtains regular updates on price and market trends. The fol lowing sug ges tions may be useful:
q q

Green Trade Net, an international database on organic products on the Internet, which provides market information and links exporters in these coun tries with importers in Germany and else where. The database is sponsored by Protrade/GTZ, Germanys trade promotion and entrepreneurship programme.
Web site: E-mail: Tel: Fax:
q

Producers and exporters should pay regular visits (preferably at least once a year) to the target market(s) to collect market and marketing infor mation through meet ings with trading part ners and visits to retail shops and special ized trade fairs.
q

http://www.green-tradenet.de oekologie_marketing@compuserve.com +49-69 811 228 +49-69 824 684

Producers and exporters should establish and maintain contacts with other producers and exporters to exchange information and discuss market developments and trading conditions.
q

BioFoodNet, an information and news platform for the global, European and local organic markets on the Net. It is operated from Belgium and is sponsored by BioFoodNet PVBA.
Chemin des Marchaux 35 B-1300 Wavre-Limal Web site: http://www.biofood.net E-mail: office@biofood.net Tel/Fax: +32-10 410 675
q

Producers and exporters should make maximum use of existing sources of information, such as the publications mentioned in the bibliography at the end of this study.
q

Many importers, processors, food manu facturers, retail organizations and other companies involved in the organic trade have Web sites that provide useful information. This is also true of a number of international organizations, NGOs, aid organizations, trade associations, certification bodies and other enti ties. As far as possible, rele vant Web sites and e-mail addresses are provided in this study. The fol lowing sources of infor ma tion are par ticu larly useful:

Fresh-Marketplace is a new on-line database that links potential buyers and sellers of fresh fruits and vegetables via the Internet. It was co-developed by the International Trade Centre UNCTAD/WTO (ITC) and an organization in the United Kingdom. It covers mainly conventional but also organic fruits and vegetables. Coverage of products other than fresh fruits and vegetables may be included at a later stage. For further information contact:
Fresh-Marketplace International Trade Centre UNCTAD/WTO (ITC) 54-56 rue de Montbrillant

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CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

CH-1202 Geneva Switzerland Web site: http://www.fresh-marketplace.com E-mail: itcreg@intracen.org Tel: +41-22 730 01 11 Fax: +41-22 733 44 39

some stage. For sub scrip tion and fur ther infor ma tion contact:
Market News Service International Trade Centre UNCTAD/WTO (ITC) 54-56 rue de Montbrillant CH-1202 Geneva, Switzerland Web page:http://www.intracen.org/services/ mns/mns.htm E-mail: MNS@INTRACEN.ORG Tel: + 41-22 730 01 11 Fax: + 41-22 730 05 72; + 41-22 730 09 06

Market News Service (MNS), an ITC global programme, provides price and market information on a number of food products, including fresh fruits and vegetables, bulk-packed fruit juices, spices and rice. MNS does not cur rently cover organic prod ucts, although selective coverage may be introduced at

Trade fairs
Organic producers and exporters in developing countries should aim to visit food fairs whenever possible. Increasingly exporters also participate as exhibitors, usually in cooperation with a trading partner or under the sponsorship of an import pro mo tion organi za tion. There are a number of trade fairs relevant for the organic trade, including the following:

January (annual)

Grne Woche (Green Week)

Berlin, Germany Tel: +49-6634-91929-0/-1 Http://www.messe-berlin.de E-mail: R.maeder@t-online.de Nrnberg, Germany Tel: +49-9171-96100 Fax: +49-9171-4016 Http://www.biofach.de E-mail: Info@biofach.de Anaheim, Ca, United States Tel: +1-303939-8440 Fax: +1-303939-9559 Http://www.naturalproductexpo.com E-mail: expo@newhope.com Brighton, United Kingdom Tel: +44-1903-879077 Fax: +44-1903-879052 Http://www.naturalproducts.co.uk E-mail: Info@naturalproducts.co.uk Amsterdam, Netherlands Tel: +44-1273-384282 (UK) Fax: +44-1273-384285 (UK) E-mail: expoeurope@newhope.com Geneva, Switzerland Tel: +44-1872-263682 (UK) Http://www.vitafoods.co.uk. E-mail: Vitafoods@cornwall.net Barcelona, Spain Tel: +34-93-5801118 Fax: +34-93-5801120 E-mail: Asvidasana@adv.es Namur, Belgium Tel: +32-81 303690 Fax: +32-81 310306 Http://www.euronature.com E-mail: Natpro@skynet.be

Mainstream food show with a growing presence of organic products.

February (annual)

Bio Fach

The worlds largest organic food show; has many exhibitors from developing countries.

The largest organic and natural food show in the United States.

March (annual)

Natural Products, Expo West

The United Kingdoms largest organic and natural food show.

April (annual)

Natural Products, Expo East

31 May - 2 June 2000

Natural Products, Expo Europe

April (annual)

Vitafoods International, Conference and Trade Exhibition

Organized by Vitafoods International Ltd, Truro, United Kingdom. Natural medicines and foods, including organic products. The Barcelona version of Spains largest organic and natural food show, created by Vida Sana. Created by Nature et Progrs; Belgiums largest organic food show.

May (annual)

Bio Cultura

September (annual)

Valeriane

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65

September (annual)

SANA

Bologna, Italy Tel: +39-02 8645 1078 Fax: +39-02 8645 3506 Http://www.sana.it E-mail: info@sana.it Baltimore, MA, United States Tel: +1-303939-8440/-9559 Expo East Http://www.naturalproductexpo.com SIAL Paris, France Tel: +33-149685499/-147313782 Http://www.sial.fr E-mail: Sial@easynet.fr Cologne, Germany Tel: +49-221-821-0/-2574, Http://www.koelnmesse.de E-mail: Info@koelnmesse.de Netherlands Info: Miller Freemann Bv Tel: +31-346 559444 Fax: +31-346 573811 Http://www.infbv.com/food E-mail: exponl@ibm.net Paris Tel: +33-490310042 Fax: +33-490324391 Madrid, Spain Tel: +34-3-5801118 Fax: +34-3-5801120 E-mail: Asvidasana@adv.es

Traditionally Italys largest organic food show.

September (annual)

Natural Products

The East Coast version of the Anaheim show.

October (biennial, to be held next in 2000)

SIAL

A large European mainstream food show, alternating with Anuga in Cologne, Germany; with a growing organic presence. A large European mainstream food show, alternating with SIAL Paris.

October (biennial, to be held next in 1999)

Anuga

(Biennial)

Food-Ingredients-Europe-Exhibition

Mainstream event with strong organic presence rotating netween Paris (September 1999), Frankfurt (November 2000) and London (2001).

November (annual)

Marjolaine

Frances traditional organic food show, created by Nature & Progrs. The Madrid version of Spains largest organic and natural food show, created by Vida Sana.

November (annual)

Bio Cultura

FAOs contribution to organic agriculture


In response to a request made by its gov erning bodies in January 1999, FAO is devel oping an organizationwide and cross-sectoral programme in organic agri culture. This programme will be undertaken in col labo ra tion with public and pri vate insti tu tions such as national and international agricultural research cen tres, national programmes, consumer associations and international organizations such as ITC and IFOAM. Countries are requesting advice and assistance for informed decision-making and policy analysis, as well as technical assistance in research, extension work and in tap ping market oppor tu ni ties. FAO intends to help developing countries to access international markets by providing technical infor mation on production requirements, trade infor mation on market opportunities, and assistance in capacity building. Specific assistance will be given for the development of appropriate national leg is lation, cer ti fi ca tion capa bili ties, research and exten sion facili ties, and to pro mote the exchange of expe ri ences between coun tries. FAO will cover the whole pro duction, storing, handling, processing and marketing chain. In order to obtain the basic intelligence needed to understand fully the magnitude of organic production and trade, statistical data is required on the number of farmers who have adopted organic management techniques, and on the volumes of goods produced and traded. Steps are being taken to specify data collection methodologies and to amend international classification systems. Countries seek assistance in deciphering the multitude of rules various traders expect their suppliers to follow. Increasing international trade in organic products has placed FAO at the forefront of efforts to achieve greater harmony in organic standards. The Codex Committee on Food Labelling has prepared Guidelines on the Production, Processing, Marketing and Labelling of Organically Produced Foods which were adopted by the FAO/WHO Codex Alimentarius Commission in July 1999.

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CHAPTER 3 OVERVIEW OF WORLD TRADE AND MARKET CHARACTERISTICS

FAO is prepared to respond to requests from member countries for assistance in developing regional organic standards that take into account local production needs as well as international market demands. The highly local nature of organic production means that community-based expertise and organizational capacity is needed. FAO could support, upon request, the establishment of local certification organizations in developing countries.

For further information contact:


Food and Agriculture Organization of the United Nations Via delle Terme di Caracalla 00100 Rome Italy Web site: http://www.fao.org Tel: +3906 57051 Fax: +3906 57053152 Contact: Secretary, Inter-Departmental Working Group on Organic Agriculture of FAO

Chapter 4 WORLD SUPPLY BY GEOGRAPHICAL REGION AND BY COUNTRY

Introduction
This chapter gives a worldwide overview of production and trade in organic food products by region and by country. Spe cial atten tion has been paid to devel oping coun tries and the dis cus sion focuses on key issues of production, trade, certification and export poten tial. As has been mentioned in an earlier chapter, this study does not concentrate on a specific product or product group but on a niche in the overall food sector. While this niche encompasses the whole spec trum of food prod ucts, there is little or no offi cial statistical information available. The description therefore of production and trade is primarily qualitative. It is based on whatever data were avail able during 1998 when the study was car ried out and on interviews with importers, retailers, certification and accreditation agencies, and trade pro mo tion organi za tions [such as Pro trade/GTZ, the Centre for the Pro mo tion of Imports from devel oping countries (CBI) and Office suisse dexpansion commerciale (OSEC)]. The difficulty of making estimates of production volumes and market sizes was exacerbated by the significant proportion of organic produce sold direct by producers to con sumers, the pro lif era tion of organic schemes, and the differing certification and labelling practices all over the world. It must be empha sized that the amount and detail of infor ma tion given on each country in this chapter and in the country chap ters do not reflect the size of their respective sec tors, but simply indi cate that for some countries data have been more easily avail able than for others. The same applies to the mention of organi za tions, traders and others, which should not be interpreted as an endorsement of any kind. The mention is merely an indication of the information avail able within the time frame for the study and the methods used for collecting data. The country sections therefore, while they give an insight into national organic food sectors, can by no means be regarded as pre senting a com plete pic ture. All prod ucts referred to as being pro duced or traded in various countries are organic products certified to recognized standards. Goods that could probably be rightly called organic but have not received certification are excluded from the study, although they are sometimes alluded to. Similarly, products marketed as organic, biological, ecological, etc. but which are certified to standards that do not con form to inter na tional stan dards (the latter including the EU Regu la tion on organic crop pro duc tion and the IFOAM stan dards for animal pro duc tion) fall beyond the scope of this study. It should be added that, wher ever they are pro duced, organic prod ucts other than food and bev er ages (such as wood and wood prod ucts, wool, cotton and cotton yarn) are men tioned in the country sec tions, basi cally to indi cate devel op ments in other seg ments that may have an impact, however indirect, on the food and beverage sector. Advances in certification, for example, in other sectors, would facilitate similar ini tia tives in regard to food. The reader should also note that the list ings of items by product cate gory are merely illustrative of the items being produced in individual countries. Furthermore, the geographical grouping of countries follows that of the United

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CHAPTER 4 WORLD SUPPLY BY GEOGRAPHICAL REGION AND BY COUNTRY

Nations Sta tis tical Year book,which is gen er ally (but not always) based on con ti nental regions. It is hoped that this study will serve as a first step

towards the continued collection and dissemination of data on world pro duc tion and trade in organic food prod ucts, espe cially in devel oping coun tries.

Africa
Organic farming takes place in a growing number of African coun tries, but gen er ally on a very small scale. The absence of an organized national market and local distribution system is a major hindrance. Organic prod ucts are usually sold only in impro vised farm ers mar kets, more often than not with no price premiums. Access to technical assistance and reasonable credit remains difficult. Nonetheless, numerous farmers and womens organizations and NGOs practice organic farming to promote self- sufficiency in food in their areas, to cur tail land erosion, to recover land in desertified areas, or for export. Sometimes, benefiting from new insights, they return to long-abandoned traditional practices, similar in many ways to organic farming methods (see section on Burkina Faso). In many countries, certification, with its cost implications, does not yet make much economic sense. However, Egypt is already an important producer and exporter of organic products as are Madagascar, some of the Maghreb countries, and South Africa. Exotic fruits, herbs and spices, nuts, essential oils, oil-seeds, vegetables and cotton are some of the most important items produced organically. Control and certification are mostly carried out by for eign enti ties although local struc tures are being set up in a number of coun tries.
(Production, development)

Benin
Benin produces some quantities of dried fruits and nuts, oil-seeds like palm, coconut and sesame, and cotton. Useful addresses
Association ORUKUTUKU BP 80, Dassa-Zoum Tel/Fax: +229-324300 (Production, development) PADEC - Kandi Projet dappui au dveloppement dans la circonscription urbaine de Kandi BP 90, Kandi Tel: +229-630013 (Development)

Burkina Faso
This was the first African country to host the bien nial IFOAM International Scientific Conference and General Assembly (in 1989). At that con fer ence the Dec la ra tion of Oua ga dougou was launched: it states that organic agri cul ture in devel oping coun tries is not a luxury but a precondition for attaining food self-sufficiency. Burkina Faso is member of the IFOAM African francophone group (see section on Senegal). The country produces some fresh fruit (mango), millet, oil crops (sesame seed), pulses, sorghum, vegetables and other products for domestic consumption. It engages in a small export trade, mainly in sesame seed, predominantly to Belgium and France. The rediscovery and reu tili za tion of the tra di tional zai method in the Sahel area, abandoned for about 50 years, is making it pos sible to regain deser ti fied land. The method consists of hacking holes of a depth and width of 30 centimetres into the

Algeria
Algeria has the begin nings of an organic agri cul tural sector. It produces dried fruit (dates) and exports some of this, mainly to the Euro pean Union. Useful address
ECO MRK Institut des sciences de la nature de lUniversit de Bejaia DZ-Tizi Ouzou 15000 Tel: +213-5214334 Fax: +213-5214332 E-mail: tizi@cerist.ist.dz

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stone- hard lat erite soil. Com posted manure and then some millet or sorghum seed and some pulses are sown into the holes. Stone dikes 10-20 centimetres high are built, forming parcels and preventing rain water (when it comes) from flowing away. Hedges are planted next to the dikes, strengthening them. Ani mals are fenced in or guarded so that they do not eat the young plants and hedges. The soil recu per ates sufficiently after three harvests to be ploughed nor mally again. In this country, where close to half of the popu la tion lives below the threshold of poverty, distribution is rudimentary. A number of NGOs and farmers and womens asso cia tions (such as SSSSSS the Six S) are active in organic agriculture in the Sahel area. Their goal is not only to help the population attain food self-sufficiency but also to stop desertification and to regain land both in the north, where the Sahel desert advances, and in the south where defor es ta tion causes heavy ero sion. The Ligue des con som ma teurs in Ouagadougou promotes organic agriculture and defends consumers rights vis--vis the authorities and eco nomic opera tors. Useful addresses
ABC (Agri Bio Conseil) BP 2545, Bobo-Dioulasso Fax: +226-970850 (Development, consultancy) AVAPAS (Association agrocologistes au Sahel) Aned La Baoogo PO Box 8095, Ouagadougou 04 Tel: +226-308499 Fax: +226-310618 (Producer, processor) INADES (Institut africain pour le dveloppement conomique et social) 01 BP 1022, Ouagadougou 01 Tel: +226-302070; 340341 Fax: +226-340519 E-mail: inades@bfasonet.bf (Production, development) Ligue des consommateurs du Burkina Faso BP 6936, Ouagadougou 1 Tel/Fax: +226-315570 E-mail: icb.ben@fasonet.bf (Production, development, and safeguarding consumer interests)

Burundi
Burundi produces fresh fruits such as avocados, bananas, man goes and pine ap ples.

Cameroon
Cameroon produces and exports some fresh fruits (pine ap ples, papayas, bananas) and vege ta bles. Useful addresses
CAIPE (Centre dappui initiatives paysannes dEbolowa) BP 132, RFC-Ebolowa Tel: +237-283618 Fax: +237-281034 (Production, trade) Export Agro sarl BP 4524, Douala Tel: +237-401024 Fax: +237-400613 E-mail: export.agro@camnet.cm (Producer, exporter) SAP (Sustainable Agroforestry Promoters) PO Box 514, RFC-Bamenda Fax: +237-362111 E-mail: allied-engineers@compuserve.com (Production, consultancy)

Cape Verde
An export- oriented banana proj ect is in an advanced stage of devel op ment.

Comoros
Organic agriculture is just beginning on this archi pelago in the Indian Ocean. Some quan ti ties of spices (e.g. vanilla) are being pro duced.

Cte dIvoire
The country pro duces some cocoa and coffee. It exports some quan ti ties of cocoa to the Euro pean Union. Useful address
IACO (Inter-African Coffee Organization) BP V 210, Abidjan Tel: +225-216131; 216185 (Production, development)

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Democratic Republic of the Congo


Organic pro duc tion is in its first stages. Useful address
CANAEL (Comit de lanimation dEntre Lubau et Ntumina) BP 39, Eglise Kimbaguiste Ave. Bongolo 44, Kinshasa

Certification
The Egyp tian Bio dy namic Asso cia tion (EBDA) has its own cultivation standards and regulations. Both COAE and EBDA cooperate with universities and research institutions for the further development of Egyptian standards for organic farming. The Swiss-German body IMO supervises the countrys inspec tion sys tems. Useful addresses
COAE (Centre for Organic Agriculture in Egypt) Faculty of Agriculture, Ain Shams University PO Box 1535, Alf Maskan , ET-11757 Cairo Tel/Fax: +20-2-2818886 E-mail: sekem@sekem (Production, development) EBDA (Egyptian Biodynamic Association) PO Box 2834, El Horreya, ET-Heliopolis, Cairo Tel: +20-2-2807994 Fax: +20-2-2806959 E-mail: klaus@sekem.com (Development) ECOA (Egyptian Centre of Organic Agriculture) 18 Mena Street, Dokki, ET-Giza Tel/Fax: +20-202-3618717 (Inspection) Sekem PO Box 2834, El Horreya, ET-Heliopolis Tel: +20-22807994 Fax: +20-22806959 E-mail: sekem@sekem.com (Producer, processor, wholesaler) UGEOBA (Union of Growers and Exporters of Organic and Biodynamic Agriculture) 3 Cumbeese Street, ET-12311 Dokki-Giza, Cairo Tel: +20-2-3484252 Fax: +20-2-3601028 (Production, development)

Egypt Production
The Sekem group ini ti ated and gave a strong impetus to organic farming in Egypt in 1978. It is involved with COAE, the Centre for Organic Agriculture in Egypt, established in 1990 to promote organic farming and to advise and assist organic farmers. In 1998, 150 farms covering 5,000 acres were in operation, largely following biodynamic standards. Crops include fruits, both fresh and dried (apricots, bananas, citrus, dates, grapes, mangoes); grains (barley, rice, wheat); herbs ( basil, dill, paprika, spearmint); leg umes, dried (peas, beans); medicinal plants; roots and tubers (potatoes); vegetables (cucumbers, eggplants, garlic, onions, squash, tomatoes); spices (caraway, cori ander, paprika, pepper); and tea. Livestock farming also takes place (dairy cattle, sheep; pigeons), as does some apiculture. Cotton is also produced. Egypt is member of the AgriBioMediterraneo (see Italy) and of the IFOAM African anglo phone group (see Kenya).

Processing and trade


Many products are processed through the Sekem group. On the domestic market, these are sold as food and phyto- pharmaceuticals to super mar kets, spe cialized food shops and phar ma cies. Exports are con siderable and are rising. Agrofood Organic Egypt in Cairo is an exporter of herbs, spices and vege ta bles. The main export crops are fresh fruits and vege ta bles (more than 6,000 tons yearly), herbs and medicinal plants (around 200 tons yearly), and cotton. The main mar kets are the Euro pean Union and Swit zer land

Ethiopia
Ethiopia is an important coffee-producing country. An ITC proj ect is assessing the fea si bility of organic farming and of estab lishing a cer ti fi ca tion system in the country. Ethiopia is member of the IFOAM African anglo phone group (see Kenya).

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The major varieties of coffee include yergacheffe, harrar and sidamo, which may be exported in organic form in the future. Useful address
Coffee & Tea Authority PO Box 3222 Addis Ababa Tel: +251-1518088 Fax: +251-1517293 (Production, consultancy)

Useful addresses
Ghana Export Promotion Council PO Box 146, Accra Tel: +233-21-228813 Fax: +233-21-668263 GOAN (Ghana Organic Agriculture Network) PO Box 6342, GH-Kumasi Tel: +233-51-20954 Fax: +233-51-25306 (Production, development) TOFA (Traditional Organic Farmers Association) PO Box 71, GH-Mampong Akrofoso Fax: +233-21-777098 (Production, consulting)

Gabon
Gabon is taking its first steps towards estab lishing an organic sector. Some quan ti ties of organic cocoa are now being pro duced.

Gambia
The Gam bias nas cent organic sector pro duces some oil crops (e.g. sesame seed). Useful address
Farato Farms PO Box 142, 79 Hagan Street, Banjul Tel/Fax: +220-227869; +220-226148 (Production, development)

Guinea
Organic agri cul ture in Guinea is at an early stage. Useful address
CePATA (Centre de promotion agricole et de technologies adaptes) PO Box 530, Conakry Tel/Fax: +224-443291 (Production, processing)

Ghana Kenya
Ghana pro duces cocoa; fruits, fresh (bananas, papayas, mangoes, pineapples); nuts (peanuts) and vegetables, fresh. It has many wild tropical fruits, herbs, nuts and vegetables, whose potential for cultivation and mar keting has not yet been explored, but which could broaden the organic product range on the world market. The Tra di tional Organic Farm ers Asso cia tion (TOFA) and various other groups and NGOs pro mote tra di tional organic farming sys tems. Organic farming in Ghana has good potential for further development. As it is, the use of chemical inputs is restricted to the large com mer cial farms and market gar dens around the cities, which account for only a small pro por tion of overall food pro duc tion. With two weekly open-air markets in Accra, the national market is growing. The export trade with the Euro pean Union is prom ising. There is no certification body in the country and smallholders depend on sponsored international inspec tion and cer ti fi ca tion. Ghana is member of the IFOAM African anglo phone group (see Kenya).

Production and trade


Various Kenyan NGOs actively promote organic agriculture by establishing demonstration farms for small farmers and extension workers. Certified production for export is in its infancy; the cer ti fi ca tion of maca damia nuts (by a German entity) started in 1996. Organic vegetables, dried legumes (beans), tea and cotton are also pro duced. The Kenya Institute of Organic Farming (KIOF) under takes activi ties to create aware ness of organic farming and carries out training courses on organic farming techniques. Since 1993, KIOF has been working on a research proj ect to assess the on- farm potential of organic farming techniques under different agro-ecological and socio-economic conditions. Certified macadamia nuts are exported, though no figures were made available for this study. It is possible to find organic products locally, but the market is very small.

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Kenya is member of IFOAMs anglo phone African group, which has its seat at KIOF.

Fax: +254-2-521001 E-mail: meckert@cgnet.com (Production, processing) KIOF (Kenya Institute of Organic Farming) PO Box 34972, Nairobi Tel: +254-2-583194; +254-2-583383 Fax: +254-2-583370 E-mail: kiof@iconnect.co.ke SACDP (Sustainable Agriculture Community Development Programme) PO Box 44752, Nairobi Fax: +254-2-331276; +254-2-225725 (Production, development)

Certification
There are no national stan dards for organic farming. However, the Kenya Organic Farmers Association, which is in the process of being formed, plans to draw up organic stan dards. In coop era tion with the United King doms The Soil Asso cia tion, the Asso cia tion for Better Land Husbandry (ABLH) has started developing standards, which will be based on the standards of The Soil Association but adapted to con di tions in Kenya.

Potential
There is no doubt that Kenya has good possibilities for the further production and trade in organic prod ucts. It is believed that it has good con di tions for pro ducing sesame seed, and fresh and dried fruits, for which reason a trade promotion programme was ini ti ated in 1997. It also has favour able con di tions for cotton production and a related programme was started in 1997. Kenya has an excellent supply base and an existing export infrastructure (it is already a significant exporter of conventionally produced fruits and vege ta bles, flowers and other prod ucts). Fur ther more, there seems to be great interest in organic agri cul ture among farmers, extension agents, NGOs and other associations. Several activities are already being undertaken, including the training of stu dents and research. Some collaboration will take place with a GTZ agro-forestry project, covering, for example, the planting of mango trees. Useful addresses
Export Promotion Council Anniversary Towers 1st & 16 th Floors University Way PO Box 40247 Nairobi Tel: +254-2-228 534 Fax: +254-2-218 013, +254-2-228539 ITFSP (Integration of Tree Crops into Farming) ICRAF House, UN Avenue c/o GTZ Office PO Box 47051, Gigiri Tel: +254-2-522887

Madagascar Production and certification


The controlled production of organic food products in Madagascar began in 1990 in collaboration with the German company Rapunzel and the French com pany Man timex. The first cer ti fied prod ucts were oils (palm oil, coconut oil), cashew nuts and spices (vanilla). Today several producers are certified by Ecocert. The product groups currently produced (with some exam ples of spe cific items) are listed below:
q q q q q q

Cocoa; Coffee; Essential oils; Fruits, dried (orange, papaya, pineapple, mango);

Fruits, fresh (apples, passion fruit, litchis, gooseberries); Fruits, processed (fruit juices and pulp of pineapple, mango, papaya and banana);
q q q

Herbs and spices (vanilla, clove, allspice, pepper, nutmeg, mace, cinnamon, ginger, chilli); Honey;

Oil crops (coconut) and oils (coconut, pine, palm, geranium, lemon grass, green pepper);
q q

Sugar cane, sugar cane molasses and syrup; Vegetables, fresh (green beans).

Some new processing activities are starting, including a joint ven ture with a French com pany.

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The producers include both small to medium-sized family-run farms and larger plantations. Some of the latter are State- owned, pro ducing coco nuts for instance; others are privately owned and produce palm oil, for example. Around 1,000 farm fami lies are thought to be involved in the pro duc tion of organic prod ucts.

Trade
Organic products are produced mainly for export; Ger many is a major market. The failing infra struc ture has impaired Madagascars export potential con sid erably. Some exporters and the prod ucts they handle are listed below:
Exporter Agrico Agropole Location Antananarivo Tamatava Product Fruits and essential oils Edible oils Pharmaceuticals Exotic fruits and spices Spices, cacao and coffee Vanilla and essential oils Essential oils Rum

Malawis output includes bambara nut, beans of various kinds, cal en dula, cay enne pepper, chamo mile, chilli, coriander seed, cumin, dill, echinacea and annato, fennel, ground nuts, hibiscus, lav ender, lemon grass, lemon ver bena, melissa, pigeon pea, rose mary, sesame seed, sunflower seed and sugar cane. These products are exported by two of SHOGAs larger mem bers (see above). Their main market is Ger many; the United Kingdom and the United States are also export des ti na tions. Some prod ucts have likewise been sent to Zimbabwe. The export trade is organized through SHOGA. The cold pressing of oils is sched uled to start in 2000, and a still for essen tial oils is planned. There seems to be a small domestic market for cer ti fied and non- certified organic prod ucts. Organic honey, for instance, can be found in one local store. Ecocert takes care of inspection and certification. There are no local inspec tion or cer ti fi ca tion bodies, and no offi cial stan dards for organic farming.

ExpamAntananarivo Homeopharma La Bouffe Antananarivo Millot Antananarivo Pabiom Phael Flor Satrana Antsiranana Antananarivo Taomasina

Potential
Malawi has good con di tions for the pro duc tion of a wide range of tropical, subtropical and certain tem perate zone crops. In addition, SHOGA can provide technical advice and assistance on organic farming, market access, and arranging and preparing for inspection and certification. Some members have considerable experience and expertise in the production, inspection and export of organic products. Malawi therefore has a good potential for the further development of organic production and trade, including that of new products, e.g. organic food additives and organic pesticides. Useful addresses
Lipangwe Organic Manure Demonstration Farm PO Box 26, Matale, Ntcheu Fax: +265-671427 (Production, development) MEPC (Malawi Export Promotion Council) Delamere House, Victoria Avenue PO Box 1299, Blantyre SHOGA (Shire Highlands Organic Growers Association) PO Box 930, Blantyre

PROMABIO, a company in Antananarivo, coor di nates the activi ties of organic exporters. Useful address
PROMABIO Lot II N 184 Ter Besarety, RM-Antananarivo Tel: +261-20-2242499 Fax: +261-20-2226921 E-mail: agrico@bow.dts.mg (Exporting)

Malawi Production, trade and certification


Shire Highlands Organic Growers Association (SHOGA) is the main promoter of organic pro duc tion and trade in Malawi. Founded in 1995, it has 13 active mem bers and a number of small- farmer associate members. These members are primarily engaged in the production of organic herbs and spices. The bulk of pro duc tion is car ried out at two of the larger farms, on certified areas of 30 and 50 hec tares respec tively. Herb proc essing and pack aging facili ties for export have been set up. Several other small independent organizations and NGOs are inter ested in pro moting organic farming in the country.

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Tel: +265-671355/671182 Fax: +265-671427 (Production, processing, trade)

Perpignan for distribution throughout EU. A major brand is ECOFARM, marketed, among others, by the growers Kohar sa in Taroudant. Certification is carried out by the German leg of Eco cert, Eco con trol GmbH. Useful address
Magrebio 5, Route Inara Hay Lelbahja Tel: +212-4492104 Fax: +212-4492101 (Development

Mali
Organic agri cul ture in Mali has just begun. Useful address
GRAT (Groupe de recherches et dapplications techniques) BP 2502, Bamako Tel/Fax: +223-224341 (Production, development)

Mauritius Mozambique
Organic sugar has been pro duced since 1991 and has mainly been cer ti fied by the British cer ti fi er OF&G. Among the other products are fresh fruits (litchis, pineapples, mangoes) and spices (chilli paste, pepper). In 1995, 650 tons, mainly of cane sugar, were exported from three farms with a total area of around 175 hec tares. The area has since been reduced owing to lower yields and the higher costs of weed con trol. The United Kingdom and France are the main customers. Mauritius is member of IFOAMs anglophone African group (see Kenya). Useful address
IOAEN (Indian Ocean Agro-Ecology Network) 11, Royal Street, Mont Ida Tel/Fax: +230-4165080 E-mail: apj1kd@bow.intnet.mu (Control, development)

Some nuts are being pro duced. Cashew nuts are an example. Useful address
AMRU (National Asso cia tion for Rural Women Development) PO Box 1892, Maputo Tel: +258-1-422809 Fax: +258-1-422893 (Pro duc tion, devel op ment)

Nigeria
Organic agri cul ture in Nigeria is at its ini tial stages. Useful addresses
Regfoss Green Commission 7, Murtala Mohammed Way Jos, PO Box 531, WAN-Jos Plateau State Tel: +234-73-454668 Fax: +234-73-55202 (Production, development) Village Pioneer Project PO Box 1622, Akure, Ondo State, WAN-Nigeria (Production, development)

Morocco
Production includes fresh fruits (citrus, which has become an impor tant export to the Euro pean Union); fresh vegetables (such as tomatoes); dried fruits (dates); olives; dried leg umes; spices and herbs (basil, mar joram). There is no formal domestic market as yet. All produce is exported to the European Union. In the past this was done through Bio-Maroc, an organization that is no longer in existence. Nowadays, the trade is handled by the individual growers who sell mainly to French importers in

Senegal
In Senegal, several NGOs pro mote organic farming practices among smallholders. Self-sufficiency in food is the pri mary goal and exporting the sec on dary objective. Fruits (mangoes) and vegetables are among the main products with export poten tial. Initia tives are being taken to set up a national cer ti fi cation body.

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Senegal has good poten tial for the pro duc tion of fresh fruits like papayas and melons, dried fruits, cashew nuts and cotton. Useful addresses
Agrecol Afrique BP 234, SN-Mbour Tel: +221-9563215 Fax: +221-9564202 E-mail: agrinat@enda.sn (Production, development) ASPAB (Association sngalaise pour la promotion de lagriculture biologique) BP 412, SN-This Tel: +221-511237 (Production, certification) PRONAT ENDA 54 rue de Carnot, BP 3370, SN-Dakar Tel: +221-225565, Fax: +221-8222695 E-mail: pronat@enda.sn (Production, development)

imports from Zim babwe. Borneo Fruit in Lady brand and Kirlington Organic Farm in Ficksburg are prominent fruit exporters, Meadowsweet Farm in Win terton exports herbs, spices and herbal tea to the European Union (e.g. to Denmark, France, Sweden and the United Kingdom). Among the other pro ducers are Organic Herbs Farms (Cape Town) and Coetzee and Coetzee in Kuils rivier. The main whole saler is Uni foods in Durban. The local South African market is developing. Organic foods are sold in a number of specialized stores. Supermarket chains such as Shoprite Checkers, Pick nPay, Woolworths and Hyperame sell some organic foods, mainly in their health food sec tions. Particularly around Johannesburg, much of the production and local trade is coordinated by Wensleydale Farms. They supply a wide range of fruits, berries and vegetables to some supermarkets, e.g. Pick n Pay, as well as direct to private customers. Products are labelled organically grown. In the same area, there is a weekly open market for organic produce.

Sierra Leone
Sierra Leone has taken its first steps towards devel oping an organic sector. Useful addresses
FOE (Friends of the Earth in Sierra Leone) PM Bag 950, 33 Robert Street, WAL-Freetown Tel: +232-22-226511 Fax: +232-22-224439 (Production, development) KEIOF (Kenema Institute of Organic Farming) 9 Hangha Road, PO Box 165, Kenema Fax: +232-22-229076 (Production, development)

Certification
There is no legislation on organic production and labelling. Several foreign certifiers, including The Soil Association, Ecocert and SKAL, are active in the country. Discussions are also taking place on the setting up of a local certification programme. Useful addresses
BDAASA (Bio Dynamic Agricultural Association of South Africa) PO Box 115, ZA-Paulshof 2056, Sandton Tel: +27-11-8031688 Fax: +27-11-8037191 E-mail: jamesmoffet66@hotmail.com (Production, development) OAASA (Organic Agricultural Association of South Africa) Box 1975, ZA-Kelvin 2054 Tel/Fax: +27-11-7062672 E-mail: organic@lesoff.co.za (Control, certification) Organic Herb Farms 601 Costa Brava, 299 Beach Road PO Box 4336, Cape Town

South Africa Production and trade


Over the last few years South Africa has gained importance as a producer and exporter of organic products. Its output includes fresh fruits (mangoes, avocados, litchis), vegetables, herbs and spices, and cane sugar. There are about 35 organic growers in all. South Africa exports and imports organic products. For instance, it exports to the European Union and

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Tel: +27-21-4397816 Fax: +27-21-4394732 (Production and trade) Wensleydale Farms Bryanston 2021 PO Box 71085 Tel: +27-12-6500064 Fax: +27-12-6500207 E-mail: wensley@netactive.co.za Western Cape Organic Agricultural Society PO Box 611, Stellenbosch Tel/Fax: +27-21-8548904; +27-083-4614567 E-mail: gorganic@iafrica.com

farms and one company were certified to EU standards. They included one tea plantation of 230 hec tares, a pri vate farm of 350 hec tares, a farm of 40 hectares producing essential oils, and an enterprise that pro duces spices on around 300 hec tares on the basis of land leases and con tracts with small holders. These four enter prises have so far exported black tea, hibiscus tea, essen tial oils and spices. Since 1995, an increasing number of farmers have started pro ducing essen tial oils and spices. Some packing of spices and cracking of cashew nuts take place. A certain amount of cotton is produced under the aus pices of a tex tile com pany that has con tracts with small-scale cotton producers. The company also organizes certification, processing into cotton yarn and exporting. The yarn is exported to Swit zer land. One company, Kimango Farm Enterprises Ltd (in Moro goro) exports herbs and spices, fresh and dried fruits (papayas, mangoes, guavas), herbal tea and other products. Zanz-Germ Enterprises (Zanzibar) exports a wide variety of herbs and spices. The Zan zibar State Trading Cor po ra tion, also in Zan zibar, exports essen tial oils. Sev eral NGOs pro mote organic cul ti va tion prac tices in the country by training small holders and exten sion workers. The Tan za nian Society of Organic Farming (KIHATA), an umbrella organization of groups working on sustainable agriculture, has been estab lished. Much of the coun trys output is cer ti fied by Euro pean bodies like IMO and The Soil Asso cia tion. There is a local inspector in Zan zibar, and inspec tors from Kenya and Zambia are also used. The United Republic of Tan zania has no offi cial organic farming stan dards.

Sudan
Organic agri cul ture in the Sudan has just begun. Its output includes fresh fruits (citrus), oil crops ( sesame seed), grains and poultry prod ucts.

Tanzania, United Republic of Production, trade, certification


Some of this countrys output by product group are listed below; some exam ples of spe cific prod ucts are also given.
q q q q q

Cotton; Essential oils (lemon grass);

Fruits, dried (banana, pineapple, mango, papaya); Fruits, fresh (citrus, papaya, guava, mango);

Herbs and spices (cinnamon, ginger, vanilla, chilli, pepper, nutmeg, cardamom, clove, curry, lemon grass);
q q q

Potential
The country appears to have good potential for organic pro duc tion. How ever, farmers need training and there are sev eral hur dles to be over come in order to increase exports, especially in relation to infra struc ture and product quality. Useful addresses
Board of External Trade Trade Fair Grounds PO Box 5402, Dar es Salaam Tel: +255-51-851706 Fax: +255-5-851700 E-mail: betis@intafrica.com

Honey; Nuts (peanuts, cashew nuts);

Oil-seeds (sunflower) and oils (palm oil, sunflower oil);


q q q

Tea (black tea, hibiscus tea); Vegetables, fresh (peas);

Vegetables, processed (garlic and onion powder). In all, more than 4,000 hec tares have been cer ti fied organic and this area is increasing. In 1993, three

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KIHATA (Chama Cha Kilimo Hai Tanzania) PO Box 208 c/o Kilimo Cha Mseto, Peramiho Fax: +255-6352917 (Production, development) Kimanga Farm Enterprises Ltd PO Box 642, Morogoro Fax: +255-56-4714 Swedish Export Promotion of Organic Products from Africa (EPOPA) Programme PO Box 71393, Dar es Salaam Tel: +255-51-131205; +255-51-118239 Fax: +255-51-131205 E-mail: pjm@raha.com Zanz-Germ Enterprises Ltd PO Box 3369, Zanzibar Tel: +255-811-326440 Fax: +255-811-321072 E-mail: zanz-germ@cctz.com

Useful address
ITTA (Institut tunisien de technologie applique) BP 61, 4042 Chatt Mariem Tel/Fax: +216-3-210188; +216-1-276656 (Production, development)

Uganda Production and trade


Uganda produces fresh fruits and vegetables (pine ap ples, pas sion fruit, bananas, avo cados), roots and tubers (sweet pota toes), dried fruits (pine apple), oil-seeds (sesame, sunflower), dried legumes (soy beans), coffee, cocoa, herbs and spices (vanilla, ginger, chilli), and honey. More than 30 organizations promote the organic production of a variety of items, including dairy products in Bukonyo county. One of the largest ventures is the Lango cotton proj ect, in which 5,000 farmers participate. The Department of Social and Economic Development (SED) carries out training programmes in rural communities and has a dem on stra tion farm. Most of the farmers trained have diver si fied their pro duc tion. There are also Good Food (see the Netherlands) projects producing dried fruits and edible nuts. One com pany has been exporting fresh tropical fruits and vegetables from controlled organic farms on a contractual basis since 1993. Among the countrys export products are certified organic cocoa, coffee, ginger, pine ap ples, sesame and sweet bananas.

Togo
Production includes fresh fruits (bananas, mangoes) and dried fruits (pineapples, papayas, mangoes), processed fruit, oil crops (coconuts), stimulants (coffee and cacao) and spices (ginger). Useful addresses
ASDEB (Action solidaire pour un dveloppement entretenu la base) Rue No 106, Avenue Togo-Gaz, BP 3771, Lom Tel/Fax: +228-227427 (Development) GJED BP 536, Kpalim Tel/Fax: +228-410280 and +228-410076

Certification
There are no offi cial stan dards for organic farming in Uganda and no local inspection or certification bodies. Among the inter na tional inspec tion agen cies active in the country are IMO, KRAV and SKAL. Both KRAV and SKAL have trained local inspec tors in order to cut costs.

Tunisia
Production includes fresh fruits (citrus) and vegetables (tomatoes), dried fruits (dates), nuts, oil crops (olives) and herbs. Some farms use bio dy namic farming methods. Several Italian and German importers have set up organic proj ects in Tunisia. Exports to the European Union are rapidly increasing. Medifruit in Borj Cedria and WTCO in Kebill are date exporters. Tunisia is member of the AgriBioMediterraneo group (see Italy).

Potential
Uganda has good natural conditions for organic agriculture and many crops can be grown. Much of the agricultural land is cultivated by smallholders without recourse to agro-chemicals, and traditional mixed farming sys tems remain in use in some places.

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How ever, because of increasing pres sure on the land, tra di tional farming sys tems may not be sus tain able in many places in the long run. The main export constraint is the lack of companies with enough capital to buy organic products for export and to arrange for cer ti fi ca tion. Useful addresses
DENIVA (Development Network of Indigenous Voluntary Associations) PO Box 11224, Kampala Tel: +256-41-531150; +256-41-530575 Fax: +256-41-531238 E-mail: deniva@informa.com SANU (Sustainable Agriculture Network of Uganda) PO Box 281, Kampala Tel: +256-41-530575 Fax: +256-41-531236 (Production, development) Uganda Export Promotion Board Plot 17/19 Jinja Road PO Box 5045, Kampala Tel: +256-41-230250; +256-41-259779 Fax: +256-41-259779 E-mail: uepc@starcom.co.ug

company, Four Seasons, has a product range that includes soy products, peanut butter, herbs and spices, herbal teas, essential oils, sauces, pastas, jel lies, grains and pulses. Its output is cer ti fied by the British cer ti fier Organic Farmers & Growers Ltd, and is exported through distributors in Europe, North America, Aus tralia, Japan and South Africa. Several firms have started mar keting their prod ucts packed for final consumption under various brand names. Around 50% of the certified production is exported, the rest is mar keted in- country. In addi tion to Europe, Aus tralia, the United States and Canada, South Africa is a significant importer of organic prod ucts from Zim babwe. Useful addresses
Africa Centre for Holistic Resource Management PO Box MP 266, Mt. Pleasant, Harare Tel/Fax: +263-4-732360 E-mail: root@achrm2.icon.co.zw Four Seasons Foods P. O. Box AY 56, Amby-Harare Tel: +263-4-487832; +263-4-487559 Fax: +263-4-486178 (Production, trade) Horticultural Promotion Council Agricultural House Corner Adylins Road/Mulbury Drive POB WGT 290 Harare Fax: +263-4-309853 E-mail: hpc@cfu.co.zw (Supports organic agriculture) Nature Nurture (Pvt.) Ltd Private Bag 2003, Ruwa Tel: +263-73-2771/2 Fax: +263-73-2321 (Production) NFN (Nature Farming Network) 8 Elseworth Avenue Box CY 301, Causeway-Harare Tel: +263-4-731541 Fax: +263-4-723056 E-mail: action21@pc1.co.zw (Development) ZOPPA (Zimbabwe Organic Producers and Processors Association) PO Box BW1011, Borrowdale Tel/Fax: +263-14882094 E-mail: xyloscopa@baobab.cszim.co.zw (Production, processing, trade)

Zambia
Zambia produces some organic products, including honey. Useful address
Export Board of Zambia Fifth Floor, Woodgate House Cairo Road, South End, Lusaka Tel: +260-1-228106; +260-1-228107 Fax: +260-1-222509; +260-1-222259

Zimbabwe
In 1993, some farmers started to grow commercial organic prod ucts and organ ized them selves into the Zimbabwe Organic Producers Association (ZOPA), now ZOPPA. The area under production is about 1,000 hectares. Out puts include essen tial oils, herbs (e.g. basil), spices and spice preparations (barbecue seasonings, cayenne pepper), fruits, soy beans and cocoa. Certification is carried out by a British certificationbody. Under the Nature Farming Network of Zimbabwe, around 10 NGOs work together in organic agriculture, mainly for home consumption. One

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Other countries in Africa


In December 1998, there appeared to be no cer ti fied organic agriculture in the following countries: Angola, Bot swana, Cen tral African Republic, Chad, Congo, Djibouti, Equatorial Guinea, Eritrea, Guinea-Bissau, Lesotho, Liberia, the Libyan Arab

Jamahiriya, Mauritania, Namibia, Niger, Rwanda, Western Sahara, Sao Tome and Prin cipe, Sey chelles, Somalia and Swa zi land. How ever, ini tia tives may have been taken in some of these coun tries to develop organic farming.

Asia
Organic pro duc tion takes place, though gen er ally on a very small scale, in most Asian countries. It is prac tised to reach self- sufficiency in food, to improve soil fertility, or to engage in the export trade. It is organized by individual farmers, farmers and womens organi za tions and a wide variety of NGOs. In almost all countries local distribution is a huge problem. Often, it does not exist or is impro vised and generally provides no price premium. Access to technical assistance and reasonable forms of credit remains dif fi cult. Israel, Japan and, to a much lesser extent, Malaysia and the Philippines have distribution systems involving supermarkets as well as spe cial ized stores. Israel and Turkey are impor tant producers of a variety of food prod ucts, but mainly dried and fresh fruits and vegetables, and nuts. Among the other sig nifi cant pro ducing coun tries are China, India, the Republic of Korea and Sri Lanka; their output includes cocoa, coffee, essential oils, herbs and spices, peanuts, rice, tea and vanilla. The Asiatic areas of the Russian Federation have some pockets of impro vised organic agri cul ture without a structured market. Israel and Japan have become organic importers as well as exporters. Certification becomes an issue if organ ized national or export mar kets are to be devel oped. China, India, Israel and Japan have well-established control and certification bodies; some other countries are establishing similar entities. Nevertheless, foreign con trol and cer ti fi ca tion bodies remain active in Asia since only Israel has so far obtained equiva lency with the stan dards of the Euro pean Union.

Bangladesh
Bang la de shs organic output includes herbs and tea. Useful addresses
PROSHIKA-PRO-Training SHI-Education, KA-Action Central Training Center, PO Koilla Dist. Manikgonj Tel: +880-2-09333127 Fax: +880-2-805811 (Production, development) SCI Bangladesh Moudubi Health & Agriculture Development Project 6/5 Sir Syed Road, 1E floor, Block A Mohammedpur, Dhaka 1207 Tel/Fax: +880-2-9113623 Fax: +880-2-810254 E-mail: sci@citecho.net (Production)

China Production
From 1995 to end-1997 the area under certified organic production increased from around 450 hectares to about 4,000 hectares. In addition, about 10,000 hec tares in the wild have been cer ti fied. China produces about 40 items within the product cate go ries listed below; sample items are also given.
q q q q q

Fruits, processed fruit ( juices); Fruits, fresh (apples); Grains (rice, wheat, buckwheat, maize); Herbs and spices (ginger); Honey;

Azerbaijan
Initial steps are being taken to develop organic farming. One project, which produces apples, is on the verge of being cer ti fied by SKAL.

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q q q q q

Legumes, dried (soybeans, beans); Nuts (chestnuts, walnuts, peanuts); Oil crops (sesame, pumpkin, sunflower) and oil; Tea; Vegetables.

China also offers specialties like sea-buckthorn oil, con cen trate and powder.

developed standards for production, processing and labelling; has set up inspection, certification, research, extension and training facilities; and has initiated a promotion network. It is now the main Chinese certifier. SKAL (of the Netherlands) and OCIA (of the United States) have con trib uted to the devel op ment of cer ti fi ca tion in China. The German BCS, the Swiss IMO and the American QAI (Quality Assurance International) are also active in this field.

Potential Trade
The domestic organic market is being organized under the initiative of the China Green Food Development Centre and others. Production is strongly export- oriented. The first fully organic food trading com pany, Winged Ox Organic Food Co. Ltd, was formed in 1995 and since then four other companies have been established. The overall turnover has risen almost tenfold in recent years to reach an esti mated $600 mil lion in 1997/98. A growing array of products is finding markets in Europe, Japan and the United States. Records show that certified organic tea was exported to European coun tries by the Import and Export Tea Cor po ra tion of Zhejiang Province as early as 1994. Organic soybean was exported to Japan for the first time in 1994. Some exporting com pa nies and their prod ucts are listed below:
q

China has an enormous potential as a producer of organic products. A survey has indicated, for instance, that around 30% of the tea pro duced in the moun tainous regions of Anhui and Zhejiang could be turned rela tively easily into organic prod ucts. Useful addresses
CGFDC (China Green Food Development Centre) 15, Guangximen Beili, Xibahe Chaoyang District, Beijing 100028 Tel: +86-10-64227205 Fax: +86-10-64221175 E-mail: cgfdc@agri.gov.cn (Development) China Dalian Free Tariff Zone Hei Agriculture Cultivation International Organic Food Development Co., Ltd 12-4 Qing Song Bel Economy and Technology Department Zone Dalian 116600 Tel: +86-411-7605917 Fax: +86-411-7602447 (Production and trade: soy, oleaginous seeds, pulses and vegetables) ICAIRD (Intercontinental Centre for Agro-ecological Industry Research) 17-206 Xijadatong, Golou, Nanjing 210008 Tel: +86-25-3602748 Fax: +86-25-3602748 E-mail: icaird@jlonline.com (Research, control) JROFT (Jiangsu Ruikang Organic Food Trade) 66-1 Chengxian Street, Nanjing 210018 Tel: +86-25-7712445 Fax: +86-25-3356700 E-mail: ruikang@public1.ptt.js.cn (Processing, trade) NA - Produce Green Foundation 18, Hok Tau Village, Hong Kong, Fanling N.T. Tel: +852-6741190

China Environmental Organic Food Company (Beijing): corn, peanuts, rice, sesame and spices;
q

Hei Agriculture Cultivation International Organic Food Development Co., Ltd (in the Dalian free tariff zone): produces and exports grains, oleaginous seeds, pulses, soy and vegetables;
q

Huan En Organic Food Trading Co. (Dalian development zone): exports soy to Japan;
q

Naturex Organic Foods Ltd (Jiangsu): dried fruits, edible oils, Suzhou noodles, sweets;
q

Winged Ox Organic Food Co. Ltd (Nanjing): peanuts, seeds, soy.

Certification
In 1994, the Chinese National Environmental Protection Agency established the Organic Food Development Centre (OFDC). The Centre has

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Fax: +852-6748077 E-mail: info@producegreen.org.hk Web site: www.producegreen.org.hk (Production, development) NOF (Naturex Organic Foods Ltd of Jiangsu) 233 Binhe Rd., Suzhou New District Suzhou 215011 Tel: +86-512-8254247 Fax: +86-512-8251347 E-mail: naturex@public1.sz.js.cn OFDC-SEPA (Organic Food Development Centre of China) 8 Jiangwangmiao Street PO Box 4202, Nanjing 210042 Tel: +86-25-5412926 Fax: +86-25-5420606 E-mail: ofdc@nj.jsinfo.net; xiaoxj@public1.ptt.js.cn (Control, certification) Winged Ox Organic Food Co. Ltd 85 Huju Road, Nanjing 210013 Tel: +86-25-3737169 Fax: +86-25-3710549

pea nuts), oil crops (sesame, coconut), dried leg umes, grains (rice), coffee, sugar cane, herbs and spices and other prod ucts. India is best known for its organic tea, of which it has numerous varie ties.

Trade
The home market is small and mainly informal. Production is largely export-oriented, with markets including the Euro pean Union, the United States and Japan. The number of organic traders is growing rap idly. Among them are the Amboothia Tea Group and Godfrey Phillips India Ltd, both based in Cal cutta and both exporters of tea. Another exporter is Enfield Agro base Pvt Ltd of Madras which trades in nuts, pea nuts, sesame, rice and dried fruits.

Certification
ENCON, formed in collaboration with The Soil Asso cia tion, cer ti fies Indian pro duce as well as those from some neigh bouring coun tries. Sev eral Euro pean and American inspec tion cer ti fi ca tion bodies are also active. The Swiss IMO has estab lished a sub sidiary in India (IMO Con trol). It is believed that India has tre men dous poten tial as a producer of organic products and further efforts to develop it are expected in the near future. Useful addresses
ENCON PO Box 575, Kanchan Nagar Nakshatrawadi, Aurangabad 431002 Tel: +91-240-332336/322828 Fax: +91-240-322866 (Certification) Ginni Exports 14 Madan Chatterjee Lane, Calcutta 700002 Tel: +91-33-2320138 Fax: +91-33-2330915 E-mail: ginni@giascl.vsnl.net.in (Production, trade) IIRD PO Box 12, Nakshatrawadi Aurangabad 41300, Maharashtra Tel: +91-240-332336 Fax: +91-240-331036 E-mail: iirdind@bom4.vsnl.net.in (Consultancy, development) IMO Control Umesh Chandravekhar 1037 29A Cross Rd, Jayanagar, Bangalore 560082 Tel/Fax: +91-80-6651772

Cyprus
Cyprus has two organic producers. Yiallourou has eight hec tares of vine yards with an output of 17,000 bottles of organic wine a year; it is controlled and certified by SKAL. The second produces a small quan tity of aro matic herbs, which are not cer ti fied. Useful address
Oekologiki Oenotechnia Yiallourou PO Box 1827, CY-Limassol Tel: +357-5-242730 Fax: +357-5-359009 (Production, trade)

Georgia
Organic agriculture is at an early stage.

India Production
Lord Albert Howard, one of the founding fathers of organic agriculture, developed his first composting methods in India around 1910. Organic agriculture gained impetus in the 1980s and now India pro duces a wide variety of organic prod ucts such as fresh and dried fruits (pineapples, bananas, pears), processed fruit (mango con cen trate), vege ta bles, nuts (cashew,

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E-mail: billy@giasbga.vsnl.net.in (Control, certification) IOAM (Indian Organic Agricultural Movement) 25/1, Yeshwant Niwas Rd, Shreesh Chamber Indore DIN 452003 Tel: +91-731-536813 Fax: +91-731-432869 (Inspection, certification)

Iraq
Organic agri cul ture is in its early stages. Useful address
ZQVP, Zakho Projects University of Dohuk, College of Agriculture Abid Ali Hassan, Dohuk, Kurdistan Tel: +964-62-682623815 Fax: +964-62-682623816

Indonesia Israel
In 1995, Indo ne sias output of organic food stuffs was insignificant. It consisted of wild fruits, vegetables, grains (rice), coffee and spices (vanilla, cinnamon, cloves) and herbs. Since then production has taken off, and vanilla has become an export crop. Further devel op ments are expected to take place. Useful addresses
Biotani Pan Indonesia-Biodinamika Pertanian Pan Jl. Persada Raya NE 1 RI-Menteng Dalam, Djakarta 12870 Tel/Fax: +62-21-8296545 (Inspection, certification) OAADC (Organic Agriculture & Agroforestry Development Centre) Sribhawono RT/ 05/RW 02 Labuhan Maringgar RI-Kabupaten Lampung Tengah, Lampung 34199 Tel: +62-21-8293967 and 8318967 Fax: +62-21-8293967 E-mail: ecodev@hotmail.com (Production, development) PPLH Seloliman (Pusat Pendidikan Lingkungan Hidup) PO Box 03 Trawas, Mojokerto 61375 East Java Tel/Fax: +62-343-80884 E-mail: ppl@sby.centrin.net.id Web page: http://www.webcom.com.com/pplh

In the beginning of 1999, Israel had close to 250 organic farms on roughly 2,100 hectares of land. In terms of their products, the farms are distributed as fol lows (some have sev eral cate go ries of prod ucts):
No. of farms 125 110 50 27 30 Products Vegetables Fruits Field crops Citrus Livestock Yearly volume 11,500 tons 6,500 tons 18,000 tons 17,200 tons 3 million litres of milk, 10 million eggs, 150 tons of meat, honey

Among the fresh vege ta bles, roots and tubers pro duced are carrots, celery, cherry tomatoes, Chinese cabbage, cucumber, fennel, garlic, iceberg lettuce, onions, potatoes (early), sweet corn, sweet potatoes, tomatoes and zuc chini. Fruits include avo ca dos, bananas, citrus, dates, grapes, man goes, melons and papayas. Bio dy namic farming is also prac tised.

Processing and trade


The country has about 20 packing houses; it also has proc essing plants pro ducing fruit juices, for example. Both North America and the Euro pean Union import fresh produce from Israel, especially fruits and vegetables. The country has an effi cient pro duc tion and marketing system, for the larger part based on collaboration between farmers and the State. Marketing is carried out by Agrexco, which has sub sidi aries in France, Ger many, the Neth er lands, the United Kingdom and the United States. About 16,000 tons of field crops, 13,000 tons of citrus, 5,000 tons of fruits, 3,000 tons of vege ta bles, and all of the livestock prod ucts are sold in Israels

Islamic Republic of Iran


Organic agriculture is in its initial stages of devel op ment in this country. Useful address
College of Agriculture, Ferdowski University PO Box 91775-1163, Mashhad Tel: +98-51-8108635 or +98-51-822939 Fax: +98-51-815845 E-mail: akooch@ferdowsi.um.ac.ir

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health food stores, local markets and supermarkets, or are proc essed. The bal ance is exported. Various organic products are imported by about 10 importers. Israel has its own organic regulations, which have obtained equiva lency with EU stan dards. It has its own certification agency, IBOAA (Israel Bio-Organic Agriculture Association). IBOAA issues its own certification label, Biotop. It is seeking IFOAM accreditation. Israel is a member of IFOAMs Medi ter ra nean group, AgriBioMediterraneo(see Italy). Useful addresses
Agrexco Ltd PO Box 20601, Tel Aviv 61206 Tel: +972-3-5630940 Fax: +972-3-5630918 E-mail: malchyy@agrexco.com Citrus Bio Organic Growers Association Kibbutz Gevolut, IL-85525 Kibbutz Gevolut Tel: +972-7-9983101 Fax: +972-7-9987900 (Production, trade) IBOAA (Israel Bio-Organic Agriculture Association) 121 Hahashmonaim St, IL-67011, Tel Aviv Tel: +972-3-5610538 Fax: +972-3-5618633 E-mail: iboaa_m@netvision.net.il (Certification)

q q q q

Pickles and fermented apricots (umeboshi); Sake (rice wine); Soy sauces like tamari and shoyu;

Tea, such as the special teas bancha, kukicha (twig tea) and green tea;
q

Ume-su (a fermented apricot genmai-su (whole rice vinegar).

vinegar),

Prod ucts now popular all over the world, such as rice cake and soy milk, origi nated in Japan. A fer til izer widely used in organic cir cles in Japan is a com posted mix ture of rice bran (sup plying cel lu lose) and okara (a by- product of the soy milk industry and supplying nitrogen). Organic livestock farming is non-existent. There is a very strong partnership, referred to as tei-kei, between organic farmers and con sumers. The consumers often supply pre-financing and other services, and the farmers provide an organic food basket at affordable prices. It is believed that more than 1 million Japanese consumers are involved in the tei-kei. However, no clear standards have been evolved for the tei-kei output and none of it is certified.

Manufacturing and trade


Production is aimed at both domestic and export markets, the national market being estimated at $1.3 billion-$1.5 bil lion in 1998. There are numerous organic processors and manufacturers, both small traditional family enterprises and large companies. Prestigious traditional companies such as Hatcho Miso Company and Sendai Company have an organic line. Health food shops carry organics all over Japan and an increasing number of super mar kets have included organic prod ucts in their assortments. The Jusko retail group carries the French La Vie brand. Japan has become a substantial importer of all organic consumer products, but is extremely demanding on quality aspects. One of the main imported raw materials is soy, obtained from the United States and else where and proc essed into such products as soy sauces and miso, partly for export. Large Japa nese com pa nies (for instance, Mit su bishi, Nissho Iwai and Kirin) are becoming increasingly involved in the trade. The Organic Bank is a strong pro moter of the trade.

Japan Production
Organic pro duc tion in Japan started in the 1930s, and has developed strongly since the 1970s. In the two decades since 1970, an increasing number of traditional Japanese food producers and processors have been converting to organic production. These com pa nies con tinue to export through com pa nies like Muso in Osaka and Mitoku in Tokyo to mac ro bi otic circles and natural food shops all over the world. Their prod ucts include the fol lowing:
q q q

Miso (a soy condiment); Mochi (a dried paste of steamed rice);

Noodles, including the specialities ramen, soba (buckwheat noodles) and udon;

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Certification
Japans official regulations on organic food pro duc tion are not clear and are often con fused with standards for low-input sustainable agriculture. Private organic standards are in use and the main certifier is JONA, which frequently works together with American and Euro pean cer ti fiers. Useful addresses
Japan External Trade Organization (JETRO) 2-5, Toranomon 2-chome Minato-ku, Tokyo 105-8466 Tel: +81-3-3582-570 Fax: +81-3-3582-5670 Web site: http://www.jetro.go.jp JONA (Japan Organic and Natural Foods Association) Aomori-Ken Blas Plaza, Sumitomo Building 5F 2-2-1, Yaesu, Chua-Ku, Tokyo 104-0028 Tel: +81-3-52017003 Fax: +81-3-32710701 E-mail: info@joandna.com (Inspection, certification) Muso Company 3-7-22 Nishitenma, Kita-ku, Osaka 530-0047 Tel: +81-6-6316-6021 Fax: +81-6-6316-6016 Email: yuko@muso.obicnet.ne.jp (Import, export) NOAPA (Nippon Organic Agricultural Products) Fukuroku Bldg, 2-7, Tsukasa-Cho Chiyoda-ku, Tokyo 101 Tel: +81-3-32955448 Fax: +81-3-32592884 E-mail: kikou@remus.dti.ne.jp Web page: http://www.yokohama.venture-web. or.jp/noapa/join.html (Control, development) Organic Bank Shibata Building 3F, 1-5-16 Nihonbashi Bakurocho Tokyo 103-0002 Chuo-ku Tel: +81-3-36601637 Fax: +81-3-36601638 E-mail: organic@po.iijnet.or.jp Web page: http://www:iijnet.or.jp/organic/ (Trade, development)

group north of Almaty. Prod ucts are sold locally and without certification. The Netherlands Agro Eco Con sul tancy group provides tech nical assis tance. Useful address
Zhana Zhol Aytiev Street 96, Almaty Tel/Fax: +7-3272-509266

Kyrgyzstan
There are several uncertified organic farmers ini tia tives. They carry out their own mar keting.

Lebanon
Organic agri cul ture in Lebanon has advanced to the stage of being able to export some products to the European Union and the United States. Some prod ucts are sold in local health food stores. Lebanon is a member of the IFOAM Medi ter ra nean group AgriBio Medi ter raneo (see Italy). Useful address
MECTAT (Middle East Centre of Transfer of Appropriate Technology) PO Box 113-5474, Beirut Tel: +961-1346465 Fax: +961-1346465 E-mail: boghos@mectat.com.lb Web site: http://www.mectat.com.lb/ (Consultancy)

Malaysia
Organic agri cul ture and agro for estry are devel oping rapidly. Some national distribution of organic products takes place and the export trade is commencing. Useful addresses
CETDEM PO Box 382, 46740 Petaling Jaya Tel: +60-3-7757767 Fax: +60-3-7754039 E-mail: cetdem@po.jaring.my MOFAN (Malaysian Organic Farming Network) PO Box 382, 46740 Petaling Jaya Tel: +60-37757767 Fax: +60-37754039

Kazakhstan
There are several groups of organic farmers in Kazakhstan. Among them are a group of 20 farmers in the moun tainous region in the south- east and another

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Myanmar
Some quantities of grains (Basmati rice) and cane sugar are pro duced. A cer tain volume is exported, for instance to Den mark and other EU coun tries.

Palestine
Pal es tine pro duces organic fruits and vege ta bles. It is a member of the IFOAM Mediterranean group AgriBio Medi ter raneo (see Italy). Useful address
PARC (Palestinian Agricultural Relief Committees) PO Box 25128 Shufat, Jerusalem Tel: +972-2833818 Fax: +972-2831898 Quattro Department for Organic Agriculture POB 1080, Nablus Fax: +972-9382217

Nepal
The Kanchajunga Tea Estate in Panchtar and other farms produce some green and black tea, which is traded by Highland Trading Co. (P) Ltd (located in Baneskwar, Kathmandu). Some organic herbs and spices are also produced. Local distribution is almost non-existent, while the export trade is beginning. Useful addresses
ECOSCENTRE (Ecological Service Centre) Maheswar Ghimire PO Box 04, NEP-Nrayangarh, Chitwan Tel: +977-56-23834 Fax: +977-56-20165 E-mail: mahesh@ecocent.wlink.com.np (Production and research) INSAN (Institute for Sustainable Agriculture Nepal) Bharat Shrestha GPO Box 8126, Kathmandu Tel: +977-1-481305 Fax: +977-1-473276 E-mail: mahendra@scc.wlink.com.np

Philippines
The Phil ip pines is an impor tant pro ducer of organic coffee, with an annual output esti mated at 2,000 tons in the mid 1990s. Addi tional prod ucts include fresh and dried fruits (mangoes, bananas), grains (rice), sugar, herbs and spices (black pepper, cloves) and animal prod ucts (dairy prod ucts). Part of the sugar from the island of Negros is sold under fair trade schemes. Local farmers deliver their pro duc tion to the local refinery. Nearly 400 tons of sugar are pro duced every year, half of which is sold to Euro pean fair trade organi za tions, the other half to a Japanese entity. Exports of other products are also increasing. Useful address
ATC (Alter Trade Corporation) BLK 6-A, Lily St., Bata Subdivision RP-Bacolod City 6100 Tel: +63-34-4410051 Fax: +63-34-4410057 (Processing, trade) OPTA (Organic Producers Trade Association) 235 San Francisco del Monte Avenue RP-Manresa, Quezon City 1115 Tel: +63-2-9391402 Fax: +63-2-3617695 E-mail: grdc@futurenet.com.ph (Production, marketing, control)

Pakistan
According to the Pakistan Organic Farmers Association (POFA), the country produces organic cotton; fruits, fresh and dried; grains (rice, corn and wheat); herbs and spices; nuts; and pulses (chickpeas). In the domestic market, sales are made direct from the farms. The Paki stan Organic Farmers Food Ltd in Lahore is the main exporter. Useful addresses
Pakistan Organic Farmers Foods Ltd 76 West Wood Colony, PAK-53700 Lahore Tel: +92-42-5221707 Fax: +92-42-5220433 (Exporter) POFA (Pakistan Organic Farmers Association) 78 West Wood Colony, PAK-Lahore 53700 Tel: +92-42-5221707 Fax: +92-42-5220433 (Production)

Republic of Korea
The Republic of Korea has been practising organic farming since the Korean Organic Farming

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Asso cia tion (KOFA) was estab lished in 1978. KOFA has more than 17,000 mem bers. Sales of organic produce in the domestic market account for less than 1% of the total trade in farm prod ucts. Organic prod ucts are sold either directly by producers to consumers or through supermarkets. Sales from super mar kets are usu ally proc essed foods. The export trade is just begin ning. Useful addresses
KOFA (Korean Organic Farming Association) 4th Fl. Sungwon B/D 3-72 Garak Dong, Songpa Gu Seoul 138-160 Tel: +82-2-406-4462 Fax: +82-2-403-4463 (Production, development) KSOA (Korean Society of Organic Agriculture) 375-45, Seqyo-Dorig, Mapo-ku, Seoul 121-210 Tel: +82-2-3975628 Fax: +82-2-3975630 (Development)

q q q q q q

Cane sugar; Coconut products; Coffee; Fruits, canned;

Fruits, fresh and dried (pineapples, papayas, bananas, mangoes); Fruits, juices and concentrates (from pineapple, mango, passion fruit, papaya);
q q q q

Grains (rice);

Herbs and spices (pepper, cardamom, cloves, cinnamon, ginger). Nuts (cashew nuts); Oil-seeds (sesame seeds, coconut).

In the mid 1990s, 10 enti ties were con trolled according to EU rules; these cov ered around 15 plan ta tions and cooperated with more than 100 smallholders. Many small holders have come together in the Lanka Organic Agri cul tural Move ment (LOAM). The Need wood Tea Estate was con verted during the mid 1980s and certified by Naturland and the National Association for Sustainable Agriculture Australia (NASAA). It is one of the oldest organic tea plantations in the world. One company, Stassen Natural Foods Ltd, started organic tea production in 1987; by 1995 it was cul ti vating 250 hec tares of land, with an annual output of around 150 tons. The company is certified by Naturland and the tea is exported to Ger many and other Euro pean coun tries, as well as to Aus tralia and Japan. Sri Lanka exports its prod ucts mainly to Europe, the United States, Australia and Japan. National dis tri bu tion is mostly informal. Around five European, American and Australian certification agencies are active in Sri Lanka, including IMO, NASAA and SKAL. Selected addresses
Gami Seva Sevana Office Junction, Galaha Tel: +94-867201 Fax: +94-8232343 and +94-467299 E-mail: Irsdes@eureka.lk (Production, trade, development) Needwood Organic Tea Estate Haldummulla

Saudi Arabia
Health food stores such as the Saudi Health Food House in Riyadh have a long tradition of carrying (imported) organic products. Local organic pro duc tion is emerging. Useful address
Sunsmile Saudi Health Growers PO Box 641, Shaka/Al-Jouf Tel: +966-46220511 Fax: +966-46221100

Singapore
Organic agriculture is at its initial stages in Sin ga pore. Useful address
Pureland Organic Health Farm 50 Chin Swee Rd, 10-06, Thong Chai Bldg SGP-Singapore 0316 Tel: +65-7387748 Fax: +65-7387749

Sri Lanka
Sri Lanka is one of the worlds leading sources of organic tea. It also produces other certified organic prod ucts. These include the fol lowing:

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Tel: +94-57-8126 Fax: +94-57-8242 E-mail: needwood@mail.lanka.net SNF (Stassen Natural Foods Ltd) PO Box 1919, 833 S.B. Mawatha, Colombo 14 Tel: +94-1-522871 and 522925 Fax: +94-1-522913 E-mail: stassen@eureka.lkF Sri Lanka Export Development Board 115 Sir Chittampalam A. PO Box 1872, 94-1 Colombo 2 Tel: +94-1-438517 Fax: +94-1-438404 (Trade) Tropical Health Food (Pvt.) Ltd 95 Castle Street, Colombo 8 Tel: +94-1-683956 Fax: +94-1-686670 (Processor, exporter)

trade activities as does Green Net, created in 1994. ACT (Organic Agriculture Certification Thailand) is involved in certification. Useful addresses
Bio-Safer 99/220 Tessagbarnsongkraoh Rd Ladyao, Jatujak, Bangkok 10900 Tel: +66-2-9543120/6 Fax: +66-2-9543128 Green Net 183 Regent House, Rajdamri Road Patumwan, Bangkok 10330 Tel/Fax: +66-2-6519055/56 E-mail: greennet@asiaaccess.net.th (Development and trade) SGS (Socit gnrale de surveillance) GPO Box 429, Bangkok 10501 Tel: +66-2-6781813 Fax: +66-2-6781543 E-mail: david-horlock@sgsgroup.com (Control, certification)

Taiwan Province (China)


The Organic World Corporation is an importer and distributor of organic food in Taiwan Province (China). It imports organic prod ucts from all over the world, including Australia, France, Japan and the United States. It dis trib utes these imports through its own stores. Organic production is in its first stages. Useful addresses
Organic World Corporation No. 60, Wu-Kung 5th Rd. Wu-Ku Industrial Area, Wu-Ku Hsiang Taipei Hsien Tel: +886-2-2989186 Fax: +886-2-2989315 Sheng Chung Industrial Corporation PO Box 32-22E, Taipei Tel: +886-2-7316099 Fax: +886-2-7316096

Turkey Production
By the end of 1997, Turkey had 18,000 hec tares (with 7,500 farmers) under organic production. It is believed that by the end of 1998 these figures had increased by roughly 25% and that annual exports amounted to 50,000 tons. Production is essentially for export and Euro pean organi za tions like the Good Food Foun da tion (see the Neth er lands) have been at the van guard of this devel op ment. The most important organic prod ucts are dried fruits (apples, apricots, pears, figs, cherries, mulberries, peaches, prunes, raisins, currant). Turkey also pro duces fresh and proc essed fruits and vege ta bles. Its output includes fruit juices and juice concentrates (from apple, apricot, pear, cherry), canned fruit, tomato paste, nuts (apricot kernels, hazel-nuts, peanuts, almonds, pine- nuts, pis taccio nuts, wal nuts), oil crops (poppy-seed, olive, sesame), dried leg umes (chickpea, lentils), grains (wheat), dairy products (milk), herbs (bay leaf) and honey. Organic cotton is also pro duced. The German wholesaler Rapunzel has opened a subsidiary in the country. Turkey is member of the IFOAM group AgriBio Medi ter raneo (see Italy). The main export mar kets are the Euro pean Union and the United States.

Tajikistan
Although there are iso lated pro duc tion ini tia tives, no cer ti fied prod ucts are pro duced in the country.

Thailand
Thai land pro duces organic grains such as rice. It has a small domestic market and there are organic shops in Bangkok and some other areas. Rice is among its exports. The Alternative Agriculture Network (ANN), established in 1984, carries out development and

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Turkey has had legislation on organic agriculture since 1994, and its request for the grant of equivalency with EC Regulation 2092/91 is pending. A number of foreign inspection and certification bodies are active in the country, including INAC (Germany), IMO (Switzerland), BCS (Germany), Ecocert (Germany, France) and SKAL (Neth er lands). Useful addresses
EGE Ihracatci Birlikleri Genel Sekreterligi 1375 Sok. Nr 25 Kat.3, 35210 Alsancak-Izmir Tel: +90-232-4218699 Fax: +90-232-4216560 E-mail: eibo1@cakabey.ege.edu.tr ETKO (Ekolojik Tarim Kontrol Organzasyonu) 160sk. No. 7 Bornova, 35040 Izmir Tel: +90-232-3397606 Fax: +90-232-3397607 (Control, certification) ETO (Ecological Agricultural Organization) Ekojolik Tarim Organizashyonu Demegi Ege University, Faculty of Agriculture 35100 Bornova-Izmir Tel: +90-232-4637551 Fax: +90-232-3881864 E-mail: ETO@ziraat.ege.edu.tr (Research, development) Isik Tarim rnleri Sanayi ve Ticaret A.S. Sair Esref Bulvan No.6/605, 35230 Izmir Tel: +90-232-4415274 Fax: +90-232-4411931 E-mail: info@isiktarim.com Web site: http://www.isiktarim.com (Production, processing and trade)

United Arab Emirates


There are several projects for the establishment of organic farming. Imported organic foods are sold in health food shops, mainly in Dubai.

Uzbekistan
While there are production initiatives, certification does not yet take place in Uzbeki stan.

Viet Nam
Organic agri cul ture is just begin ning in Viet Nam. Useful address
Ecological Economy Institute 189 B. Tay-Son Street, Dong Da-Hanoi Tel: +84-48574400 Fax: +84-48572697 (Production, development) REC (Renewable Energy Center) Do Ngoc Quynh Can Tho University, Can Tho Tel: +84-71838757 Fax: +84-71839250 E-mail: dnquynh@ctu.edu.vn anaerob@|netnam2.or.vn (Production, development)

Other Asian countries/areas


At the time of writing of this study (December 1998), there was appar ently no cer ti fied organic agri cul ture in the following countries: Afghanistan, Armenia, Bahrain, Bhutan, Brunei Darussalam, Cambodia, Kuwait (import market), Lao Peoples Democratic Republic, Mongolia, Oman, Qatar, Syrian Arab Republic and Yemen. How ever, ini tia tives may have been taken in some of these coun tries to develop organic farming.

Turkmenistan
Although there are some local production initiatives, no certification takes place as yet in Turkmenistan.

Oceania
Australia
Australia produces a large number of certified organic products for the domestic market and for export. It has close to 1,800 organic farms, including 150 biodynamic ones. It has ample manufacturing and processing facilities. Specialized organic retail shops are found in the main urban areas as well as in some rural zones. One supermarket chain is test marketing certified organic produce in two States.

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The main export mar kets are Japan and the Euro pean Union, the leading export product being fruits. NASAA, which is accredited by IFOAM, currently cer ti fies 400 farms cov ering no less than 7.5 mil lion hectares. These farms produce cereals (including rice), pulses, fruits (apples, pears, bananas, avo cados and citrus) and wine. They also raise live stock. About 20% of the farms hold 80% of the acreage, the farming system being highly extensive on arid or semi- arid land. Among the other certifiers are the Biodynamic Research Insti tute, the Bio logical Farmers of Aus tralia, the Organic Vignerons Association of Australia, Inc., and the Organic Herb Growers of Aus tralia Inc.

NASAA (National Association for Sustainable Agriculture Australia) PO Box 768, AUS-Stirling, South Australia 5152 Tel: +61-883708455 Fax: +61-883708381 E-mail: nasaa@dove.mtx.net.au (Control, certification) RIRDC/OFA (Rural Industries Research and Development Corporation/Organic Federation of Australia) PO Box 4776, Kingston, ACT 2604 Tel: +61-2-62724819 Fax: +61-2-62725877 E-mail: publications@rirdc.gov.au Web site: http://www.rirdc.gov.au

Fiji
Australias organic standards are set out in the National Standard for Organic and Biodynamic Pro duce. These are vol un tary for the domestic market (unless the products are labelled ce rt ified organic, but man da tory for the export market. How ever, the organic industry strongly encourages certification that is equiva lent to Aus tra lias national stan dards. If an imported product is to be used in a processed export product, it must be cer ti fied against stan dards equiva lent to those of Aus tralia. The Australian Quarantine and Inspection Service (AQIS) enforces export stan dards, and accredits and supervises certification bodies. Imports may be cer ti fied by a cer ti fi ca tion body abroad that has been accred ited by IFOAM or AQIS, or deter mined to be equiva lent by an AQIS- accredited cer ti fi ca tion body. Prod ucts from coun tries whose organic stan dards and inspection systems are recognized by AQIS as equivalent to those of Australia may be imported freely. Useful addresses
BFA (Biological Farmers of Australia) POB 3404, Toowoomba Village Fair Queensland 4350 Tel: +61-7-46393299 Fax: +61-7-46393755 E-mail: bfa@icr.com.au Web site: http://www.bfa.com.au (Production, development) Biodynamic Agricultural Association Poweltown, Victoria 3797 Tel: +61-59667333 Fax: +61-59667433 (Control, certification)

Organic agri cul ture (e.g. tropical fruit) is in its early stages in Fiji. Useful address
FijiAgTrade Ministry of Agriculture, Fisheries and Forest Private Mailbag Raiwaqa, Suva Tel: +679-384-233 Fax: +679-385-048 E-mail: jyoung@govnet.gov.fj kaumaitotoya@govnet.gov.fj

New Zealand
Organic agriculture is well developed in New Zea land. It pro duces the entire range of arable crops (e.g. cereals, pulses), meat and meat products (including lamb), fruits and vegetables, and honey, both for national consumption and for export. The farms include indigenous Maori cooperatives and inde pendent family farms. About 50 farms follow the biodynamic method. New Zea land is experi menting with organic fish eries as well. There are suf fi cient proc essing facili ties for prod ucts such as dairy products, meat products, baby food, wine, processed and frozen fruits and vegetables, culi nary oils, sauces and herbal teas. Organic 100 in Kau ka pakapa pro duces organic fer til izer. Exports of kiwi fruit, pro moted by the New Zea land Kiwi Board, are increasing, not with standing growing com pe ti tion from coun tries like France and Italy. The company Zespri International exported more than 3,000 tons of kiwi fruit in 1997. Among the other important export items are apples, pears and lamb.

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The main export markets are Japan (which absorbs 78% of all exports), and the Euro pean Union. Total exports rose from NZ$ 7.5 mil lion in 1994/95 to NZ$ 23 million 1996/97. The leading exporters belong to the Organic Products Exporters Group (OPEG). Lincoln University of Christchurch, an important centre for organic research, was the first Oceanian host (in 1994) of the biennial IFOAM Scientific Con fer ence and Gen eral Assembly. BIO-GRO (Biological Producers and Consumers Council Inc.) certifies 300 primary producers and proc es sors; it has been accred ited by IFOAM. Useful addresses
BDFGANZ (Bio Dynamic Farming & Gardening Association in New Zealand, Inc.) PO Box 306, Napier Tel: +64-45895366 Fax: +64-45895365 (Production) BIO-GRO PO Box 9693, Marion Square, Wellington 6031 Tel: +64-48019741 Fax: +64-48019742 E-mail: levick@bio-gro.co.nz (Control, certification) LEO Lincoln University Biological Husbandry Group PO Box 61, Lincoln University, Canterbury Tel: +64-33252811 Fax: +64-33253855 E-mail: crowder@tui.lincoln.ac.nz (Production, development)

2,000 tons of coffee, 800 tons of copra, 100 tons of pine apple, 500 tons of cocoa, 1.5 tons of vanilla and 1.2 tons of pepper. Some roasting and packing for end-consumption takes place in the country. It also pro duces pine apple juice and tea. Some farms are managed by Australian and European farmers. Germanys Protrade/GTZ has promoted the conversion of a coffee plantation to bio dy namic farming. Among the cer ti fied proc essing com pa nies is a pineapple- juice pro ducer and various coffee proc es sors. About 200 tons each of tea and coffee are exported yearly. The main markets are Australia and the European Union. Some traders arrange for the cer ti fi ca tion of the coffee pro duced by small holders. Australias NASAA is the main certifier in Papua New Guinea.

Tonga
Tonga is a fairly significant producer of vanilla, which is mainly exported to Europe. Useful address
TOAA (Tonga Organic Agriculture Association) PO Box 14, Nukualofa Tel: +676-22355 Fax: +676-24271 (Control, certification)

Other Oceania
Organic agriculture is in its initial stages in a few other countries in Oceania, although certification does not yet take place in Kiribati, the Marshall Islands, the Federated States of Micronesia, Nauru, Palau, Samoa, the Solomon Islands, Tuvalu and Vanuatu.

Papua New Guinea


In the mid 1990s, Papua New Guinea had 4,265 hec tares under organic farming. Its yearly output was

Europe
Organic and bio dy namic agri cul ture had their cradle in Germany (see country chapter) and the United Kingdom, spread rapidly to the Netherlands, Swit zer land and the rest of Europe and from there, in the late 1920s, to the United States and sub se quently to the rest of the world. The big development in Europe came in the 1980s and today the European Union is the leading producer of, and the largest market for, organic products in the world. Over the last decade and a half, EU organic farming devel oped extremely rapidly, with the area certified and under con ver sion rising from 0.11 mil lion hec tares in 1985

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to nearly 1.4 million hectares in 1998 or at annual growth rates sometimes exceeding 20%. In Central and Eastern Europe, growth rates in the 1990s were even higher; however, processing, manufacturing, local distribution and exporting are still heavily under de vel oped which can cause a slow down. In EU and EFTA coun tries, organi cally man aged land made up 1.45% of the utilized agricultural area in 1998, com pared with 1.4% for EU alone. The most extensive organically farmed areas are in Italy (550,000 hec tares), Ger many (351,062 hec tares) and Aus tria (350,000 hec tares). In terms of per cent ages, Austria stands on top with more than 10% of the

utilized agricultural land managed organically. Swit zer land comes next with almost 7%, fol lowed by Finland with close to 6%, Sweden with 3.4% and Italy with 3.20%. In the southern Euro pean coun tries of Greece, Italy, Portugal and Spain, the rise in organically farmed areas has been particularly high since the early 1990s. For instance, in Spain, this area expanded more than four times between 1991 and 1995. How ever, in that country as well as in Por tugal and Greece, the share of organic farming is still well below 1%. The total number of farms certified and under conversion in Western Europe rose from 13,908 in

Table 4.1

Europe (EU and EFTA) a/: organic agriculture in figures Agricultural land Country Organic (hectares)
345 375 6 418 64 329 125 550 120 241 351 062 6 000 119 23 591 550 000 630 625 17 500 11 796 11 584 152 105 118 175 71 790 54 270 2 031 760 1 893 155

Number of farms Rank


2 14 7 4 15 8 18 19 12 6 1 13 10 9 17 11 5 3 16

% share in all agricultural land


10.09 0.48 2.37 5.6 0.4 2.02 0.09 0.01 0.53 3.18 18 0.49 0.88 1.16 0.29 0.61 3.44 6.7 0.34 1.45 1.4

Organic
19 996 291 1 617 5 170 3 994 6 793 1 065 27 808 29 500 33 24 868 1 310 321 3 526 2 733 4 768 1 026 84 805 78 667

% share in all farms


8 0.38 2.19 6 0.5 1.12 0.67 0.6 0.51 1.19 11.96 0.8 0.72 1.46 0.07 0.25 2.97 7.6 0.42 1.08 1.02

Rank
2 17 6 4 15 9 12 13 14 8 1 10 11 7 19 18 5 3 16

Austria (mid 1998) Belgium (end 1997) Denmark (mid 1998) Finland (end 1998) b/ France (end 1997) Germany (January 1998) Greece (March 1998) b/ Iceland (area: end 1997, farms mid 1998) Ireland (early 1998) Italy (mid 1998) b/ Liechtenstein (mid 1998) Luxembourg (mid 1998) Netherlands (early 1998) Norway (early 1998) Portugal (early 1998) Spain (1998) Sweden (mid 1998) Switzerland (late 1998) United Kingdom (mid 1998) b/ EU + EFTA EU

Source: Stiftung kologie & Landbau (Erhebung, July 1998). a/ European Free Trade Association. b/ Estimates. Note: There are some discrepancies between the figures in this table and those given in some country se ctions where more recent figures may be cited (for instance, in the section on Iceland).

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1990 to an estimated 85,000 in 1997-1998, up by more than 600%. Gen er ally speaking, the market has been growing faster in the north, pro duc tion faster in the south. However, in the 1980s and 1990s, production in the north developed rapidly and, espe cially the last five years, southern mar kets have expanded con sid erably. Today, the mar kets in France and Italy are booming and that of Spain is growing. The commitment of individual countries to organic farming varies con sid erably. Some coun tries, such as Sweden, have officially set a target of 10% of all agricultural land under organic management by the year 2000 (30% by 2010); Austria has already exceeded this level. Other countries have more modest or no tar gets for the devel op ment of organic farming. Some EU regulations, especially EC Regulation 2078/92, supported by Regulation 2092/91, are having a significant impact on the growth of the organic sector. However, the lack of market development and consumer awareness remain important inhibitors in certain sectors, in particular the market for organic livestock products. Nonetheless the organic dairy, poultry and egg markets are well established and the meat market, although still small, is growing strongly. Although European production has developed well, imports remain massive. While production and processing facilities are available in all food sectors, many main stream food com pa nies have not yet joined the organic bandwagon. Supplying countries can therefore realize much value added if they run their processing and manufacturing facilities according to strin gent Euro pean quality and service cri teria. Despite the fact that many farms produce their own animal feed, there is a continuous shortage of this item and hence large imports. EU imports grains (wheat, millet, rice), oil crops (sesame, sunflower, safflower, palm, coconut) and pulses (soy, beans) as well as all tropical prod ucts. The main sup pliers are the United States, Latin America and Eastern Europe. The lack of supplies of organic seed for sowing is another problem commonly faced by organic farmers, and non- organic seed continues to be widely used. Initiatives to improve this situation are being taken, partly as a result of EU regu la tions.

with 345,375 hec tares, third after Italy and Ger many. In terms of the shares of organic land and farms in the overall agricultural figures, it is second after Liech ten stein, with 10.1% of the land and 8.3% of all farms. Austrias small and extensive farms, averaging 14 hec tares, would have had great dif fi culty com peting with cheap imports from the more intensive production systems in the European Union, and con ver sion to organic pro duc tion with its value added was con sid ered a good way of defending its farms. The milk farms came first, and around 80% of the cer ti fied organic land area is grass land. By mid 1998, almost 20,000 farms (of which about a third were in con ver sion) were organic. Roughly 152,000 milk cows (out of a total of 338,000 bovine heads) pro duce around 300 million kg of milk annually, equivalent to almost 10% of all milk produced. Additionally there are 40,000 heads of beef cattle, 40,000 pigs and 227,000 chickens. While organic milk is currently over-produced, the output of grains, fruits, vegetables is still much smaller than demand, so imports have grown, espe cially from Ger many, Hun gary and Italy. The con ver sion rate slowed down con sid erably in the two years to end 1998, particularly because of the satu ra tion point reached in the dairy sector. The State continues to subsidize organic farms as part of a programme for furthering ecologically sound agricultural systems (the PUL programme). In 1996, the pro gramme paid around S 756 mil lion ($66 mil lion) to organic farms; of this, half was financed by EU and the rest by the State. In addi tion, the State subsidizes organic farmers associations and their umbrella organi za tions ARGE and IG. The national mar keting organi za tion AMA (Agrar Markt Aus tria) subsidizes organic marketing schemes out of con tri bu tions from organic farmers; more than a third of the countrys organic farmers are not associated with the organi za tion. As in Ger many, a large number of con trol bodies (22) operate according to EC Regulation 2092/91, the Austrian food law as well as private standards (for animal products). This number will be greatly reduced when the State accreditation system completes its task. The largest control and certification body, ABG (Austria Biogarantie), con trols almost 50% of all organic farms.

Austria Production and control


In terms of the area under organic farming, Aus tria is,

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Processing and manufacturing


Austria has a large number of organic processors, manu fac turers and whole salers. The German organic baby food com pany Hipp has an Aus trian sub sidiary in Gmunden. Molk erei Pinzgauer in Mais hofen is the dominant organic dairy company. Agrana Strke in Gmnd produces organic starch and is an important exporter.

ARGE-Biolandbau Wickenburggasse 14/9, A-1080 Wien Tel: +43-1-4037050 Fax: +43-1-4027800 (Umbrella organization of farmers associations) Austria Biogarantie GmbH Knigsbrunnenstrasse 8, A-2202 Enzersfeld Tel: +43-2262-672212 Fax: +43-2262-674143 (Control and certification body) EP Naturprodukte Handels GmbH A-6300 Itter 300 Tel: +43-5332-75654 Fax: +43-5332-75656 E-mail: engelberts-naturprodukte@tirol info@engelberts-naturprodukte.de Web site: http://www.engelberts-naturprodukte.de (in Germany) (Packer and wholesaler) Ernte fr das Leben Europaplatz 4, A-4029 Linz Tel: +43-732-654884 Fax: +43-732-65488440 (Farmers association, marketing and development) Ja! Natrlich, Naturprodukte GmbH IZ-Sd Strasse 3, Objekt 16, A-2355 Wiener Neudorf Tel: +43-2236-6007960 Fax: +43-2236-6007690 (Organic arm of the Billa/Merkur supermarket chain)

Retailing and trading


The national organic retail turnover, calculated in terms of wholesale values, was estimated at S 2 bil lion ($170 mil lion). This was equiva lent to 2% of the overall food market. As indicated above, some organic products like milk have over 10% of their respective markets. Domestic products have around two thirds of the overall turn over, and imports a third. The main super market mul ti ples Billa/Merkur (brand name: Ja, Natr lich!) and Spar (organic brand: Natur Pur), together with some minor chains, sell 70% of all organic products. The share of Billa/Merkur alone was cal cu lated in 1996 at close to S 1 bil lion. About 10% of all products are distributed through direct sales and the catering sector; about 13% are sold through natural and health food shops. It is felt that distribution through these other outlets should be strengthened. EP (Engelbert Perlinger) in Wrgl is an important importer, packer and wholesaler. It also exports to Ger many and Italy. The farmers association Ernte fr das Leben (Harvest for Life) and the umbrella organization ARGE are important partners of the food industry and the retail sector, and are extremely active in mar keting. Ernte fr das Leben has cre ated koland ster reich Ver triebs GmbH for mar keting pur poses. Ernte fr das Leben is a partner of the national certification body ABG. These bodies can be con tacted by third- country organic sup pliers. Ernte fr das Leben pub lishes a major maga zine on organic farming. Useful addresses
Agrana Strke-Gesellschaft mbH Conrathstrasse 7, A-3953 Gmnd Tel: +43-2852-503381 Fax: +43-2852-503361 (Processing and trading)

Belarus
There are sev eral prom ising organic ini tia tives and an organic farmers organization is being set up. The Gov ern ment is sup por tive of these ini tia tives. Useful address
Beleko Ul. Terechkovoi 28, 230600 Grodno Tel: +375-152-472062; +375-152-449989 Fax: +375-152-471497 Niva@selhoz.belpak.grodno.by (Production, development)

Belgium Production
Whilst consumption of organic products in Belgium rose con stantly over the past decade or so, pro duc tion remained underdeveloped and most products consumed domestically were imported. However, in more recent years, notable changes have occurred in the livestock and dairy sector in Wallonia, mainly

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bovine, in regard to the pro duc tion of both meat and milk. To boost vegetable production, the Federal Government in 1999 tripled the hectare subsidy until at least the end of 2000. The subsidy for grassland, however, was reduced. In 1997 there were 107 organic farms on 820 hec tares in Flanders and 184 farms on 5,598 hectares in Wallonia, representing roughly 0.5% of the total agri cul tural area in Belgium. In 1998 there was a rise to 1,099 hectares in Flanders and 10,745 hectares in Wallonia. The main outputs are cereals, milk and beef (pro duced predominantly in Wallonia) and vegetables (grown mainly in Flanders). Some quantities of chicken meat, pork and fruits are also pro duced. While Belgium imports all these products, it also exports substantial quan ti ties of green house products such as tomatoes, cucumbers and paprika as well as substantial quantities of processed products like rice cakes, soy drinks and desserts, chocolate and cereal-based sweeteners.

organic chocolate;
q

Meurens Natural sa (Herve): cereal-based natural sweeteners;


q q q

MIK nv/Indumel nv (Kruishoutem): yoghurt and other dairy products; Natural Bio Mills (Oudenaarde): milling;

Ortis sprl (Elsenborn) and Biolife (St Genesius-Rhode): medicinal herbs, and other medicinal and nutri tional prepa ra tions;
q q q

Soubry nv (Roeselare): pasta; Vondelmolen nv (Lebbeke): spice bread; Candico nv (Merksem): sugar.

There are a multitude of smaller dairy plants, bakeries, makers of tofu-seitan and vege tari an burgers, and beer brew eries (e.g. Brasserie Dupont in Tourpes). De Meerschaut in Ghent imports organic salmon. Biomilk sa in Vielsalm is the main milk collector; it obtained 7 million - 8 million kilo grams in 1998 and expects this figure to rise to 10 million kilo grams in 2000. Brava cvba (in Kampenhout) is a public fruit and vegetable auction dealing mainly with organic produce. Groupement Viande Biologique Origine Belge scrl (GBVBOB) in Libramont is the main bovine producers group. Biomarch scrl (Sombreffe) and Biofresh nv (Sint Kathelijne Waver) are the dominant fruit and vegetable packers and importers. Reformwaren nv (Maldegem), Natudis nv (Tienen) and Hagor nv in Lubbeek (of the French Distriborg group) are the leading wholesalersimporters of grocery products. OAO in Brussels has just launched a gourmet assortment of organic products. Reformwaren and Lima, belonging to the same owners, merged in late 1998 with Natudis, the Belgian subsidiary of the dominant Netherlands wholesaler of the same name. Ostara bvba (Horebeke) is a broker-importer of raw materials and processed products, as is Olans Agrotrade in St Amandsberg. Most of the above companies are members of the professional union Probila/Unitrab.

Processing and wholesale trading


The value of the Belgian organic market can be esti mated at BF 2.5 bil lion - BF 3 bil lion, which is roughly 0.3% of the overall food market. Belgian proc es sors, traders and packers import the larger part of their raw mate rials. The company Lima, until the 1980s one of Euro pes largest proc es sors of organic products, has since become mainly a packer. However, it continues to process rice cakes and vege tarian prod ucts. Lima exports a vast array of dry prod ucts to many coun tries all over the globe. Among the other important processors are the following:
q q q

Alpro nv (Wevelgem): soy drinks and desserts, margarine; Bioline Europe nv (Antwerp): ready meals.

Cidre Stassen sa (Aubel) and Pajottenlander (Pepingen): juices;


q q

Retail trade
The retail trade is well developed. There are about 400 natural food and Reform or health food shops, some of which are small super mar kets. Most of the larger cities have farm ers mar kets. Del haize Le Lion, a leading supermarket chain, has been carrying for

Delifrance Belgium sa (Nivelles) and La Lorraine NV (Ninove): industrially baked organic bread. Dhler/Citrusco (St Truiden): organic food ingredients (mainly from fruits);
q

Callebaut nv/Kraft Jacobs Suchard nv (Halle):

CHAPTER 4 WORLD SUPPLY BY GEOGRAPHICAL REGION AND BY COUNTRY

95

over a decade an organic assortment which now con sists of both fresh and proc essed foods, including organic smoked salmon. The largest mul tiple retailer, GB, car ries the French generic brand Le Got de la Vie for pack aged prod ucts as well as a range of fresh prod ucts. The main dis counter, Col ruyt, sells a small assort ment of dried goods as well as some fresh fruits and vegetables. Smaller chains like Battard are increasingly introducing organic products. Most mul ti ples are step ping up their organic pro grammes.

Biogarantie asbl (Biogaranties secretariat is located at Blik and Ecocert, see below) (Owners of the organic label Biogarantie) Blik vzw Uitbreidingsstraat 392D, B-2600 Berchem Tel: +32-3-2812152 Fax: +32-3-2817469 E-mail: agri.berchem@club.innet.be (Control body) Ecocert Belgium sprl Chemin de la Haute Baudecat 1 B-1457 Walhain Tel: +32-81-600377 Fax: +32-81-600313 E-mail: info@ecocert.be Web site: http://www.ecocert.be (Control body) Ets Delhaize Frres & Cie Le Lion sa Osseghemstraat 53, B-1080 Brussels Tel: +32-2-4122111 Fax: +32-2-4122194 E-mail: jtgeelhand@delhaize-le-lion-be Web site: http://www.delhaize-le-lion-be (Main supermarket chain carrying organics) European Office of Preparators & Distributors of Organic Products Bd Louis Schmidt, 119-bte 3B, B-1040 Brussels Tel: +32-2-27438202 Fax: +32-8-5270104 (European federation of organic processors and traders) Hagor nv Ambachtenstraat 4, B-3210 Lubbeek Tel: +32-16-620711 Fax: +32-16-621421 (Wholesaler) Lima/Reformwaren NV Industrielaan 11, B-9990 Maldegem Tel: +32-50-710564 (Lima); +32-50-713811 (Reformwaren) Fax: +32-50-710567 (Lima) (Packer-wholesaler) Max Havelaar vzw Leopold II Laan 184D, B-1080 Brussels Tel: +32-2-4116462 Fax: +32-2-4116005 E-mail: Luc@Maxhavelaar.be (fair trade) Natudis nv Hamelendreef 85, B-3300 Tienen Tel: +32-16-816156 Fax: +32-16-821298 (Wholesaler)

Control and certification


There are two State-accredited control bodies: Blik and Ecocert. The main farmers organizations are Bel bior in Flan ders and Unab in Wal lonia. There are also a number of bio dy namic farmers and proc es sors. Velt in Flan ders and Nature et Pro grs (in Wal lonia), both asso cia tions of farmers and gar deners, are active at the con sumer level. Blivo in Flan ders and Crabe in Wallonia extend technical expertise to farmers. All these organizations as well as Probila/Unitrab are united in the umbrella organization BioForum vzw. Biogarantie vzw groups the owners of the Belgian organic seal (Bio garantie).

Information source
Belgium is the seat of Biofood.Net, a global organic information platform on the Internet. Biofood.Net is building up a consumer section, with information in the language of the consumer, as well as in English. The business section has an organic master guide, which allows one to find out who is who in the organic world, an elec tronic news and infor ma tion service as well as an electronic trade journal where offer and demand can meet, without Bio food.Net inter fering as a broker or intermediary. All access is free. Income comes from adver tise ments. Useful addresses
Biofood.net Chemin des Marchaux 35, B-1300 Wavre-Limal Tel/Fax: +32-10-410675 E-mail: office@biofood.net Web site: http://www.biofood.net (Organic information platform on the Internet) BioForum vzw Rue Saint Mdard 4, B-1370 Jodoigne Tel: +32-10-814050 Fax: +32-10-814346 (Umbrella organization for farmers, processors, traders)

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Ostara bvba Kerkplein 5, B-9667 Horebeke Tel: +32-55-456734 Fax: +32-55-456741 (Importer) Probila/Unitrab Kerkplein 5, B-9667 Horebeke Tel: +32-55-456734 Fax: +32-55-456741 (Organization of processors and traders) Triodos Bank Voskenslaan 97D, B-9000 Gent Tel: +32-922-04044 Fax: +32-922-04875 E-mail triobe@ibm.net (Ethical banking, involved in organics) WOSC (World Organic Supermarketing Club) Parvis Saint Roch 3, B-1324 Chaumont-Gistoux Tel: +32-10-681387 Fax: +32-10-681112 E-mail: wosc@eronet.be (Group of supermarkets involved in organics)

Tel: +359-3358365 (Organic producers association) Foundation for the Development of Sustainable Agriculture Slavekov Plz 9, App. 8 1000 Sofia Tel: +359-2-9816498 (Extension service)

Croatia Production
BIOS, an association for organic farming, environmental protection and health improvement founded in June 1991, works for the promotion of production and trade in organic products. It has adopted production standards that are based on the IFOAM basic standards, and has formed a control and advi sory group. By early 1995, eight family farms (covering 50 hec tares) had con verted to organic farming, ena bling them to label their prod ucts with the reg is tered trade mark Bios Croatia. Another 10 farms total ling about 70 hectares were under conversion. The area is cropped as fol lows: 40% - 50% under grains and oil crops (maize, soy bean, sun flower); 20% under forage crops (clover mixtures, mixtures of common vetch, peas and cereals, and some root crops); 10% - 15% under vegetables and other products that can be marketed directly; and 5% - 10% under perennial crops (orchards and vineyards). The rest is mostly natural grass land and woods. Croatia is member of the AgriBio Medi ter raneo (see Italy).

Bosnia and Herzegovina


There are sev eral local ini tia tives, including organic mar keting activi ties mainly in Sara jevo. The country is a member of AgriBio Medi ter raneo (see Italy). Useful address
GBOFA B (Great Brijesnica Organic Farmers Association) Beta, S. Tomica 1, 10000 Sarajevo Fax: +387-71-652423 E-mail: vselak@utic.net.ba (Production, processing, development)

Bulgaria Trade
Organic agriculture is at the initial stages of development. Some Western European companies are attempting to produce herbs, fruits and other prod ucts for export. Useful address
Agricultural University Plovdiv Agroecol Centre, 12 Mendeleev Street 4000 Plovdiv Tel/Fax: +359-32-265909 (Development) Bio-Bulgaria Ivan Vazov Str. 47 4300 Karlovo

It is dif fi cult to sell organic prod ucts in Croatia as the consumers are not familiar with organic food prod ucts and their pur chasing power is low. A small chain of specialized shops supplying a range of con trolled organic prod ucts has been set up. Sales are still mainly aimed at tourists and the home market although attempts to export are being under taken. Useful addresses
BIOS c/o Trim-Rosa, A. Hebranga 5, 10000 Zagreb Tel/Fax: +385-1-4819276 (Inspection, production, processing)

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Eko Liburnia Jelacicev 1/III, 51000 Rijeka Tel: +385-51-331184 Fax: +385-51-212948 E-mail: eko-liburnia&ri.Tel:hr (Producer, processor) EKOP-ISTRA C. Huguesa, 52440 Porec Tel: +385-52-211672 Fax: +385-52-232119 (Producer, processor, trader)

(Consulting, development) NRFH (Nadace Rytire F. Horskho) K. Netlukam 958, 10400 Prague 10 - Uhrinves Tel/Fax: +420-2-67712143 E-mail: bartak@env.cz (Consulting, development) Pro-Bio PO Box 116, 78701 Sumperk Tel: +420-649-216609 Fax: +420-649-214586 E-mail: probio@sumperk-net.cz (Union of producers and processors)

Czech Republic Production

Denmark (see chapter 6)


In the begin ning of 1999, the farm ers and proc es sors asso cia tion PRO-BIO had 48,000 hec tares under its coverage (up from 260 hectares in 1989). Of these, 6,500 hectares were prairie land, 513 hectares were orchards, and the rest were under field crops (e.g. wheat and vegetables). Government support since 1998 has been boosting the growth of the sector.

Estonia Production
In 1998 120 farms covering 3,000 hectares were under certified organic and biodynamic production. The main prod ucts are dairy prod ucts (drinking milk, curd, butter and cottage cheese), potatoes, grains, vege ta bles, herbs and honey.

Processing, distribution and certification


The country uses a growing number of raw mate rials for processing such products as buckwheat tea, bulgur, pasta and spelt coffee. The under de vel op ment of the domestic market remains a serious problem. Many prod ucts and vir tu ally all animal prod ucts are still sold con ven tion ally. There are a number of health food and natural food stores in Prague, Kar lovy, Vary, Brno and other urban areas, including 40 run under a Pro-Bio fran chise. Super mar kets have so far shown little interest in selling organic products, but this situa tion is changing and two chains have picked up their first organic prod ucts. Exports to the European Union, for example of wheat, are considerable but stagnating because of increased competition. Around 80 organic items are imported from the Euro pean Union. KEZ is the control body. Certification takes place through a mixed com mittee involving the Min istry of Agri cul ture. Useful addresses
FOA (Foundation for Organic Agriculture) Kubatova 1, 10200 Prague 10 Tel: +420-2-751046 Fax: +420-2-6849107 E-mail: foa@ecn.cz

Processing, trading
Most proc essing, packing and even sales are organ ized by the farmers them selves. An increasing number of retail shops, including supermarkets, are picking up organic prod ucts. There are no exports as yet. An organic law was passed in 1977. The Eesti Biodnaamikahing Tartu koinsenerikeskus (Estonian Biodynamic Association Centre for Ecological Engineering Tartu) is the main certificationbody. Useful addresses
Estonian Biodynamic Association Centre for Ecological Engineering Tartu V. Jannseni 4, EE-2400 Tartu Tel: +372-7-422051 Fax: +372-7-422746 E-mail: ceet@ceet.tartu.ee (Production, development, certification) Estonian Chamber of Agriculture & Commerce J. Vilmsi 53B, EE-10147 Talinn Tel: +372-6419007 Fax: +372-6419008 E-mail: pille@epkk.ee Web site: http://www.epkk.ee (Information)

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Finland Production
Fin land is one of the worlds most advanced organic pro ducing coun tries. At the end of 1998, there were about 5,100 farms, equivalent to 6% of all farms. They covered 126,000 hectares (5.9% of all agricultural land), of which 40,000 hec tares are still under conversion. The average size of an organic farm is 24.3 hectares, about 10% larger than con ven tional farms. The organic idea is old and was influenced by the great Finnish biochemist Artturi Virtanen (1895-1973). Modern organic devel op ment started in the 1960s, accel er ated in the 1980s and exploded in the 1990s. Between 1995 (the year Fin land joined the Euro pean Union) and 1996, the number of farms rose from 2,793 to 4,452. Since them, organic farming has spread from the exten sive sys tems in the middle of Fin land (Kainuu, Mik keli, Pirkanmaa, Vaasa) to the more intensive systems in the south (Satakunta, Uusimaa, Varsinais- Suomi). About 45% of the area under cultivation is pastureland; 40% is planted to cereals, particularly barley, oats and rye; 2% to pota toes; 2% to vege ta bles, 2% to other crops. About 8% of the land is left fallow. Fruits are cropped on 960 hectares, of which 16 hectares are planted to apples and the rest mainly to straw ber ries and many other kinds of ber ries and small fruits. Herbs are cul ti vated on 30 hec tares. Around 65,000 square metres of greenhouses produce primarily cucumbers and tomatoes. There are 33,300 hec tares of grass land. Roughly half of the organic farms carry live stock, but only a small number (350 in 1998) were cer ti fied for animal pro duc tion. The rea sons are: total con ver sion is not obligatory and, above all, facilities for the proc essing and mar keting of organic animal prod ucts are not sufficiently developed. In 1996 35% of the certified animal production units were dairy farms; 24% raised beef cattle, 19% sheep, 15% poultry, 11% pigs and 1% goats. Many farms had mixed herds. About 12% of the farms also had api aries. As more fodder becomes available, more animal farms are expected to con vert to organic sys tems.

proc es sors and manu fac turers were under inspec tion by the National Food Admin istra tion. More than half were cereal proc es sors (such as mills and bak eries). Many proc essing units are farm- based. Proc essing is mainly at the primary level in the beverage, fruit, potato and vege table sec tors. In the beginning, the development of the domestic market was dif fi cult and pro gressed slowly from the first stage of on- farm sales and farm ers mar kets to lim ited suc cess in a few natural food stores in each of the larger towns. Supermarkets refused to take up uncoordinated product assortments associated with insuf fi cient service. Nowa days there are a mul ti tude of mills and bak eries, and cereal products can be found in all the major supermarkets, which also carry imported organic prod ucts. The supply of pota toes and vege ta bles is insufficient and increasing quantities of these prod ucts are obtained from abroad. In 1997, 5 mil lion kilo grams of organic milk were proc essed by 4 dairy plants into milk, yoghurt, cream, butter milk and a range of tra di tional Fin nish dairy prod ucts. The marketing of organic meat remains a problem. The Finnish Association for Organic Farming (Luomu-Liitto) is coordinating the activities of 15 regional producer- owned mar keting organi za tions in order to improve this situation and a State-funded promotion organization for organic products (Fin food) has been set up. In gen eral, con sumer interest in organic foods is high. The motivating factors are the absence of contaminants and other health issues, taste, and the envi ron ment. Insuf fi cient sup plies remain an obstacle to increased consumption. A few products are exported to Scandinavia and the European Union: baby food, bis cuits, liq uo rice, rape oil and rye bread.

Control, certification
Luomu-Liitto, the Finnish Association for Organic Agriculture, published standards in 1986 (vegetal), 1988 (animal) and 1989 (processing) and was until 1994 respon sible for cer ti fi ca tion. This respon si bility has since been taken over by the Ministry of Agriculture and Forestry and the relevant control bodies which function according to EC Regulation 2092/91. The State has no organic seal and most Finnish organic prod ucts carry the seal of Luomu- Liitto or of the Biodynaaminen Yhdistys/Biodynamiska Fren ingen (Fin nish Bio dy namic Asso cia tion).

Processing and trade


By the end of 1998 about 500 organic food

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Useful addresses
Biodynamic Association Uudenmaankatu 25A4, FIN-00120 Helsinki Tel: +358-9-644160 Fax: +358-9-6802591 E-mail: info@biodyn.fi Web site: http://www.biodyn.fi (Development, certification) Kesko Corporation PO Box 152, FIN-0133001 Vantaa Tel: +358-105328774 Fax: +358-105328704 E-mail: minna.nastolin@kesko.fl (Retail trade) Luomu-Liitto ry (Finnish Association for Organic Agriculture) Postbox 42, FIN-01301 Vantaa Tel: +358-9-41349600 Fax: +358-9-41349601 E-mail: terhernaa@sicom.fi Web site: http://www.luomulehti.luomu-liitto.fi (Development, certification) Plant Production Inspection Centre PO Box 111, FIN-32201 Loimaa Tel: +358-2-76056436 Fax: +358-2-76056220 E-mail: sampsa.heinonen@mmm.fi Web site: http://www.ananda.fi/kttk/luomuvalvonta (Plant inspection, information)

other fruit (kiwi fruit, apri cots, apples), medicinal and aro matic herbs, pulses and vege ta bles. Some green houses are run organi cally. There are no cer ti fied animal farms, although demand is growing for organic feta cheese and honey. Greece is a member of AgriBioMediterraneo (see Italy).

Processing and trade


Proc essing facili ties are basic and con sist mainly of oil and grain mills, structures for drying fruit, and packing plants. Domestic distribution is being built up gradually. Sales are made through farm ers mar kets and natural health food stores, of which there are over 20 in Athens and 25 - 30 in the provinces. Supermarket chains such as Alfa Beta have started to introduce organic assortments, especially of fruits and vegetables. A number of stores in the large cities, mainly Athens and Thes sa lo niki, also carry imported processed products. The consumer association Dorippi in Athens, with more than 1,500 members, facili tates the pur chase of organic prod ucts. The bulk of the coun trys organic output is exported, mainly to the Euro pean Union. Ger many is the most important market, followed by countries such as France and the Netherlands. Companies such as Bio- Zeus in Kala mata (which han dles fruits and uses the brand name Bio-Kyklos) and Bluel Greek Organic Prod ucts in Pyrgos Lefk trou near Kala mata (which deals in olive oil) have been established to coor di nate pro duc tion, proc essing and exporting for the benefit of pro ducers from all over Greece.

France (see chapter 7) Germany (see chapter 8) Greece Production


In March 1998, Greece had 1,065 organic farms (0.7% of all farms) on around 6,000 hec tares (0.1% of all agri cul tural land). In the 1980s, Western Euro pean traders such as Fertilia (now Natudis) in the Netherlands and Rapunzel in Germany made it possible for Greece to establish its first organic proj ects, such as those for the pro duc tion of cur rants by the Agricultural Cooperatives Union (ACU) in Aeghion, and of olives and olive oil in Mani, the Peloponnesian peninsula south of Kalamata. Since then numerous farmers have converted to organics. About 60% of the output con sists of olives and olive oil; 11% of wheat; 10% of cur rants, rai sins, and wine; 5% of citrus fruits; 3% of cotton; and 3% of wal nuts and almonds. Among the other organic pro duce are

Certification
SKAL has long been the most active for eign con trol organization in Greece. In conformity with EC Regulation 2092/91, the State has accredited three Greek certifiers: Soge Syllogos Oikologikis Geor gias Elladas (Asso cia tion of Organic Agri cul ture of Greece), DIO- Certification & Inspec tion Organi zation of Organic Products, and Fysiologiki Foreas Elegchou kai Postopiisis Viologikon Proionton. Soge has been active as a farmers organization since 1985. Today, DIO cer ti fies more than 50% of all organic farms. Fysiologiki is active only in Macedonia.

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Useful addresses
Alfa-Beta Vassilopoulos sa 81, Sparta Avenue, GR-Gerakas-Athens Tel: +30-1-6612501 Fax: +30-1-6612675 (Supermarket chain carrying organics) Bio Forum PO Box 1028, GR-71001 Heraklion Tel: +30-81-752009 Fax: +30-81-752651 E-mail: bioforum@otenet.gr (Processing, trade) DIO (Certification & Inspection Organization of Organic Products) Aristonikou 23-25, GR-11636 Athens Tel: +30-1-9231466; 9232259 Fax: +30-1-9224685 E-mail: dio@forthnet.gr (Control, certification) EEVE (Enosi Epangelmation Viokalliergiton Elladas) And. Metaxa 13-15, GR-10681 Athens Tel: +30-1-5905823 Fax: +30-1-3304647 (Production, development) Fysiologiki (Fysiologiki Foreas Elegchou kai Postopiisis Viologikon Proionton) 24N Plastiras Street, GR-59300 Alexandria Tel: +30-333-22113 Fax: +30-333-24444 (Control, certification) Soge (Association of Organic Agriculture of Greece) 26 Averof, GR-10433 Athens Tel: +30-1-2688227 Tel/Fax: +30-1-2687027 (Control, certification)

hectares were registered, but not all have asked for certification. The certified area consists mainly of pastures and crop land. In a natural reserve in Hortobgy, Hortobgy GG runs over 600 hectares organically, raising, among others, longhorn grey cows, a threatened species, for meat production. The livestock raised comprises goats, cows and chickens; honey is also produced. The countrys main crops are grains (winter wheat: 4,800 tons, maize: 1,800 tons, and spelt: 1,600 tons), barley, rye and oats. Millet and pumpkin seeds are pro duced, as are fresh fruits (ber ries, apples, melons), vegetables, mush rooms, paprika, peppers, herbs and nuts. In 1990 Hungary hosted an IFOAM scientific conference and general assembly, the first Eastern European country to do so.

Processing
Proc essing is increasing. Among the out puts are fruit juices (apple juice); frozen products (peas, onions, car rots, fruits); baby food; dehy drated vege ta bles and fruits; dried herbs; herbs and spices (paprika, red pepper). The processed output is mainly exported although some baby food, for instance, is sold on the domestic market. The German baby food producer Hipp has a subsidiary in Budapest.

Trade
The main export mar kets are Aus tria, Ger many and the Neth er lands. Among Hungarys import products are oil crops (sunflower: 2,300 tons, and soy). The domestic market is extremely small with only a few natural food and Reform shops carrying a limited range of organic products. A weekly organic market is organized by Biokultra in Budapest. Some sales take place at the farm gate. In the middle of 1999 the organic sector started organizing itself for entry into the supermarket sector. Virtually all production is exported: 40% to Germany, 20% to Austria, 20% to Switzerland and about 10% to the Netherlands. The Hungarian organization koszerviz and the Swiss company W. Kundig & Cie AG, which has a subsidiary in Budapest, have been instrumental in developing organic exports.

Hungary Production
Organic agri cul ture has been car ried out in Hun gary since 1983 and has been devel oped in col labo ra tion with Austrian, German and Netherlands importers. Hungary was one of the first countries to obtain equiva lency to EC Regu la tion 2092/91 and this has stepped up the interest of EU market players in its organic prod ucts. The cer ti fied area expanded slowly until 1992, but increased significantly in the mid 1990s to an esti mated 23,000 hec tares in 1996. In mid 1999, around 350 farms with about 25,000

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Certification
The local body Biokontroll Hungria Kht and SKAL are the two certifying bodies. Demeter certifies to biodynamic standards. Biokontroll, with the assistance of The Soil Association, is also active in neighbouring countries. Useful addresses
Biokontroll Hungria Kht Postbox 800 H-1035 Budapest Tel/Fax: +36-1-2123127; +36-1-2122379 E-mail: bkontrol@mail.datanet.hu (Inspection and certification) Biokultra Egysulet Kitaibel P.u.4, H-1204 Budapest Tel/Fax: +36-1-2123127; +36-1-2122379 E-mail: figi@biok.datanet.hu (Development) koszerviz Krnyezetvedelmi Lpormalom U3, H-1031 Budapest Tel/Fax: +36-1-2025192 E-mail: fruhwald@mail.datanet.hu (Trade)

output includes barley, oats; cabbage, carrots, cauliflower, and other vegetables and herbs; fodder beet and hay; potatoes and rape seed. Cucumber, paprika and tomatoes are grown in geothermic greenhouses. Several cosmetic firms, such as the Blue Lagoon, use organically grown raw materials, mainly herbs. Wild Ice landic moss is a world- famous product.

Processing and trade


Proc essing is gen er ally at the pri mary level. Agaeti, Icelands largest wholesaler of fruits and vege ta bles, has a large assort ment of organic prod ucts and is certified. Products are sold either at the farm gate or in a few spe cial ized stores, mainly in the cities. The main supermarket chain Hagkaup offers a wide array of organic products, partly imported. There are currently no exports, but there is great interest in organic Ice landic lamb. Fresh fruits and vege ta bles as well as proc essed prod ucts are imported.

Certification
The Soil Asso cia tion (United Kingdom) and KRAV (Sweden) have helped set up local certification bodies. Today, the pri vate enti ties Tn (Ice landic for pra irie) and Vist frae distofan carry out cer ti fi ca tion activi ties. Useful addresses
form Development Project c/o Baendahllin PO Box 7080, Hagatorg 1, IS-127 Reykjavik Tel: +354-5-630300 Fax: +354-5-628290 (Development) Birala Lifraent taksverkefni c/o Baendahllin PO Box 7080, IS-127 Reykjavik Tel: +354-5-630300 Fax: +354-5-623058 E-mail: ord@bi.bondi.is and bi@bi.bondi.is (Development) Tn (Vottunarstofan Tn) Myrarbraut 13, IS-870 Vik Tel: +354-4871389 Fax: +354-4871205 (Control, certification) Vistfraedistofan Thevers 9, IS-110 Reykjavik Tel: +354-5672244

Iceland Production
In mid 1998 Ice land had 27 organic farms (0.6% of all farms) on 1,150 hec tares (0.8% of the agri cul tural area), mainly in the south- west. Its first organic farm (biodynamic) was Slheimar, established in 1930. Organi za tions like VOR (Verdnun og Raektum or the Ice landic Asso cia tion of Eco logical Farmers, cre ated in 1993) and Grska (estab lished in 1996) have been instru mental in the recent growth of the sector. form, the Icelandic Development Committee on Natural and Organic Production, encompassing the Ministries of Agriculture and the Environment, the farm ers union and VOR, has the imme diate goal of making all Ice landic food pro duc tion, be it land- or water-based, sustainable and of creating an eco-island. Activities are governed by legislation No. 26 of 3 March 1995 on organic and natural agricultural production. Substantial sums have been granted by the Government to support the Com mit tees work. Most farms have extensive livestock operations, producing beef and lamb, dairy products and eggs. How ever, crop ping activi ties are more sig nifi cant. The

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Fax: +354-5682433 E-mail: ahb@ismennt.is (Control, certification) VOR (Verdun og Raektun) Akur, Biskupstungur, IS-801 Selfoss Tel: +354-4868983 Fax: +354-5667035 (Production, processing)

Farming, Trading & Consulting (based in Kahir, County Tipperary) coordinates production, proc essing and trading in beef, flakes, flours, grains, lamb, and woollen fab rics. Bord Bia, the Irish Food Board, is showing increasing interest in organics. It seems likely that Irish organic beef will be mar keted in the near future in con ti nental Europe. Imports of all prod ucts are con sid er able.

Ireland Production
In early 1998, Ireland had 808 organic farms on 23,600 hectares. The sector has expanded enormously in recent years. When growth started in the early 1990s, the emphasis was on vegetable pro duc tion on small farms. The emphasis has since shifted to livestock production, mainly bovine and ovine, on larger farms of up to 100 hectares. The latter has been due to encour age ment from the Rural Environment Protection Scheme which provides finan cial aid for con ver sion. There are roughly 25 biodynamic farms. With Norway, Ire land is a pio neer in organic fish farming. The Irish Seafood Producers Group Ltd (ISPG) in Con ne mara, County Galway, pro duces and trades in organic salmon, raised according to Germanys Naturland standards and exported to several Euro pean coun tries.

Control and certification


Three certifiers are active in the country: IOFGA which certifies most of the farms, Bio-Dynamic Asso cia tion of Ire land, and Organic Trust Ltd. Useful addresses
IOFGA (Irish Organic Farmers & Growers Association) 56, Blessington Street, IRL-Dublin 7 Tel/Fax: +353-1-8307996 E-mail: iofga@tinet.ie Web site: http://www.homepage.tinet.ie/-iofga (Inspection, certification) Organic Foods Unit 26, Hill Industrial Estate IRL-Liffey, Bridge, Lucan, County Dublin Tel: +353-1-6281375 Fax: +353-1-6282997 (Wholesaler)

Italy Production

Processing and manufacturing


There are a growing number of processing and manufacturing plants for both animal and plant products. However, as a whole this sector remains underdeveloped. With 564,913 hectares certified, distributed over 31,118 farms and equivalent to 3.8% of all agricultural land, Italy is by far the largest organic producer by area in the European Union. Of the cer ti fied land, 83,292 hec tares are in the north, 80,288 hec tares in cen tral Italy and 401,333 hec tares in the south (of which 261,699 hec tares are mainly in Sicily and Sar dinia). In 1998, the certified land was cropped as follows: 45.4% fodder, 22.9% cereals (Italy is Euro pes largest producer of organic durum wheat and rice), 10.4% fruits and vegetables for processing (such as tomatoes), 9.4% olives, 7.7% fresh fruits and vege ta bles, and 2.7% vine yards. (The pro por tions in terms of market value shift radi cally, with fruits and vege ta bles for proc essing having a share of roughly 50%.) Italy is one of the few sig nifi cant pro ducers of organic apple in Europe; much of this produce is grown in the area around Trento in the north.

Trading
Distribution continues to take place largely through spe cial ized sales chan nels: farm gate sales, con sumer groups, organic box subscription schemes (for vegetables) and, above all, natural and health food stores. Nev er the less, with the expan sion of sup plies, supermarkets are increasingly entering the trade. Supermarkets in urban areas like Dublin and Cork offer organic fruits and vegetables, some dried prod ucts and meat. Many farmers have joined cooperatives for marketing purposes. Ballybrado Ltd Organic

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During recent years, the importance of Italy as a sup plier of organic raw mate rials, semi- processed and proc essed organic prod ucts has grown dra mati cally.

Processing, manufacturing
Italy has more than 500 organic processing plants, producing a large assortment of products including fruit juices and pulps, olives and olive oil, pasta, pastries, rice, dairy products (including ice cream), tomato-based products and wine. Most of the food processors are established in the north. However, large factories such as Barbagallo (pasta) and Damiano (hazel nuts and almonds) as well as various citrus processors (peel, candy, juice) are located in Sicily. There are also a number of fruit and vege table packers.

Fattoria Scaldasole (in Monguzzo near Como), originally a dairy factory specializing in yoghurt, now offers a large assort ment of goods car rying the Scaldasole brand name, one of Italys best known brands. Masinari (located in Mede, in the valley of the Po) is the domi nant rice mill. There are about 900 natural food shops, mostly in the north (about 600) and cen tral Italy (about 190). These shops are generally small (only about 25% have premises larger than 100 square metres) although there are a number of superettes. Five franchise systems have about 50 outlets. Many herbal stores (erboristerie, which sell herbs and cosmetics) have small dry organic assort ments. Super mar kets have taken on organics in recent years. It is reported that 95% of all Italian supermarkets carry some organic products; however, only about 300, or 20% of all super mar kets, carry fresh organic fruits and vegetables, mostly in the north and in Tuscany. The super market chains more promi nently involved in organics are Billa, Coop, Esse lunga and Euromercato. The best known organic brands are Scaldasole, Cral and Bjorg (the latter two are French brands), Alce Nero, La Danza, Ger minal and Euvita. Supermarkets such as Billa, Coop, and Esse lunga have their own organic labels. Italy has about 100 organic res tau rants, mostly in the northern and cen tral regions, and in the larger towns. Organic catering in schools and cafe te rias is rising as is eco-tourism on organic farms. The latter takes place in about 400 farms all over the country, with a higher con cen tra tion in Tus cany. Some 1,500 farms sell their organic products off the farm. Organic farming in natural reserves and parks is increasing. According to the marketing maga zine Largo Consumo, the Italian organic con sumer is between 35 and 45 years old, lives mainly in the northern urban areas, has average or above- average edu ca tion, and is in the upper-middle or high income levels. Around 70% of all Italian consumers know organics, 40% buy them from time to time and 4% more regu larly.

Trade
The value of the domestic organic market is estimated at between Lit 1,300 bil lion and Lit 1,500 bil lion ($750 mil lion to $900 mil lion), equiva lent to 0.5% - 0.7% of the overall food market. In the four years to 1998, the organic market expanded at the rate of 20% annu ally. Close to 40% of the organic output is exported, mainly to Europe, Japan and the United States. Annual exports are valued at an estimated Lit 500 billion and Lit 700 billion ($300 million - $400 million). Italian olive oils, pastas, tomato products and wines are mar keted suc cess fully in vir tu ally all international markets. Imports, particularly of proc essed prod ucts, are con sid er able. Fruit and vege table packers such as Ara bios, Di Rosa & Can niz zaro and Salamita (all in Sicily), Mus tiola in Cesena, Elios in Trig giano (near Bari) and Brio in Vicenza are the domi nant whole salers; they are also heavily involved in exporting and sometimes in importing. Brio also car ries cheese, pasta, pre serves, wine and other prod ucts. Il Fior di Loto (in Grugliasco near Torino), the KI group (Collegno near Torino), WBT (Settimo Torinese near Torino), La Selva (Orbeteno), Coop. Alce Nero (Isola del Piano) and Il Sarchio (Carpi, Emilia-Romagna) are a few of the well-known wholesalers specializing in dry foods. Like the packers, they are mostly exporters, but they also import occasionally. NBC (Torino) groups organic producers and processors, and coordinates their exports.

Control and certification


Of the eight State-accredited control bodies, the fed era tion AIAB is the largest, cov ering about 9,700 farms on close to 160,000 hectares. The second biggest is Suolo e Salute with 6,500 farms and 122,000 hec tares, and the third is Bio agri coop with 4,300 farms and 120,000 hectares. Of the other

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con trol bodies, CCPE, Eco cert Italia, IMC and QC&I encom pass between 2,000 and 3,000 farms on 30,000 - 50,000 hectares. The smallest, Codex-Demeter, con trols just over 1,000 farms (14,500 hec tares). It is believed that fur ther efforts to reduce the number of cer ti fiers and cer ti fi ca tion logos will be made in order to increase con sumer rec og ni tion.

Tel: +39-051-6130512 Fax: +39-051-6130224 E-mail: bioagric@iperbole.bologna.it Web site: http://www.bioagricoop.it (Control and certification) Brio-I scrl Via del Comercio 8, I-36100 Vicenza Tel: +39-045-8731777 Fax: +39-045-8731744 (Wholesaler, exporter, importer) CISS (Cooperazione Internationale Nord-Sud) Via Papale 41, I-95123 Catania Tel: +39-095-433799 Fax: +39-095-439740 E-mail: cissci@ctonline.it (Fair trade, education) Di Rosa & Cannizzaro Contrada Grafalongo, I-97014 Ispica Tel/Fax: +39-0932-956887 (Exporter and importer of fruits and vegetables) Ecocert Italy Via Baldvino 25, I-95128 Catania Tel: +39-095-442746 Fax: +39-095-505094 E-mail: ecocertitalia@ctonline.it (Control and certification) Fattoria Scaldasole Via Donizetti 7, I-22040 Monguzzo (Como) Tel: +39-031-651501 Fax: +39-031-617323 (Producer and wholesaler: dairy products and dried products) KI srl Via Marchesi 9, I-10093 Collegno (TO) Tel: +39-011-7791027 Fax: +39-011-725983 E-mail: direzione@kigroup.com (Wholesaler of dried products) Mustiola scrl Via Ravennate 801, I-47023 Cesena (FO) Tel: +39-0547-384523 Fax: +39-0547-631518 (Producer and wholesaler: fruits and vegetables) NBC (New Bio Concept) Corso Matteotti 12, I-10121 Torino Tel: +39-011-5178621 Fax: +39-011-5178628 E-mail: info@newbioconcept.com Web site: http://www.newbioconcept.com (Exporter, importer) SANA Fiere & Comunicazioni srl

SANA
The SANA organic and natural products show in Bologna, held every fall, has devel oped into one of the largest organic food shows in Europe. SANA will stage the 6th IFOAM Organic Trade Conference in October 1999 in Flor ence.

AgriBioMediterraneo
AgriBioMediterraneo, IFOAMs Mediterranean group, comprises Algeria, Bosnia and Herzegovina, Croatia, Egypt, France, Greece, Israel, Italy, Lebanon, Slovenia, Spain, Tunisia and Turkey. Por tugal is also a member though it is not on the Medi ter ra nean. Useful addresses
AgriBioMediterraneo c/o Ciheam Via Ceglie 9, I-70010 Valenzano (BA) Tel: +39-080-7806254 Fax: +39-080-7806268 E-mail: Albitar@biomail.iamb.it (Federation of Mediterranean organic organizations) AIAB Strada Maggiore 29, I-40125 Bologna Tel: +39-051-272986 Fax: +39-051-232011 E-mail: aiab@aiab.it Web site: http://www.aiab.it (Federation of certifiers) Alce Nero Cooperativa/La Corticella Via Montebello 1, I-61030 Isola del Piano (PS) Tel: +39-051-329411 Fax: +39-051-703172 E-mail: corticella@iol.it (Producer, processor, wholesaler: handles mainly dried products) Ass. Suolo e Salute P.A. Mentuccia Augusto, Via Abbazia 17 I-61032 Fano (PS) Tel: +39-0721-830373 Fax: +39-0721-830373 (Controller, certifier) Bioagricoop Via Fucini 10, I-40033 Casalecchio di Reno (BO)

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Via San Vittore 14, I-20123 Milano Tel: +39-028-6451078 Fax: +39-028-6453506 E-mail: info@sana.it Web site: http://www.sana.it (Yearly organic trade show) WBT (Well Being Trade) Franz Rivetti Via E. De Nicola 7 ter, I-10036 Settimo Torinese (TO) Tel: +39-011-8977493 Fax: +39-011-8977575 (Wholesaler and trader: rice, pasta and dried products)

Liechtenstein
This tiny (160 square kilometres) independent principality with 31,000 inhabitants, squeezed between Swit zer land and Aus tria, has no less than 32 organic farms (12% of all farms) on 605 hectares (18% of all agri cul tural land). A large pro por tion of the organic area is grass land (for milk cows). Animal fodder and cereals are impor tant out puts. Roughly 5 hectares each are planted to vegetables and fruits (including grapes for raisin pro duc tion). There are seven licensed proc es sors, mainly dairies, slaughterhouses and bakeries. Marketing is sponsored by pri vate organi za tions. Organic prod ucts are mar keted by the slaugh ter houses and dairies, or are sold at the farm gate and by some health food stores and a few super mar kets. The catering industry is another outlet. Some quantities are exported to Switzerland. Farms are controlled by the Swiss body FiBL according to VSBLO guidelines, and are certified by VSBLO, another Swiss entity. Processors and traders, on the other hand, are controlled by IMO (also Swiss) and are certified by the Liechtenstein-based VBO (Vereinigung Buerlicher Organisationen im Frstentum Liechtenstein). VBOs logo is an ear (Bio-Lndle-Produkt). Useful address
Ingenieurbro fr Agrar- & Umweltberatung Postfach 323, FL-9494 Schaan Tel: +41-75-2329614 Fax: +41-75-2329631 (Information)

Latvia
In 1998, there were approximately 200 farms and roughly 19,000 hec tares under cer ti fi ca tion. Of these, about 50 were biodynamic farms. The Biodynamic Asso cia tion has a subsidiary in Grobina. Most farms are in the 15- 30- and 45-hectare range; a few are large units of 200 hectares. Production is extensive and the main prod ucts are dairy meat, grains, fruits, vege ta bles and honey. Processing takes place at the primary level. The absence of a domestic market is the main obstacle to devel op ment. There are no natural food shops in Riga and other urban areas, and attempts to interest the supermarkets have so far failed. However, it is believed that domestic marketing efforts may have greater chances of succeeding when coherent assortments of products become available. In the meantime, products are sold often with no price premiums on farm, and to hotels, embassies and schools. Buckwheat and honey have a reasonable export potential. Cer ti fi ca tion is car ried out by Ger manys Demeter and by an inde pendent national cer ti fi ca tion body working on the basis of private standards. The national body collaborates with the Ministry of Agriculture, independent inspectors and farmers. The Ministry supports the Latvian organic movement, although there is no national law on organic pro duc tion. Useful address
Latvijas Biologiskas Lausaimniecibas Biedriba Kuldigas rajons, 3319 Renda Tel: +371-33-47280) (Production, development)

Lithuania
The number of organic farms in Lithuania rose from 107 in 1997 to 140 in 1998 with a total area of roughly 200 hectares. They produce cereals, vege ta bles, milk and meat. The market has yet to develop and prod ucts are partly sold on-farm. There are five processors of cereals, including flour mills and bakeries. No dairy proc essing takes place. Prod ucts are also sold in food shops, including supermarkets in cities such as Vil nius and Kaunas. EKOAGROS has formulated organic standards and car ries out cer ti fi ca tion activi ties.

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Useful addresses
EKOAGROS Lzu, LT-4324 Kaunas Tel/Fax: +370-7-296844 E-mail: EK@nora.Izua.lt (Control, certification) GAJA (Lithuanian Society of Organic-Biological Agriculture) K. Douelaicio 2, LT-3000 Kaunas Tel: +370-7-205421 Fax: +370-7-200423 E-mail: eko@eko.kau.osf.lt (Production, development)

Land wirtschaft Ltze burg car ries these activi ties out for farms fol lowing bio dy namic stan dards. Useful addresses
Verin fir Biologesch-Dynamesch Landwirtschaft Ltzeburg 13 rue de la Gare, L-5353 Oetrange Tel: +352-350245 Fax: +352-355961 (Control, certification) Verenegung fir Biologesche Landbau Ltzeburg asbl Krizhaff, rue de Luxembourg L-1899 Kockelscheuer Tel: +352-290404 Fax: +352-290504 E-mail: secretary@luxnatur.lu Web site: http://www.luxnatur.lu (Control, certification)

Luxembourg
This small country (2,586 square kilo me tres, 412,000 inhabitants) had by mid 1998 around 625 hectares (24 farms) devoted to organic farming, equiva lent to 0.5% of all agricultural land and 0.8% of all farms. About a third of the area is bio dy nami cally farmed. Dairy farming is the main activity; beef cattle, pigs, goats and poultry (for both meat and eggs) are also raised. Five farms pro duce organic vege ta bles, which while reaching a volume that is close to half of the overall national vege table output, is not suf fi cient to cover demand. Organic fruit production (including grapes) started in 1995 and is sup ported by the local nature con ser va tion asso cia tion Hllef fir dNatur. Some proc essing of milk, meat and cereals (bak eries, pasta production, processing of breakfast cereals) takes place, and there is a packing plant for fruits and vegetables. Organic con sump tion on a per capita basis is one of the largest in Europe. As a result, the import trade in vir tu ally all prod ucts is considerable. Sales are made through a number of natural and health food stores and at the farm gate. The biggest supermarket chain, Cactus, offers in its large hypermarket in Bertrange one of the widest assort ments of organic prod ucts that can be found in mainstream markets in Europe. The cooperative BioG (Biobaueregenosssenschaft Ltzeburg) pro motes national pro duc tion. Organic farmers have estab lished a whole saling entity called Bio- Gros. Verenegung fir Biologesche Landbau Ltzeburg controls and certifies the majority of the farms and processors. Verin fir biologesch-dynamesch

Malta
Organic production, mainly of vegetables is being organized in Malta by Italian companies. Inspection and certification will also be carried out by Italian entities.

Moldova, Republic of
Organic production in the Republic of Moldova is beginning. Organic walnut kernels certified by the German entity Lacon and IMO are already exported to EU by Reforma-Werk Andreas Stellisch. Useful address
Reforma-Werk Andreas Stellisch GmbH Stellauer Hauptstrasse 8 22885 Barsbttel-Stellau Germany Tel: +49-40-6757950 Fax: +40-40-67579520 (Production. trade)

Netherlands (see chapter 9) Norway


In the begin ning of 1998, close to 12,000 hec tares in 1,310 farms were farmed organi cally. These made up 1.2% of all agri cul tural land and close to 1.5% of all farms. Despite the rapid expansion in organic farming in recent years, demand still far exceeds supply. Nor we gian farms are gen er ally small family farms which are some times run in addi tion to other pro fes sional activi ties. Some farms are bio dy namic.

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Land for grazing and for the production of fodder takes up the greater proportion of the area under organic management. Production of cereals, vegetables, berries and herbs is significant. Barley and oats are produced in larger vol umes than wheat and rye because of the cli mate. Milk and meat products are produced on livestock farms on which cattle, sheep, goats and poultry are raised. The pro duc tion of eggs and pork is lim ited by the lack of organic feed stuff. Some proc essing of dairy, meat and cereal prod ucts is car ried out. Norway was one of the very first coun tries to market organic fish. This con sists of salmon from farms in the fjords run under closed farming sys tems. Sales are made mainly on the farms, and also through natural food stores. Supermarkets are starting to show an interest in organic prod ucts and this interest is likely to intensify as the supply increases. The imbal ance between domestic supply and demand has resulted in sub stan tial imports and minimal exports. Norway is not a member of the Euro pean Union. But as a member of the Euro pean Eco nomic Area (EEA), it applies EU Regulation 2092/91. The sole official cer ti fier is Debio. Useful addresses
Debio PO Box 50, N-1940 Bjoerkelangen Tel: +47-63-856305 Fax: +47-63-856985 E-mail: kontor@debio.no (Control and certification) NOELL (Norsk Oekologisk Landbrukslag) Langeveien 18, N-5003 Bergen Tel: +47-55-320480 Fax: +47-55-320345 Web site: http://www.home.sd.no/organic.no (Information) NORSOEK (Norsk Senter for Oekologisk) Landbruk, Tingvoll Gard, N-6630 Tingvoll Tel: +47-7153-1342 Fax: +47-7153-1339 E-mail: nso@&post.nlh.no (Information, development)

Poland Production and trade


In 1998, Poland had 185 farms (5,500 hectares) cer ti fied by Ekoland and another 100 farms cer ti fied by PTRE ((Polska Towarzyatwo Rolnietwo Ekologlcznego, the Polish Society of Organic Farming.) As the figures for Ecoland indicate, the strong growth that began in 1990 (when there were 27 farms and 300 hectares certified) and continued through to 1996 (236 certified farms on 6,855 hec tares) came to an end in 1998. The retrench ment was due to the wholly underdeveloped domestic market and the lack of export out lets. Polands wide range of products includes fruits, grains, oil crops, pulses and vegetables. Livestock farming and bee keeping are also under taken. There are some primary processing units producing such items as coffee sub sti tutes. There are currently four wholesalers. Organic foods are sold in about 130 health food and natural food stores, essen tially in the urban areas of Warsaw, Krakow and other big cities. Supermarkets have so far shown little interest in car rying organics, but this situation is changing. An example is the arrival of the French supermarket chain Carrefour, which offers a full organic assortment. Polands export trade, mainly with the Euro pean Union, is also opening up.

Control and certification


Ekoland, the leading certifier, spurred much of the sectors growth in the 1990s. It published its own standards in 1994. To ensure a separation of func tions, it estab lished Agro Bio Test in 1996 as an independent entity; Agro Bio Test is now the coun trys main con trol body. PTRE, another control and certifying body, has its own standards. Among the foreign control entities active in Poland are SKAL and the German Eco cert. A law on organic pro duc tion has been drafted, but it is awaiting pas sage by Par lia ment. Useful addresses
Agro Bio Test Ul. Nowoursynowska 166, PL-0287 Warszawa Tel: +48-22-8439063

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Fax: +48-22-8471562 (Control) Ekoland Przysiek/Toruniak, PL-87134 Zlawies Wielka Tel: +48-56-6789239 Fax: +48-56-6789239 E-mail: ekoland2@pol.pl (Warszawa office) Web site: http://free.ngo.pl/ekoland (Certification, development)

is car ried out on an ad hoc basis. Por tugals poten tial as an exporter is essen tially good. It is a fairly small importer.

Certification
Socert Portugal Certificao Ecolgica, the Portuguese leg of Ecocert, is the only State- accredited cer ti fier. Its logo often appears with that of Agrobio, a pro duc ers asso cia tion. Useful addresses
Agrobio (Associao Portuguesa de Agricultura Biolgica) Calada de Tapada 39 R/e Dto, P-1300 Lisboa Tel: +351-1-3623585 Fax: +351-1-3623586 (Production, development) Socert Portugal Certificao Ecolgica R. Alexandre Hergulano 68-1E Es, P-2520 Peniche Tel: +351-62-785117 Fax: +351-62-787171 E-mail: socert@mail.telepac.pt (Control, certification)

Portugal Production
In the beginning of 1998, Portugal had 321 farms (0.1% of all farms) on 11,584 hec tares (0.3% of the total agricultural area) under organic production. Strong growth from 1993 was followed by a fall in 1996 and a resurgence thereafter. About 4,500 hec tares are planted to olives; 1,800 hec tares to fruits, particularly citrus; 1,500 hectares to cereals; 600 hec tares to grape vine; 170 hec tares to vege ta bles and 110 hectares to medicinal and culinary herbs. Although there are 1,350 hec tares of cer ti fied pas ture land, there are very few cer ti fied animal prod ucts on the market. Por tugal is member of the AgriBio Medi ter raneo (see Italy).

Romania
A significant volume of organic products like wheat is being produced by companies like Agigea sa in Constanta. Among the certifiers are the German body Lacon. The entire crop is exported to the European Union, mainly to France and Germany. In Transsylvania the Bioterra organization is starting an organic network. Useful addresses
Asociatia Bioterra 3442 Luna de Sus nr. 376, jud. Cluj Tel: +40-64-266606 Fax: +40-64-266709 (Production, development) Eco Rural Sos. Oltenitei 35-37, Room 43 69656 Bucharest IV Tel: +40-1-2408789 Fax: +40-1-2408799 (Production, development)

Processing and trading


Portugal produces wine, port wine and other products. It has some packing plants. Price is the major obstacle to the devel op ment of the national and international markets, although there is consistent growth in the first and good poten tial in the second. Large quantities of organic products continue to be sold as conventional items and without a price premium. Urze, a wholesaler of fresh products in Mon tigo (near Lisboa) has built a strong organic line, as has the producers cooperative Biocoop, also in Lisboa. Prod ucts are retailed by spe cial ized shops, mainly in the urban areas, with growth particularly strong in Lisboa and weaker in Porto. Sales are also car ried out in farm ers mar kets as well as by super market chains such as Pingo Doce and Jumbo. Mark-ups in the supermarkets appear to be high, which slows down sales. The export trade, mainly with Ger many and France,

Russian Federation Production


The first really suc cessful attempts to estab lish organic farming in the Rus sian Fed era tion were car ried out by

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Ekoniva, an organi za tion with roots in Ger many. In 1994 Ekoniva certified 11 farms working 3,609 hec tares. By 1997, the fig ures had risen to 15 farms and 4,647 hec tares. How ever, the main cash crops buckwheat, barley, oats, wheat and flax are essentially traded as conventional products on the local market for various reasons. These include the absence of domestic demand for organic products, failure to meet requirements for the export trade, or farmer speculation. Another organization that has been active in devel oping organic farming is Altagro. There are a few pockets of non- certified organic and biodynamic production throughout the Russian Fed era tion, including the Irkutsk area in Siberia, but prod ucts are sold on the con ven tional market. A number of pro ducers, proc es sors, whole salers and retailers are planning to work together to convert a number of mixed farms in one area (province of rel) to organics. These produce cereals, fruits and vegetables, dairy products, meat, and poultry meat and other prod ucts. The inten tion is to dis tribute the organic output to super mar kets in Moscow and to tap the con sid er able export poten tial.

Useful addresses
Altagro Paveletskaja Nabereshnaja 4/5 Etage Dom 53, Moscow Tel/Fax: +7-095-9596236 (Production, development) Ekoniva AO PO Box 1, Nemchinowka-1, Moscow Oblast 143013 Tel/Fax: +7-095-5918460 E-mail: ekoniva@glasnet.ru (Production, processing, trading) Ekoniva MO PO Box 1, Nemchinowka-1, Moscow Oblast 143013 Tel/Fax: +7-095-5918460 E-mail: ekoniva@glasnet.ru (Control, certification)

San Marino
In this tiny republic (61.2 square kilometres, 24,500 inhabitants), an enclave in Italy near the Adriatic coast, there is no organic production to speak of. Some organic herbs are produced for a local cos metics and food sup ple ment industry, but are not certified. The Italian organization Mustiola has issued a franchise for a natural food shop in San Marino which sells an array of organic prod ucts.

Processing, manufacturing and trading


The absence of an appropriate processing and manufacturing infrastructure is one of the main obstacles to the development of organics in the Russian Federation. Ekoniva has built a grain- processing plant in Kaluga, pre domi nantly for hulling buckwheat. There is virtually no national market, a situation which may change if the above-mentioned conversion project takes off. Moscow super mar kets carry a few imported organic items, particularly the Hipp baby food from Ger many. Buck wheat is so far the only export crop that has encountered some success. This too is expected to change.

Slovakia
The area under conversion in Slovakia expanded from around 12,000 hec tares in 1992 to an esti mated 17,000 hec tares in 1996. Some export trade with the Euro pean Union, for example in wheat, has already taken place. The possibility for set ting up a scheme for organic sugar beet is being studied. Useful addresses
Dimini spol sro Pribinova POB 24, 92001 Hlohovec Tel: +421-804-7425829 Fax: +421-804-7425827 (Development, trade) Natural Alimentaria sro LAdov Ul.c.8, 81105 Bratislava Tel: +421-7-399466 Fax: +421-7-398109 (Development, trade)

Control and certification


Ekoniva has been instrumental in lobbying Par lia ment for an organic law and has been appointed by Gosstandard (the Committee of Russian Federation for Standardization, Metrology and Certification) as the certifying organization for a voluntary certification scheme. The certification work of Ekoniva is super vised by the Swiss IMO. In order to ensure separation of interests, certification activities (Ekoniva MO) have been split from production, processing and trading activities (Ekoniva AO).

Slovenia
In 1998, Zdruzenje ekolokih kmetor Slovenije (SOFA) cer ti fied its first 22 farms (on 270 hec tares)

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of mixed pro duc tion and 1,500 hec tares of high land pas ture. Another 12 farms in the north- east are being certified by the Aus trian Bio garantie. The output is diverse: fruits, grains, vegetables, meat and dairy prod ucts. Slovenia is member of AgriBioMediterraneo (see Italy). Today vir tu ally all prod ucts are proc essed and sold on farm. However, health food stores in Ljubljana and other cities, which now import most of their organic prod ucts, are expected to pick up the national pro duce in the near future. It is also hoped that supermarkets will soon show an interest in carrying Slovenias organic prod ucts. No exports are as yet planned. SOFA has established standards and is the national certification body. The Ministry of Agriculture is for mu lating national stan dards. Useful addresses
Institut Za Trajnostni Razvoj Metelkova 6, 1000 Ljubljana Tel: +386-41-725991 Fax: +386-61-1337 029 E-mail: aslabe@ibm.net (Development) Mevi-Mediacor-Vigred Glavni trg 10, 3000 Celje Tel/Fax: +386- 63412111 E-mail: mediacor@hotmail.com (Production, processing) SOFA (Zdruzenje ekolokih kmetor Slovenije) Metelkova 6, 1000 Ljubljana Tel/Fax: +386-61 1343 772 E-mail: ekomet@ibm.net (Control, certification) The Business Research Centre Zadruzna 9, 1218 Komenska Tel/Fax: +386-841325 E-mail: timi.ecimovic@siol.net (Production)

but also grapes, kiwi fruit, peaches, nectarines and strawberries); vegetables (carrots and most other vegetables); grain for animal fodder; herbs; nuts (hazelnuts, almonds); pulses; oil-seeds; olives; and rice. Pro duc tion takes place all over the country, with a larger concentration in Andaluca, Aragn, Cata lonia and Valencia. Although local consumption of organic products is growing, Spain is primarily an exporter of organic produce. Its climate makes it possible to offer early- season crops to Euro pean mar kets. Spain is a member of AgriBio Medi ter raneo (see Italy).

Processing
There are several hundred, generally small, processors, including bakeries; cereal processors; dairies; fruit and vege table packers; makers of tofu, other soy prepa ra tions and seitan; olive oil mills; and wine producers. Most of the larger food processors have so far kept out of the organic sector although interest is growing. Some of the best- known proc es sors are as fol lows:
q q q q q q q q q q q q q q q

Albet i Noya, Subirats-Barcelona: wine;

Aliment Vegetal, Barcelona: cereals and baby foods; Almendra del Sur sa, Mlaga: almonds; Alter Vida, Valencia: fruits and vegetables; Bioartsa, Barcelona: bakery and fresh products; Cal Valls, Lrida: fruits juices and preserves;

Central de Productos Biolgicos sa, Barcelona: cereals, dry groceries, preserves; Eco-Llevant, Alicante: fruits and vegetables; Herbes del Moli sc, Alicante (herbal teas and spices); Luz de Tierra sc, Zaragoza: fruits, oil; Monsoya, Viladrau: organic rice drink and soy products; Natursoy and Vegetalia sl, Barcelona: vegetable protein products; Nuez de Prado CB, Crdoba: oils; Silvestre Alcolea sa, Huesca: rice, cereals, seeds, fruits; Vea sa, Lrida: olive oil.

Spain Production
In 1998 Spain had 3,526 organic farms (0.3% of all farms) working 152,100 hectares (0.6% of all agricultural land), up from 1,200 farms and 28,130 hectares in 1995, and from 264 farms and 2,140 hectares in 1985. The land is cropped as follows: pas tures for cattle and sheep; fruits (pri marily citrus

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Most organic proc es sors and traders now coop erate to improve their market access within the recently created FABIO, the Asociacin Espaola de Transformadores y Comercializadores de Productos Biolgicos.

Trade
The Spanish organic market is under de vel oped and is cur rently valued at between Ptas 4.5 bil lion and Ptas 5 bil lion ($32 mil lion - $35.5 mil lion). A large part of the market is supplied by imports, especially of processed prod ucts. The value of organic exports is currently estimated at Ptas 7 billion ($50 million); exports con sist mainly of fruits and vege ta bles, rice, nuts and oils. There are over 2,000 herboristeras, shops selling herbs, cosmetic products and a small assortment of organic products, and some 150 well-established natural food stores with a full organic assortment, excluding meat prod ucts. In cen tral Bar ce lona, on the Va Laie tana, there is an organic super market with a restaurant called Comme-Bio, and more of these combined outlets are to be opened. Barcelona has various other organic restaurants. Sales at the farm gate and by con sumer asso cia tions and coop era tives are sig nifi cant. Entry into super mar kets con tinues to be ham pered by the lack of supply and the absence of a con sis tent and performing supply system, although the main Spanish retail organi za tion, El Corte Ingls, has been carrying organic fruits and vegetables and a small range of dried products for many years. Continente recently took up the French La Vie organic assort ment. It is expected that with the offer of a fuller range of products and the establishment of efficient supply structures the interest of the mainstream dis tri bu tion system will grow rap idly.

found, for instance, in Badajoz (Extremadura); Barcelona (Catalonia); Zaragoza (Aragn); La Corua (Galicia); Logroo (Rioja); Madrid (Madrid); Muriedas Camargo (Cantabria); Toledo (Castilla la Mancha); Oviedo (Asturia); Palma de Mallorca (Baleares); Pamplona (Navarra); Santa Cruz de Tenerife (Canary Islands); Sevilla (Anda luca); Valencia (Valencia); Val la dolid (Cas tilla y Len) and Vitoria (Basque Prov inces). Useful addresses
Asociacin Vida Sana Clot 39, Bajos, E-0818 Barcelona Tel: +34-93-5800818 Fax: +34-93-5801120 E-mail: asvidasana@ben.servicom.es (Publisher, organizer Biocultura fair) Central de Productos Biolgicos sa Ctra. Sabadell a Granollers km 12,7 NE 3 E-08185 Llica de Vall (Barcelona) Tel: +34-93-8436517 Fax: +34-93-8439600 E-mail: cpb@cpbio.com (Importer, exporter, wholesaler) CRAE (Comisin Reguladora de la Agricultura Ecolgica) Paseo Infante Isabel, 1, E-28014 Madrid Tel: +34-91-3475480 Fax: +34-91-3475410 (Coordination of control and certification bodies) FABIO (Asociacin Espaola de Transformadores y Comercializadores de Productos Biolgicos) Calle Bonavista 15-2E-5a, E-08012 Barcelona Tel/Fax: +34-93-4157184 E-mail: fabio@bcn.servicom.es (Association of processors and traders)

Sweden (see chapter 10) Switzerland (see chapter 11)

Trade shows
The Asociacin Vida Sana organizes an annual exhibition, Biocultura, both in Madrid and in Bar ce lona.

The former Yugoslav Republic of Macedonia


Organic agri cul ture is just begin ning in this country. The Netherlands establishment SKAL certifies herbs.

Control and certification


EC Regulation 2092/91 is applied through control authori ties linked to the depart ments of agri cul ture in autono mous com mu ni ties or the appro priate regional bodies. These authori ties belong to CRAE (Comisin Reguladora de la Agricultura Ecolgica) and are

Ukraine
The number of organic farmers in Ukraine is increasing. Their output includes grains (wheat) and fruit.

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Proc essing is lim ited to pri mary on- farm proc essing. The domestic market has yet to be developed. However, exports to Western Europe, largely of wheat, are increasing. Export control and certification are carried out mainly by SKAL. The Russian certifier Ekoniva is also active in Ukraine.

Netherlands. Yugoslavia is member of the AgriBioMediterraneo (see Italy). Certification is currently done by the Netherlands body SKAL. Terras Natural Food Association is set ting up a national cer ti fication body. Useful addresses
Den Juro Prote Mataje 25a, YU-11000 Beograd, Tel: +381-11-451603 Fax: +381-11-4462129 (Trade, development) Terras Natural Food Association Trg. Cara Jovana Nenada 15, YU-24000 Subotica Tel: +381-24-24699 Fax: +381-24-553116 E-mail: terras@fodns.opennet.org (Control, certification)

United Kingdom (see chapter 12) Yugoslavia


Production is con cen trated around Blace (which has about 500 fruit producers working 4,000 hectares), and in Gadzin Han (with another 500 fruit pro ducers and 4,000 hectares). The current output includes apples, cher ries, pears, prunes, quinces, rasp ber ries, blackberries, rose hips and strawberries. The production of cereals and animal products is being planned. Fruit is frozen as well as processed into juice, concentrates and marmalade. There is no domestic market as yet. The existing production has been devel oped mainly in coop era tion with a trader in the

Other European countries


As of December 1998, there was apparently no certified organic agriculture in Albania, Andorra and Monaco, though plans are being discussed in Andorra.

The Americas (excluding NAFTA countries)


Most countries in the region have an organic agri cul tural sector though at widely varying levels of development. The greater part of production is export-oriented, but numerous farmers, womens organi za tions and NGOs prac tice organic agri cul ture to attain self-sufficiency in food for themselves or their members and for environmental reasons. Among the leading plant products are cane sugar, cocoa, coffee, cotton, fruits (a wide variety of exotic fruits, bananas), grains (including the tropical grains ama ranth and quinoa), mat (also known as Para guay tea, obtained from the leaves of the shrub Ilex paraguayensis), medicinal and culinary herbs, nuts, oil-seeds (sesame, sunflower and saf flower), olives, pulses (soy and other beans), spices (vanilla), tea, wine and honey. Livestock products include dairy prod ucts, meat, honey and wool. In most countries certified organic production and trade expanded steadily in the 1990s, the latter despite the lack of processing and packing plants. The undeveloped national markets are a huge problem. Farmers groups organize local and national markets and some of them are members of the network RELACC (Red Latinoamericana de Comercializacin Comunitaria) under which they work together to make their products available to other countries in the region through a common dis tri bu tion system. National mar kets are mostly unde vel oped, as a result of which farmers are largely dependent on the export trade for their livelihood. Many producers lack the infra struc ture for direct exporting and have to rely on exploitive intermediaries popularly called coyotes. Access to tech nical assis tance and rea son able credit remains dif fi cult. Argentina has a structured national distribution system as well as a con trol and cer ti fi ca tion system that has obtained equivalency with EC Regulation 2092/91. In the other countries foreign control and certification bodies continue to be active, either directly or through branch offices or sub sidi aries. In

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general, how ever, the ten dency is to set up national bodies. The umbrella organi za tion Bio- Latina groups Bolivian, Colombian, Nicaraguan and Peruvian certifiers under its wing. The stringent EU rules on the accredi ta tion of con trol bodies in third coun tries puts a great deal of pressure on control and certification bodies in these countries to organize them selves in such a way as to qualify.

Grains (buckwheat, maize, millet, oats, rye, sorghum, wheat) and bread;
q q q q q q q q q

Herbs (basil, dill, parsley, oregano, rosemary, sage, savory, tarragon, thyme) and spices (pepper); Legumes, dried (beans and soy beans for milk, oil and fodder); Mat;

Antigua and Barbuda, Bahamas, Barbados, Belize


Organic agriculture is in its first stages in all these countries, with Belize beginning to produce cocoa and fruits.

Meat (beef, lamb, chicken), dairy products (milk, cheese), other poultry products (eggs); Nuts (peanuts);

Oil crops and oil (flax, olive, safflower, sunflower); Roots and tubers (carrots, potatoes); Sweeteners (cane sugar, honey); Tea;

Argentina Production
Organic agri cul ture took off in Argen tina in the late 1980s and early 1990s and soon became a tremendous success. The early passage of national leg is la tion and its attain ment of equiva lence with EC Regulation 2092/91, the export pro mo tion efforts of Promex and the concurrent development of the national and export markets contributed in a large measure to this suc cess. In 1996, 346,978 hectares were being organically farmed by over 900 farmers. Less than 10% of this area was used for cropping; the rest was mainly devoted to livestock farming: 211,000 hectares for beef cattle, 4,600 for milk cows, 864 hectares for sheep, 21 hec tares for poultry. Some land was also set aside for api cul ture, woods and fallow fields. Of the land under cropping, 23% was planted to sun flowers, 16% to olives and about 14% to wheat. Soy production is expanding rapidly as is fruit pro duc tion. Argen ti nas organic prod ucts include the fol lowing:
q q q q

Vegetables, fresh (artichokes, asparagus, cucumbers, eggplants, garlic, onions, tomatoes);


q

Wine.

Argentina has a large output of organic olive oil, estimated at around 2 million litres annually. The livestock sector is growing rapidly. The certified api cul tural sector (com prising three proj ects in 1995) pro duces about 40 tons of honey yearly. The output of cotton is small but rising.

Processing and trade


Expansion has been particularly high for bakeries (bread) and for processors of olive oil, wine, sun flower seeds, tea, mat, herbs, polenta, cane sugar (in the Misiones province), fruit, meat, apple concentrate and grape juice. The dairy com pany La Seren is sima pro duces organic milk. The major super mar kets in Argen tina such as Jumbo, Norte, Car re four, and the vast majority of the natural food and health food stores offer some organic products. The first two multiples have fairly large assortments including fruits and vegetables, dairy prod ucts, meat and dry prod ucts. Some of the smaller super mar kets offer vege ta bles and canned prod ucts, and one of them retails beef and bread. Domestic sales are increasing as a result of efforts to develop the domestic market. Almost 70% of Argentinas organic produce is exported; exports are rising strongly at an annual growth rate of about 25%. In 1996, more than 7,000

Alfalfa; Cotton and cotton textiles; Fruits, dried (prunes, raisins);

Fruits, fresh (apples, blackcurrants, cherries, citrus, elderberries, grapes, melons, mulberries, pears, raspberries, strawberries);
q

Fruits, processed (apple concentrate, fruit pulp, grape juice, marmalade, pure);

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tons of organic products were sold abroad. The Euro pean Union is the most impor tant market, taking about half of Argen ti nas export volume. The United States absorbs most of the remaining half, with some exports going to Canada, Mexico and Japan. The leading export products (and some of the exporters) are apples and pears (exported by PAI, Agro Roca and Expofruit in Ro Negro Province); citrus (Ecoc itrus); can ta loupes; small fruits (fresh and processed); garlic (El Treboll del Sur in Mendoza Province, Argentbio in Buenos Aires); onions and other vegetables; grains; oil-seeds, soy; cane sugar; honey; and wine. Argensun in Buenos Aires is the dominant exporter of hulled sun flower ker nels and grains. Agro pecuaria Paso Viejo (Cr doba Prov ince), Bioolive sa (Buenos Aires), Viedos San Nicols sa (which has 1,200 hec tares planted to olives) are olive oil pro ducers and exporters. Eco siembra (Buenos Aires) is a fruit and vege table packer and exporter The export proc essing of meat involves slaugh tering, butch ering and vacuum- packing, which are sub ject to international inspection. Eco-Pampa sa (Buenos Aires) exports some organic beef to Europe. Avrigreen sa exports organic poultry. Tierra Libre and Sol de Acuario in Buenos Aires are whole salers and exporters which also offer assortments under generic brands in supermarket and hypermarket chains like Disco Jumbo, Norte, Carrefour, and in around 600 health food stores.

certification agencies. Certification agencies are required to register annually with the National Register of Certifying Companies for Organic Pro duce. Cer ti fi ca tion bodies that do not comply with the Resolution are subject to sanctions. Organic import prod ucts must origi nate from coun tries having organic regu la tions equiva lent to those of Argen tina; these regu la tions must be accepted by SENASA and the name of the cer ti fi ca tion body must appear on the National Reg ister. Addi tion ally, each ship ment must have a cer tifi cate iden ti fying the product as organic. As of June 1997, no country had asked for approval of its organic stan dards by the Argen tine authori ties and no foreign certification agencies were on the National Reg ister. Argentinas producers, processors, traders, and control and certification bodies are united in the umbrella organization MAPO. This organization coor di nated the 12th IFOAM Sci en tific Con fer ence in Mar del Plata in November 1998. Useful addresses
AGROINVEST Tel/Fax: +54-11-43936934/38 E-mail: agroinv@informatic.com.ar (Producer, trader) APROBA (Asociacin de Productores de Buenos Aires) Vicente Lpez 2698, RA-Quilmes 1878 Provincia Buenos Aires Tel: +54-11-42542222 Fax: +54-11-44320448 (Control, certification) Argencert Bernardo de Irigoyen 760, piso 10, Of. B ARG-1072 Buenos Aires BA Tel: +54-11-43421479 Fax: +54-11-43317185 E-mail: argencert@interlink.com.ar Web site: http://www.argencert.com (Control, certification) Ecofarmers sa Bernardo de Irigoyen 8, 6 piso ARG-1379 Buenos Aires Tel/Fax: +54-11-43343124 E-mail: ecofarm@satlink.com (Producers, traders) MAPO Sarmiento 1562, 7 piso, Dept. 6 ARG-1059 Buenos Aires Tel/Fax: +54-11-43825562 E-mail: mapo@satlink.com (Umbrella organization for the organic sector)

Certification
Argen tina has its own national stan dards for organic crop and livestock production. SENASA, the Argentina Agri-Food and Quality National Service, administers these stan dards. Argen tina is on the EU list of approved third countries as far as organic stan dards and cer ti fi ca tion are con cerned. There are around nine certification bodies in the country. In 1995, three agen cies were accred ited for cer ti fi ca tion: Argencert, OIA (Organi za cin Inter nacional Agro pecuaria) and APROBA (Asocia cin de Productores de Buenos Aires). OIA is mainly involved with the certification of animal products. Argencert is the main certifier and is IFOAMaccredited. Resolution IASCAV No. 82/92 sets out specific requirements for national as well as foreign

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OIA (Organizacin Internacional Agropecuaria) Av. Santa Fe 830 ARG-1641 Acassuso, Buenos Aires Tel: +54-11-47989084 and +54-11-47934340 Fax: +54-11-47934340 E-mail: oia@impsatl.com.ar (Control, certification) Sol de Acuario Av. Belgrano 355, piso 11 ARG-1092 Buenos Aires Tel/Fax: +54-11-47618482 E-mail: organicsol@arnet.com.ar (Processor, wholesaler) Tierra Libre Biodiversidad SA Bernardo de Irigoyen 190, Piso 8 ARG-1072 Buenos Aires Tel/Fax: +54-11-43429001 E-mail: EcoSiembra@ciudad.com.ar (Processor, trader)

(soybeans); grains (amaranth and quinoa); sweet eners (sugar, honey); and other proc essed food.

Trade
Bolivia started to export organic cocoa in 1987. In a more recent year, organic cocoa made up about 75% of all of its exports of cocoa and nearly 4% of its exports of non-traditional products. Most exports were sold in fair trade mar kets. There appears to be some export of sugar to France. Anapqui (in La Paz) exports coffee and hibiscus, El Ceibo (also in La Paz) exports cocoa, and Natu raleza (Cocha bamba) exports dried fruits. GTZ is involved in an organic trade promotion project in cooperation with the Bolinvest. (The GTZ Adviser is attached to the Bolinvest Santa Cruz Office.)

Bolivia Production
Bolivia is one of the worlds leading producers of organic cocoa and is an important producer of organic coffee. With support from Switzerland, Agruco (Agroecolgica Universidad Cochabamba) has been instrumental in the growth of the organic sector in the country. The umbrella organization, Asociacin de Organizaciones de Productores Ecolgicos de Bolivia (AOPEB), was founded in 1991. It has seven member organizations. It focuses mainly on cocoa although it also deals with prod ucts like coffee and Brazil nuts. Central de Cooperativas Agropecuarias (El Ceibo), was the first pro duc ers asso cia tion to adopt organic practices. It groups cooperatives producing 1,500 tons of cocoa on 8,000 hectares of land. Half of the cocoa pro duced meets organic stan dards. Among the members producing other crops such as paranuts, quinoa, coffee and hibiscus are Anapqui, Cam pesino and Minga. Bolivias other organic products include fresh fruits (cher ries, egg fruit, goose ber ries, grape fruit, guavas, limes, mandarins and oranges, mangoes, papayas, passion fruit, pineapples, plums, tamarind, water melons), dried fruit (apples, bananas, fruit teas); proc essed fruit (juices and pures); nuts (Brazil nuts); oil crops (sesame) and oils; dried legumes

Certification
Bio- Latina and Boli cert are the national con trol and cer ti fi ca tion bodies. They are seeking accredi ta tion at IFOAM and EU levels. Bio-Latina is also active in Columbia, Nica ragua and Peru. For eign con trol and certification bodies continue to work in Bolivia. An example is IMO, which has a subsidiary in the country.

Potential
The organic agricultural techniques used in Bolivia are similar to the countrys traditional cultivation practices. As mechanization and the use of high-yield, input-dependent varieties have not yet spread extensively, the conversion of farms to organic agriculture can be carried out with relative ease and within short periods. Useful addresses
AGRUCO (Agroecolgica Universidad Cochabamba) Casilla 3392, Cochabamba Tel: +591-4-252601 Fax: +591-4-252602 E-mail: agruco@pino.cbb.entelnet.bo (Development) AOPEB (Asociacin de Organizaciones de Productores Ecolgicos de Bolivia) J.J. Prez 268A, Casilla 1872, La Paz, Zona Central Tel/Fax: +591-2-333331

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E-mail: aopeb@aopeb.rds.org.bo Web site: http://www.rds.org.bo/aopeb (Production, development) Bio-Latina Edificio Cmara de Comercio, of. 406 Avda Mariscal Santa Cruz, La Paz Tel/Fax: +591-2-377338 (Control, certification) Bolicert Casilla 13030, General Gonzlves 1317, La Paz Tel/Fax: +591-2-310846 (Certification) BOLINVEST Calle Abdn Saavedra 2120 PO Box 141 La Paz Tel: +591-2-411717 Fax: +591-2-414535 E-mail: bolinves@datacom-bo.net Web site: http://bolinvest.org/main/contact.htm Santa Cruz Regional Office Tel: +591-3-473754 Fax: +591-3-471808 E-mail: bolinvsc@bibosi.SCZ.entelnet.bo/ FIDES (Fundicin Integral de Desarrollo) Casilla 1911, Avda. Santa Cruz 187 Santa Cruz de la Sierra Tel: +591-3-472278 Fax: +591-3-472279 E-mail: fides@mailexcite.com (Production, trade) SIBIO SA (Sociedad Impulsora de Productos Ecolgicos de Bolivia) Barrio Hamacas, Calle 1 Oeste Pasillo 3, No. 46 Casilla 4299 Santa Cruz de la Sierra Tel: +591-3-438641 Fax: +591-3-438120 E-mail: sibiofid@bibosi.scz.entelnet.bo (Trade)

has a large number of coop era tives, small holders, and firms practising organic agriculture. Producers are usually members of a regional association which provides training and assistance in production and marketing, and promotes certification. In collaboration with other organizations, the Instituto Biodinmico runs an organic seed bank. Among Bra zils organic output are the fol lowing:
q q q q q q q q q q q q q q q q q

Cane sugar; Cocoa; Coffee; Cotton; Essential oils; Fruits, fresh (apples, grapes, banana, citrus); Grains (quinoa, wheat); Herbs and spices (pepper, cloves); Honey; Legumes, dried (soybeans, black beans); Mat; Nuts (cashew, Brazil nuts); Oil crops (sesame); Oils and fats (palm oil, palm kernel oil and fat); Processed fruit (banana puree); Tea; Vegetables, fresh (e.g. garlic).

Processing
There are at least two asso cia tions coor di nating the activi ties of pro ducers for proc essing pur poses. One is AOPA (Associao de Agricultura Orgnica do Paran) which deals with producers of onions, pota toes and pump kins. The other is Terra Pre ser vada Alimentos Orgnicos in Colombo, Paran, which handles acerola, coffee, mango, mat, passion fruit, soy beans and tea. Among Brazils processing enterprises are Produtos Naturais Planeta Verde Ltda in Luclia (So Paulo), better known as Fazenda Jacutinga, which is one of the oldest organic cane-sugar producers and exporters in the world. Duas Rodas Indus trial Ltda in Jaragu do Sul (Santa Catarina) is a prominent processor of fruits, producing banana pure for

Brazil Production
Rio de Janeiro hosted the UNCED Earth Summit in 1992 (which issued the famous Agenda 21 on sustainable agriculture). In the same year So Paulo played host to the 9th International Scientific Conference of IFOAM. Brazil has a strong tradition in organic and bio dy namic agri cul ture dating back to 1973. Today, it

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example. Ecocitrus in Montenegro (Rio Grande do Sul) is a fruit packer, and Agro palma SA in So Paulo (So Paulo) is a palm-oil processor. Latsis Ltda in Curi tiba (Paran) is a honey pro ducer. In addition, there are numerous small processing facilities.

and rosehip), and spices (chillies).

Trading and certification


There is vir tu ally no domestic market although there are a few spe cial ized stores in San tiago which are run jointly with the Asociacin Tierra Viva. Supermarkets are expected to start car rying organic prod ucts as the supply grows. Exports to Europe and the United States are developing steadily. Agro-Frio sa in San Felipe, Afodech Ltda in Osorno, Surfruit Ltda in Santiago and Com er cial Frutcola sa in San tiago are promi nent exporters of organic fruits and vegetables. Sociedad Agrcola y For estal Casino Ltda in San tiago exports dehydrated wild fruit (rosehips) and aromatic herbs such as cedrn (verbena). Cambiaso Hermanos sa (Santiago) and ndex Salus Ltda (Villarrica) export herbal teas and medicinal herbs respec tively. The domestic entities CCO and PROA carry out control and certification activities, as do various for eign bodies. Useful addresses
CCO Almirante Riberos 43, Providencia-Santiago Tel/Fax: +56-2-6353051 E-mail: cial@interacces.cl (Control, certification) CLADES (Consorcio Latinoamericano sobre Agroecologa y Desarrollo) Casilla 97, Correo 9, Santiago Tel/Fax: +56-2-2338918 E-mail: adm@clades.mic.cl (Development) Enec Consultores Asociados Sargento Aldea 902, Chilln Tel/Fax: +56-42-210752 E-mail: melagro@entelchile.net (Development) PROA (Corporacin de Promocin Orgnica Agropecuaria) Simn Bolvar 7305K, La Reina-Santiago Tel/Fax: +56-2-2775995 (Control, certification)

Trade
Although the national Bra zilian market is in its early stages of development, an increasing number of products are sold domestically. Exports are significant and were recently estimated at around 3,000 tons annually. The most important certified products are: fruits (such as grapes and apples); vegetables; wheat; tea; coffee; sugar; nuts; sesame; palm oil and essen tial oils.

Control and certification


The Insti tuto Biodinmico is an IFOAM- accredited certifier. A number of foreign inspection bodies are active in the country. Useful addresses
AAO (Associao de Agricultura Orgnica) Av. Francisco Matarazzo 455, Caixa interna 24 05001-900 So Paulo Fax: +55-11-2638013 E-mail: organica@uol.com.br Web page: http://www.muitosmeios.com.br/aao (Production, development) Instituto Biodinmico Caixa Postal 321, 18603-970 Botucatu (So Paulo) Tel: +55-14-8225066 Fax: +55-14- 8223648 E-mail: ibd@laser.com.br Web site: www.laser.com.br/ibd (Certification, development)

Chile Production and processing


While organic agriculture in Chile began in the 1970s, the major breakthrough took place in the 1990s. In 1998, there were around 200 farms with 2,700 hectares under organic production. Crops included fresh fruit for export (raspberries, apples, and especially kiwi fruit), fresh vegetables (green beans, asparagus), proc essed fruit (frozen pure, e.g. of raspberry, and apple concentrate), wine, grains (e.g. quinoa), materials for herbal teas (e.g. camomile

Colombia Production
Colombias organic output includes the following

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products: fresh fruits (bananas, guavas, papayas, mangoes, pineapples), nuts (Brazil nuts), oil crops (palm, coconut), coffee, sugar cane, honey, herbs and spices (mint, cori ander, thyme), aloe vera and cotton. There are also some organic nurseries and organic flower pro duc tion may be ini ti ated.

Processing, trade and certification


Processing facilities are insufficient but Columbia has an organic palm oil refinery and has long been a major supplier of organic palm oil to European organic margarine producers and other processing indus tries. Com paa Envasa dora del Atln tico Ltda in Bar ran quilla pro duces con cen trates and pures of mango and goyave. Agro in dus trial Hun zahua Ltda in Cundi na marca processes sugar cane. Exports of other prod ucts to the Euro pean Union and the United States are increasing. The Davilla Company exports bananas to France and Germany. There is as yet no formal national dis tri bu tion system, but groups of organic farmers make their products avail able to the local com mu ni ties. Control and certification are carried out mainly by foreign entities. The national certification body Biomuisco collaborates with Bio-Latina in Bolivia, Nica ragua and Peru. Useful addresses
CETEC (Corporacin para Estudios Interdisciplinarios y Asesora Tcnica) PO Box 26279, Cali Tel: +57-23-577018 Fax: +57-23-560496 (Production, processing, development) Corporacin Colombia Internacional Calle 16, No. 6-66, P6, Santa Fe de Bogot Tel: +57-1-2834988 Fax: +57-1-2867659 E-mail: ccinf@colomsat.net.co (Inspection, development) Fundacin para el Desarrollo Rural Comunitario PO Box 58-04, Cali Tel: +57-23-835829 Fax: +57-23-835284 (Production, development)

organic producers, working on farms ranging from 0.5 hec tares to 150 hec tares. The area under organic farming is now esti mated at 3,500 hec tares. The main produce is bananas. Other products include cocoa; coffee, raw and toasted; fruits fresh (blackberries, raspberries, mangoes), dried and processed; grains (rice); herbs and spices (vanilla); honey; oil crops (coconut); roots, processed (such as manioc chips); spirits (rum); sugar cane; tea; and vegetables, fresh and proc essed. There were around 550 hectares of certified organic coffee in the mid 1990s, producing 250 - 300 tons of coffee annu ally. As pro duc tion is on the rise, the output could reach 1,000 tons by the turn of the cen tury. Farmers generally belong to producers groups or cooperatives. APPTA (Asociacin de Pequeos Productores de Talamanca) is a producers organization with around 1,500 members, of which 1,050 have certi fied farms; the rest of the farms are under conver sion. APPTA claims that it covers about 2,000 hectares of certi fied farms; among their outputs in 1996 were 160 tons of cacao and 1,000 tons of bananas. The association is establishing a fruit- processing plant. In general, there is strong interest in organic agri cul ture in the country and the organic food sector is devel oping fast. The Uni ver sity of San Jos has a research pro gramme (Programa de Agricultura Orgnica) on organic agriculture and several other projects on aspects of organic farming are being car ried out in the country.

Processing, trade, certification


In 1995, there were a few coffee-processing enterprises and two plants producing banana pure. Small quantities of dried fruit, noodles and cookies were also produced. The product range has since expanded to include hot sauces, pasta and manioc snacks and bev er ages. Organic prod ucts are pro duced mainly for export to the United States and the Euro pean Union. How ever, some uncertified vegetables are retailed by the super market Mas por Menos, and dried fruit, tea and medicinal herbs are sold in health food shops. One company, Ecoexport, produced and exported 200 tons of raw coffee annu ally in the mid 1990s in addi tion to roasted coffee and other organic prod ucts.

Costa Rica Production


In 1995, Costa Rica had more than 1,500 certified

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The company farm was certified in 1993; the com pany also coop er ates with 126 local growers. An organic depart ment has recently been estab lished in the Min istry of Agri cul ture and a law on organic pro duc tion and label ling, inspec tion and cer ti fi ca tion has been drafted. The pro duc ers asso cia tion, ANAO (Asociacin Nacional de Agricultura Orgnica), founded in 1995, has a national pro gramme and has established a national certification agency, EcoLgica. ANAO and Icaf, the national coffee institute, are collaborating in a project for the development of the production and processing of organic coffee.

overall aim is to develop systems to enable the average small farm er to pro duce enough food for his or her family. Useful address
INCA, Grupo de Agricultura Sostenible Caseta Postal 1 San Jos de las Lajas , La Habana Fax: +53-64-63867 (Production and development)

Dominica
Organic agri cul ture in Dominica is in its early stages.

Biofair
During the period 1995 to 1997 the Costa Rican Chamber of Commerce organized, with the support of GTZ, a yearly international fair for organic products, BIOFAIR, an initiative that is expected to be revived. Useful addresses
ANAO (Asociacin Nacional de Agricultura Orgnica) Apdo 132-2020 Centro Postal, CR-San Jos Tel/Fax: +506-2240911 E-mail: lbrenes@cariari.ucr.ca.cr (Control, certification) APPTA (Asociacin de Pequeos Productores de Talamanca) Bribri, Talamanca, CR-Limn Tel: +506-7584445 Fax: +506-7584972 E-mail: ecoappta@sol.racsa.co.cr

Dominican Republic Production, trade and certification


The Dominican Republic has engaged in organic farming since 1982 and the area devoted to organic production continues to rise. It is an important producer of organic cocoa and bananas in their various forms. In the 1995/96 season, the countrys output of cer ti fied coffee was esti mated at 250 - 300 tons; an increase to 1,000 tons is expected in the two to three years from 1998. A more detailed list of prod ucts fol lows: cocoa (beans, butter, liqueur and powder); coffee; fruit, processed (banana paste for baby food, mango pure, shredded coconut); fruits, fresh, other (man goes, pas sion fruit); honey; neem (a natural pesticide) products; oil crops (coconut); roots and tubers, fresh (manioc); spices (ginger);sugar cane; and vege ta bles, fresh. There are nine entities producing and/or marketing organic prod ucts. They are Apcola Tropical (honey); Conacado (cacao, coffee); Gran (coffee, ginger); Hori zontes Orgnicos (bananas, cacao, coffee); Liga; Plantaciones Tropicales (bananas); Procesadora de Caa Orgnica Cruz Verde (cane sugar); Savid (bananas); Cooperativa Francisco de Rosario Snchez (bananas). Gran is an NGO that supports sustainable rural development as well as organic and biodynamic agri cul ture. In 1997 it cov ered 12 vil lages with about 1,000 farmers, pro viding credit, tech nical assis tance, certification services and marketing assistance. Its exports of coffee started in 1992 and are on the rise. Con acado com prises 2,000 small and medium- sized farmers organized in nine cacao and two coffee cooperatives. The Ministry of Agriculture has

Cuba
Conversion to organic farming began in the 1980s and food production took off in the 1990s. One condition favouring this development was the fall from 1990 onwards in imports of arti fi cial fer til izers and pes ti cides by as much as 70% -80% from their peak levels. Con ver sion has not been lim ited to the rural areas, and a large number of fami lies in urban centres have been converting their gardens into mini- farms since 1991. It is believed that a large part of the countrys output of sugar and rice will be organic within a decade. Organic spirits, like rum, are also pro duced. The Cuban Association of Organic Agriculture (ACAO) is run ning mixed livestock- crop trials. The

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recently given support to certain organic projects, including those pro ducing cacao and sugar cane. The small domestic market is open mainly to fruits and vege ta bles, and the bulk of the coun trys organic output is exported to Europe and North America. The Dominican Republic is believed to be the major supplier of fresh organic bananas to the European Union. Some coffee is exported to Sweden. Several foreign control and certification bodies are active in the Dominican Republic. They include BCS, Demeter Association, Ecocert, FVO (Farm Verified Organic), KRAV and SKAL.

Tel: +1-809-5213571 Fax: +1-809-5213925 (Production, trade) Plantaciones Tropicales sa Cesar Nicolas Penson 116 Santo Domingo DCM Tel: +1-809-2212727 Fax: +1-809-6860755 E-mail: drtrade1@tricom.net (Production, trade) Savid sa Calle Coln 125, Azua DCM Tel: +1-809-5213568 Fax: +1-809-5212310 E-mail: savid.sa@codeTel:net.do (Production, trade)

Potential
While a large proportion of the countrys coffee is produced without agro-chemicals, only small quan ti ties have been cer ti fied organic. Rep re sen ta tives of the National Coffee Board believe that in order to raise this volume, efforts to increase awareness of organic farming methods, con ver sion pro ce dures and market oppor tu ni ties should be made. According to ADAO, a national umbrella organi za tion for companies and other bodies interested in the development of organic agriculture, the number of coffee farmers wanting to learn about organic farming methods and to receive assistance in conversion is growing. Gran sees providing access to credit as one of the most important tools for assisting farmers attempting to engage in sustainable organic agri cul ture. There seems to be a good poten tial for the production of several herbs and spices for flavouring and medicinal purposes; they include products from aloe vera, citrus peel and neem. Useful addresses
ADAO (Asociacin Dominicana de Agricultura Orgnica) Benigno del Castillo 4, 2 Planta, Apt. No. 22263 San Carlos, Santo Domingo Tel: +1-809-2210012 Fax: +1-809-6899013 E-mail: adaoimaria@redid.org.do (Production, development) Cooperativa Francisco de Rosario Snchez Calle 19 de Marzo 166 Azua DCM Tel/Fax: +1-809-5214322 E-mail: RitthalerG@vahoo.com Horizontes Orgnicos C&A Apartado 15, Azua DCM

Ecuador
The organic output of this country includes fresh and processed fruit (banana powder, banana flakes and pure), grains (amaranth, quinoa) and sugar cane. The advisory service, Promecados, provides pro duc tion and mar keting sup port. GTZ has assisted in the par tici pa tion of rep re sen ta tives of the sector in the Bio fair in San Jos and Bio fach in Frank furt. The aim is to gen erate interest in Ecua dors organic fruits, which are not well known in the main markets for organic prod ucts. A struc tured national market for organic prod ucts does not exist. MCCH (Maquita Cushunchic, which means Trading Like Brothers) is typical of the farmers organi za tions which work together to build their own distribution structures. MCCH has over 220 sales points throughout the country. Internationally these organizations have formed RELACC (Red Latinoamericana de Comercializacin Comunitaria). Exports are increasing. It appears that Ecuador has good conditions for the pro duc tion of cacao, bananas, tra di tional grains like quinoa and ama ranth, sugar cane and various kinds of citrus fruits. In 1998, it was thought that these items could be produced and certified to EU rules within two years, and first steps were expected to be taken towards the pro duc tion of banana pure, cacao butter and citrus peel oil. Useful address
Centro de Agricultura Biolgica Bolvar 13-30, entre Juan Montalvo y Estvez de Toral Cuenca Tel: +593-7-838293 (Production, development)

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El Salvador
In 1996, around 4,900 hectares were devoted to the certified production of organic coffee. The German entity Protrade pro vides assis tance in the pro mo tion of organic agriculture and the establishment of a certification body. The Good Food Foundation (Netherlands) has project activities in the country; their output includes coffee, honey, nuts (cashew, pea nuts), oil crops (sesame seed). Exports are aimed mainly at the North American market. Useful address
Agrodesa sa de cv Urban. Buenos Aires 27 Av. Norte, ES-1221 San Salvador Tel/Fax: +503-2252547 E-mail: agrodesa@es.com.sv (Production, trade)

coffee; much of their output is cer ti fied by OCIA. Organizations like Agexpront, Altertec and Cemat have been promoting organic agriculture for many years. Anacaf, which over sees the Gua te malan coffee sector, pro motes organic farming through infor ma tion activi ties, semi nars and devel op ment proj ects.

Trade
In 1997, large quan ti ties of coffee and sesame as well as some fruit and spices were exported to Canada, the United States and the Euro pean Union. Trade sources estimate overall exports of certified organic coffee during the 1996/97 season at 600 tons; this volume is expected to rise in the near future. Some vegetables are mar keted domes ti cally as well as inter na tion ally. GTZ implements a trade promotion project, which finances participation in fairs and supports the creation of a certification body and the training of certificationagents. Useful addresses

Grenada
Gre nada has the begin nings of organic agri cul ture.
Ag ex pront (or: Gremial) 15 Avenida 14-72, Zona 13, Guatemala Ciudad Tel: +502-3-622002 Fax: +502-3-621950 E-mail: gexpron@pronet.net.gt Web site: http://www.agexpront.com (Association of exporters of non-traditional products) Altertec Boulevard los Prceres 18, Calle 9-31 Guatemala City-10 Tel: +502-3683181 Fax: +502-3683181 E-mail: altertec@guate.net (Development) Asociacin Chajulense Val Vaq Quyol 14005 San Gaspar Chajul-El Quiche Guatemala Ciudad Tel/Fax: +502-2-340085 (Production, trade) Cemat 28, Ave.18-80, Zona 10, Apdo 1160 Guatemala Ciudad Tel: +502-2-3631280 Fax: +502-2-3394804 E-mail: reaceres@uvalle.edu.gt (Development)

Guatemala Production
In the mid 1990s, around 7,000 hec tares were planted to organic coffee. Organic coffee is an important national export; it is traded both raw and roasted. Guatemalas other organic products include cocoa and cocoa prod ucts (cocoa butter); fruits, proc essed (pure of frozen berries); fruits, fresh (bananas); fruits, dried; honey; nuts (cashew); oil crops (sesame); spices (allspice, cardamom, pepper, vanilla); and vege ta bles, fresh. Samples of some products different varieties of coffee, spices and dried fruits were exhibited at Bio fach 1997 and 1998 in Ger many. Prod ucts in the process of cer ti fi ca tion were also shown at this fair; they included flowers, chewing gum and sugar. Guatemala has four large producers of certified organic coffee: two coop era tives (Asocia cin Aderso and Grupo de los Catorce) and two pri vate com pa nies (nico and Diversica). Another producer is the Asocia cin Cha yulense Val Vaq Quyol, cer ti fied by Naturland. There are also a large number of smallholders who have started to produce organic

Guyana
The nas cent organic sector in this country has started pro ducing rice, among other prod ucts.

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Haiti
Haiti produces fresh fruit (mango) and processed fruit (mango pure and chutney), coffee and honey. OGBA (United States) certifies some mango pure and chutney.

Useful addresses
FHIA Apartado 2067, San Pedro Sula Tel: +504-68-2030; +504-68-2078 Fax: +504-68-2313 E-mail: fhia@simon.interTel:hn (Banana research) Red Nacional de Agricultura Orgnica Vecinos Mundiales Apartado Postal 3385, Tegucigalpa Tel: +504-30-2003 Fax: +504-30-2004 (Development)

Honduras Production and trade


Organic agriculture has been practiced in Honduras since the early 1990s. Products include fresh fruits (pine ap ples, bananas, man goes), dried fruit (bananas, man goes, pine ap ples) and proc essed fruit (pine apple juice and con cen trate, banana and pine apple pure), sesame, peanuts and cashew nuts ( maran), oil crops (coconut) and cocoa. There is a model organic farm at a pri vate uni ver sity (Escuela Agrcola Panamericana) in Zamorano. FHIA (Fundacin Hondurea de Investigacin Agrcola) in San Pedro Sula is the world authority on banana research and has developed several disease-resistant banana varieties, which bear its name and are of particular interest to organic growers. NGOs like CINDES (Consultara para las Iniciativas de Desarrollo Econmico y Social) in Cholu teca are intro ducing the organic pro duc tion of coffee and nuts. Hurricane Mitch heavily damaged organic pro duc tion units in 1998. Nev er the less, it is believed that there are good possibilities for developing the sector further, as important initiatives towards this have already being taken.

Jamaica
Jamaica has the beginnings of organic farming. Its prod ucts include cane sugar and ginger. Useful address
Jamaica Organic Growers Association 16 Windsor Avenue, Kingston 5 Tel: +1-809-978-1721

Martinique
The island has the beginnings of an organic agricultural sector. The Boris Challe Company pro duces and exports bananas.

Nicaragua Production and trade


By 1998, organic agriculture had been practiced in Nica ragua for more than 10 years. It is esti mated that in the mid 1990s it produced around 500 tons of organic coffee annually on about 1,400 hectares of land. Among its other out puts are cocoa, cotton, dried legumes (beans, soy beans), fresh fruits (bananas), honey, nuts (cashew), oil crops (sesame, referred to as ajonjol), spices (ginger) and spirits (rum). It also has some proc essed organic prod ucts (vinegar). The national market is undeveloped. Some health food stores and certain outlets of the La Colonia super market chain sell organic prod ucts. Organic coffee, sesame and beans are important export products and are sent mainly to the United States and the Euro pean Union. Clusa (Coop era tivas Ligue USA), which has the support of the United States Agency for International Development

Trade and certification


National dis tri bu tion is in its infancy, although there are sev eral health food shops car rying organics. The supermarket chain La Colonia retails whatever organic products are available and has expressed interest in other organic goods. Most of Hon du ras output is exported. It mar kets its dried fruit in Europe. A net work of envi ron mental and rural devel op ment organizations, called the Red Nacional de Agricultura Orgnica, works on standards and cer ti fi ca tion, and col labo rates with the Nica ra guan cer ti fier Cenipae.

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(USAID), is an effective organization which coordinates the activi ties of farmers, proc es sors and packers, and pre pares prod ucts for export.

Various other products are marketed in the United States and the European Union. The national market is insignificant. Useful address
MAELA (Movimiento Agroecolgico en Amrica Latina y El Caribe) Cas. Correos 1730 Manuel Domnguez 1040, Asuncin Tel/Fax: +596-21-201512 E-mail: cectec@sce.cnc.una.py (Production, development)

Certification
There are no government regulations on organic agriculture. Inspection and certification are mainly carried out by the local inspection body Cenipae (Centro Nicaragense para la Investigacin y Promocin de la Agricultura Ecolgica). Cenipae was founded in 1994 by members of Nicaraguan environmental protection organizations. It now works within the umbrella organization Bio-Latina which also covers Bolivia, Colombia and Peru. Useful addresses
Cenipae/Bio-Latina Colonia del Periodista no.232, Managua Tel: +505-2787060 Fax: +505-2787090 (Control, certification) Fishnet (Farmers International Self-help Network) Apartado Postal 40, Masaya Fax: +505-5226018 Web site: http://www.leibi.de/fishnet (Development, information)

Peru Production and trade


In 1998, about 2,000 organic farmers, mainly smallholders, belonged to farmers groups and cooperatives and worked an estimated 12,000 hectares. Production includes nuts (cashew), oil crops (sesame), dried legumes, grains (amaranth and quinoa), coffee, honey, herbs, cotton and woollen fabrics. Processing is limited. Much of Perus organic produce is sold in the United States. The European Union is the second market. There is a nascent domestic market, and organic produce is sold in supermarkets, for instance. Peru Naturtex in Vallecita (Arequipa) and Raymisa sa in Lima produce woollen and cotton fabrics.

Panama
The nascent organic sector in Panama produces cocoa and herbs. The Panama Herbs Group helps to market herbs in the European Union and the United States. Useful address
Vacar Grupo de Consumidores de Productos Orgnicos Box 2223, Zona 9A, Panama-City Tel: +507-2633464 Fax: +507-2139151 E-mail: vacaru@sinfo.net (Development, information)

Certification
The local inspec tion and certi fi ca tion body, Inka Cert, was founded in 1994, supported by NGOs within Perus Red de la Agricultura Ecolgica. Guidelines and a control programme meeting the requirements of EU regu la tions were devel oped with the support of a GTZ project. Inka Cert carries out its inspec tion and certification activities throughout the country. However, products destined for North America continue to be inspected and certified mainly by North American inspec tion bodies. Inka Cert and similar ini tia tives in Bo livia, Co lumbia and Nicaragua have formed an association called Bio-Latina. The association supports organic agriculture in its member countries. Information is exchanged, inspection work is coordinated and cer ti fi ca tion is car ried out at prices that small holders can af ford.

Paraguay
Production includes cotton, nuts (peanuts), dried legumes (soy beans), oil (safflower oil), oil crops (sesame, sunflower and safflower seeds) and sugar cane. Processing facilities are limited, but Otisa in Asuncin is a large sugar processor and exporter, trading predominantly with the United States.

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Useful addresses
Bio-Latina Av. Arenales 645 PO Box 11-0170, PE-Lima 1 Tel: +51-14-247773 Fax: +51-14-331073 E-mail: biolatin@ideas.org.pe (Control, certification) Red de la Agricultura Ecolgica Av. Arenales 645 PO Box 11-0170, PE-Lima 1 Tel: +51-14-247773 Fax: +51-14-331073 E-mail: rae@ideas.org.pe (Development)

PO Box 1229, Port of Spain Tel/Fax: +1-868-6259223 (Production, development)

Saint Lucia, Saint Vincent and the Grenadines


These countries have the beginnings of an organic sector.

Suriname
Suriname has 250 hectares under organic (uncertified) cropping. It produces fruits, vegetables and grains (rice), which were intended to be exported to the Netherlands, but this has not happened so far. Useful address
Winston Wirht Madeliefjesstraat 14, Paramaribo Tel: +597-400785 Fax: +597-410555 E-mail: wirhtww@sr.net (Production, development)

Puerto Rico
Some production of processed fruit (banana pure, for example) takes place in Puerto Rico. Useful address
APARI (Asociacin de Pequeos Agricultores de Rabonbal, Inc.) PO Box 1656, Cidra 00739 Tel/Fax: +1-809-7390222

Uruguay
Since 1985, Uru guay has taken ini tia tives to pro mote the production and the domestic and international mar keting of organic pro duce. A National Pro gramme for Organic Production, established in 1997, is coor di nated by the Pro gramme for the Mod erni za tion and Development of the Horticultural Sector of the Min istry of Agri cul ture and has the strong sup port of Germanys GTZ. Today, more than 150 organic farmers work under the national programme. Their output includes beef and dairy prod ucts; fruits, fresh (apri cots, small fruits); grains (brown and white rice); honey; medicinal and aromatic plants; oil-seeds (sunflower); and vegetables, fresh. Most farmers belong to the Uruguayan Association of Organic Pro ducers (APODU). There are a number of processing units producing dairy products, meat and meat products, and processed fruit. Biosur, a wholesaler, buys organic produce from smallholders for onward sale to retail outlets like supermarkets. Biosur also provides assistance in cultivation and trade promotion. A national market is developing, with interest among domestic consumers increasing rapidly. As early as 1995, test sales of organic fresh fruits and vegetables were carried out in the Disco supermarkets. The Devoto supermarket chain is entering the organic field.

Trinidad and Tobago


The Trinidad and Tobago Organic Agriculture Movement Ltd (TTOAML) had in the beginning of 1999 about 80 members, of which the Coffee Industry Board is the largest. Five members cultivate avocados, ginger, hibiscus, mangoes and pineapples. The Movement also produces herbs like basil, chives, mint, parsley and thyme. Its efforts are directed towards converting hill farming, largely mono-cropping, into sustainable organic systems. Much of the farming in the country is organic by neglect. Four agronomists are being trained in proper organic farming techniques. Proc essing (of coffee and herbs) is at the pri mary level. There are many health food stores, and super mar kets are beginning to show interest in organic products. Export destinations are the United States and the United Kingdom. As the products have not been certified to international standards, they are labelled natural rather than organic. Negotiations for co- certification by the Swiss IMO are taking place. Useful address
TTOAML (Trinidad & Tobago Organic Agriculture Movement Ltd)

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Export potential is believed to be highest for fresh plant products, beef, and processed meat products. As indicated above, the Uruguayan Government strongly supports the organic movement, has its own legislation on production and control, and has filed for equivalency with EC Regulation 2092/91. The Asociacin Rural del Uruguay (ARU), the Society for Consumers of Organic Products, and Urucert are involved in inspection and certification. Foreign certifiers, including the Argentinean Argencert, are also active in Uruguay. Useful addresses
Asociacin Rural del Uruguay Avda. Uruguay 864, 11.100 Montevideo Tel: +598-2-920484 Fax: +598-2-9020489 E-mail: aru@netgate.com.uy Web site: http://www.aru.com.uy/ (Control, certification) Biosur 21 de Setiembre 2873/101 Montevideo Tel: +598-2-7103957 Fax: +598-2-7112539 (Trade, development)

mangoes) and coffee. Useful addresses


CENDA (Centro de Desarrollo y Ambiente) PO Box 17183, Caracas 1015-A Tel: +58-2-5717648 Fax: +58-2-5717648 (Development) FUNDAGREA (Fundacin para el Desarrollo de la Agricultura Ecolgica) PO Box 60848, Caracas 1060 Tel: +58-2-4963569 Fax: +58-2-2838519 E-mail: fundagre@reacciun.ve (Development) IPIAT (Instituto para la Produccin de la Agricultura Tropical) Apartado 84, 5101A Edo. Mrida Tel: +58-74-523779 Fax: +58-74-523779 (Production, development)

Other countries/areas
In December 1998, there was apparently no certified organic agriculture in Aruba, the Netherlands Antilles, and Saint Kitts and Nevis.

Venezuela
Venezuela produces organic fresh fruits (such as

NAFTA countries
Canada, Mexico and the United States, the three members of the North American Free Trade Agreement (NAFTA), are substantial producers of a wide range of organic products. Canada and the United States have well-developed domestic organic markets. All three are large exporters, and Canada and the United States are substantial importers. New Brunswick, 20 in Nova Scotia, 18 on Prince Edward Island and 2 in Yukon Territory. The main crops are grains (buckwheat, millet, rice, wheat,), oil crops (flax, safflower) and dried legumes (beans, soy, various kinds of peas and lentils). Large areas are utilized for grazing and forage. Canada produces fresh fruits (e.g. apples), fresh vegetables and maple syrup (in 1995 it had 1,500 hectares of maple woods). Ginseng is also grown organically (in British Columbia). Many dairy farmers work organically and there are some organic poultry farms. Beef producers are slow to convert to organic farming.

Canada Production
By the end of 1997, there were 1,830 certified organic and biodynamic farms in Canada, covering roughly 1 million hectares (more than 0.6% of all farmland). The farms are distributed as follows: 429 in Quebec, 399 in Saskatchewan, 344 in Ontario, 288 in British Columbia, 178 in Alberta, 119 in Manitoba, 33 in

Processing, trading
By the end of 1997, Canada had 164 certified organic

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processors and manufacturers. To date, processing has concentrated on primary processes such as cleaning, grading and milling, baking, processing of maple syrup and dairy products, and so on. However, the volume of further-processed organic products is rising rapidly. In 1995 the farm-gate value of organic products was estimated at 1% of the value of all agricultural production. About 80% of the organic output was exported in 1995. Canada imports organic raw materials and finished products; these imports were valued at an estimated Can$ 75 million in 1995. There are roughly 1,000 retail outlets in the health food and natural food sectors which carry organic products in addition to their main items. Supermarkets are taking up organic assortments; for instance, all new Loblaws and Sobeys supermarkets carry organic products.

Delta, BC V4G IE8 Tel: +1-604-9400505 E-mail: cereal@naturespath.bc.ca Web site: http://www.naturespath.com (Cereal processing and trading) OCIA Saskatchewan Chapter 1 Box 83 Socoro, Carlyle, SK S0G 0R0 Tel/Fax: +1-306-4532884 (Control, certification) OCPP (Organic Crop Producers & Processors Ontario) RR 1 KSV 4R1, Lindsay, Ontario Tel: +1-7053242709 Fax: +1-7053244829 (Control, certification)

Mexico Production
Mexico is Latin Americas biggest producer of organic coffee and one of the regions largest organic producers and exporters overall. Organic (biodynamic) coffee production in the country was started by Finca Irlanda in 1950. A boom in this particular sector occurred in the 1980s and continued through most of the 1990s. The country, like many others in the region, was severely affected by the consequences of El Nio in 1998. For instance, flooding in Chiapas totally destroyed the crop of UDEPOM, one of the countrys main exporters of organic coffee. The national output of organic coffee from a total of 30,000 hectares is currently estimated at more than 30,000 tons annually. Mexico is also a major producer of organic cocoa and honey. Among its other products are agave juice (a sweetener); chicle (the milky juice of the sapodilla tree which is a raw material for chewing gum); cotton, loofa and wood products; fruits, processed (fruit juices); fruits, dried (mango); fruits, fresh (apples, avocados, bananas); grains (amaranth); legumes, dried (beans); medicinal herbs; nuts (peanuts); oil crops (sesame, pumpkin, coconut); roots and tubers, fresh (potatoes); spices (cardamom); and vegetables, fresh. FSC (Forest Stewardship Council ac, whose head office is in Oaxaca, certifies sustainable forestry and its products, which are increasingly re-certified by organic certifiers such as The Soil Association (United Kingdom) and SKAL (the Netherlands),

Legal status and certification


All domestic and imported products marketed as organic in the province of Qubec will have to be certified from 1 March 1999 (domestic) and 1 January 2000 (imports) in accordance with the Qubec Accreditation Program. A demand for equivalence with the EC 2092/91 Regulation is to be filed in 1999. In the rest of Canada, products marketed as organic have to be produced according to organic standards but without any formal need for certification. There are several dozen certifiers in the country, both Canadian (see useful addresses below) and American (OCIA, FVO, QAI and OGBA) (see section on the United States). Useful addresses
COG (Canadian Organic Growers) PO Box 116, Collingwood, ON L9Y 3Z4 Tel: +1-705-4440923 Fax: +1-705-4440380 E-mail: organic@georgian.net Web site: http://www.gks.com/cog/ (Development, certification) MAPAQ (Qubec Organic Network) 200 chemin Ste Foy, 11e, Qubec G1R 4X6 Tel: +1-418-6468371 Fax: +1-418-6443049 E-mail: arthur.marcoux@agr.gouv.qc.ca (Production, certification, trade) Natures Path Foods, Inc. 7453 Progress Way

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Producer groups like ISMAM (Indgenas de la Sierra Madre de Motozintla, in Tapachula, Chiapas); Productores Orgnicos del Pacifico sc (Atoyac de Alvarez, Guerrero); UCIRI (Unin de Comunidades Indgenas de la Regin del Istmo, in Ixtepec, Oaxaca); UDEPOM (Unin de Ejidos Profesor Otilio Montano in Motozintla, Chiapas); Unin de Ejidos San Fernando (San Fernando, Chiapas); Yeni Navan (San Francisco Tutla, Oaxaca) and others are important producers of certified organic coffee and other products, both of which often also qualify as fair trade products. They have their own processing plants and sales organization and are no longer dependent on exploitative intermediaries. Some large coffee fincas (farming estates) are run by European families. They include Finca la Patria (in Tapachula, Chiapas) and Finca Irlanda. Access to technical assistance and reasonable forms of credit remains difficult. Cooperatives like the Unin de Ejidos Maravillas Tenejapa (in Comitn, Chiapas) and CESMACH (Campesinos Ecolgicos de la Sierra Madre de Chiapas (in Angel A. Corzo, Chiapas) and others are struggling to gain entry into export markets. CNOC (Coordinadora Nacional de Organizaciones Cafetaleras) is a national network of 125 peasant organizations, many of whose members grow certified organic coffee. CEPCO (Coordinadora Estatal de Produc tores de Caf de Oaxaca ac) coordinates organic coffee growers and sells their output through CAEO (Comerciali za dora Agropecuaria del Estado de Oaxaca sa de cv). SSS Costa de Tabasco (in Comalcalco, Tabasco) is a large cooperative of cocoa growers. Pronatura (Mrida, Yucatn) and Nectar de Campeche SA de CV (Chulon, Yucatn) are among the leading traders of honey, which comes mainly from nature reserves in Yucatn. A new product on the organic market is concentrated agave juice, a natural sweetener, produced on large estates in Jalisco, Guadalajara, and traded by IIDEA (Industrializadora Integral del Agave sa de cv) in Mexico City. Not all intermediaries take advantage of the farmers. AMSA (Agroindustrias Unidas de Mxico sa de cv), also known as the Esteve Group, works closely with farmers groups and provides them with processing and exporting facilities.

Productores Orgnicos del Cabo (in San Jos del Cabo) packs and exports large quantities of fresh and dried organic vegetables, mainly to the United States. Huertas de Guadalupe (Chihuahua) produces organic apples and apple juice and exports them to the United States under the brand name Pomitas. Asociacin de Productores de la Tarahumara in Guachochi, which produces large quantities of organic apples, is struggling to access processing facilities and to reach export markets.

Official support
The Ministry of Social Development (Secretaria de Desarrollo Social, Sedesol) is particularly supportive of the organic movement in Mexico. One of its sections, FONAES, has the task of fighting the often extreme poverty of the small farmers and of 80% of Mexicos indigenous people. It supports many producer groups involved in organics.

Trade
Most of Mexicos organic produce is exported. The domestic market is growing very slowly. Only a few natural and health foods store carry organic products. Farmers markets are developing where small producer-owned cooperatives and associations make their products available to the local communities.

Legal basis and certification


In 1992, AMEA (Asociacin Mexicana de Agricultores Ecolgicos AC), the sectors first umbrella organi za tion, was founded; it took steps to have offi cial organic rules adopted by the Direc cin Gen eral de Sanidad Vegetal (DGSV), a sec tion of the Ministry of Agriculture (Secretaria de Agricultura, Ganadera y Desarrollo Rural, SAGAR). Rules (Norma Oficial Mexicana NOM-037-Fito-1995) were established in 1995 and amended in 1997. These are incom plete, are con sid ered insuf fi cient and have not achieved equivalence with EC Regulation 2092/91. Some years ago a large number of farmers dependent on foreign certifying entities created Ecomex AC (Campesinos e Indgenas Ecolgicos de Mxico) to represent their interests and to establish a national certification body. Ecomex spun off AMIO (Asociacin Mexicana de Inspectores Orgnicos), an inspection body, and Certimex, a certification body.

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A certification initiative of the University of Colima is CUCEPRO (Centro Universitario Certificador de Productos Orgnicos). Among the foreign certification agencies working in Mexico are OCIA (which has a Mexican chapter) and Oregon Tilth (United States), IMO (Switzerland, Bolivia), BCS and Naturland (Germany).

E-mail: unofoc@akbaal.image.net.mex (Sustainable forestry certification) ISMAM 18 Calle Poniente No. 2, 30700 Tapachula, Chiapas Tel/Fax: +52-962-52404 (Producer, trader) UCIRI Ap. Postal 60, 70110 Cd. Ixtepec, Oaxaca Tel/Fax: +52-971-30426 E-mail: uciri@antequera.com (Production, trade) UDEPOM 3ta Norte 410 30900 Motozintla de Mendoza, Chiapas Tel/Fax: +52-964-10271 E-mail: trac@tapachula.podernet.com.mx Web site: http://www.udepom.com (Production, trade)

Potential
Mexicos organic sector has a high potential for growth. Market demand is growing, the infrastructure is improving and the business community at all levels is becoming aware of the expanding market for certified organic products. Useful addresses
AMSA (Esteve Group) Bosques de Alisos 45-A2 Bosques de las Lomas, Cuajimalpa 05210 Mexico-DF Tel: +52-5-2576500 Fax: +52-5-2597785 (Processor, trader) CEPCO/CAEO H. Esc. Naval Militar 708, Col. Reforma 68050 Oaxaca (Oaxaca) Tel: +52-452-34001 or +52-452-34996 Fax: +52-452-33904 E-mail: cepcos@antequera.com (Production, trade) Certimex Antonio M. Ruiz 11 U. Isste. CP 56231, Chapingo, Mxico Tel/Fax: +52-595-42060 E-mail: certimex@antequera.com (Certification) CNOC Tabasco 262 Desp. 301 Col. Roma, CP 06700 Mxico-DF Tel: +52-5-5140205 Fax: +52-5-2070508 (Trader) FONAES Av. Parque Lira 65 San Miguel Chapultepec, 11850 Mexico DF Tel: +52-5-2726205 Fax: +52-5-2725939 (Ministry of Social Development) FSC (Forest Stewardship Council) Hidalgo 502, Centro, 68000 Oaxaca Tel/Fax: +52-983-71145

United States Introduction


The United States market, estimated at $4.2 billion in 1997, had another year of over 20% growth in 1998. The most phenomenal growth has taken place in the snack and candy sector, very important in the United States, with annual growth rates of far over 100%. The United States is not only a major importer, both of raw materials mainly from developing countries and of processed products from developed countries, but it is also an important exporter, mainly of cereals, soy and pulses as well as of some processed products, predominantly to Europe and Japan.

Production
Close to 5,000 cer ti fied or ganic pro ducers farmed a total of 369,000 hec tares in the United States in 1995. More land may be managed with organic farming methods but is not certified. Federal regulations re quiring the cer ti fi ca tion of foods sold as or ganic are not yet in place, and most States do not oblige or ganic farmers or food manu fac turers to be cer ti fied in order to market foods as such. Furthermore, processors may be pur chasing in gre di ents claimed to have been pro duced in ac cor dance with the Cali fornia Or ganic Foods Act of 1990 but not cer ti fied. Nev er the less, in the grain-producing States with the largest areas under organic production, most organic farms are cer ti fied or ganic. The acreage certified organic in 1995 was down on the figure for 1992, a result of the withdrawal of

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organically managed range-land from certification. Because the U.S. Department of Agriculture disallows the organic labelling of meat products, organic beef producers have no incentives for maintaining vast range-lands under costly certification programmes. The number of hectares used as pasture or range-land declined by 36% to about 112,000 hec tares between 1994 and 1995. Beef cattle, dairy cattle, chicken and turkey for meat, layer hens, sheep, pigs and ducks are among the certified live stock. Certified organic crop-land, on the other hand, continues to expand at a double-digit rate. It rose to about 258,000 hectares in 1995. Output includes grains, pulses, cotton and other products. About a quarter of the land produces livestock feed, the need for which is rising rapidly with the heavy demand for organic dairy products in the United States. The labelling of dairy products and fresh eggs is the purview of the Food and Drug Administration rather than the Department of Agriculture; these products can be labelled organic and have strong markets. Nevertheless, beef cattle and meat poultry, as well as swine, lamb, goats, and other meat animals continue to be certified organic, in some cases for export to foreign markets. The area under certified organic fruit and vegetable production amounted to around 43,000 hectares in 1995, making up about 12% of all certified land. The certified area planted to fruits, vegetables, nuts, aloe vera and mushrooms account for around 24% of all land under food crops. In 1994, more than 1% of the land under vegetables was certified organic. The States of California and Texas have the largest areas under organic vegetable production. In 1996, the acreage under cer ti fied organic vege table production and the certifying authorities were as follows: 7,300 hectares, Texas Department of Agriculture; 5,313 hectares, California Certified Organic Farmers (CCOF); 500 hectares, Florida Certified Organic Growers and Consumers; 350 hec tares each in Idaho and Wis consin, cer ti fied by the States main cer ti fying bodies. The cer ti fied areas in all these States expanded between 1993 and 1996. Subsequent fig ures are not avail able. The United States has a sig nifi cant output of organic grains (barley, buckwheat, corn, millet, wheat), and produces several organic rice varieties. An assortment of dried legumes (all kinds of beans,

lentils, soybeans) are also produced organically; soybeans have a particularly lucra tive market in the United States and abroad. Some 102,000 hectares planted to grains were certified organic in 1995, as were about 25,000 hectares under legumes for drying. Almost 20,000 hectares of soybeans were certified organic in 1995. Oleaginous crops (flax, sun flower) are also impor tant. The largest farmers organization is the Organic Crop Improvement Association (OCIA), with roughly 40,000 farmers. It has chapters in many Latin American and Asian countries.

Processing and manufacturing


The United States has proc essing and manu fac turing facili ties for all types of organic items. Its proc essed food products include baby food, baked goods, cereals, convenience foods (snacks, frozen meals, side dishes), cooking and salad oils, flours, herbs, liquorice, meat and dairy products, nuts (almonds, pea nuts, wal nuts), proc essed fruits (apples, avo cados, citrus fruit, pears, prunes, raisins), wines and processed vegetables (canned beans, processed toma toes, soy sauce, sprouts). Well-known processors and manufacturers are Arrow head Mills (cereal prod ucts), now belonging to the Hain Food Group in Boulder, Colorado; Cascadian Farm Inc. in Sedro-Woolley, Washington (fruit and vegetable-based products, including deep-frozen products and ready meals); Coleman Natural and Organic Meat in Denver, Colorado (meat); Earths Best in Pittsburg, Pennsylvania (baby food), belonging to the Heinz Group; Florida Bottling Inc. in Lakewood, Florida (juices); Florida Crystals, Palm Beach, Florida (sugar); Horizon Organic Dairy in Boulder, Colorado (dairy products and juices); Knudsen in Chico, California, part of the Smuckers Group (juices); M & M Mars in McLean, Viriginia (confectionary); Made in Nature, part of the Vacu-Dry Company in Santa Rosa, California (fruits, dried fruits, juices); Montana Flour & Grains in Fort Benton, Montana (cereals, specializing in the wheat grain Kamut); Muir Glen in Petalumna, California (tomato products); National Raisin Company in Fowler, California (dried fruits); Pavich Family Farms in Terra Bella, California (fruits, including dried fruits, and nuts); San-J(irushi) International Inc. in Richmond, Virginia (soy sauces); Organic Valley in La Farge, Wisconsin (dairy); Spectrum Naturals Inc. in Petaluma, California (oils) and Wholesome Foods in Tigard, Oregon (sugar). Celestial

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Seasonings in Boulder, Colorado is a renowned processor, importer and exporter of tea and herbal teas. Lily of the Desert in Irving, Texas (aloe vera) is an example of an organic producer and processor also active in the supplement and personal care field.

Boulder, Colorado. Alfalfas had about 10 stores in 1996, including two in Canada. Prod ucts of organic cotton and other fibres, per sonal care products, vitamins and herbal remedies are impor tant to the United States organic industry. Levi Strauss, Nike and Gap buy organic cotton and mix it with con ven tional cotton. The niche market for 100% organic cotton is growing despite high prices. Other than a small amount of organic coffee pro duced in Hawaii, most organic coffee sold in the United States is imported. However, most roasting and bagging of certified organic coffee beans take place within the country. There are numerous organic traders, brokers, wholesalers, processors and manufacturers, many of them members of OTA (Organic Trade Association, the former OFPANA) through which they can be contacted. Two of the oldest and best-known wholesalers (and importers) are Tree of Life in St Augustine, Florida and Eden Foods Inc. in Clinton, Michigan. Another well-known wholesaler is Rapunzel (Kinderhook, New York) a subsidiary of the German company Rapunzel. One of the oldest brokers is Mercantile Food Company (Philmont, New York), which has set up organic projects in developing countries, including the Dominican Republic. Recent studies have shown that 12% of American shoppers are naturalists inclined to buy organic products.

Trade
The United States is an important exporter of cereals and legumes; its main markets are the European Union and Japan. It is also a significant importer of tropical and processed products. It is the second largest organic market in the world after the European Union. Continuing its pattern of double-digit growth rates for six years running, the domestic market was valued at an estimated $4.2 billion in 1997. However, this was only a little over 1% of all of the countrys food sales in that year. Sales of natural products, including organics, through mainstream outlets rose by 8% between 1996 and 1997. Retailers of natural products and health foods, of which there are close to 13,000, had an average sales increase of 9%. About 62% of retail sales take place at natural product stores, 31% at super- and hypermarkets of which 50% now carry organics, and 7% through clubs, food box systems and food service outlets. A wide array of organic products can be found in conventional supermarkets. These are fighting average profit margins of 10% or less, and are facing increasing competition from mass-market discounters as well as natural food supermarkets. They are therefore seeking to add to their customer base, create new sales and enhance profits. Natural food supermarkets are a special feature of the United States market. The largest supermarket chain dealing in organics is run by Whole Foods Market, Inc., based in Austin, Texas. In 1998, it had 85 supermarkets selling natural food and non-food products in about 20 States, where it is known under various names including Fresh Fields, Wellspring Grocery, Bread & Circus, Bread of Life, Merchant of Vinoland and Mrs. Goochs. From $92.5 million in 1991, its turnover rose to $401.7 million in 1994; in the third trimester of 1998, its turnover was no less than $325 million, 25% up on the corresponding 1997 period. Another important chain with over 50 stores in western United States is Wild Oats, which is based in

Food laws and regulations, control and certification


The Organic Foods Production Act (OFPA) was adopted as part of 1990 Farm Bill in order to estab lish a National Organic Pro gram (NOP). OFPA has three pur poses: to estab lish national stan dards gov erning the marketing of certain agricultural products as organically produced; to assure consumers that organi cally pro duced foods meet a con sis tent stan dard; and to facilitate inter-State commerce in fresh and proc essed food that is organi cally pro duced. On 16 December 1997, a proposed regulation to establish the National Organic Program was published in the Federal Register for public comment until 16 March 1998. It included detailed requirements and guidelines for the production and handling of organic agricultural products, both crops and livestock. However, it was withdrawn after more

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than 275,000 comments on various controversial issues were received by USDA, which is now working on a revision. It is hoped that a new draft regulation can be published before the end of 1999. In the meantime there are no clear rules or regulations on organic products. About 30 States have some laws (for instance, labelling laws governing the use of the term organic); about 20 States have no legislation whatsoever on organics. There also appears to be great differences in what the laws cover in each State. About 13 States operate organic certification programmes. Other States have standards, but no certification programmes. As a result, the United States market for organic products accepts both certified and uncertified products. There are more than 30 private certification bodies in the country. Further information on the USDA National Organic Program can be obtained at http://www.ams.usda.gov/nop.

Rt. 3 Box 162-C, Winona, MN 55987 Tel/Fax: +1-507-4548310 E-mail: jriddle@luminet.net (International organization of organic inspectors) OCIA (Organic Crop Improvement Association) 1001 Y. Street Suite B, Lincoln, NE 68508-1172 Tel: +1-402-4772323 Fax: +1-402-4774325 E-mail: info@ocia.org Web site: http://www.ocia.org (Control, certification) OFRF (Organic Farming Research Foundation) P.O. Box 440 Santa Cruz, CA 95061 Tel: +1-831-4266606 Fax: +1-831-4266670 E-mail: research@ofrf.org Web site: http://www.ofrf.org OGBA (Organic Growers and Buyers Association) 7362 University Ave, NE Suite 208, Fridley, MN 55432 Tel: +1-612-5721967 Fax: +1-612-5722527 E-mail: ogba@sprynet.com (Control, certification) OTA (Organic Trade Association) 50 Miles Street POB 1078, Greenfield, MA 01302 Tel: +1-413-7747511 Fax: +1-413-7746432 E-mail: ota@igc.apc.org Web site: http://www.ota.com (Association of organic traders and manufacturers) OTCO (Oregon Tilth Certified Organic) 860 Hawthorne Ave NE, Suite 200 Salem, Oregon 97303 Tel: +1-503-3780690 Fax: +1-503-3780809 E-mail: organic@tilth.org Web site: http://www.tilth.org (Inspection, certification) QAI (Quality Assurance International) 12526 High Bluff Drive, Suite 300, San Diego, CA Tel: +1-619-7923531, Fax: +1-619-7928665 E-mail: organic@together.net (Control, certification)

Information
AgriSystems International (e-mail: agrisys1@aol.com) publishes a newsletter on organic trends. Natural Business Communication (naturalbiz@aol.com) issues a natural business newsletter. New Hope Communications (info@newhope.com), the organizer of the annual Expo West (Anaheim) and East (Baltimore), publishes the Organic Times, a version of its Natural Food Merchandiser focusing on organic products. Useful addresses
CCOF (California Certified Organic Farmers) 115 Mission Street, Santa Cruz, CA 95060 Tel: +1-408-4232263 Fax: +1-408-4234528 E-mail: Dianeb@ccof.org (Control and certification in California) FVO (Farm Verified Organic) RR #1, Box 40-A, Medina, ND 58467 Tel: +1-701-486-3586 Fax: +1-701-486-3580 E-mail: faremvo@dakTel:com (Control, certification) IOIA (Independent Organic Inspectors Association)

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Rodale Institute 222 Main Street, Emmaus, PA 18049 Tel: +1-610-6831400 Fax: +1-610-6838548 E-mail: wlande@rodaleinst.org (Production) USDA - Foreign Agricultural Service Horticultural & Tropical Products Division Organics Staff 1400 Independence Ave., SW, AG Box 1049 Washington, D.C. 20250-1049

Tel: +1-202-7201176 Fax: +1-202-7203799 Web site: http://www.fas.usda.gov USDA - National Organic Program 14th & Independence Ave., SW 2510S PO Box 96456 Washington, D.C. 20090-6456 Tel: +1-202-7208405/3252 Fax: +1-202-2057808 Web site: http://www.ams.usda.gov

Chapter 5 WORLD SUPPLY BY PRODUCT GROUP

This chapter gives an overview of the world supply of organic products by major product group. The lists given of products and supplying countries are far from complete, but they do give an indication of the

world supply situation. The countries are not necessarily cited in the order of their importance as suppliers of the products under review.

Animal products
Meat, dairy products, eggs
The European Union and the United States are important producers of organic meat and dairy products. Organic meat is likewise produced in Argentina, Uruguay and New Zealand (lamb). The European Union and the United States are major producers of milk and a wide range of dairy products. Among the leading European producers are Austria, Belgium, Denmark, France, Germany, Sweden, Switzerland, the Netherlands and the United Kingdom. Other producers and their products include: Argentina, milk, cheese and eggs; Egypt, cheese; and Turkey, milk.

Honey
Mexico is an important producer of organic honey. Among the other developing country producers are Argentina, Bolivia, Brazil, China, Colombia, Costa Rica, the Dominican Republic, Egypt, El Salvador, Guatemala, Haiti, Madagascar, Turkey, Uganda, the United Republic of Tanzania, Uruguay and Zambia. In Europe, the Balkan States, Hungary and Poland are producers, as is New Zealand in Oceania.

Fish
Some organic fish farming takes place, including salmon farming in Ireland and Norway. Organic fish and shellfish projects exist in the United States, Brazil, the Netherlands and the United Kingdom.

Vegetable products
Vegetables, roots and tubers
Both the European Union and the United States are major producers of vegetables, roots and tubers, including potatoes, carrots, onions and tomatoes. Israel is also an important supplier. Some developing countries (e.g. Argentina and Egypt) offer a variety of items in this product group. Several other countries produce certain quantities of vegetables for domestic consumption. Among the other producers are Brazil, Chile, Costa Rica, Ghana, India, Mexico, Poland, Tunisia, Turkey, Uganda and Uruguay.

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Legumes (pulses)
The United States is a major producer of dried beans. Other producers include Argentina, Brazil, Egypt, Honduras, India, Mexico, Nicaragua and Peru. Turkey produces some chickpeas and lentils, and Egypt grows peas. The output of the European Union includes peas, lentils, brown and white beans, and chickpeas. (For soya beans, see the section on oil-seeds below.)

Haiti, Honduras, India, Madagascar, Mexico, Morocco, Nicaragua, the Philippines, Poland, Senegal, South Africa, Sri Lanka, Sudan, Togo, Tunisia, Turkey, Uganda, the United Republic of Tanzania, Uruguay, Venezuela and Zimbabwe produce fresh fruits.

Fruits, dried
Turkey is an important source of a wide variety of dried fruits. A large volume is also produced in the United States (raisins in California, for instance), and in the Mediterranean (dates in Egypt, Algeria and Israel). Among the other suppliers are Latin America and the Caribbean (Argentina, Colombia, Costa Rica, Guatemala, Honduras and the Dominican Republic), Africa (Togo, Tunisia, Morocco, Uganda), Asia (Sri Lanka and India) and Eastern Europe (Poland and Hungary). Raisins, dates, apricots, apples, figs, bananas and other tropical fruit are typical dried fruit products.

Spices and herbs


Egypt is an important supplier of a variety of herbs and spices. Substantial production also takes place in India, Malawi and the United Republic of Tanzania. Many other developing countries offer herbs and spices, including Argentina (which grows a wide range of herbs), Brazil, Chile, China, Colombia, Costa Rica, the Dominican Republic, Guatemala, Indonesia, Jamaica, Mexico, Morocco, Madagascar, Mauritius, Morocco, Nicaragua, Papua New Guinea, the Philippines, Sri Lanka, Togo, Tunisia, Turkey, Uganda and Zimbabwe. Some herbs and spices are produced in the European Union, especially herbs like sage and parsley. It also produces organic lavander. Vanilla is produced in the Comoros, Costa Rica, Guatemala, Indonesia, Madagascar, Mexico, Papua New Guinea, Tonga and Uganda, among other developing countries.

Nuts
Turkey is a major producer of nuts, including hazel nuts. The United States (producing almonds; for example) and the European Union also offer organic nuts (Italy and Spain: hazelnuts and almonds; France: walnuts). Cashew nuts are produced in Latin America (Brazil, El Salvador, Guatemala, Honduras, Nicaragua, Peru), Africa (Madagascar, Mozambique, United Republic of Tanzania) and Asia (India and Sri Lanka). Peanuts are grown in Argentina, Ghana, India, Israel, Mexico, Paraguay and the United Republic of Tanzania, and Brazil nuts in Brazil and Colombia. China (walnuts), the Republic of Moldova (walnuts) and Tunisia also offer nuts.

Fruits and nuts Fruits, fresh


The European Union, the United States, Israel and Australia are some of the major producers of various kinds of organic fruits. Among the other producers are Chile and Argentina, countries around the Mediterranean (for instance Egypt), and many other countries particularly in Latin America and the Caribbean, and Africa. The Dominican Republic is an important supplier of bananas. This fruit is produced in many other countries in the Latin American and Carribean region, as are mangoes. New Zealand has a significant crop of kiwi fruit, as have Chile, France and Italy. Berries are produced for instance in Argentina and Hungary. Brasil, Burkina Faso, Burundi, Cameroon, Canada, Chile, China, Colombia, Costa Rica, the Dominican Republic, Ecuador, Egypt, Ghana, Guatemala,

Cocoa, coffee, tea and mat


Coffee is one of the most important organic products exported by developing countries. It is produced mainly in Latin America, where the largest producing country is Mexico. Among the other producers are Bolivia, Brazil, Colombia, Costa Rica, the Dominican Republic, Ethiopia, Guatemala, Haiti, Honduras, India, Indonesia, Madagascar, Malawi, Nicaragua, Papua New Guinea, Peru, the Philippines, Sri Lanka, Togo, Trinidad and Tobago, Uganda, the United States (Hawaii) and Venezuela.

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India is the biggest producer of organic tea, followed by Sri Lanka. Tea is also produced in countries like the United Republic of Tanzania (which offers several varieties), Argentina, Brazil, China (green tea), Costa Rica, Egypt, Japan, Nepal (green tea) and Papua New Guinea. Bolivia is a major producer of cocoa. Among the other producers are Belize, Brazil, Costa Rica, the Dominican Republic, Gabon, Ghana, Guatemala, Honduras, Cte dIvoire, Madagascar, Mexico, Nicaragua, Panama, Papua New Guinea and Togo. Mat is produced in Argentina and Brazil, for instance.

Seed grain
Some seed grain is produced in the European Union (for instance in Germany and the Netherlands), Switzerland and the United States. This sector is becoming crucial in efforts to create a food chain that is totally free of genetically modified organisms.

Oil-seeds and oleaginous fruits


Some of the most important oil crops are sunflower, safflower, pumpkin, sesame, flax, coconut, olive and soya bean. Many developing countries produce oil-seeds, as do Europe and North America. Examples of producers worldwide are listed below:
q

Cereals For human consumption


Cereals are an important organic staple food product. They include wheat, durum wheat, spelt, rice, rye, barley, oat, maize, millet, buckwheat, quinoa and amaranth. The European Union and the United States are large producers of wheat, as are Canada and Australia. Among the other producers are Argentina, Brazil, China, the Czech Republic, Egypt, Hungary, Poland, the Russian Federation, Slovakia and Turkey. Rice is mainly produced in Asia, for instance in China, India, Indonesia, Myanmar, Pakistan, the Philippines, Sri Lanka and Thailand. It is also grown in Canada and the United States; France, Italy and Spain; and Costa Rica, Guyana, Suriname and Uruguay. Supplies are increasing in a number of countries. The three European countries mentioned are by far the largest suppliers of organic rice to the European market. Old varieties of cereals like amaranth are gaining in importance. Amaranth and quinoa are produced in Latin American countries like Bolivia, Brazil, Mexico and Peru. Kamut, a very old wheat variety, is mainly produced in the United States. Millet and buckwheat are grown in the United States, Canada, the Russian Federation and Argentina.

Coconut: Colombia, Costa Rica, Dominican Republic, Honduras, India, Madagascar, Sri Lanka;
q q q q q

Linseed: Russian Federation; Olives: Mediterranean countries, Argentina; Pumpkin seeds: China, Hungary, Mexico. Safflower seeds: Canada, Argentina, Paraguay;

Sesame seeds: Bolivia, Brazil, Burkina Faso, China, El Salvador, Gambia, Guatemala, India, Malawi, Mexico, Nicaragua, Paraguay, Peru, Sri Lanka, Sudan, Turkey and Uganda.
q

Soya bean: United States (an important producer), Argentina, Austria and France.
q

Sunflower seeds: Hungary, United States, Argentina, China, Croatia, France, Paraguay, Uganda, Uruguay. Soya bean is an important item as it goes into the production of food items that replace meat and dairy products, for instance soy milk, tofu and cheese. As has been mentioned, the United States is a large producer of soya beans. Production also takes place in Argentina, Bolivia, Brazil, China, Croatia, Nicaragua, Paraguay, Uganda, Zimbabwe and the European Union. The search for GMO-free soy and soy products (such as lecithin) for use in the production of organic and conventional products is growing strongly.

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Prepared foodstuffs
Vegetable oils and fats
A large volume of oil is produced in countries importing oil-seeds. However, some developing countries also produce oil. Examples are Argentina, which has a considerable output of olive oil and sunflower oil; Benin (palm oil and coconut oil); Bolivia; Brazil (palm oil, and palm kernel oil and fat); China; Colombia (a large output of palm oil); Madagascar; and the United Republic of Tanzania.

Fruits
Some countries/areas offer a wide range of processed fruit products, including Argentina, the European Union, Sri Lanka, the United States and Turkey. Others offer a smaller range of prod ucts. A level of proc essing takes place in places like India (mango concentrate), Brazil (banana pure) and Puerto Rico (banana pure). The developing countries/areas producing juices, pures or pulps and concentrates include Bolivia, Brazil, China, Costa Rica, the Dominican Republic, Honduras, Hungary, India, Israel, Madagascar, Mexico, Papua New Guinea and Puerto Rico.

Sugars and sugar confectionery


Cane sugar is produced in many developing countries/areas, including Argentina, Brazil, Colombia, Costa Rica, Cuba, the Dominican Republic, Gua de loupe, India, Mada gascar, Mau ri tius, Mexico, Paraguay, Myanmar, the Philippines, Runion, South Africa and Sri Lanka. Production of organic beet sugar (in Europe) is in its infancy.

Alcoholic beverages
Organic wine is produced in France, Germany, Greece, Italy, Portugal, Romania and Spain, as well as in Argentina, Chile, the Russian Federation and the United States. France, Germany and Italy also make organic champagne or champagne-type wines. Organic beer is produced in the European Union, mainly in Belgium, Denmark, France, Germany, the Netherlands and Switzerland. There is some output of rum in Cuba, Costa Rica and Nicaragua. Organic grappa (a brandy distilled from the skins, pips, and stalks of the grapes after they have been pressed for wine-making) is produced in Italy, organic cognac in France and organic whisky in Scotland.

Other sweeteners
Mexico produces agave juice as a sweetener, Belgium offers cereal-based sweeteners, and Italy makes a citrus-based product. Among the other sweeteners are maple syrup (mainly from Canada) and date syrup (largely from the Middle East). Concentrated apple and pear juices, basi cally from the Euro pean Union and the United States, are also used as sweet eners. Stevia rebaudiana, a plant from the jun gles of Brazil and Para guay, is the source of a con cen trated juice with potent sweet ening prop er ties.

Food additives
The supply of organic food additives is underdeveloped. One of these additives is annatto, a natural food colourant produced from the pulp surrounding the seed of the tropical American tree Bixa orellana. It is produced in Malawi, other East African countries and in tropical America. Guar gum (obtained from a legume with the same common name) and carob gum (from the leguminous carob or locust bean tree) and other gums are produced in the Mediterranean basin, East Africa and Asia. Among the numerous other products in this category are alginates (obtained from marine brown algae like kelp) and carrageenin (from red algae).

Preparations of vegetables, nuts and other parts of plants Vegetables


Both the Euro pean Union and the United States are major producers of proc essed vege ta bles, of which toma toes are a common example. Among the other producers are Australia, Costa Rica, Hungary, Turkey and the United Republic of Tanzania. Dehy drated vege ta bles are pro duced by Argen tina, Germany, Hungary and the Netherlands. Belgium, Denmark, Germany and Switzerland produce frozen vege ta bles.

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Other processed food products


The European Union, North America (United States, Canada) Japan, Australia and New Zealand, and Argentina are the main producers of this category of products. For more detailed information on producing countries and product groups, the reader should refer to the country chapters. Denmark, Germany, the

Netherlands and Switzerland, and increasingly also France, offer an almost complete range of processed foods, as does the United States. Their output includes cereal products, meat products, preserves, dried and frozen food, ready meals and other convenience foods. The United Kingdom offers, for instance, jams, marmalades and cereal products; Italy pasta, jams and marmalades; Belgium pasta and other cereal products including cereal-based sweeteners. Germany is the largest supplier of organic baby food.

Miscellaneous products
Feedstuff
Individual farms produce fodder, and several countries have set aside areas for animal forage. However, countries with considerable livestock farming operations (as in Demark, France and the Netherlands) import proteins. These include soya beans and fodder-quality grains from the United States and other countries. Argentina produces soya beans for fodder. Tanacetum) cinerariifolium or C. coccineum; it is produced in East Africa and elsewhere. Neem, from the East Indian tree, Azadirachta indica (Melia Azadirachta), is produced in India, Africa and Mexico. Rotenone (from Derris elliptica), quassia (from the South American tree Quassia amara) and ryania (from the tropical South American shrub Ryania speciosa) are produced in various parts of the tropics. Products from such species as Albizia gummifera, Cassia fallacina, Cassia didymobotra, Euphorbia tirucalli and Tephrosia vojellia, produced and used for example in Malawi and other East African countries, and many other products have not yet found their way into the market place.

Cotton
Organic cotton is an important agricultural item for many developing countries. The United States is the main producer, but it is also produced in India, Egypt, Turkey, Argentina, Colombia, Paraguay, Pakistan, East and West Africa, Tunisia, Nicaragua and Peru.

Other non-food products


Organic products such as cut flowers and pot plants, hemp, jute, leather, sisal, wood and wood products, wool, and ingredients for cosmetics and cleaning products are likely to enjoy a growing market in the future.

Natural pesticides and repellents


The natural pesticide pyrethrum is obtained from the powdered flower-heads of Chrysanthemum (or

Part III

MAJOR MARKETS

Chapter 6 DENMARK

Introduction
Though a small country, both in population and in geographical size, Denmark has become one of the pioneers in promoting organic agriculture, and in the production and marketing of organic food and beverages. Since the first organic legislation was introduced in Denmark in 1987, it has been the Governments policy actively to promote organic farming. The rapid development of the sector in recent years is to a great extent a result of strong cooperation among three parties, i.e. government authorities, organic farmers and the retail trade, in particular FDB (Coop Denmark), which have all been working towards a common goal. In 1993, FDB made a policy decision to lower the retail prices of organic products drastically; this stimulated sales enormously. In 1995, the Government issued an Action Plan for the Advancement of Organic Food Production in Denmark, most of the recommendations of which have been implemented. In January 1999, the Ministry of Food, Agriculture and Fisheries published Action Plan II to support organic development during the period 1999-2003. It provides policy guidelines and recommendations on organic farming (e.g. conversion), product and quality development, marketing and distribution, export marketing, training, research, etc. It is also significant that an association of suppliers and processors of organic food and beverages (gruppen -Dansk kologileverandrforening) was established in 1998. One of its major objectives is to promote sales of organic products, and it is expected to play a major role in the Danish organic trade.

Supply and demand


Production
Organic farming accounted for 2.3% of the total Danish farmland (corresponding to about 64,300 hectares) in 1997. By 1998, these figures had risen to 3.6% and 99,000 hectares. The number of organically run farms increased from 677 in 1994 to 2,228 in 1998. In 1999, the number of farms is expected to rise to 3,300 in addition to about 800 farms in conversion. Though, generally speaking, most Danish farmers have been reluctant to go into organic farming, a significant switch has taken place during the last few years. This is partly a result of market pressure and partly due to government policy. The Government started to grant subsidies to organic farmers and various organic projects in 1988. Organic farming has also been subsequently subsidized under EU environmental programmes. The Government continues to promote organic farming. The 1995 Action Plan for the Advancement of Organic Food Production put forward by the Ministry of Food, Agriculture and Fisheries set a target of 200,000 hectares, corresponding to 7% of all farmland, for the year 2000. The Action Plan II objective is 300,000 hectares by 2003, or about 10% of all farmland.

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The dairy industry is the most important producer of organic food and has played a major role in promoting overall sales of organic food in Denmark. According to Ecoguide 5, production of organic milk has grown rapidly from 33,300 tons to 134,700 tons (estimates) annually during the five-year period 1992/93-1996/97. In the latter year, organic milk accounted for an estimated 3% of total milk production (including milk used for producing organic cheese and other dairy products); organic milk also accounted for 16% of all table milk sales in Denmark. Organic cheese, on the other hand, has a market share of only about 2%, according to trade sources. The two major suppliers of organic milk are MD Foods and Klver Mlk (recently merged), though a number of smaller dairy companies are also involved. In 1998, the total intake of organic milk was estimated at about 157,000 tons. It was forecast roughly to double by the year 2000. Organic milk is exported, e.g. to Germany. Imports of milk and milk products are insignificant. Beef production has been overshadowed by milk production and consumption of beef has been slow to take off, though it has increased considerably since 1993. Less than 0.5% of all cattle slaughtering is organic. No exact figures exist for organic beef, but according to some estimates, production increased from about 100 tons in 1992 to just over 800 tons in 1997. It is sold partly as fresh meat and partly as processed meat (sausages and other charcuterie). The number of slaughtered cattle was about 10,000 in 1998, forecast to rise to 15,000 - 20,000 in 1999. The main suppliers are Hanegal kologisk Kd A/S and Friland Food A/S. Imports of organic beef products are relatively insignificant, though some sausages and other meat products are made from raw materials imported from the Netherlands. The organic production of pigs is comparatively little developed. Exact figures are not available, but production of pig meat is thought to have increased from just over 100 tons in 1992 to just under 350 tons in 1996. Sales have been poor owing to insufficient supply, but both production and consumption are on the increase. Pork is sold both as fresh and as frozen meat and is used in charcuterie. The biggest distributors are Hanegal kologisk Kd A/S and Friland Food A/S. In 1998, 20,000-25,000 organic pigs were slaughtered, a figure expected to rise to

50,000 pigs in 1999. Imports of pig meat amount to less than 50 tons yearly, according to trade sources. There is also organic production of mutton and lamb (3,200 tons in 1998), poultry (insignificant but growing) and eggs (over 5,000 tons in 1998). Imports of these items are insignificant. Production of organic cereals roughly tripled during the five-year period 1992-1996, from about 7,000 tons to 21,000 tons. The most common species of grain grown and used in Denmark are wheat, rye, barley and oats. It is not known exactly how much is used as animal feed by farmers and how much goes for human consumption. Drabks Mlle A/S is an important organic flour mill. Producers of organic animal feeds include Skjern Andel and DLG kologi. Imports of cereals are significant and growing. Domestic production of vegetables, roots and tubers amounted to an estimated 23,000 tons in 1996 (potatoes: 8,000 tons, carrots: 7,000 tons, others: 8,000 tons) according to Ecoguide. Production has increased considerably since 1992. It is mainly sold as fresh produce, though some quantities are used for processing. In early 1999 there were plans to set up a processing plant for red cabbage (initially 50 tons) and beetroot. Production of fruit and berries is small and probably amounted to less than 100 tons in 1997. The main crop was blackcurrants, followed by pears. In some years, certain quantities of apples and cherries have been produced, as have various types of jams and marmalades.

Market size
The Danish retail market for organic food and beverages was estimated at close to DKr 2,000 million in 1997 (exclusive of 25% VAT), corresponding to about 2.5% of the total market. The figures do not cover the institutional and catering market for organic food, which is believed to be still small. It is significant that retail sales of organic food and beverages have increased sharply since 1993 and that the high growth rates are likely to continue in the next few years. Preliminary trade estimates for 1998 indicate total sales of organic food and beverages of close to DKr 3,200 million (exclusive of VAT), or 3.5% - 4% of total food sales.

koguide 1997/1998 - 1999 (Ecoguide), Michael Borgen, ed. Denmarks koWeb page is accessible at http://www.ecoweb.dk. (See also http://www.ecoguide.dk.)

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Since official production and foreign trade statistics on organic food and beverages are either incomplete or non-existent, an attempt to provide estimates of market size and imports (on the basis of fragments of

statistics and information from trade sources) for the main product groups is given whenever possible in the section that follows.

Import and market requirements by major product group


Imports of most consumer-packed organic food and beverages are currently insignificant. This is mainly because only products that are processed or packaged in Denmark are allowed to use the government logo (see below). As a consequence, imports of organic foodstuff are largely in the form of unprocessed or semi-processed raw material, though there are some exceptions. The product groups discussed below are likely to be the most interesting for exporters in developing countries. Regardless of origin, most imported fresh fruit is obtained through traders in the Netherlands. The Is raeli trading com pany Agr exco has a sales of fice in Rot terdam, which sup plies the Benelux coun tries and Scandinavia. Almost all fresh organic produce, including imports (repacked in Denmark), is mar keted under the logo. In 1998, exports of vegetables (mainly carrots) amounted to 6,500 tons.

Fresh fruits and vegetables


Fresh fruits and vegetables constitute one of the most important organic product groups. Though most demand, in particular for vegetables, is currently met by domestic producers, there appears to be good opportunities for imports. However, it must be noted that Danish consumers are less confident about the organic origin of imported products. An estimated 5,200 tons of vegetables, roots and tubers were imported in 1998, the main items being carrots, potatoes, onions, cucumbers, cabbage and tomatoes (including cherry tomatoes from Israel). Herbs and salads were also imported. The Netherlands is the main supplier of most of these prod ucts, fol lowed by France, Italy and Spain. Fresh tomatoes and cucum bers are in high demand during the summer, whereas cabbage, beetroot, leeks, etc. are sold mainly during the winter. Only a small volume of fruit is cur rently imported. In 1998, imports amounted to an esti mated 3,000 tons, including 900 tons for processing by Danish companies. The main imports are avocados (from Israel, South Africa), bananas (the Dominican Republic, Colombia, Costa Rica, Honduras and Uganda), apples (Israel and Germany), lemons (Israel), grapefruit (Israel), clementines (Spain), oranges (Spain), pears (Italy), kiwi fruit (France), papaya (Israel) and litchis (South Africa). There is very little demand for tropical fruit, though there are some sales of papaya (Israel).

Dried fruits and nuts, seeds and kernels


This is an important product group, and demand is met almost entirely by imports. The range of products include temperate-zone, subtropical and tropical dried fruits, as well as various types of nuts, kernels and seeds. The following main items offered by importers are some of the products available:
q

Fruits: raisins, figs, dates, mangoes, bananas, peaches, apricots, plums, apples (e.g. rings and flakes), candied peel, diced orange, pineapple.
q

Nuts: hazel-nuts, peanuts, almonds, walnuts, almonds, cashews, coconut chips, des si cated coconut.
q

Seeds and kernels: sunflower, pine kernels, pumpkin, sesame, linseed, white and blue poppy seed. Other varieties are also seen in shops, and consumers appear to be interested in most dried items, if available. Most retail packs are sold under the logo.

Processed fruits and vegetables


One of the main items in this product group appears to be tomato products (peeled tomatoes, tomato paste/pure, tomato ketchup, pasta sauce), which are currently supplied by Urtekram A/S, for example. However, there is no doubt a demand for several other products, e.g. the most common canned fruits and vegetables, including pineapple.

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Fruit juices also offer interesting opportunities. Cur rently, four com pa nies sell organic fruit juices in Den mark. Nutana A/S, for example, offers two 100% fruit juices (apple and orange) in one-litre T-packs carrying the logo. There is certainly a market for other juices as well, but for sales to increase sig nifi cantly, prices will probably have to fall. Retail prices may be up to twice those of con ven tional fruit juices in some cases, and consumers generally find these too high. Import requirements are for bulk-packed juice (e.g. in concentrated form), which is then packed or bottled in Denmark. There is likewise a demand for other forms of semi-processed fruit, e.g. block-frozen or individually quick frozen (IQF) fruits and berries, for the manufacture of marmalade and jam (e.g. strawberry, raspberry, blueberry, blackcurrant, orange, apricot). There is also a market for various spreads made from vegetables and figs. In 1998, an estimated 700 tons of processed fruit were imported, whereas imports of processed vegetables were insignificant. Several retail packs of frozen vegetables are sold in the country, e.g. peas, carrots and corn, processed from fresh Danish produce or from imported fresh or frozen vegetables (processed or repacked and relabelled in Denmark). In general, consumers have been less interested in frozen organic vegetables, though demand is on the rise.

and other cereals are also imported. Though no statistics are available, organic rice is an important product, obtained mainly from Italy but also from developing countries. There is a considerable retail market for different types of flour and bakery mixes used for home baking. The market for bread and other bakery products is large, and is principally supplied by the major supermarkets, though the institutional market is growing. During 1998, most of the FDB-owned Kvickly bakeries (numbering around 75) went organic and stopped selling conventional bread. Pasta (mainly of Italian origin) is imported in bulk for repacking in Denmark to obtain the logo, but some quantities are imported in retail packs and sold under a label certified in Italy. Tholstrup Pastella A/S is a major Danish producer of fresh pasta from imported durum wheat.

Coffee, tea and cocoa


All major retail organizations offer a selection of organic coffee and tea, mostly packed under a manufacturers brand name and carrying the logo. Some packs are also marked with the Max Havelaar logo for fair trade. Suppliers of organic coffee include Mexico, Guatemala, Costa Rica, Nicaragua and Peru. The organic teas and infusions found in the Danish market include tea (Darjeeling, Earl Grey, Kashmir and Japanese), lemon grass, mango and orange. Organic cocoa powder and chocolate are also sold.

Grains, flour and bakery products Herbs and spices


Flour, cereals and bakery products are among the most popular food products sold in the Danish market. Though most of the demand is met by domestic production, there is a significant import business, which supplies Danish food manufacturers and packers. According to Ecoguide, imports of cereals for human consumption rose from about 400 tons in 1992 to about 7,300 tons in 1996 (wheat: 4,367 tons, oats: 1,746 tons, rye: 1,167 tons, barley: 15 tons). The major suppliers are Germany, the United Kingdom and France. Barley is used for brewing organic beer (e.g. by A/S Thisted Bryghus). The other cereals are mainly used in the preparation of breakfast cereals, like oatmeal, muesli (which has a strongly growing market) and corn flakes, and for milling flour for bakeries and home baking. Millet, quinoa, amaranth Dried culinary herbs constitute an important product group. Urtekram A/S, to cite an example, offers close to 100 different herbs and similar items, as well as about 50 herbal teas and various tea mixes. Several of these products are imported, mainly in bulk for repacking in Denmark. Important items include vanilla, cinnamon, cardamon, clove, ginger, caraway, fennel, garlic and oregano.

Sweeteners
These products include the following: honey, currently supplied by Mexico and New Zealand; beet sugar; cane sugar (white, golden and brown), mainly obtained from Mauritius through a Netherlands company; agave syrup; maple syrup; beet syrup and glucose.

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145

While Denmark manufactures a large volume of conventional sugar (from beetroot), it does not as yet make organic sugar. However, Danisco Sugar is planning to start production sometime in 1999.

Dried legumes/pulses
Imported products include dried beans such as aduki (or azuki), kidney beans, brown beans, white beans, chickpeas, and red and green lentils.

produced locally or because domestic production is unable to meet demand. Virtually all food and beverage items consumed by the average household whether fresh, dried, canned, frozen or otherwise prepared and even convenience foods can easily be bought in organic form on the Danish retail market. This includes all sorts of beverages, including milk, juice, coffee, tea, soft drinks, beer and wine. In 1998, an estimated 150,000 litres of wine were imported. Most of the above-mentioned products are usually processed or packed in Denmark and can consequently be sold under the logo. However, in many cases the raw material is imported, e.g. coffee beans, tea leaves, fruit juice concentrate and malt. Organic baby food, an important product, is imported in retail packs, mainly from Germany. Wine, mostly from France, Italy and Germany, is usually imported bottled. Other suppliers of organic wine include Argentina and California. Urtekram imports an organic whisky from Scotland.

Oil-seeds and oils, starch, soy


A large variety of seeds is imported, including sesame, sunflower and flax to mention a few. Soya beans and soy products are important as they form the basis for a large number of different food items from soy drinks to tofu and vegetal burgers. Various forms of starch, e.g. from wheat and maize, are also imported. Several cooking oils are on the market, e.g. sunflower, sesame, soya bean, grape, rape, thistle and olive. Cooking oils are among the few products imported in retail packs, since no bottling of this product group takes place in Denmark. Sales of organic oils, in particular olive oil, are increasing strongly.

Animal feed
Imports of animal feed have been allowed only since 1990. On the basis of information from trade sources, Ecoguide estimates that imports of cereals used as animal feed have increased from 1,900 tons in 1992 to 6,400 tons in 1996. Imports of other forms of animal feed, e.g. soya-bean products, rose from about 100 tons in 1992 to about 4,100 tons in 1996.

Other food and beverage products


A large number of other organic products are imported into Denmark, either because they are not

Market characteristics
Market segments
From the point of view of a developing country exporter, the food processing industry is the most impor tant market seg ment, as most imports con sist of fresh pro duce or raw mate rial which is repacked or further processed by Danish companies. Though reli able sta tis tics are unavail able, the retail trade has by far the largest share in total sales to the ultimate consumer. However, the institutional and catering trade is growing in impor tance. It is interesting to note that in Denmark over 70% of all organic products are sold by supermarkets and discount stores; only a small percentage is handled by health and speciality shops. Most supermarkets exhibit organic products next to conventional items in order to offer the consumer a real choice, though some stores also have an organic corner or shelf. Organic food and beverages are usually easy to find, not least because most of them are marked with the well-known logo. Furthermore, the shelves are clearly marked kologisk to facilitate the consumers choice.

Consumer habits and product preferences


According to a note on consumption (compiled by

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Infood in August 1997), 1% - 2% of consumers buy only organic foodstuff and about 8% claim they buy mainly organic products if available. Another 22% are frequent buyers, and about 38% buy occasionally. Around 32% apparently never buy organic foodstuff. The share by area of consumers who buy organic products (with various degrees of frequency) is highest in the Copenhagen region (about 90% of all consumers). The proportion in the rural districts is about two-thirds. A more recent Infood note (dated September 1998) states that about 80% of all consumers claim they buy organic products; the corresponding figures for the big cities are above average. Non-buyers cited indifference (58%) and high prices (23%) as reasons for not buying organic food. Over 10% of Danish households spent more than 10% of the food budget on organic products in the year covered by the note. The typical con sumer of organic food stuff is gen er ally inter ested in new food prod ucts and is like wise highly quality and health conscious. It should also be emphasized that consumers expect organic food products to be at least of the same quality as conventional products, preferably better. Recent research indicates that health reasons, followed by environmental considerations, are the main motives for purchasing organic food. For meat and meat prod ucts animal ethics also play an impor tant role. Price considerations are significant for most consumers, in particular for the higher priced items. As a rule of thumb, a price premium of 20% - 30% over conventional products seems to be the maximum acceptable in most cases. In terms of specific food items, it appears that milk, followed by eggs, rye bread, carrots and potatoes, are the products most frequently bought by consumers. For the time being, most sales consist of products with a lower rather than a higher degree of processing, though the latter market segment is growing. The relative importance of various product groups can also be illustrated by the following breakdown of sales of the biggest retailer (FDB) in 1997: dairy products

and eggs accounted for 47.3% of total sales of organic food and beverages, followed by fruits and vegetables (mainly carrots, onion and potatoes) with 16.4%, groceries (11%), bread and bakery products (8.4%), meat and meat products (6.7%), frozen food (1.5%), wine (1.4%) and others (7.3%). At the time of the survey dairy and meat products had the highest growth rates. Finally, it may be interesting to look at the market share of organic food in relation to overall sales (organic and conventional) of a particular item. Again in the case of FDB organically grown carrots accounted for 30.8% of total carrot sales in 1997, followed by eggs (20.9%), butter (20.9%), milk (15.5%), onions (10.1%), potatoes (9.4%) and bread (7.8%). Some products had much smaller shares, e.g. fruit (2.4%), vegetables other than carrots, onions and potatoes (2.1%), cheese (5.1%) and frozen food (1.5%). As mentioned elsewhere, consumer confidence in the organic origin of the product is of paramount importance. In the Danish market this is strongly illustrated by the role played by the State-controlled logo,which enjoys a high recognition value and is considered by most buyers of organic foodstuff as an important product guarantee.

Sales promotion and advertising


As mentioned at the beginning of this chapter, organic food is promoted jointly by the agricultural sector, the food industry, the retail sector and even the Government. Though FDB, the biggest organic retailer, has sold organic food since 1981 on a small scale, sales really took off only in 1993. The retail group decided to cut the prices of organic products drastically at the same time as it broadened its product range substantially. A nationwide marketing campaign, including advertising in national newspapers and television as well as the groups own weekly promotion leaflets, was successfully undertaken. Consumer information campaigns and advertising by other major retail organizations also helped to develop the market to its present level.

Market access
Customs duties
Denmark applies the EU common external tariff. The same tariffs apply to both conventional and organic food and beverages. Most products from the 71 African, Caribbean and Pacific (ACP) countries signatories to the Lom Convention, as well as from overseas countries and territories associated with EU,

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147

are granted duty-free access or preferences. In addition, the EU Generalized System of Preferences covers some products, and duty-free access is granted to LDCs for most products. Non-organic products enjoy the same preferences.

by the newly adopted EU rules on animal pro duc tion. Only farms approved by the Danish authorities may market and sell their products as organic. They are controlled by the Danish Plant Directorate. Processors, importers and packers must likewise be inspected and approved to handle organic products, which is the responsibilty of the Danish Veterinary and Food Administration. There are strict rules for processing organic food, in particular regarding the use of additives, auxilliary substances and non-organic ingredients. The logo is a State guar antee that the final prepa ration and packaging of the organic food in question has been carried out by a company in Denmark approved by the Danish authori ties. If imported raw material is used, the necessary permits and cer tificates, etc., are checked. Imported ready-packaged organic food and beverages, whether from EU or from third coun tries, are not usu ally allowed to carry the logo. This explains why most organic food stuff is imported in bulk form for proc essing, prepa ra tion or repacking in Denmark. However, an importer claims to have the per mis sion to use the logo on a pack of spray-dried coffee, although it has been packed in and imported from Mexico.

Food laws and regulations


In 1987, the first Danish legislation on organic farming and organic food was introduced with the Act on Organic Farming. Since 1991, however, the production and sale of organic products have been regulated by EU through Council Regulation (EEC) No. 2092/91 of 24 June 1991 and its subsequent amendments. EU regulations are dealt with in detail in chapter 2. Pro duc tion and sale of organic food of animal origin, e.g. meat, milk, eggs and honey, are currently gov erned by Danish leg is la tion: Ministry of Agriculture Regulation No.753 of 2 September 1992 on Con ditions for Mar keting of Organic Foods, as amended. The regulation has provisions on the preparation, importing and labelling of organic foods. Whether the organic food of animal origin is imported from EU or from other coun tries, it must meet the requirements of this law. This regu la tion will be sup planted

Distribution channels
Agents, importers, repackers, processors
The import of fresh fruits and vegetables, whether organic or not, is in the hands of a few companies. Biodania AmbA specializes in organic produce and operates as a wholesaler for Danish products, but is also a large importer. Other large importers are H. Lembcke A/S (50% owned by Fyffes plc of Ireland) and Th. Olesen A/S, which both import organic and non-organic produce. The import of other organic food and beverages is likewise dominated by a few companies, including the following:
q

offers more than 2,500 organic items, most of which are food and bev erage prod ucts. But the company is also a specialist in natural shampoos and other cosmetic products with organic ingredients. The main product groups include: dried fruits and nuts, herbs and spices, grains and breakfast cereals, cookies and crackers, cooking oils (e.g. olive oil) and vinegars, tea, pasta, rice, beans, lentils, sugar and other sweeteners and wine. The company works direct with a number of producers in developing coun tries and packs under the logo. It is involved with the Organic Group of Scandinavia as regards dis tri bu tion, and is a founding member of the Good Food Foundation. Urtekram is associated with McGrails Naturmagasin, a food and non-food organic shop in Copen hagen.
q

Urtekram A/S (partly owned by Gaia Trust AmbA) is the largest importer and packer of organic food and non- food prod ucts in Den mark and has been in the busi ness for more than 25 years. The com pany

Unikost A/S (owned by JAN Import A/S) is an importer and packer of both conventional and organic food. It packs under the logo and its own label

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Green Valley. The company currently offers about 30 organic food items, including dried fruits and nuts, pasta, rice, seeds, sugar, grains and flour.
q

carrots, green beans, peas, spinach, mixed vegetables) and a wide range of products like muesli, rice, pasta, other beans, seeds, kernels, flour and fruits.
q

Bio Trading A/S is an importer and trader in organic food raw materials for the bakery and food industry in Denmark and other Nordic countries. It operates either direct or through wholesalers. Among its important product groups are sugar, malt, starch, eggs and egg powder, seeds, dried fruits and nuts, cocoa and chocolate, fats and oils, and spices. The company also trades in other organic food products, e.g. processed fruit (jam and jelly). Among the other importers are the following:
q

Svans Food A/S. Produces various organic marmalades and jams. It uses domestic as well as imported raw material. It has just acquired Scan Agra A/S in Odense, which is a trader and importer of frozen fruit and vegetables. Svans also imports pasta and olive oil.
q

Schulstad Brd A/S. Produces a range of organic bread and bakery products, including the traditional Danish rye bread.
q

U-landsimporten. Importer/whole saler of foodstuff, including organic prod ucts, e.g. coffee, tea and cocoa; a non- profit organi za tion working on the fair trade prin ciple.
q

De Danske Brdfabrikker A/S. Owned by FDB (see below). Produces a range of bread and bakery products.
q

Sunprojuice Denmark ApS. An importer and producer of organic semi-processed fruits and berries, pure, concentrates, IQF, and others; supplies the food industry. The names and addresses of these and the other companies importers are given in the annex to this chapter.

Mlle Skovly. Produces organic chocolate and also sells imported natural sweets.
q

Natur Frisk Brewery. Bottles a range of organic fruit juices and fruit juice drinks.

Retail organizations
q

Food and beverage manufacturers


With the exception of the dairy and meat industries, the major Danish food manufacturers are generally little involved in organic food production. The largest Danish food manufacturer, Danisco Foods A/S, for example, produces very little organic food (e.g. frozen peas). However, there are a number of smaller companies, whose organic products are well known by consumers, including the following:
q

FDB (Coop Den mark) is the largest retail group in Denmark with about 33% of the overall food market. It comprises the supermarket chains Brugsen, Lokal Brugsen, DagliBrugsen, SuperBrugsen and Kvickly (with a total of about 925 retail out lets) and around 12 OBS! hyper mar kets. All the chains carry out high-profile marketing of organic products. FDB also owns IRMA (see below) and the discount chain Fakta (which handles a small volume of organic products and has more than 200 outlets). Most organic products are marketed under the logo, though some items are sold under other (non-Danish) organic logos. The FDB group markets products carrying various manufacturers or packers brands, but it is also building up a range of products under its own Natura label. In all, about 800 organic items are sold through FDB stores. Generally speaking, FDBs imports of foodstuffs are handled by NAF-Intergroup, which coordinates imports for members (cooperatives) in Denmark, Sweden, Norway, Finland, Italy and the United Kingdom.

Drabks Mlle A/S. Recently bought by Havne Mllerne A/S, owned by the Swedish concern Cerealia AB. Processes cereals and sells a range of flour and breakfast cereals under its brand Kornkammeret.
q

Nutana A/S. Owned by Kavli A/S of Norway. Produces vegetarian products and has a policy of not using any additives, preservatives, artificial colouring or flavouring. Its organic assortment currently includes juices, pats, baked beans, chilli beans, frozen ready-meals, frozen vegetables (e.g. sliced

CHAPTER 6 DENMARK

149

FDB owns De Danske Brdfabrikker (manufacturer of bread and bakery products) and Dansk Kaffekompagni (packer of coffee and tea) as well as various non-food retailers and other companies. De Danske Brdfabrikker obtains its organic raw materials from Danish millers, e.g. Drabks Mlle; Danske Kaffekompagni imports raw materials through NAF.
q

Dansk Supermarket has no food manufacturing operations of its own, and obtains all its requirements from Danish and foreign manufacturers. Though it imports some food products direct, it buys organic products only from Danish companies which manufacture or pack under the logo. Likewise, the group does not use its own label on organic products, but sells these under manufacturers brands.
q

IRMA, owned by FDB, is an upmarket super market chain with about 55 retail outlets in the Copenhagen area. Its organic assort ment consists of about 400 items. It is the Danish retail organization with the highest percentage of organic food and beverages. For example, it has decided to sell only organic milk and is phasing out conven tional milk. It sells a wide range of prod ucts carrying its own label (e.g. IRMA coffee and IRMA tea) and manufacturers or packers brands. In general it obtains its imports through NAF-Intergroup. In January 1999, organic food and bever ages accounted for 12.5% of total sales, the most impor tant prod ucts being rye bread (making up 70% of all rye bread sold), fresh pasta (67% of all pasta sold), milk (62%), flour (44%), vege ta bles (24%) and fresh meat (13%).
q

DAGROFA A/S is a major wholesaler supplying a number of independent supermarkets and other retailers, including the supermarket chain Favr. It handles a range of organic food products.
q

Matas A/S, a health and body care shop rather than a food store, retails a range of organic dried fruits and nuts, beans, seeds, ker nels, rice and pastas. It has also introduced a subscription serviceunder which fresh fruits and vegetables are delivered to households on a weekly basis. It has roughly 290 stores.
q

ISO is a supermarket chain in Copenhagen with a fairly broad range of organic food products.

Catering and institutional trade


Dansk Supermarket A/S is the second largest retail group in Denmark with about 22% of the total food market. It comprises the following supermarket chains: ftex (a supermarket chain with over 50 outlets throughout the country); Bilka (over 10 hypermarkets selling food and everyday goods); NETTO (a chain of discount shops with about 240 outlets in Denmark in addition to stores in the United Kingdom, Germany and Poland, which is promoting organic food aggressively). Of those, ftex is currently the most important as far as organic food and beverages are concerned. It offers a broad range of organic items, including fresh produce, dairy products, meat products, dry goods and beverages. Though organic food and beverages are still of relatively low importance in this sector, the catering and institutional trade is expanding and considerable growth is expected in the future. A government programme is actively promoting the use of organic products by municipal and other public institutions. The Governments Action Plan II, prepared by the Organic Food Council, likewise pays special attention to developing sales of organic products to the catering and institutional sector. One of the problems cited was the lack of special distribution channels for this sector.

Market prospects
With a population of just over 5 million people, Denmark is a fairly small market for most food and beverages. However, as shown earlier in this chapter, total sales of organic food and beverages in 1997 may be estimated at about DKr 2,000 million, corresponding to about 2.5% of the total retail market for foodstuff. This places Denmark in the top league among world markets with the highest per capita consumption of organic foodstuff. Furthermore, consumption has been growing rapidly in recent years, including 1997 when retail sales increased by about 25% according to trade sources. Preliminary figures for 1998 seem to indicate total sales of close to DKr 3,200 million (exclusive of 25% VAT).

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CHAPTER 6 DENMARK

There are very strong indications that the Danish market for organic foodstuff will continue to expand for a considerable number of years. Firstly, consumer interest in healthy food and environmentally friendly products continues to grow and more and more people are purchasing organic products. Secondly, the major retailers are promoting organic foodstuff quite aggressively, inter alia, through heavy advertising and competitive pricing. FDB, for example, has set ambitious sales targets for specific organic products (as a percentage of total sales of a given item) to be reached by the year 2001. For some of these products the lack of supply seems to be the major problem. Thirdly, Danish farmers as well as food manufacturers are increasingly becoming aware of the opportunities that exist in satisfying consumer expectations. Finally, government policy continously aims at promoting the production and consumption of organic foodstuff. Trade sources and industry people believe that sales may reach 10% of total food sales by the year 2005. Market opportunities exist for most product groups

listed in the section on market and import requirements (see above), in particular those that are not produced in Denmark. There also seems to be a latent demand for a number of products that are currently unavailable to the consumer. Continuous sourcing of new products by importers and product development by food processors, as well as consumer confidence in the authenticity of the organic origin of the product are necessary conditions for the market potential to be fully realized. In conclusion, interesting prospects exist for exporters in developing countries who can supply quality products at competitive prices. Importers and food processors are interested in obtaining more supplies direct from source (rather than through intermediaries in other EU countries) depending on the product in question and provided there is confidence in the certification procedure applied. Imports will probably continue to consist mainly of unprocessed or semi-processed products for repacking or processing in Denmark.

Annex

Denmark: selected addresses*

IMPORTERS, PACKERS, ETC.


Bio Trading A/S benrvej 9 Kiskelund 6340 Kruss Tel: +45-70 23 15 15 Fax: +45-70 23 15 16 E-mail: bio@bio-trading.com http://www.biotrading.dk Biodania AmbA Grnttorvet 6, 1.sal 2500 Valby Tel: +45-36 30 24 78/36 30 24 29 Fax: +45-36 30 24 79 Cofradex ApS Skelstedet 16 2950 Vedbk Tel: +45-42 89 17 67 Fax: +45-42 89 03 13 (Importer of rice, etc.) F-I Mejerifrugt Hestehaven 3 5260 Odense S Tel: +45-66 13 13 70 Fax: +45-66 13 44 10 (Fruits and berries for the dairy industry) Jakobsen & Hvam A/S Hovedvejen 22 7490 Aulum Tel: +45-97 47 39 27 Fax: +45-94 47 39 27 (Honey) H. Lembcke A/S Grnttorvet 244-260 PO Box 427 2500 Valby Tel: +45-36 15 62 22 Fax: +45-36 15 62 23 Mortensens Kaffe Vejle A/S Ulvehavevej 58 7100 Vejle Tel: +45-75 82 01 99
___________________________ * List not exhaustive.

Fax: +45-75 82 07 66 (Coffee) NAF International AmbA Fangade 15 2100 Copenhagen Tel: +45-39 16 90 00 Fax: +45-39 16 90 80 Natur-Drogeriet A/S Nydamsvej 13-15 8362 Hrning Tel: +45-86 92 33 33 Fax: +45-86 92 33 43 http://www.natur-drogeriet.dk (Importer and wholesaler of cereals, including rice, and flours) Th. Olesen A/S Frugtmarkedet 17 2500 Valby Tel: +45-36 30 61 11 Fax: +45-36 30 79 53 Solhjulet Storhedevejen 32, Taul 8850 Bjerringbro Tel: +45-86 68 64 44 Fax: +45-86 68 62 75 http://www.solhjulet.dk (Supplies the catering sector) Sunprojuice Denmark A/S Huginsvej 2-4 4100 Ringsted Tel: +45-57 67 11 77 Fax: +45-57 67 11 45 E-mail: sunpro@post4.tele.dk http://www.ecoweb.dk/sunprojuice Svanholm Import Svanholm All 2 4050 Skibby Tel: +45-47 56 66 56 Fax: +45-47 56 66 77 (Importer of wine, beer, other alchoholic drinks and foodstuff) Trsleff & Co. A/S Helseholmen 7-9 2650 Hvidovre

Tel: +45-36 34 30 00 Fax: +45-36 34 30 01 http://www.toersleff.dk (Importer and packer of vanilla) U-landsimporten Rolstrupbakken 6 7900 Nykbing Mors Tel: +45-97 72 57 88 Fax: +45-97 72 53 54 E-mail: u-landsimporten@vip. cybercity.dk (Trade) and Skindergade 24 1159 Copenhagen K Tel: +45-33 91 90 90 Fax: +45-33 91 90 97 E-mail: u-landsimporten@dk-online.dk http://www.u-landsimporten.dk (Information) Unikost A/S Over Hadstenvej 58 8370 Hadsten Tel: +45-86 98 01 44 Fax: +45-86 98 00 48 E-mail: jan@jan-import.dk http://www.jan-import.dk Urtekram A/S Klostermarken 20 9550 Mariager Tel: +45-98 54 22 88 Fax: +45-98 54 23 33 E-mail: urtekram@inet.uni2.dk http://www.urtekram.dk/

FOOD PROCESSORS AND MANUFACTURERS


BKI Kaffe Axel Kiersvej 4 8270 Hjbjerg Tel: +45-86 29 22 99 Fax: +45-86 29 10 89 (Coffee importer and wholesaler)

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A/S Crispy Food International Blommeskoven 2 4281 Grlev Tel: +45-58 86 05 05 Fax: +45-58 86 00 22 (Producer of muesli, owned by MD) Danisco Foods A/S Fredensgade 7 5800 Nyborg Tel: +45-65 31 11 30 Fax: +45-65 31 58 30 Dansk Kaffekompagni A/S Roskildevej 25a 2620 Albertslund Tel: +45-43 86 33 33 Fax: +45-43 86 40 09 De Danske Brdfabrikker A/S Korsdalsvej 101 2610 Rdovre Tel: +45-43 86 41 70 Fax: +45-43 86 41 69 Drabks Mlle stparken 1-5 6640 Lunderskov Tel: +45-75 58 52 66 Fax: +45-75 58 58 30 E-mail: dml@post3.tele.dk http://www.kornkammeret.dk Friland Food A/S stersgades Butikstorv 7, Jebjerg 7870 Roslev Tel: +45-97 57 47 99 Fax: +45-97 57 41 99 E-mail: friland@post5.tele.dk http://www.ecoweb.dk/friland (Slaughterhouse and distributor of meat and meat products) Hanegal kologisk Kd A/S Resenbrovej 29, Voel 8600 Silkeborg Tel: +45-86 85 36 72 Fax: +45-86 85 36 73 E-mail: hanegal@hanegal.dk http://www.hanegal.dk (Slaughterhouse and distributor of meat and meat products) Klver Mlk AmbA Vejlevej 10 7000 Fredericia Tel: +45-75 92 49 88 Fax: +45-75 91 05 95 (Harmonie: organic milk) Kohberg Rugbrd A/S Industrivej 7-9 6392 Bolderslev Tel: +45-74 64 62 30 Fax: +45-74 64 63 81 MD Foods AmbA Skanderborgvej 277 8260 Viby J

Tel: +45-89 38 10 00 Fax: +45-86 28 16 91 http://www.mdfoods.dk Merrild Kaffe A/S Lrkevej 6000 Kolding Tel: +45-79 31 31 31 Fax: +45-79 31 31 90 (Coffee importer and wholesaler) Mlle Skovly Lyngvej 21, Skringstrup 8832 Skals Tel: +45-86 69 49 66 Fax: +45-86 69 50 86 E-mail:johsmil@cybernet.dk http://www.ecoweb.dk/skovly Natur Frisk Brewery Lillehjvej 18 8600 Silkeborg Tel: +45-86 80 37 67 Fax: +45-86 80 24 55 NUTANA A/S Ringstedvej 531 4632 Bjveskov Tel: +45-56 86 96 00 Fax: +45-56 86 96 16 Peter Larsens Kaffe A/S rvej 15-17 8800 Viborg Tel: +45-86 62 67 33 Fax: +45-86 62 62 67 (Coffee importer and processor) Rynkeby Foods A/S Vestergade 30 5750 Ringe Tel: +45-62 62 11 35 Fax: +45-62 62 48 49 (Juice producer) Schulstad Brd A/S Hammerholmen 21-31 2650 Hvidovre Tel: +45-36 39 71 00 Fax: +45-36 77 01 65 Svans Food A/S Strandvejen 1 5800 Nyborg Tel: +45-65 31 41 00 Fax: +45-65 30 10 41 A/S Thisted Bryghus Bryggerivej 10 7700 Thisted Tel: +45-97 92 23 22 Fax: +45-97 91 18 98 http://www.thisted.bryghus.dk (Beer; imports malt and hops) Tholstrup Pastella A/S Lille Strandstrde 20b

1254 Copenhagen K Tel: +45-33 12 22 77 Fax: +45-33 12 60 77

RETAIL ORGANIZATIONS
Dagrofa A/S Gammelager 11-13 2605 Brndby Tel: +45-43 22 82 82 Fax: +45-43 22 84 04 Dansk Supermarked A/S Bjdstrup 18 8270 Hjbjerg Tel: +45-89 30 30 30 Fax: +45-86 27 65 63 FDB (Coop Denmark) Roskildevej 65 2620 Albertslund Tel: +45-43 86 43 86; +45-43 86 48 11 Fax: +45-43 86 42 09; +45-43 86 33 86 E-mail: fdb@fdb.dk http.//www.fdb.dk Irma A/S Korsdalsvej 101 2610 Rdovre Tel: +45-43 86 38 22 Fax: +45-43 86 38 09 ISO Supermarked Vermlandsgade 51 2300 Copenhagen S Tel: +45-31 54 84 11; +45-32 69 76 00 Fax: +45-31 54 31 42; +45-32 69 76 01 E-mail: iso@iso.dk http://www.iso.dk Matas A/S Rrmosevej 3450 Allerd Tel: +45-48 16 55 55 Fax: +45-48 16 55 66 http://matas.dk/VOKOLOGI.HTM

CATERING AND INSTITUTIONAL SALES


MN Catering Fuglebakkevej 94 2000 Fredeiksberg Tel: +45-38 34 38 12 Fax: +45-38 34 38 22

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153

SUPPLIERS
Animal feed
A/S Carl Rasmussen Frigaardsvej, Gamby 5471 Snders Tel: +45-64 83 11 00 Fax: +45-64 83 11 87 Carl Hfner I/S Hesteskoen 1 2880 Bagsvrd Tel: +45-44 44 27 00 Fax: +45-44 44 64 00 DLG kologi Nrrevang 23, Skave 7500 Holstebro Tel: +45-97 46 84 88 Fax: +45-97 46 85 65 E-mail: ssn@dlg.dk

Fax: +45-8684 1746 E-mail: solsikken@solsikken.dk http://www.solsikken.dk

Tel: +45-86 12 86 38 Fax: +45-86 12 86 37 E-mail: infood@post8.tele.dk http://www.ecoweb.dk/infood (Consultancy) Landsforeningen kologisk Jordbrug (LJ) (The Danish Association for Organic Farming) kologiens Hus Frederiksgade 72 8000 rhus C Tel: +45-87 32 27 00 Fax: +45-87 32 27 10 E-mail: ecojord@ecoweb.dk http://www.ecoweb.dk/oekoland Max Havelaar Fonden c/o Folkekirkens Ndhjlp Nrregade 13 1165 Copenhagen K Tel: +45-33 11 13 45 Fax: +45-33 11 13 47 E-mail: maxhavelaar@dk http://www.maxhavelaar.dk gruppen - Dansk kologileverandrforening Udgrden 30, Lading 8471 Sabro Tel: +45 86 12 77 66 Fax: +45 86 12 77 41 E-mail:: gruppen@ecoweb.dk http://www.ecoweb.dk/gruppen/ (Association of suppliers and processors of organic food and beverages) kologisk Landscenter (LC) (The Danish Organic Service Centre) kologiens Hus Frederiksgade 72 8000 rhus C Tel: +45-87 32 27 00 Fax: +45-87 32 27 10 E-mail: ecoinfo@ecoweb.dk http://www.ecoweb.dk/ecoinfo (Information centre for the marketing of organic food)

GOVERNMENT OFFICES, OTHER ORGANIZATIONS AND ASSOCIATIONS, ETC.


Danish Import Promotion Office for Products from Developing Countries (DIPO) Danish Chamber of Commerce Brsen 1217 Copenhagen K Tel: +45-33 95 05 00 Fax: +45-33 12 05 25 Danish Veterinary and Food Administration Mrkhj Bygade 19 2860 Sborg Tel: +45-33 95 60 00 Fax: +45-33 95 60 01 E-mail: info@vfd.dk http://www.vfd.dk (Administers organic production rules on labelling and inspection) Demeterforbundet (The Demeter Association) Birkum Bygade 20 5220 Odense S Tel: +45-65 97 30 50 Fax: +45-65 97 30 50 Det kologiske Fdevarerd (The Organic Food Council) Strukturdirektoratet, Udviklingskontoret Toldbodgade 29 1253 Kbenhavn K Tel: +45-33 63 73 00 Fax: +45-33 63 73 33 Infood Langballevnget 102 8320 Mrslet

Ecological seeds and plants


KFK Grndalsvej 1 8260 Viby J Tel: +45-89 47 70 00 Fax: +45-86 14 10 85 E-mail: info@kfk.dk http://www.kfk.dk (Animal feed, seeds, etc.) Skjern Andel a.m.b.a. Storegade 36 6900 Skjern Tel: +45-97 36 44 44 Fax: +45-97 36 63 40 http//:www.ecoweb.dk/skjern Solsikken Skellerupvej 89 Lin 8600 Silkeborg Tel: +45-8684 1546

Chapter 7 FRANCE

Introduction
Offi cial sta tis tical infor ma tion on the French market for organic prod ucts is lim ited and com pares poorly with that available in some EU countries. Although the market started to develop during the 1970s, the need to estab lish a per ma nent moni toring system has only recently been made a pri ority. The rapid development of production and consumption which took place in the mid 1990s motivated three key organizations the Association permanente des cham bres dagri cul ture (APCA), Asso cia tion dagriculture biologique regroupant des transformateursindustriels et distributeurs franais de produits biologiques (BIO CONVERGENCE) and Direction gn rale de lali men ta tion au Min istre de lagri culture, de la pche et de lalimentation (DGAL)6 to coop erate in set ting up a frame work for analysis and forecasting, which should gradu ally lead to a policy for guiding, developing and promoting organic agriculture in France. Initially, the organizations agreed to undertake the preliminary studies necessary to establish such a framework and to organize their work through a steering committee, which would draw together all stakeholders at both the national (government authorities, APCA, BIO CONVERGENCE, the Fdration nationale de lagriculture biologique des rgions de France or FNAB, and the Fdration nationale des centres dinformation et de vul gari sa tion de lagri cul ture or FBCIVAM)7 and the regional level (regional organic agriculture structures).

Supply and demand


Domestic production Agriculture
Although France is a major producer and a significant exporter of a wide range of food and beverage products, organic farming has failed to keep pace with devel op ments in con sump tion on the home market and with the accelerated rate of
6

conversion to organic agriculture in neighbouring Euro pean mar kets. Over the last 10 years France has lost its lead er ship role: in 1997 only 0.3% to 0.4% of agricultural land was being farmed organically or was in con ver sion, com pared to over 7% in Aus tria, Sweden and Swit zer land, and 2% in Ger many. Conversion to organic agriculture has increased steadily since 1993 and a government policy is in

The names of these organizations in English are: APCA, Permanent Association of Agricultural Chambers; BIO CONVERGENCE, association of organic agriculture grouping French industrial processors and distributors of organic products; DGAL, Directorate General for Food at the Ministry of Agriculture, Fisheries and Food.

FNAB is the National Federation of Organic Farming and is made up of all of Frances organic farmers. FBCIVAM is the National Federation of Information and Advice Centres for Agriculture.

CHAPTER 7 FRANCE

155

place to support and promote more rapid development over the next five years. By 1996 the area farmed organically had reached 137,000 hec tares, including 20,000 hec tares in con ver sion. The number of agricultural producers qualified to carry the national AB logo for organic food (see the sec tion on cer ti fi ca tion fur ther below) increased from 3,600 in 1985 to 3,850 in 1996 and, at a much faster rate, to 4,500 at the end of 1997. The 1997 figure cor re sponded to 0.5% of all French farmers, 2,300 of which were involved in crop pro duc tion and 2,200 in mixed crop ping and animal raising. The most dynamic regions for organic pro duc tion in France are Midi-Pyrnes, Pays de la Loire, Languedoc-Roussillon, Rhne-Alpes and Bretagne (Brittany), where farmers have invested heavily in organic farming. The number of organic livestock farms increased strongly between 1995 and 1996, as shown in table 7.1 below.

Processed products
Organic processing in France has to date concentrated largely on the primary processing of domestic raw materials, but the last few years have seen increasing growth in imports of raw materials for processing. Cereals dominate the processing sector, and bread and bakery products have a large share in the total output. Following in order of importance are dairy products, fruits and vegetables, condiments, poultry, aromatic and medicinal plants, soya-based products, meat, prepared dishes and coffee. The fig ures below show the approxi mate break down by product group in 1996, as revealed by a study carried out by INRA-UREQUA (Unit de recherche spcialise sur lconomie des qualifications agroalimentaires or the specialized research unit on the eco nomic aspects of agro- food speci fi ca tions) in 1997.

France: output of the organic processing sector (including exports), 1996


Product group Cereals Dairy products

FF million
1 301 1 051 750 187 160 139 82 78 45

Table 7.1

France: organic livestock and livestock products, 1995 and 1996 1995
361 9 500 41 000 255 5 637 35 3 831

Fruits and vegetables Condiments Poultry Aromatic and medicinal plants Meat Prepared dishes Coffee

Sector Dairy products Farms (units) Dairy cows (head) Milk (000 litres) Beef Farms (units) Milk cows (head) Mutton Farms (units) Sheep (head) Pork a/ Farms (units) Meat pigs (head) Breeding sows (head) Eggs Farms (units) Laying hens (head) Eggs (000) Honey b/ Farms (units) Hives (units)

1996
451 13 655 58 644 409 10 178 73 8 402 77 6 047 275

% increase 1996/1995
25 45 43 60 81 109 119

Source: INTA-UREQUA (Unit de recherche spcialise sur lconomie des qualifications agro-alimentaires), Le Mans, October 1997.

Although cereals continue to lead the sector, their share has fallen in recent years, particularly relative to that of dairy products, which has increased strongly. The eggs and poultry sector has also grown steadily. The processing sector is dominated by a large number of small, medium-sized and, often, artisan companies, which account for about 40% of the total turnover of the organic business. However, increased investment in larger-scale production and the involvement of some major food groups (e.g. Besnier, Bourgoin, Danone/Bio Vivre) have meant

173 103 162 23 000

209 135 762 30 000 60 13 058

21 32 30

Source: Ministre de lagriculture, de la pche et de lalimentation, Observatoire economique national de lagriculture biologique. a/b/ In the absence of national regulations in 1995, no production was recorded as organic or in process of conversion.

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that the sector is now evolving into a more industrialized and efficient manufacturing sector. Recent estimates have put the average annual growth rate at close to 20%. Primary processors are on the whole more important than secondary processing companies.

Imports
Domestic production of organic foods has not kept pace with consumer demand. Therefore, there has been a sharp rise in imports, not only of produce which cannot be grown in France, but also of organic products where local supplies are not sufficient to meet demand. Import-export traffic between member countries of EU is not recorded in official trade statistics, but the increase in imports from outside EU can be seen from the fast-growing number of requests to the French authorities for authorization to import organic produce. In 1994 extra-EU imports amounted to 1,300 tons, but by 1997 this figure had risen to somewhere between 13,000 and 20,000 tons. The range of products imported from third countries has also steadily widened and reached almost 70 different items by 1997. These are mainly fresh fruits and vegetables, dried fruits and nuts, spices, edible oils, tea, coffee, cocoa beans and cane sugar. The main products imported from non-EU third countries between 1993 and 1997 are set out in table 7.2. Intra-EU imports are sourced mainly in Germany, the Netherlands, United Kingdom and Italy. Non-EU imports in 1997 came mainly from: Algeria, Belgium, Belize, Bolivia, Burkina Faso, Cameroon, Canada, Colombia, Costa Rica, the Dominican Republic, Ethiopia, Guatemala, Guinea, Hungary,

Retail sales
Although France, with its population of over 58 million people, is one of the largest markets for organic foods in the European Union, per capita consumption and the penetration of the sector into mainstream food consumption is low. Organic foodstuffs account for less than 0.5% of total expenditure on food products. According to information provided by the Ministry of Agriculture and professional organizations of organic producers, processors and distributors, the retail market for organic products can be estimated at about FF 4 billion in 1997. Consumption doubled between 1991 and 1997, as follows: 1991 1994 1995 1996 1997 FF 2 billion FF 2.4 billion FF 3 billion FF 3.6 billion FF 4 billion

The cur rent annual rate of growth is esti mated at 20% or 25% and this explo sion in demand is expected to con Table 7.2 France: imports of organic products from non-EU countries, 1993-1997 tinue in the next few years. Cereals (about 33%), dairy 1993 1994 1995 1996 1997 products (25%) and fresh Bananas Fresh and dried Apples Cane sugar Apples bananas Cocoa beans Arabica coffee Courgettes Beet sugar fruits and vegetables (20%) Fresh and dried Fresh and dried Beet sugar Dried figs Cane sugar together account for over pineapple pineapple Brown cane sugar Dried grapes Carrots three quarters of the total Mango Orange Cocoa beans Fresh and dried Chickpeas Quinoa turnover. Meat and poultry Sesame seed bananas Dates Clementines account for about 5% and Fresh pineapple Dried chicory Cocoa beans Dates Essential oils Dried bananas others for the bal ance. Green beans Within the non- fresh organic food segment, research carried out by one of Frances leading supermarket chains (Carrefour), in June 1997 indicated that the items in greatest demand were biscuits, crisp bread, galettes, fruit juices and jams, cereals, flour, pastas and rice.
Fresh and dried bananas Fresh pineapple Fresh mango Millet Orange Quinoa Sesame seed Maple syrup Millet Potatoes Soya beans Tomatoes Dried chicory Dried grapes Grapefruit Green coffee Lemons Lentils Mango Oranges Palm oil Pears Peeled nuts Quinoa

Source: Trade information.

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157

Madagascar, Mexico, Morocco, Paraguay, Poland, Senegal, Slovakia, South Africa, Spain, Togo, Tunisia, Turkey, the United States and Zimbabwe. Supplies from Asia were insignificant. Annex II gives more detailed information on imports of organic food from non-EU countries in 1997.

Exports
It is difficult to assess the size of the export trade because EU foreign trade statistics do not differentiate between organic and conventional food produce. INRA-UREQUA estimated Frances exports in 1994 at about FF 600 million. Research findings indicate that, by 1997, exports had dropped by over 50%. The main reasons are the substantial increase in domestic French consumption of organic foods and the growing self-sufficiency in organic products of Germany, Frances major export market.

Between 1994 and 1997 the professional and regulatory framework for organic production developed considerably and processing industries expanded. By the end of 1997 the range of products exported had changed significantly. Exports of raw materials and semi-processed organic products, such as cereals, had declined whilst exports of processed products increased owing to the efforts of dynamic processors, some of which have subsidiaries in other European countries. One-third of Frances processing enterprises were exporters in 1997. Frances main export markets for processed organic products are in Western Europe, mainly Germany, Switzerland, the Netherlands, Belgium, the United Kingdom, Spain, Italy and Scandinavia. Exports to the United States and Japan are less significant. Major increases in exports of fresh fruits and vegetables and wine to Germany, the United Kingdom, Austria and Scandinavia have been recorded. Organic eggs and poultry are also important export products.

Market characteristics
Consumer patterns
Consumers in France are traditionally health conscious and associate organic foods with a good diet and a healthy lifestyle. However, research has shown that, compared with other European populations, the French tend to prefer to resort to medi cines to cure health prob lems rather than to take pre ven tive action in terms of a posi tive diet and life style. Moreover, consumers often have difficulty in dis tin guishing between the dif ferent types of health, diet and natural food prod ucts on sale, which include:
q q q

Products with the red quality label;

AOC products (appellation dorigine contrle or registered designation of origin);


q

Para-pharmaceutical food (food supplements).

Certified organic products (bio is the term used to signify organic);


q

For these reasons, despite clear evidence that both retail turnover and consumer interest in organic food have been increasing strongly since the early 1990s, it is difficult to estimate the real level of penetration among food pur chasers. According to a survey car ried out in Feb ruary 1998 by Louis Harris for Eco cert and Vivez Nature, the trade exhibition for organic agriculture, 10% of those questioned claimed to buy organic prod ucts regu larly and 38% occa sion ally. A survey by Pole Qualit du Maine, in collaboration with INRA-CRISALIDE, in 1995 distinguished four main types of consumers of organic food, according to a multi-criteria analysis of attitudes and behaviour. These were:
q

Products purchased direct from farmers, whether organic or not;


q

Products labelled as farm produced, whether organic or not;


q q

Natural (naturel) products, free from additives; Dietetic and slimming products;

Nostalgics: a conservative segment of the population, concerned primarily with welfare and producing some of its own organic food require ments;

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Ideologists: altruistic views;


q

revolutionary

militants

with

Health-conscious consumers: new generation of consumers of organic foodstuffs, who are primarily concerned with their state of health;
q

(bovine spongiform encephalopathy, the mad cow disease), nitrates in water, pesticide residues and high dioxine levels in milk, and concern about genetically modified food have made this factor more significant).
q

Favour pre-packaged products.

The fashionable crowd: new consumers of organic foodstuffs, interested in buying only what is perceived to be the best quality, in paying great attention to their appearance, and in showing off their ways to other people. The first two segments of consumers have declined considerably in significance and the major growth has come from the third and fourth types of consumers profiled, which correspond roughly to the categories of regular and occasional buyers of organic foods. The main characteristics of these two types of customer are described below. Regular long-term buyers
q

Attach great significance to the (known) brand or label of the supplier as the principal guarantee of the foodstuff.
q q

Are more occasional, less faithful purchasers.

Are generally not prepared to pay more than 20% above the price of conventional products. Occasional buyers are expected to fuel the main growth in the organic market in the coming years. Social and environmental issues are exerting an ever- increasing influ ence on con sumers and there is growing scope for industrial companies to develop ranges of processed and pre-packaged products similar to dietetic products. Moreover, as super mar kets and hyper mar kets gradu ally expand the variety of organic foods stocked, purchasing by this latter group of cus tomers will increase, because they tend to do a major part of their gro cery shop ping in these out lets, rather than in spe cialist shops, organic mar kets, etc. The most important expectations of the French in their food purchasing, both individually and collectively, and the required responses in terms of food production are summarized in the box on page 159. According to INRA (Institut national de la recherche agronomique), the French agricultural research institute, half of the consumers choose organic food primarily for health reasons, one third are ecologically motivated and about a fifth purchase for the better or fresher taste of organic food. Despite the strong potential demand and a good certification system, there are obstacles to the development of the French market; these are as follows:
q

Are mainly intellectuals, managers and self- employed profes sionals with higher than average incomes.
q

Attach high importance to the official AB organic logo and the labels of traditional organic organizations like Nature et Progrs for a guarantee of organic quality.
q

Are faithful to established distribution channels for organic food (direct purchases, markets, Biocoop cooperative shops, etc.).
q

Are concerned about the ecological or envi ronmental aspects of food produc tion, consump tion and buying. The AB logo backs up their socio-political world view.
q

Are prepared to accept price differentials for certified organic foods of 50% or more over the conventional alternatives. New occasional buyers
q

Are mainly from the middle and lower social or income groups.
q

Are most concerned about the product itself and its measurable characteristics (taste, freshness, quality, etc.).
q

High prices. Organic products are expensive and can be priced at between 30% and several hundred per cent higher than the conventional alternatives, depending on the product and the sales outlet.
q

Want safe food, free from chemical residues and other pollutants. Recent food scares, like BSE

Inadequacy of communication with the consumer. Despite much improvement in the situation since the early 1990s, French consumers

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still have great difficulty in understanding exactly what constitutes an organic product. It is estimated that about 50% of consumers can now correctly define organic products. The product range on offer is too restricted.
q q

number of intermediary distributors sell small quantities of a wide range of products, again leading to high costs and prices.
q

Appearance of the products. Long, inefficient chains of distribution. A large

Inconvenience. Shops selling organic foods are often too far away. The more multiple chains become involved in selling organic foods the better, because of the habit of French households of doing one major weekly shopping visit to the hypermarket.

France: consumer expectations and responses required


Consumer expectations
Good for health, fitness and status

Response required from food producers


Absence of chemical pollutants of agricultural and industrial origin (pesticides, nitrates, artificial colours). Products richer in natural micronutrients. Balanced overall approach to nutrition and food hygiene. Products grown with less water, maturing more slowly and with a stronger taste. Search for more rustic varieties and for more suitable growing areas. Better tasting crops which may be less productive. Genuinely natural products without unnecessary gimmicks in production or processing (e.g. use of artificial flavourings). Products defined by a national or EU regulation and certified by a competent, approved, independently registered body. Confidence of the retailer (local shops, Biocoop stores, markets, etc.). Involvement of professional organizations.

Good taste and enjoyment Authenticity

Guarantees and confidence in certification/labelling

Collective concerns
Environment Ecology Protecting the earth Social concerns Human factors Employment/unemployment Migration from the countryside

Response required from food producers


Cultivation without inorganic fertilizers or pesticides. Exclusive use of natural fertilizers and in small quantities. Preservation of the soil, water table, fauna, flora and ecosystems. Preservation of the countryside. Family farming roots. Individual and motivated approach of farmers. Dialogue between the various participants in the branch. Maintenance and rebuilding of rural structures, management of soil and space.

Source: Syndicat europen des transformateurs de produits de lagriculture biologique (SETRAB), Les Produits de lAgriculture Biologique, 1996 - 1997.

Product and market requirements


In France, professionals (farmers, processors and distributors) and consumers generally distinguish between the following major groups of organic food and beverage products:
q q q q q q q q q q

Edible oils; Wine, beer, vinegar; Prepared and pre-cooked dishes.

Products derived from cereals and oil-seeds;

Fruits and vegetables (fresh, preserved, dehydrated, dry, juices, deep-frozen, concentrated); Coffee, tea, cocoa; Dairy products;

A detailed list of most of the organic foodstuffs consumed in France can be found in Annex III. It has been compiled from catalogues issued by producers, processors and distributors, from data supplied by various types of shops and from the Annuaire vert 1998. Since 1990, French consumption of organic food products has grown dramatically, and the trade expects an average annual rate of growth in consumption of about 20% in the coming years. This demand will be met by the steady increase in French production and by

Meats, meat-based products, poultry, eggs, pork-based products; Spices, aromatic and medicinal plants; Sugar, honey, sweeteners;

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imports both from EU member States and from third countries. Domestic production will not be able to meet the demand for a large number of products, either because they cannot be produced locally in sufficient quantities or because they cannot be produced in France at all, e.g. tropical products. In recent years, the most rapidly developing sectors have been fresh fruits and vegetables, cereals and cereal-based products and beverages. These three product groups together currently represent about half of the total organic market and are expected to grow from 10% to 20% annually. Dairy products, meat, meat products, prepared and pre-cooked dishes are among the products for which demand will probably grow the fastest over the next five years, at an expected annual rate of over 20%. Pork is an interesting example: while there is currently an oversupply of conventional pork, the organic pork industry is unable to meet demand and imports are growing. Growth prospects of about 20% per year are also forecast for a third group of products, comprising dried fruits, legumes, edible oils, coffee, tea, cocoa, sugar, honey, aromatic and medicinal plants, and spices. The main product groups showing a strong import potential, which can be supplied by developing countries in Africa, Asia and Latin America, either as raw materials or as semi-processed or fully processed products ready for consumption, include:
q

Dried tropical and Mediterranean-type fruits and

nuts;
q q

Deep-frozen and concentrated fruit pures and pastes for the processing industry; Coffee, tea, cocoa in all forms, raw or semi-processed. Developing countries, which already export a large number of organic products that have been certified for sale in other European markets, can investigate the possibilities for exporting these products to France. The development of sales of deep-frozen and convenience organic foods has been slower in France than in some neighbouring countries but is now catching up rapidly. With regard to organic fish, there are no EU or French regulations on either ocean or aquaculture fish products. However, since 1997 the French authorities have been working on the certification of aquaculture products according to an agreed set of specifications. A project for the aquaculture sector in France is under review. Most food supplements such as vitamins, minerals and trace elements, proteins and some dietetic products fall outside the categories of organically certifiable products. It should be noted, however, that they constitute, together with products that can be certified organic (such as herbal teas or infusions, medicinal plants, essential oils and others), a fast-growing market segment. Trade sources estimate the yearly growth rate at over 20%. Organic animal feed has developed well in France and is marketed by half a dozen producing and distributing companies. Organic pet-food products, which are sometimes imported (mainly from the Netherlands) have recently taken off, but are not yet covered by EU regulations.

Cereal products such as soya beans, quinoa, sesame seed, amaranth;


q q

Rice and derived products;

Dried legumes: flageolet, chickpeas, broken lentils, green lentils, yellow lentils, soya beans, aduki beans;
q

Fresh tropical and Mediterranean-type fruits and vegetables;


q

Concentrates, juices and nectars of tropical and Mediterranean-type fruits;

Market access
Regulations on organic foods
France was the first European country to adopt a national regulation on organic farming (in 1980). Since Council Regu la tion (EEC) No. 2092/91 came into force in 1991, France has continued to adopt regulations on animal products. At the end of the 1997, these com prised speci fi ca tions issued and ratified by the Ministry of Agriculture, Fisheries and Food and by the Min istry of Economy, Finance and

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Plan ning in accor dance with the 1980 law and its enabling decree of 1996. The speci fi ca tions are mod elled on IFOAMs Basic Stan dards of Organic Agri cul ture and Food Proc essing. EU regu la tions on animal products came into effect in June 1999. Regulations on organic production methods for cow milk and other dairy products, veal and beef, dairy cows, rabbits, eggs, sheep, poultry, etc. were ratified by an inter-ministerial decision in 1992. Since then, regulations have also been adopted on pork, honey, goat milk, sheep milk and other dairy products. Additional specifications are planned for all forms of processed meats. Organic ingredients of animal origin that are in conformity with existing French regulations may be used in the manufacture of essentially plant-derived organic products. These rules will now be supplanted by the EU regulation on animal products, though France may maintain a more stringent national legislation.

There is one legally designated symbol, AB, which signifies that a food product conforms with French national and EU regulations on organic agricultural production. It is an official certification mark, and is the exclusive property of the Ministry of Agriculture. The control of the use of the logo is entrusted to the approved certification bodies. The logo is protected in Europe and in countries such as Japan and the United States. Importers wishing to use the AB logo on imported organic food products are subject to a mandatory control procedure. Under the procedure, importers must provide the following:
q

A complete description of premises and import activities with, as far as possible, details of the points of entry of the imported products into the European Union;
q

Certification
France oper ates a system of pri vate inspec tion bodies approved by law. The system meets the require ments of the Asso cia tion franaise de nor mali sa tion (French Stan dards Asso cia tion) and EU Regu la tion 2092/91. COFRAC (Comit franais daccrditation) is the official body for the accreditation of certification organizations, estab lished in accor dance with European stan dard EN 45011 and its inter na tional equivalent ISO/IEC Guide 65. Five organizations have so far been accredited by COFRAC as certification bodies: Ecocert SARL, Qualit-France, AFAQAscert- International, QNPC and ULASE. Ecocert is by far the most important body, certifying around 80% of all French organic products. Ecocert also has offices in Belgium and Germany and carries out certification in many countries outside EU, for instance in Africa.

Evidence of a commitment to carry out import operations in accordance with what the European Union authorizes and through a competent authority in an EU member country;
q q

Banking information on credit transactions;

Information on the certifying body for each consignment imported into the Union. The importer must obtain one certificate for each product to be imported and apply for import permission (unless the exporting country is on the EU Regulation 2092/91 Article 11 list of approved countries). The permit is valid for one year. In the past there were over 20 associations operating their own organic labelling schemes. Some of these traditional labels (such as Nature et Progrs and, to a lesser extent, ABF), although no longer officially recognized, are often still found next to the official AB logo on French organic products and continue to appeal to many French consumers.

Distribution channels
Retail structure
The level of penetration of organic foods into different types of retail outlets is a key factor in the development of consumption. Between 1985 and 1994 retail distribution developed much more slowly than in neighbouring countries to the north and east of France, as sales by specialist organic retailers stagnated and the multiple retail chains ( grandes surfaces) made only very limited efforts to enter the

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organic market. A high proportion of sales still took place direct from producer to consumer through weekly organic markets (marchs bio), through consumer cooperatives buying direct from producers and through farms selling to the public. Since 1994 the situa tion has changed rap idly. Organic prod ucts are now avail able in most of Frances major supermarkets and hypermarkets and, by 1997, the market share of these multiples had risen to nearly 40% of total sales. Specialist shops selling organic, die tetic, naturel products and food supplements accounted for around 30% of con sumer expen di ture on organic prod ucts. Tra di tion ally, bread and bakery products and, therefore, bakery outlets have had a sig nifi cant share of organic sales in France, but their posi tion has been eroded by the growing super market involve ment. Bakery sales and direct sales by farms and organic markets now have a market share of between 25% and 30%. The first retail chain to intro duce a coherent organic assortment was Monoprix under its own Monoprix-Bio brand. Carrefour also introduced its own Carrefour-Bio brand, which is used on both dry and fresh products other than fresh fruits and vegetables. Organic fruits and vegetables as well as dairy and bakery products are now being sold by most chains, although sometimes only in a limited number of out lets. Assort ments are avail able at Cora, Auchan, Leclerc, Casino, Continent, Super U and Prisunic. The fact that three quarters of French house holds are said to do one large weekly pur chase of groceries at a hypermarket and the growing involve ment of these mul ti ples in organic food sales should be a major stimulant to demand in the near future. There are an estimated 1,800 specialist retailers of organic, dietetic, naturel products and food supplements in France. After a long period of stagnation, they started to reorganize in purchasing groups, cooperatives and franchising systems, such as Naturalia, Croque Nature, Bio Markus, Satoriz, LEau Vive, Biocoop, Aux Rayons Verts and La Vie Claire. Their sales started to grow again, although their relative market share has diminished because of increasing competition from the grandes surfaces. There are over 25 organic markets (marchs bio) and 140 cooperative (Biocoop) outlets. Box schemes, which have been established successfully in other EU markets, have developed more slowly in the French market.

Catering and institutional sales have not expanded substantially to date.

Processors/packers and wholesalers


The distribution of organic products to retail outlets and sometimes, in the case of direct farm sales, straight to the consumer, is handled by the following:
q q q q q

About 4,200 producers (farmers);

About 40 importers (some of which are also wholesalers) trading with non-EU countries; About 500 processors/packers; Five national wholesalers;

30 regional wholesalers distributing fresh products and dry groceries. The huge geographical size of France means that wholesalers play a significant role in distribution, from the col lec tion of pro duce to sup plying proc essors and retailers and the handling of foreign trade. Until very recently the domi nant force in the dis tri bution of organic foods has been Dis tri borg, a national wholesaler of organic and diet foods, which had a turn over in 1997 of FF 1,478 mil lion. Dis tri borg sells to spe cialist shops and dis trib utes many health food brands and for eign deli ca tessen prod ucts to the supermarket or hyper market trade. Its major brand Bjorg is sold suc cess fully, not only in France, but also in Belgium and Italy; its other labels include La Vie Claire, Equili brance, Ven do mine, Th Tuocha, Evernat and Bonneterre. Distriborg controls the chain of health food shops Dame Nature (8 organic supermarkets); the franchise group of specialist shops La Vie Claire/Dame Nature (about 150 out lets), pur chased in 1996; and the chain Aux Plaisirs de Fleurance. Dis triborg is also active abroad: in addi tion to Dis tri borg companies in Italy and Belgium, it has subsidiaries like the Bel gian groups Prona, Hagor and Genucchi; the Italian firm GB TRE; and Bre whurst Health Food Sup plies (UK), Tasty Food, and Nicholson & Evans in the United Kingdom. Since the mid 1990s Distriborg has met fierce compe ti tion from a new market entrant Le Got de la Vie, which was set up in 1995 and now supplies a full range of fresh, dry and frozen organic foods. The company, with its main commercial base at Sablsur-Sarthe (Loire), sells its products under three brands: Le Got de la Vie in super mar kets and hypermarkets, and Favrichon and Pro-Sain in specialist shops. Le Got de la Vie organic foods are now

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stocked by many supermarket chains, including Monoprix, Auchan, Leclerc, Intermarch, Champion, Prisunic, Continent, Champion, Cora, Match, Systme U and ATAC. Le Got de la Vie has acquired some of the foremost organic processors and its indus trial units now include La Cepad et les Domaines de la Nature at Bagues, which produces preserved vegetables, fruits and jams; a processing plant for cereals; and two bakery and bis cuit fac tories. Le Got de la Vie has a Bel gian sub sidiary and has considerable exports, mainly to other European countries. The other major national oper ating whole salers which also handle imports include Bonneterre, Natouring France, Lima, Celnat, Crales Wander Nutrition, Borsa, AEDA, Bio prim and Roussillon. There is also a network of regional wholesalers. It should be noted that wholesalers are facing increasingly strong competition from the organic assortments developed by the big retail chains them selves.

Future trends
According to trade sources the following developments are likely to take place over the next few years:
q

Supermarkets and hypermarkets will increase their dominant market share to about 50% of all French retail sales of organic food and beverages.
q

Imports
The most usual channel of distribution for imported organic foods is through a specialized importer and/or a processor/packer, then through a wholesaler to the retail outlet, which makes the final sale to the consumer. Direct sales from foreign exporters to central purchasing units of retail chain stores are still rare. However, these sales are likely to be of growing interest to the multiples as their organic volumes and their uptake of new organic products increase. There is a rising tendency towards sourcing supplies more globally and developing partnerships at all levels. Food manu fac turers tend to buy their imported supplies either direct from importers or from spe cial ized (European) processors, which can meet speci fi cations and ensure con ti nuity of supply. The manu facturers do not often import direct from out side Europe, though it is likely that this will increase, espe cially as the more conventional food manufacturers become involved and set up organic product lines.

At the time of the prepa ra tion of this survey, the major retail organizations (like Carrefour, Promods, Auchan, Leclerc, Cora, Monoprix, Prisunic and Super U) were planning to launch significant new product ranges in 1998 and thereafter, subject to the avail ability of produce and the regu larity of deliv eries, which are expected to improve. In these outlets, part of each product shelf will be reserved for fresh organic products (dairy products, meat and meat products, fruits and vegetables) and dried fruits. In the case of dry groceries, organic products will either remain in the diet product assortment or be integrated into the rele vant special ized product shelf (e.g. jams, fruit and vege table preserves, coffee, tea, biscuits, etc.).
q

Catering and institutional sales, as well as mail order and box schemes, are likely to grow.
q

Specialist retailers will continue to reorganize and consolidate in chains, cooperatives and franchise organizations (Naturalia, Croque Nature, Bio Markus, Satoriz, LEau Vive, Biocoop, Aux Rayons Verts, La Vie Claire, etc.). However, their market share may decline vis--vis supermarkets and hypermarkets. The speciality shops are already successfully developing the mini-market concept.
q

Processors/packers and wholesalers will grow in size and capability in order to meet the increasing requirements of the retail sector and consumers for organic products. The names and addresses of major importers, processors and packers and retail organizations can be found in Annex I.

Competition, prices and margins


Although the retail prices of many organic products have fallen in the last few years because of economies of scale, better management and the increasing penetration of supermarkets in organic food sales, price remains a major brake on the growth of consumption. Prices are still typically far above

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those of comparable conventional products, and frequently higher than what many consumers are prepared to pay. Premiums vary according to distribution channels and are generally highest in specialist shops. They range from 25% to 80% and sometimes more according to the product range and the type of shop. The price differential in supermarkets and

hypermarkets tends to be lower and varies between 10% and 50%. Aver ages are between 10% and 40% for dairy products, over 50% for fresh fruits and vege ta bles, and between 5% and 25% for dry goods. Increasing vol umes of turn over and the intro duc tion of private label ranges of organic products should gradu ally make it pos sible to reduce the dif fer en tial, but the key question is whether consumers are prepared to pay the premium which will usually be necessary to cover the higher costs of raw materials and of proc essing cer ti fied organic prod ucts.

Prospects and opportunities


Overall prospects
The prospects for the further development of the French market for organic food products depend on three closely linked factors: supply and consumer demand, official policy, and growing professionalism in the organic trade. Supply and consumer demand. Since 1990 French consumption of organic food products has increased dramatically, and the trade expects an average annual growth rate of 20% in the coming years. This demand will be met partly by the steady increase in domestic production and also by imports both from EU member States and from third countries. Domestic production will not be able to meet demand for a large number of organic products, which cannot be locally produced in sufficient quantities or which are not produced at all in France, e.g. tropical products. In recent years, the most rapidly developing sectors have been fresh fruits and vegetables, cereal-based products and beverages. These three product groups together currently account for about half of the total organic turnover and are expected to have an annual growth rate of between 10% and 20% over the next several years. Other products with excellent growth prospects are:
q

and spices, sales of which should increase by about 20% annually. Offi cial policy. Between 1985 and 1995 France lost its lead er ship role in the Euro pean organic food market. A major objective of official national policy now is to close the gap, particularly with Austria, Denmark, Ger many and the Neth er lands. At the end of 1997, the Min istry of Agri cul ture, Fish eries and Food launched an ambitious five-year plan (1998-2002) for the devel op ment and pro mo tion of organic farming. France has a number of advantages which have not been sufficiently exploited to date:
q

A favourable home market based on the consump tion criteria of health, the envi ron ment and flavour;
q

Committed farming leaders and a network of organic farming advisers;


q

Large areas with low population densities where extensive farming methods are similar to those of organic farming, and other more populated areas but whose farmers, nonetheless, are aware of the excesses of certain intensive methods and the sizeable potential of the organic market;
q

Dairy products, meat, meat products, prepared and pre-cooked dishes: demand for these product categories will probably grow by over 20% annually over the next several years;
q

A strong and pioneering regulatory and control framework with rigorous national specifications, and a control system set up in conformity with European standard EN 45011, which ensures the independence, impartiality and efficiency of controlling bodies, an indispensable condition for accreditation. The five-year plan comprises six key priority actions

Dried fruits, legumes, edible oils, coffee, tea, cocoa, sugar, honey, aromatic and medicinal plants

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which, within five years, should lead to the doubling of public financial assistance. It is hoped that these priorities (listed below) will give a new growth impetus to organic food production and trade:
q

Large-scale supply and improved supply regularity.


q

Improved logistics between producers and processors to retail outlets.


q

The harmonization and strengthening of regulatory and control measures within the European framework to avoid distortion of competition;
q

Greater proximity to consumers owing to the rapid multiplication of supermarkets and specialist shops.
q

The enhancement of territorial advantages by increasing financial aid for conversion to organic agriculture and product development;
q

The strengthening of the distribution system at regional and local level;


q

The modernization of processing methods, adaptation of product quality by processors and distribution to new groups of consumers, including those who want products which are both modern and organic.
q q

Product information;
q

promotion:

quality,

availability,

Satisfactory storage conditions.

New efforts to improve product quality and pricing;


q

Mass communication on the concept of organic products (and the AB logo) aimed at improving consumer awareness.
q

The strengthening of public assistance and joint action with the trade. One of the key elements of this plan involves increasing the number of organic farmers from 4,500 at the end of 1997 to 25,000 by the year 2005. Growing professionalism in the organic trade. Since 1995 changing attitudes to the organic business have resulted in:
q

Improved packaging of, and information on, products on the shelves, especially with regard to the guarantee of quality; quality and taste characteristics: health, nutrition, security, absence of residues, flavours; respect for the environment; appearance; freshness; and identification of place of origin.
q

A simultaneous increase in sales to regular buyers and growing numbers of occasional buyers.

Increased investments by the major food groups (e.g. Besnier, Bourgoin, Danone), processors and packers;
q

Specific market opportunities


Developing countries in Africa, Asia and Latin America, which already export a large number of products that are certified organic in EU, can increase their exports to France. As said earlier, the main product groups showing a strong import potential, whether as raw materials or as semi-processed or fully processed products ready for consumption, include:
q

Heightened industrial transformation with the appearance of genuine manufacturers brand names as well as a stronger presence of the large retailers marketing manufacturers brands and/or private labels;
q

Improved presentation of organic products by supermarkets and hypermarkets with a view to narrowing the price difference between organic products and conventional products. This has the effect of broadening the product range to include items which previously were sold only by certain specialist chain stores. Consumption will be stimulated by the new trends which have emerged since 1995. These include the following:

Cereal and other products derived from soya beans, quinoa, sesame, amaranth;
q q

Rice and rice-derived products;

Dry legumes such as lentils, beans, flageolets, chickpeas, broken lentils, green lentils, yellow lentils, soya beans, aduki beans;
q

Fresh tropical and Mediterranean-type fruits and vegetables;

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Concentrates, juices and nectars of tropical and Mediterranean-type fruits;


q

cocoa, peanut, sesame and even olive oil. For most of these products, penetration of the French market will usually be through importers or through processors/packers. Direct sales to the central purchasing units of the chain stores are still rare. The development of partnerships with or without transfer of technology between suppliers in developing countries and importers and processors/packers is making progress in a large number of EU countries, including France, and should help in the further penetration of the French market. Overall there is a tendency to source supplies more globally. The creation, development and strengthening of certifying authorities for organic products in developing countries, which meet the standards required by EU and French regulations, will strongly increase the opportunities for exporters in these countries to gain access to the French market.

Dried tropical and Mediterranean-type fruits and

nuts;
q

Deep-frozen fruits and concentrated fruit pures and pastes for the processing industry;
q

Coffee, tea, cocoa in all forms, raw or semi-processed. France is largely self-sufficient in meat and meat products, including beef and lamb, as well as dairy products, and is even an important exporter of poultry products. The market potential for aromatic and medicinal plants and essential oils is limited, except, of course, for those growing only in tropical areas. There are better prospects for honey, cane sugar and some edible oils and fats, including palm oil, soy,

Annex I

France: selected addresses*

IMPORTERS
Arcadie SA 1115 route dUzs 30100 Als Tel: +33-4 66 56 99 33 Fax: +33-4 66 30 62 61 (Importer of organic spices, fresh and dehydrated aromatic herbs, dehydrated vegetables, herbal teas, infusions) Bioprim 530 Av. de Milan ZI du Grand Saint Charles 66000 Perpignan Tel: +33-4 68 54 79 79 Fax: +33-4 68 54 57 68 Email: contact@bioprim.com (Importer, packer and wholesaler of fruits and vegetables) Dynamis France 54 avenue de la Vilette 94637 Rungis Cedex Tel: +33-1 45 60 43 44 Fax: +33-1 46 87 44 05 (Importer of organic fresh fruit and vegetables) Euro Breizh 8 rue des Martyrs 29270 Carhaix-Plouguer Tel: +33-2 98 99 25 20 Fax: +33-2 98 99 25 21 (Importer, processor and wholesaler of cereals and pulses) Exodom Centre Commercial le Chateau 108 rue Jean Fournier BP 9025 69261 Lyon Cedex 09 Tel: +33-4 78 43 83 85

Fax: +33-4 78 43 87 70 E-mail: jpimele@asi.fr http://www.atgi.fr/exodom.htm (Importer of organic exotic fruits and vegetables, fruit juices, dried fruits, cocoa and coffee) Fimex 10 rue du Perche 75003 Paris Tel: +33-1 48 04 54 07 Fax: +33-1 42 71 83 84 (Importer of organic tea) IMAGO March St. Charles BP 5129 66031 Perpignan Tel: +33-4 68 68 40 40 Fax: +33-4 48 68 40 48 Email: imago1@wanadoo.fr (Importer, packer and wholesaler of fruits and vegetables) Jean Jacques Boutrou 67 rue Robespierre 93558 Montreuil Cedex Tel: +33-1 42 87 70 21 Fax: +33-1 48 51 52 73 (Agent for Tradin Organic BV, Netherlands) JK Nature ZI La Saussaye 124 rue du Rond dEau 45590 Orlans Tel: +33-2 38 25 00 70 Fax: +33-2 38 25 00 77 (Importer, packer and wholesaler of fruits and vegetables) Les Rois Mages 210 rue Louis Arnaud 13794 Aix-en-Provence Cedex 3

Tel: +33-4 42 24 42 57 Fax: +33-4 42 24 36 62 (Importer of organic tea and coffee) Pimpexport 103 boulevard Mac Donald 75019 Paris Tel: +33-1 45 91 05 88 Fax: +33-1 45 91 05 78 (Importer and trader in organic teas, aromatic plants, herbal tea plants, plant extracts, spices) Pronatura MIN 68 84953 Cavaillon Cedex Tel: +33-4 90 78 73 04 Fax: +33-4 90 78 73 14 (Importer and trader in organic fruits and vegetables, citrus fruits, dried fruits) Ren Devalance Domaine de Choisel 51120 Queudes Tel: +33-3 26 80 53 85 Fax: +33-3 26 81 35 02 (Importer and trader in organic cereals, flour, edible oils, dried legumes, legumes, oil-seeds, oil-seed/protein products, salts, semolina, preserves, rice) St Arcada France Domaine du Blazy 47130 Port-Sainte-Marie Tel: +33-5 53 87 20 24 Fax: +33-5 53 87 26 18 Email: arcada@ins.France.com (Importer-distributor of organic fruit and vegetables)

___________________________ * List not exhaustive. For additional names, see for example: Annuaire Vert, La Vie Au Natural, OCEP Editions 11 rue Sainte Ambroise 75011 Paris Tel: +33-1 47 00 46 46 Fax: +33-1 47 00 24 91 http://www.vert-world.com

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PROCESSORS AND PACKERS **


BIO Planete Sarl Route de Limoux 11150 Bram Tel: +33-4 68 76 51 27 Fax: +33-4 68 76 54 73 (Cooking oils) Celnat ZI de Blavozy 43700 Saint-Germain-Laprade Tel: +33-4 71 03 04 14 Fax: +33-4 71 03 54 31 (Processor and distributor of organic cereals, cereal-based products, tea, etc.) Distriborg France 217 chemin du Grand Revoyet 69561 St-Genis-Laval Lyon Tel: +33-4 72 67 10 20 Fax: +33-4 72 67 10 57 (Processor and distributor of organic products) Florame 34 boulevard Mirabeau 13210 Saint-Rmy-de-Provence Tel: +33-4 90 92 48 70 Fax: +33-4 90 92 48 80 (Essential oils, etc.) Fytosan - La Drome Provenal ZA de Cocause 26150 Die Tel: +33-4 75 21 09 09 Fax: +33-4 75 22 18 70 (Essential oils, etc.) Le Got de la Vie s.a. 83 boulevard Montparnasse 75006 Paris Tel: +33-1 53 63 24 70 Fax: +33-1 53 63 24 71 E-mail: vscherrer@legoutdelavie.com (Importer, processor, wholesaler and exporter of grocery items and dairy products) Markal ZA Les Plaines 26320 St-Marcel-ls-Valence Tel: +33-4 75 58 72 20 Fax: +33-4 75 58 81 85 (Processor and distributor of organic cereals, cereal-based products, rice, grains and legumes) Nutrition et Soja-Soy Chemin de lHorte 31250 Revel
___________________________ ** Of which some are also importers.

Tel: +33-5 62 18 72 50 Fax: +33-5 62 18 72 51 (Processor and distributor of organic soya-based products) St Bio dArmor La Croix Rouge Ergu - Gabric 29556 Quimper Cedex 9 Tel: +33-2 98 59 58 00 Fax: +33-2 98 59 69 99 (Processor and distributor of organic fresh produce and grocery products) St Biovivre Diepal-NSA BP 432 69654 Villefranche-sur-Sane Cedex Tel: +33-4 74 62 63 64 Fax: +33-4 74 62 61 96 (Processor and distributor of organic condiments, bakery products, cooking cereals, pasta, rice, biscuits, pre-cooked dishes, sauces, juices, infusions, coffee, breakfast foods, flours) St Bonneterre (Group Distriborg) 1 place des Planteurs 94538 Rungis Cedex Tel: +33-1 49 78 25 00 Fax: +33-1 46 87 91 68 (Distributor of organic dairy products, fresh fruits and vegetables, cereals, edible oils, flours, jam, dried fruits) St Brugier Sillon (Group Distriborg) ZI en Tourr 11400 Castelnaudary Tel: +33-4 68 94 52 10 Fax: +33-4 68 94 02 80 (Processor and distributor of organic dried fruits) St Favrichon (Group Le Got de la Vie) BP 2 42470 Saint-Symphorien Tel: +33-4 77 64 75 09 Fax: +33-4 77 62 74 11 (Organic muesli, cornflakes, rusks, biscuits, dried legumes, creamed corn, infant cereals) St Herv Produits Biologiques 36700 Clion-sur-Indre Tel: +33-2 54 38 66 03 Fax: +33-2 54 38 66 04 (Processor and distributor of organic dried fruits, pures and dried fruit sweets, lacto-fermented cereals, instant beverages)

St Prosain (Group Le Got de la Vie) Les Mates 66670 Bages Tel: +33-4 68 21 60 23 Fax: +33-4 68 21 80 36 (Jams, pures, vegetable preserves: organic peas, beans, lentils, gazpacho, tomato or piperade, ratatouille, juices, nectars, syrups) St Provence Rgime SA ZI La Verrerie BP 99 30130 Pont-Saint-Esprit Tel: +33-4 66 90 54 54 Fax: +33-4 66 39 42 31 (Processor and distributor of edible oils, speciality products from the south of France, oil-seeds, vinegars, organic sauces and condiments) Viver SA Le Marchon 47130 Bazens Tel: +33-5 53 87 27 76 Fax: +33-5 53 87 21 69 (Processed tomato product, fruit juices, jams, marmalade, fruit pure, etc.)

SPECIALIZED RETAIL CHAINS FOR ORGANIC AND NATURAL PRODUCTS AND FOOD SUPPLEMENTS
Aux Rayons Verts (60 shops) 41 rue Lon Blum ZA La Neuvillette 51100 Reims Tel: +33-3 26 87 22 90 Fax: +33-3 26 04 88 79 Biocash Distribution (Central buying) 281 avenue du March Gare MIN Espace No. 13 34047 Montpellier Cedex 1 Tel: +33-4 67 58 68 58 Fax: +33-4 67 58 59 70 Biocoop (180 shops) 22 cours Gambetta 65000 Tarbes Tel: +33-5 62 34 10 37 Fax: +33-5 62 44 15 96

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169

Biothiclub 46 rue Pierre Germain 11000 Carcassonne Tel: +33-4 68 72 09 00 Fax: +33-4 68 25 48 48 La Vie Claire (Group Distriborg - 120 shops) 35 avenue du 1er mai 91127 Palaiseau Cedex Tel: +33-1 64 53 83 00 Fax: +33-1 64 53 83 01

94000 Crteil Cedex Tel: +33-1 45 17 92 00 Fax: +33-1 45 17 92 20

ACCREDITATION AND CERTIFICATION ORGANIZATIONS


AFAQ-ASCERT International 116 avenue Aristride Birand BP 83 92225 Bagneaux Cedex Tel: +33-1 46 15 70 60 Fax: +33-1 46 15 70 69 (Certification) COFRAC 37 rue de Lyon 75012 Paris Tel: +33-1 44 68 82 58 Fax: +33-1 44 68 82 48 (Accreditation and certification organization) ECOCERT SARL BP 47 32600 LIsle-Jourdain Tel: +33-5 62 07 34 24 Fax: +33-5 62 07 11 67 E-mail: ecocert@compuserve.com (Certification) QNPC (Qualit Nord-Pas-de-Calais) 241 avenue de la Rpublique 59110 La Madeleine Tel: +33-3 28 38 94 84 Fax: +33-3 28 38 90 87 (Certification) Qualite France 18 rue Volney 75002 Paris Tel: +33-1 42 61 58 23 Fax: +33-1 42 60 51 61 (Certification) ULASE Place du Champ de Mars 26270 Loriol-sur-Drme Tel: +33-4 75 61 13 00 Fax: +33-4 75 85 62 12 (Certification)

(Ministry of Agriculture, Fisheries and Food) 30 rue Las Cases 75340 Paris Cedex 07 Tel: +33-1 49 55 57 03 Fax: +33-1 49 55 56 01 (Responsible for planning the development of the organic agricultural sector) Direction gnrale de lalimentation Bureau des labels et des certifications de produits 175 rue du Chevaleret 75646 Paris Cedex 13 Tel: +33-1 49 55 80 03 Ministre de lconomie, des finances et du plan (Ministry of Economy, Finance and Planning) (General Directorate of Competition, Consumers Affairs and Fraud Repression) Bureau H4 59 boulevard Vincent Auriol Tldoc 051 75073 Paris Cedex 13 Tel: +33-1 44 87 17 17 Fax: +33-1 44 97 30 43 RESEARCH CENTRES CREDOC - Centre de recherce pour ltude et lobservation des conditions de vie (Research Centre for the Study and Observation of Living Conditions) 142 rue du Chevaleret 75013 Paris Tel: +33-1 40 77 85 61 Fax: +33-1 40 77 85 09 CRITT-CRISALIDE - Centre de transfert de technologie dans le secteur vgtal (Centre for the transfer of technology in the crop sector) 2 rue Henri Becquerel 49070 Beaucouz Tel: +33-2 41 48 13 50 Fax: +33-2 41 48 07 87 INRA - Institut national de la recherche agronomique 147 rue de lUniversit 75338 Paris Cedex 07 Tel: +33-1 42 75 90 00 Fax: +33-1 47 05 99 66 http://www.inra.fr INRA-UREQUA - Unit de recherche spcialise sur lconomie des qualifications agro-alimentaires (Specialized research unit on the economic aspects of agro-food

SUPERMARKET/ HYPERMARKET CHAINS


Auchan Centrale dachats 200 rue de la Recherche 59656 Villeneuve-dAscq Cedex Tel: +33-3 20 67 55 78 Fax: +33-3 28 37 61 39 E-mail: pfrisch@auchan.com Carrefour BP 75 Zae de Saint Gunault 1 rue Jean Mermoz 91002 vry Cedex Tel: +33-1 60 91 37 37 Fax: +33-1 60 79 44 98 Centres Leclerc 149 rue Saint Honor 75001 Paris Tel: +33-1 46 62 52 00 Fax: +33-1 46 62 96 00 Cora/Loceda Hyperselection BP 81 Domaine de Beaubourg 77183 Croissy-sur-Beaubourg Tel: +33-1 64 62 65 00 Fax: +33-1 64 80 40 51 Monoprix SA 3 rue Paul Czanne 75008 Paris Tel: +33-1 40 75 15 15 Fax: +33-1 40 75 11 16 Prisunic SA 67-69 boulevard Gal. Leclerc 92110 Clichy Tel: +33-1 41 17 85 000 Fax: +33-1 41 27 88 77 Promods ZI, Route de Paris 14120 Mondeville Tel: +33-3 17 06 060 Fax: +33-3 18 35 619 Systme U Centrale Nationale SA Immeuble Crteil Expansion 9-11 rue George Enesco

GOVERNMENT OFFICES, RESEARCH CENTRES, TRADE AND INDUSTRY ASSOCIATIONS


MINISTRIES Ministre de lagriculture, de la pche et de lalimentation

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specifications) 8 avenue Lannec 72000 Le Mans Tel: +33-2 43 39 94 00 Fax: +33-2 43 39 94 09

PROFESSIONAL ORGANIZATIONS
APCA - Association permanente des Chambres dagriculture (Permanent Association of Agricultural Chambers) 9 avenue Georges V Paris Tel: +33-1 53 57 10 05 Association Demeter France BP 286 67606 Slestat Cedex Tel/Fax: +33-1 30 71 11 24 BIO CONVERGENCE Association dagriculture

biologique regroupant des transformateurs- industriels et distributeurs franais de produits biologiques (Association of Organic Agriculture comprising processors, manufacturers and distributors of organic products) 1 avenue de Verdun 33500 Libourne Tel: +33-5 57 51 96 82 Fax: +33-5 57 51 97 28 Fdration franaise de la dittique (French Dietetic Federation) (Federation of several professional unions organizing the DIETEXPO trade show in Paris) 14 terrasse Bellini 92807 Puteaux Tel: +33-1 47 75 03 09 Fax: +33-1 47 55 03 09 FNAB - Fdration nationale de lagriculture biologique des

rgions de France (National Federation of Organic Farming of the French Regions) 40 rue de Malte 75011 Paris Tel: +33-1 43 38 38 69 Fax: +33-1 43 38 39 70 Mouvement de Culture Biodynamique Jean Michel Florin 5, Place de la Gare 68000 Colmar Tel: +33-3 89 24 36 41 Fax: +33-3 89 24 27 47 E-mail: biodynamis@wanadoo.fr SETRAB - Syndicat europen des transformateurs de produits de lagriculture biologique (European Union of Processors of Organic Agriculture) 40 avenue des Terroirs de France 75611 Paris Cedex 12 Tel: +33-1 44 74 53 56 Fax: +33-1 44 74 52 76

Annex II

Individual import authorizations for organic food products originating in third countries in 1997
(According to the procedure set out in article 11 paragraph 6 of EU Regulation No. 2092/91, including amendments)

Products Apples Pears Apples Pears Dried cinnamon Dried cloves Avocado pears Late oranges Dried apricots Dried figs Fig pieces Fig cream Raisins Raisin cream Peeled hazelnuts Green walnuts Pine pips Chickpeas Lentils Palm oil Green coffee Green coffee Mangoes Oranges Lemons Grapefruit Nutmegs Green walnuts Tomatoes Carrots Melons Zucchini Cucumbers Pistacchio nuts in shell Sesame Dried chicory Fresh lychees Fresh pineapple Fresh rambutans Peppers Deep-frozen blackcurrants Eucalyptus oil Tea tree oil Green walnuts

Estimated tonnage 100 50 500 50 13 4.2 30 34 70 100 5 20 200 10 80 10 2 5 5 7 700 69 35 30 250 70 150 4.5 25 20 90 15 20 25 1 40 150 8 2 1.5 0.2 40 1 1 25

Origin Poland Poland Madagascar Mexico Morocco

Products Dried apricots Dried figs Fig pieces Fig cream Raisins Raisin cream Shelled hazelnuts Green walnuts Pine nuts Chickpeas Lentils Beet sugar Cocoa beans Raisins Raisins Beet sugar Quinoa Black tea Black, white and green tea Oranges Lemons Sweet mint Marjoram Citronnella Sage Basilic Rosemary Olives Molasses Nettles Parsley Deep-frozen apricots Dried apricots Pine pips Hazelnuts Sultanas Dried figs Black vanilla Cocoa beans Peeled almonds Peeled almonds Peeled almonds Dates Cocoroll dates

Estimated tonnage 30 60 5 5 150 10 15 15 10 330 270 100 90 5 15 240 200 7 2 2.4 0.3 1 0.5 0.2 0.5 0.2 0.2 0.2 0.3 0.1 0.2 5 0.275 0.1 0.16 0.2 0.2 0.5 18 2 2 10 10 2

Origin Turkey

Colombia Mexico Costa Rica Dominican Republic United States

Slovakia Dominican Republic United States United States South Africa Bolivia Sri Lanka India Morocco

Madagascar India Morocco

Turkey Turkey

United States Ethiopia Hungary Madagascar

Canada Zimbabwe India

Madagascar Dominican Republic United States United States United States United States

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Products Dried apples Dried pears Dried apples Dried pears Dates Cocoroll dates Dates Cocoroll dates Dried bananas Fresh mangoes Fresh pineapples Dried pineapples

Estimated tonnage 2 1 0.5 0.5 4 1.5 1.3 3 10 1 2 1

Origin United States United States United States United States United States United States United States United States Colombia

Products Fresh coconuts Dried coconuts Apples Tea tree oil Dried figs Late oranges Navel oranges Tampla oranges Valencia oranges Lemons Clementines Grapefruits

Estimated tonnage 2 1 100 0.75 60 422.5 240 60 80 147.5 339.5 20

Origin

Madagascar Zimbabwe Turkey Morocco

PROVISIONAL TOTAL IMPORTS OF ORGANIC FOOD PRODUCTS IN 1997: 13 288.18 metric tons

Annex III

Commercial organic products sold in 1997

CEREAL PRODUCTS AND PULSES


Cereals
Barley Buckwheat Millet Oats Popcorn Rye Spelt Wheat

Seeds
Amaranth Bulgur (pre-germinated and crushed wheat) Colza Green or yellow soya Linseed Lucerne (alfalfa) Quinoa Safflower Sesamum seeds Squash Sunflower Sheat bran

Cereals, germs Corn flakes Crackers Cream of barley, cream of rice Flour, rye flour, barley flour, cornflour, soya flour, buckwheat flour, quinoa flour Gingerbread Muesli Oat flakes, cereal flakes Pasta: all types and varieties Pastry Rusks and toasts Soya, oats, rice, wheat, malt drinks Viennoiserie Wheat, corn, bulgur semolina White wholemeal couscous

Papaya Pear Pineapple Artichoke Avocado Beans, green, butter, mung Beetroot Broccoli Brussels sprouts Cabbage, Chinese Cabbage, green Cabbage, pak-cho Cabbage, red Carrot Cauliflower Celeriac Celery Courgette Cucumber Eggplant Endive, curly Fennel Garlic Horseradish Kale, curly Leek Lettuce Lettuce, lambs Lettuce, Webb Onion, yellow Parsley Pepper, green, red, yellow Potatoes Pumpkin Tomatoes, Roma, round Spinach Turnip, white, yellow, purple

Dried seeds (pulses)


Azuki beans Black, white, red, brown, mung, ingot beans Chickpeas Green peas Soya beans Split peas White, green, red and coral lentils White, pink, red, black kidney beans Yellow peas

Rice
Basmati rice Brown rice Glutinous rice (red brown) Indian rice Precooked white rice Rice cakes Under-milled rice Wild rice

FRUITS AND VEGETABLES


Fresh
Apple Baby banana Banana Banana, red Carob Grape, red and white Grapefruit Kiwi fruit Lemon Mandarin Mango Orange

Canned
Dried fruit pure Fruit in syrup Fruit pure and compote Jams: strawberry, blackcurrant, raspberry, bilberry, fig, chestnut, kiwi, pear, plum, apricot, peach Canned vegetables: peas, green beans, lentils, chickpeas, beetroot salad, whole tomatoes in juice Tomato sauces Vegetable soups

Cereal by-products
Biscuits Bran Bread for sandwiches Cereals, breakfast Cereals for babies Cereals made of vegetable paste Cereals, pures Cereals, steaks

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Candied hazelnuts in sugar cane juice/in honey Candied almonds in sugar cane juice/ in maple syrup White sesamum in sugar cane juice Pures: hazelnut, almond, sesamum, peanut, cashew Chocolate, karouba, kokolo spread

Dried fruits (loose or packaged)


Almond Amazonia nuts Apple Apricot Bilberry Cashew nuts Cherry Currants Deglet nour date Dried banana Fig Grape Grenoble nuts Hazelnut Mango Medjool jumbo date Medjool supreme date Papaya Pear Pine nut Pineapple Pistachio nut Shredded coconut Sultanas Thompson grape

Apricot pure Banana slices Banana pure Banana paste Frozen banana Bilberry Elderberry Gooseberry Guava pure Mango pure Maracuya juice Orange concentrate Orange juice Peach Pear Pineapple Pineapple juice Plum Raspberry Raspberry pure Redcurrant Sour cherry Strawberry pure Tomato concentrate Wild bramble

Colza Corn germ Groundnut Hazelnut Marsh thistle almond Nut Olive Palm Safflower Sesamum Soya Squash seed Sunflower Wheat germ

WINE, BEER, VINEGAR


French and imported wine French and imported beer Wine vinegar, cider vinegar, raspberry vinegar

COFFEE, TEA, COCOA


Raw coffee 100% pure arabica ground coffee Freeze-dried coffee Tea Instant chicory 100% pure cocoa drinking chocolate Cocoa beans Cocoa cream Black, milk coating Carob powder

PREPARED, COOKED DISHES


Aubergine nioise Aubergine caviar Courgette pure Couscous Creams Fresh sprouts/germs: soya bean, alfalfa, lentil, radish, wheat Mixed soya Mixed salads with germinated seeds Mixed salads Mousselines (whipped pures) Piperade Ratatouille Ravioli Seitan (preparations of wheat gluten) Tabbouleh Vegetarian cooked dishes

Juices, nectars and syrups


Apple Blackcurrant Carrot Celery Cereals Grapefruit Lemon Mint (syrup) Orange Plum Potato Radish Red and white grape Tamari Tomato

DAIRY PRODUCTS
Butter Cheese: Emmenthal, Comt, gouda, tofu (soya cheese), Camembert, fresh cheese Fresh cream Faisselle Ice cream Milk desserts : cocoa, soya and caramel, natural yoghurt, stirred yoghurt, fruit flavour, with fruit Milk: cow, soya, rice/soya, vanilla/soya, almond Powdered milk, whey powder

Frozen fruits and concentrates


Acarillo pure Apple Apple concentrate Apricot

MEAT, MEAT PRODUCTS, POULTRY, EGGS, PREPARED MEAT PRODUCTS


Beef, veal, mutton Poultry Eggs Prepared meat products

OILS
Almond Coconut

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175

HERBS, SPICES, SALTS AND CONDIMENTS


Vanilla Tea tree Basil Lemon Clove Cypress Eucalyptus Juniper berries Geranium rosat Fine lavender Lavandin Peppermint Punk tree Sweet orange

Green oregano Scots pine Ravensara Rosemary Turpentine Thyme Ylang-ylang Salts Tomato concentrate Tomato coulis Peeled tomato Salted ketchup Tomato sauce la Provenale with basil Soya sauce: shoyu (made with soya and wheat, salted) Tofu sauce: tamari (made with soya and wheat, salted)

Harissa Olives

SUGAR, HONEY, SWEETENERS


Brown cane sugar, unrefined Honey: black alder, chestnut tree, lavender, mountain, mixed flowers, sunflower, acacia, heather, dandelion pollen royal jelly Honey sweets, agave syrup Maple syrup Beetroot syrup Glucose syrup

Chapter 8 GERMANY

Organic farming: historical development


Organic agriculture commenced in Germany at the time of the organ ized land and food reform move ment (1893-1925), when Reform shops (Reformhuser in German) were established. As early as 1903 Gustav Simons of the Reform Colony in Eden-Oranienburg, near Berlin, wrote a booklet about the relationship between the health of the soil, the growth of plants and the health of man kind. Bio dy namic agri cul ture started in 1924 with Rudolf Steiners Agri cul tural Course, given in Kober witz. His pupil Ehren fried Pfeiffer was instrumental in spreading awareness of biodynamic agriculture in Germany, the Netherlands and the United States. From the mid 1930s onwards the Mller-Rusch biological-organic method developed strongly, but organic (and biodynamic) agriculture remained marginal, and organic products were sold only in Reform shops. Well- known brands of natural body care products and natural medicines like Dr Hauschka (Wala) and Weleda and the Reform food brands Eden (estab lished in 1893 and now owned by DeVauGe and Gra no vita) date from that period. This situa tion lasted until the 1960s and 1970s, when the natural food movement gained importance and created its own circuit of farmers, processors, wholesalers and natural food stores (Naturkostlden in German). Major growth started in the late 1980s and early 1990s, when con ven tional food retailers became involved. Their entrance into the market forced the stagnating natural food stores to reorganize and modernize. Today Ger many as a market for organic prod ucts is Euro pes largest and the worlds second largest after the United States. However, despite the fact that it con tinues to grow, there are also rea sons for serious con cern about its future devel op ment, as will be seen in the sec tion on sum mary and market pros pects.

Supply and demand


Domestic production
The area under organic pro duc tion increased sharply from 45,000 hec tares in 1989 to 416,500 hec tares by the end of 1998. Con ver sion to organic farming has been stimulated partly by political and financial support. Public funding has been especially successful in eastern Germany, where at the time of reunification in 1990 certified organic farming was vir tu ally non- existent. Today a higher per centage of agricultural land is used for organic farming in the Neue Bundeslnder (new federal States), where farms are gen er ally larger and have lower pro duc tion costs than in western Ger many (see table 8.1). Until about 10 years ago Germany could easily absorb any organic supplies offered even at high prices. How ever, the country has now become largely self- sufficient in many basic organic food items, like cereals, vegetables, milk and meat, and has even started to export products like potatoes, some vege ta bles and cereals. Sur pluses in these sec tors are no longer exceptional, which can have a negative effect on price levels.

CHAPTER 8 GERMANY

177

Table 8.1

Germany: number of farms and areas under organic farming, 1 January 1998 Federal State No. of organic farms
5 898 2 572 1 277 467 283 541 369 330 31 21 7 888 443 185 83 48 122 7 6 786

% of all farms
1.19 1.47 1.58 0.62 1.17 0.81 1.08 0.95 1.41 2.27 2.49 2.83 8.65 2.48 1.58 0.91 1.50 8.54 1.29

Area (hectares)
185 734 69 476 32 894 22 496 19 619 16 209 14 563 8 193 1 505 686 93 166 640 85 599 46 052 14 153 10 542 10 145 149 352 374

% of all agricultural land


1.59 2.06 2.28 0.84 1.88 1.05 1.89 1.15 2.02 5.04 1.01 3.00 6.35 3.42 1.21 1.32 1.13 7.84 2.05

Total, western Germany of which: Bayern (Bavaria) Baden-Wrttemberg Niedersachsen (Lower Saxony) Schleswig-Holstein Nordrhein-Westfalen (North Rhine-Westphalia) Hessen (Hesse) Rheinland-Pfalz (Rhineland-Palatinate) Saarland Hamburg Bremen Total, eastern Germany of which: Mecklenburg-Vorpommern (Mecklenburg-Western Pomerania) Brandenburg Sachsen-Anhalt Thringen (Thuringia) Sachsen (Saxony) Berlin TOTAL, GERMANY Source: AGL and ITC compilation.

Table 8.1 only covers farms that are mem bers of one of the nine member asso cia tions of AGL (Arbe itsgemeinschaft kologischer Landbau), the German Federation of Organic Agricultural Associations. There are about 1,500 organic farms with an estimated 100,000 hectares which are not members of an AGL- affiliated asso cia tion. According to estimates, domestic production sup plies over 60% (DM 2.2 bil lion) of all retail sales

of organic prod ucts in Ger many. The most impor tant categories are bread and bakery products (over 90% of the raw mate rials used to pro duce these items are of domestic origin), dairy and tofu prod ucts and eggs (about 80% domestic), fruits and vegetables (45%) and meat (99%). A significant proportion of the whole grains, cereals, muesli and drinks consumed are also locally produced. The two key growth sec tors are meat, meat prod ucts and poultry, and dairy products, whilst organic seed and plant production

Table 8.2 Name


ANOG Biokreis Ostbayern Bioland Biopark Demeter ECOVIN Ga Naturland kosiegel Source: AGL.

Germany: AGL member organizations, 1 January 1999 No. of farms


85 200 3 385 587 1 333 198 313 1 125 23

Area (hectares)
3 287 3 397 116 739 107 754 48 065 877 35 254 57 440 1 296

Date founded
1962 1979 1971 1991 1928 1985 1989 1982 1986

Characteristics
Small organization; produces fruits and vegetables. Regional Bavarian group. Largest group. Located in eastern Germany. Follows biodynamic farming principles; also involved in imports. Wine producers. Located in eastern Germany. Regional Bavarian group, dynamic and gaining in importance; also imports. Small regional group in northern Germany.

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CHAPTER 8 GERMANY

are also on the increase.

in the world after the United States. Fruits and vegetables are the most significant sales item and accounted for 18% of sales in 1996. Since then this share has undoubtedly increased as conventional supermarkets have considerably widened their range of organic produce. Other impor tant product groups are dairy and tofu prod ucts (16% of sales in 1996), bread and bakery products (14%) and baby food (13%). Table 8.3 gives a break down of sales of organic foods in Ger many by product cate gory. For this pur pose the BNN classification has been used. BNN or Bundesverband Naturkost is the umbrella organization for the specialized natural food retail trade. Organic baby food has been added at the end of the table because, although it is of little significance to overall sales in natural food shops, it is an impor tant product cate gory in total organic sales. Fruit and vegetables are the most significant segment of sales and accounted for 18% of sales in 1996. Since then this percentage has undoubtedly increased as conventional supermarkets have considerably widened the range of organic produce sold. Other important product groups are dairy and tofu products (16% of sales in 1996), bread and bakery products (14%) and baby food.

Meat, meat products, poultry


To date meat has had a minor place in organic food sales but, according to Frost & Sul livan (1997), it is now the fastest growing sector. One reason for its slow development in the past was the high cost of production. This is especially true of pork and poultry, the organic fodder for which is expensive. Another reason was the absence of economies of scale: the stocking, slaughtering, processing and marketing of small quantities of organic produce is costly. Finally, tra di tional whole food con sumers did not and still do not eat meat or eat only small quan ti ties of it. This situation is changing as conventional food distributors, which appeal to a wider range of consumers, are begin ning to carry organic meat and meat products in a limited number of outlets. The dominant multiple Rewe has formed a partnership with the producers association Naturland, with the objective of obtaining more standardized meat supplies to suit consumer demand for uniform products. Under the auspices of Bund, the German League for Environmental Protection and Nature Preservation, the supermarket chains Edeka and Tegut also entered the organic meat sector in 1999. It is expected that the exten sion of the EU regu la tion on organic food to animal prod ucts, which took place in June 1999, will fur ther stimu late pro duc tion and trade in organic meat.

Imports and exports


Although domestic organic production has grown dramatically during the last decade, exports remain small, with some exceptions like the baby food of which Hipp is a large exporter. Vege ta bles and even wheat and other cereals have recently been exported. Germany remains, however, by far the largest importer in Europe, and imports a wide assort ment of organic prod ucts. In table 8.3, the typical dis tri bu tion, processing and packaging margins have been deducted from the retail value of each organic food category and an estimate has been made of the percentage level of imports (column H) in order to deduce an approximate import value per product group (column G). Overall, imports account for an esti mated 38% of the value of raw mate rials for the German organic market (table 8.3, bottom of column H), equiva lent to about DM 307 mil lion (bottom of column G), or about 10% of total sales at retail level. About 44% (valued at about DM 135 mil lion) of these imports are fruit and vege table prod ucts of which DM 93 mil lion in fresh

Dairy products
Dairy products are important to both conventional and specialized trade channels, and make up about 18% of all food prod ucts sold in the country. A large volume of organic milk is pro duced domes ti cally, and apart from the typical cheeses from Den mark, France and the Neth er lands, the German dairy market offers no real oppor tu ni ties for organic imports. The leading organic dairies are Andechser Molkerei Scheitz GmbH in Andechs and Molkerei Sbbeke in Gronau-Epe.

Retail sales
Germany has about 82 mil lion inhabi tants and total retail food sales in 1997 amounted to approxi mately DM 300 billion. Organic food accounts for an estimated 1.2% of the market, or about DM 3.6 bil lion. Ger many is the second largest organic market

CHAPTER 8 GERMANY

179

Table 8.3

Germany: sales of organic foods, by product group (in millions of deutsche mark) Distribution Processing/packaging margins: margins 45-60% D Value
289 327 294 55 55 18 37 37 37 55 18 18 18 37 64 9 18 18 18 18 18 37 37 37 55 1 628 -

Product group A
1 2 3 4 5 Bread and bakery Dairy, tofu products; eggs Fruits and vegetables Meat, sausages, snacks Wholegrain, seeds, nuts Wholegrain Seeds Nuts Pasta, dried fruit, cereals, muesli Pasta Dried fruit Cereals, muesli Bread spreads, honey, nut butter Bread spreads Jam, fruit spreads Honey Nut butter Spices, oils, fats Soups, cans, convenience foods Spices Oils Sweets, biscuits, pudding Sweets Chocolate Biscuits Sweeteners, baking ingredients Tea, coffee, cocoa Tea Coffee, cocoa Drinks Fruit, vegetable juices Alcoholic drinks Non-food products: body care, etc.

Sales at retail level B Value


515 589 662 110 110 37 74 74 74 110 37 37 37 74 129 18 37 37 37 37 37 74 74 74 110 3 200 400 3 600

Imports of raw materials G Value


3 52 93 0 3 9 22 9 21 8 2 5 7 10 12 2 5 3 4 1 4 10 10 6 7 307 -

C %
14 16 18 3 3 1 2 2 2 3 1 1 1 2 3.5 0.5 1 1 1 1 1 2 2 2 3 13 100

E Value
58 262 206 41 28 9 22 11 22 28 6 6 7 11 19 3 6 4 4 4 6 11 11 11 11 804 -

F %
20 80 70 75 50 50 60 30 60 50 30 30 40 30 30 30 30 20 20 20 30 30 30 30 20 49 -

H %
5 20 45 1 10 100 100 80 95 30 30 90 90

60 90 95 80 100 15 80 90 95 50 60 38 -

10

11

12

Total Baby food TOTAL Source: Trade estimates. A C D E F G H

Main categories at Naturkostshops (1-12). % of total sales of organic products (DM 3,200 million). Estimated average distribution margin of retailers and wholesalers: 50% (from a range of 45% -60%) of sales. Estimated value of raw materials before processing and packaging. E as percentage of sales to wholesalers. Approximate import value per product group. Estimated percentage level of imports.

fruits and vege ta bles, DM 21 mil lion in dried fruits, DM 12 mil lion in vege ta bles for can ning and con venience foods (mostly toma toes), DM 9 mil lion in fruit juices and prepa ra tions, and dairy prod ucts (e.g. fruit yoghurts), jams and fruit spreads. Imports of nuts and nut butter (peanut and almond spreads and the like)

are esti mated at DM 32 mil lion, which seems rather high and is plausible only if it includes dried fruit mix tures and nuts for use in cakes, muesli, choco late, biscuits and other products. Imports of organic tea, coffee and cocoa (util ized mainly in the pro duc tion of chocolate), typically from developing countries,

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amount to about DM 24 mil lion. About half of these imports are mar keted with the Trans Fair seal in conven tional gro cery out lets and the other half in natural food shops by companies like Rapunzel, Lebens baum, Allos and others. Imports of spices, oils, fats, sweets, sweet eners and baking ingre di ents, of which large shares also come from devel oping coun tries, are valued at about DM 14 mil lion. Sub stan tial quan ti ties are imported by indus trial sup pliers like Care, Davert

Mhle, Georg Rsner and belhr but processors also import direct. Imported oils, like palm oil, are the main ingre di ents for organic mar ga rine, which is produced by the margerine factories Mnsterland and Saarwerke. Further information on organic products obtained from devel oping coun tries is pro vided fur ther below in the sec tion on market char ac ter is tics.

Market characteristics
Consumer categories
The key influences on food purchasing by German consumers are convenience, health and enjoyment. However, these and other influences are often contradictory. For instance, health cannot easily be obtained by con ven ience, demand for the best pos sible quality is not com patible with demand for low prices, and the keen interest in exotic foods (from distant pro ducing coun tries) con flicts with the growing interest in and the redis covery of locally grown pro duce. Consumers in the 1990s have become increasingly multidimensional and can no longer be defined according to socio-economic criteria alone. Typical organic con sumers used to be char ac ter ized as having higher than average edu ca tional back grounds but not necessarily higher incomes (many students buy organic food), belonging to small fami lies, and so on. Market research by Germanys largest consumer research organization GfK has shown that the Germans of today often simultaneously display apparently contradictory behaviour in their food consumption: their pref er ences and actions can vary not only in the long term but even within the day. For example, it would not seem absurd for an indi vidual consumer to have a healthy breakfast with muesli, yoghurt and fruit, a fast- food lunch, and a cele bra tory dinner with lob ster and cham pagne. In a survey in 1991, the Sinus Institut fr Lebensweltforschung categorized natural food store customers according to socio-economic criteria and values as fol lows:
q q

27% came from an alternative environment (2% of the overall population).


q

14% came from a hedonistic environment (12% of the overall population).


q

6% came from a conservative environment (8% of the overall population).


q

9% came from all other backgrounds (68% of the total population). According to the Sinus Institut, at least 77% of the customers of natural food stores come from the higher and middle social classes. Other studies conclude that the organic food customer more often than not has a higher level of edu ca tion, but not nec es sarily a higher income. Data on age and family size are often con tra dic tory. The ever more com plex cate go ri za tion of con sumers requires a shift from the more traditional focus on consumer behaviour to a much more finely tuned view of the consumers dispositions, state of mind, desires and expe ri ences. In a market study carried out in 1996 by CMA (the German Marketing Agency for Agrarian Products) and Rewe, one of Germanys largest food retailers, 74% of organic buyers claimed that health con sid era tions were the key influ ence on pur chasing. The other most important reasons were making a personal contribution towards improving the environment (51%), better nutritional value (29%) and better taste (20%). The survey also found that 56% of organic consumers were ready to pay an organic pre mium of more than 15%, 33% a pre mium

44% came from a technocratic-liberal environment. This group accounts for 10% of the overall population.

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of less than 15%, and 11% were not pre pared to pay any pre mium. A more recent survey shows a dif ferent pic ture: only 20% of all con sumers are willing to pay any pre mium on organic foods.

growth of the German organic market. However, the rule limiting the use of the generic logo only in combination with the logo of one of the AGL member associations is considered by many to be a restricting factor.

Consumer confusion about organic products


It is a matter of con tro versy whether con sumers really understand what organic products are. The CMA-Rewe market study revealed that 95% of all German families claim to know what organic agri cul ture is and that organic prod ucts are pur chased by no less than two-thirds of them. Half of these pur chasers buy at least once a week. About 32% of all fami lies never buy organic prod ucts. The knowl edge level would sug gest that the market share of organic products should be much higher than the current estimated 1.2% share of total grocery sales. It empha sizes the fact that pas sive con scious ness of the need to preserve the environment is not translated into the action of buying more environmentally friendly food stuffs. Around 6% of German adults are green voters but they do not actively live a green life. In many peoples minds buying organic food seems to mean buying, for example, the occasional loaf of organic bread, a bag of organic car rots, onions or pota toes, a bottle of organic milk or a jar of organic baby food. Even the organically committed consumers eat far less organi cally than they think they do. In a survey of devoted natural food consumers Brombacher and Hamm found that, while these cus tomers esti mated the organic share of their food spending at 75% or more, the real figure was only about 40%. In 1998 many hard-core natural food consumers, and of course many more conventional food purchasers, were unaware of the EU regu la tion on organic foods and were completely confused by the numerous natural food and organic labels and logos appearing on the market.

Purchasing organic foods: the criteria used


German con sumers con sider a wide variety of qualities and other cri teria, rightly or wrongly, in deciding whether or not to purchase organic foods. They include the fol lowing: fresh ness, espe cially of fruits and vege ta bles; tasti ness; food safety (e.g. absence of contaminants); organic guarantees; buying con venience; product convenience; external appearance; contribution to health; product image in relation to the consumers values and lifestyle; appearance of the point of sale; nutritional value; naturalness; whole- food quality; absence of geneti cally modi fied organ isms (GMOs); absence of addi tives; absence of aller gens; origin of the product and the trans par ency of its journey from field to shelf; quality man agement; animal- friendly hus bandry; eco logical packing and logis tics; social impact (e.g. fair trade cri teria). Three critical aspects have a particularly strong impact on organic food pur chasing in Ger many. Authenticity and confidence in source. In the CMA-Rewe study referred to earlier, 40% of the respondents who did not buy organic foods cited doubts about their authen ticity as the main reason for non-purchase. Because people are unable to distinguish organic products from non-organic ones, they tend to trust farm shops and weekly farmers markets more than other points of sale, though the pro duce they buy there may not even be organic. They often do not realize that certified organic produce is available from other shops and, to a growing extent, from supermarkets. Major retailers such as Tengelmann, Rewe, Edeka, Metro and Globus are gradually stepping up their campaigns but the results have not been spec tacular to date. The smaller retailer Tegut (Hawege) has been more successful and its organic sales account for pos sibly as much as 3.5% of its turn over. It is esti mated that a high pro por tion of the organic purchases in conventional supermarkets is attrib ut able to con sumers whose main pri ority is, not specifically to eat organi cally, but to buy food which they per ceive to be fresh, tasty, nutri tious, con ven ient, environmentally friendly, not too expensive and which, by chance, also happens to be of certified organic quality.

The generic bio-label


After almost 10 years of preparations, AGL and CMA jointly launched a long due German generic bio- label in early 1999. The label can be used on all prod ucts, domestic or imported, which are pro duced in accordance with AGL standards. A joint licensing company, koprfzeichen GmbH also known as PZ GmbH was established and funds were made available for marketing purposes. The scheme is expected to contribute considerably to the

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Fresh ness and the need for rapid turn over. The more organic food enters main stream chan nels, the greater the applicability of the criteria customers generally reserve for con ven tional food. Fresh ness is a pri mary require ment, espe cially for per ish ables. Direct sales by farmers do guar antee abso lute fresh ness, as they offer fruits and vegetables harvested only a few hours before; how ever, this sales method reaches only a very small per centage of the poten tial organic con sumers in Germany. The logistical costs of supplying regular quan ti ties of fresh pro duce to natural food and Reform shops are high and have been a major obstacle to sales growth. If deliveries are too slow or too infrequent, shops can offer only a small range of prod ucts, which often are not fresh enough and have to be thrown away. It is esti mated that, in order to offer a good range of fresh produce, a German food shop needs to have annual sales of more than DM 1.5 mil lion. Only about 20% of natural food and Reform shops have modernized and improved their turnover of fresh organic pro duce suf fi ciently to meet this require ment. Rapid turn over is critical for suc cess. Major mul tiple super mar kets have effi cient logistic sys tems and are in a posi tion to dis tribute organic fresh food along side conventional produce, provided the merchandise is sold quickly. This has been the major problem for German super mar kets: because fresh pro duce moves off the shelves too slowly, con sumers have per ceived organic quality as old. It is pre cisely because car rots, onions and pota toes have a longer shelf life that these organic products often attain a double-digit per centage share in total sales. A higher turn over of the whole range of fresh foods including milk and dairy prod ucts, bread and even meat and sau sages is essen tial. The quality of the pro duce depends on the amounts sold, but these in turn depend on the quality per ceived by the con sumer. Perception and impulse. A consumers decision to pur chase a par ticular food product in the super market, which stocks 8,000 or more food items, is made against the background of the above list of quality require ments. How ever, he or she is basi cally looking to buy some good food, pos sibly organic and not too expen sive. The actual act of buying is made largely on impulse based on the cus tomers existing per cep tions. Clear identification, good merchandising and communication are the key to promoting any food product, whether organic or not. It has been suggested that for organic foods to make a real break through in con ven tional super mar kets, the same amount of money spent on launching the major

conventional brands, typically at least DM 30 million, needs to be set aside to promote organic foods. A generic marketing campaign supported jointly by all market participants would seem to be the best way for ward.

Fair trade and its relationship with organics


Fair traded products are widely recognized in Ger many. The country has an impor tant niche market for a growing number of product groups like coffee, tea, cocoa, honey and bananas. The primary concern of the fair trade movement is with the social and economic situation of farmers and producers in the South rather than with organic farming as an ideal, but the two move ments are tending to con verge, as both contribute to genuine sustainability. Development which proves sustainable over generations is com pel lingly linked to the use of organic methods of cultivation, processing and production. Because of their traditional experience, producers often have a sound basis for such con ver sion, it leads to addi tional employ ment and, most sig nifi cantly, cer ti fied organic pro duc tion raises the market poten tial of the prod ucts. In Ger many, three main organi za tions are involved in the fair trade move ment. Fair Trade eV. This is the reg is tered asso cia tion for the promotion of fairness in world trade. It is a non- profit organi za tion, funded largely by a number of churches and other bodies like Bread for the World and Miserior. Its main purpose is to help disadvantaged producers improve their products to meet the stringent quality requirements of the European market through research, product and project development. Public relations, and the initiation and support of campaigns, such as for example against child labour, are also important activi ties of Fair Trade. Anyone with a social com mit ment can apply for Fair Trade assis tance in researching the chances of a product in the European market and devel oping it accord ingly. About 25% of the products Fair Trade develops are cer ti fied organic when the organi za tion starts handling them, and 85% are cer ti fied organic when Fair Trades job is fin ished and the product is handed over to Gepa GmbH for mar keting (see below). Fair Trade does not work exclusively with small pro ducers. Its prin ci ples are being extended to sec tors pre vi ously not touched by it, including large pri vate

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concerns. Fair Trade can give its ready-to-market prod ucts to any trader, but to date common purpose and a his torical close ness as well as the fact that they share the same premises has resulted in Fair Trade handing over all its prod ucts to Gepa. TransFair. This is an independent non-profit organization which issues a licence to use the Trans Fair seal, con trols the con di tions of fair trade, and works in education, public relations and the dissemination of information. Together with 15 national TransFair and Max Havelaar sister organi za tions, it is part of FLO Inter na tional, the Fair Trade Label ling Organi za tion. FLO has its sec re tariat in Ger many and car ries out a dia logue with IFOAM on issues like joint certification. FLOs motto is: fair wages rather than chari table dona tions. All prod ucts mar keted by Gepa carry the Trans Fair label. So far the Trans Fair label can be obtained for coffee, tea, cocoa and chocolate, honey, and fresh bananas. A growing number of products simul ta ne ously carry both the Trans fair label and an organic label. Gepa cooperates closely with two German organic farm ers asso cia tions, Natur land and Demeter, in organic certification. At present about 25% of Trans Fair coffee, 60% of its tea and 50% of its bananas are cer ti fied organic. Very little cocoa is cer ti fied organic. Gepa aims at 100% organic for each project; about 65% of its food prod ucts are cer ti fied organic at any given moment. Gepa GmbH. A limited company, this is the main import and mar keting organi za tion in Ger many for fair trade prod ucts. It has pro fes sion al ized the move ment and today supplies not only non-profit parish sales outlets but also any marketing channel that seems suit able for the fair trade aim. Other organi za tions have entered the fair trade field as well and fair trade products can now be found in many different retail out lets, including super- and hyper mar kets. Gepas sales to the con ven tional food retail sector now account for 15% of its total sales; the sector is Gepas fastest growing market. It con tinues to sell 63% of its products to activist groups and One World Shops. Some prod ucts are exported to similar organi za tions in other European countries. (The European fair trade associations cooperate in the European Fair Trade Association.) Gepas annual sales amount to DM 55 million. Of this 90% is attrib ut able to food, of which almost 60% is coffee, 8% tea, 7% chocolate and sweets, 6% honey and nut spreads; the remainder

com prises nuts and dried fruit, sugar and cocoa, wine, cereals and spices. Spices, chocolate and sweets are the fastest growing product categories. Gepas sources include almost every Latin American country as well as quite a few African and Asian coun tries. The market pene tra tion of key Trans Fair prod ucts has been sig nifi cant. Trans Fair coffee, intro duced into the German market in spring 1993, is now sold in about 25,000 supermarkets and its market share, which continues to rise, is currently 4%. Consumers can choose from over 50 varie ties of coffee sup plied by more than 30 Trans Fair licen sees. Tea was intro duced at the end of 1994 with the par tici pa tion of nearly all German tea traders. Within one year, Trans Fair black tea had gained a market share of about 3%. First presented at the International Sweets and Biscuits Fair in Cologne at the begin ning of 1996, Trans Fair cocoa and choco late are now avail able in more then 10,000 shops in the country. Honey was intro duced in Sep tember 1996, and fresh bananas were launched in thou sands of super mar kets in early 1998. Trans Fair is readying other major product categories for market entry. Its marketing efforts have been so successful that between 1993 and 1996, its annual sales grew from just over DM 50 mil lion to DM 100 mil lion. Bananas, a case of col labo ra tion between fair trade, organics and conventional distribution. The banana story illustrates TransFairs relationship with organic farming. For sev eral years, a German banana grower in Costa Rica had experi mented with using pes ti cides at a much lower level than was customary in the banana plantations owned by the big multinationals. He replaced herbicides completely and cut down on insec ti cides and fun gi cides but could not abolish them entirely without losing his crop. He treated his labourers well and tried to find a way of mar keting to gain a pre mium for his pro duce. This was very dif fi cult as his bananas could not be offi cially sold as organic. How ever, he got Trans Fair involved and he was soon able to receive a pre mium and find stable cus tomers among main stream German food dis tribu tors. In another instance, Rewe AG, a German food multiple with some 7,000 outlets, wanted TransFair organic bananas from the Dominican Republic to be marketed under its organic private label Fllhorn. Trans Fair inspected pro duc tion and trade con di tions in the Republic and issued its licence. Today, organic bananas from the Republic are being imported by Tradin of the Neth er lands, a com pany that calls itself the No. 1 Im porter of Organic Bananas since 1988.

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Market segmentation
As has been said, the value of the German market for organic foods is estimated at approximately DM 3.6 bil lion, or 1.2% of the overall food retail market. Table 8.4 shows a breakdown of the organic trade by main type of retail outlet. The catering and export seg ments are not cov ered by the table. The largest seg ment is the organ ized food retail sector (Lebensmitteleinzel-handel, LEH, in German) which has overall annual sales of about DM 230 bil lion, of which about 78% or DM 180 billion, is real ized by the seven largest chains. Two-thirds of the LEH con sist of dis count stores and hyper mar kets, each of which has a market share of almost one-third and

which are continuously involved in price wars. The remaining one-third comprises the classic supermarkets and other sales outlets, including tra di tional neigh bour hood stores, which suffer from the fierce price com pe ti tion. Their supply system and relevance for organic foods and especially imports are dis cussed in the sec tion on dis tri bu tion chan nels, fur ther below. Direct sales, mainly by farmers, make up 20% of all organic sales. Catering is becoming important, especially in the region of Hessen where the local government has obliged official institutions like hos pi tals, uni ver si ties and the admini stra tion to offer at least one organic menu.

Table 8.4

Germany: turnover of the organic trade, by main distribution channel, 1997 No. of outlets carrying organics (estimates) % share in total organic market (DM 000 000 )
100 35 24 20 9 8 2

Trade channel
TOTAL of which: Natural food shops Mainstream supermarkets, hypermarkets, discount shops, drugstores Direct sales, mainly by farmers Reformhuser (Reform shops) Organic bakeries Organic butchers Sources: Lebensmittelzeitung 30 (24 July 1998) and trade sources.

Estimated turnover
3 600

1 700 3 000-4 000 2 000 400-500 80

1 200 800 750 300 250 60

Market requirements
This section describes the main product groups imported into Germany. The major focus is on products which are not available to German importers from European sources and/or can be supplied by developing countries. There are good import opportunities in Germany, subject to the limitations described in various sections in this chapter, espe cially for the fol lowing prod ucts:
q

European produce is available; also fruit for proc essing into juices, pures, concen trates, and dried or frozen prod ucts.
q q

Dried fruits and nuts, and by-products.

Vegetables in winter and spring, when no fresh European produce is available.


q q

Grains and cereals like durum wheat, rice, millet, buckwheat, amaranth, quinoa.
q

Herbs, spices and medicinal plants, essential oils.

Tropical and subtropical fruits like citrus and banana and, in much smaller quantities, avocado, pine apple, mango, etc.; fruit like apples, pears from the southern hemisphere in spring, when no fresh

Fruit juices and fruit preparations, not only of tropical and subtropical fruit, but also of berries and other fruits which grow in Germany but of which production and collection are labour intensive and therefore expensive.

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Wines especially from France, Italy and Spain which taste differently from the much appreciated German organic (white) wines.
q

Oleaginous seeds such as sesame, sunflower, safflower, pumpkin.


q

Oils and fats for table oil and processing, such as palm oil for margarine.
q

Honey: demand for imported organic honey is likely to increase substantially when the EU regulation on certification is extended to animal products, including honey. Allos, the dominant importer of honey for the natural food trade, has its own private standards for organic honey. TransFair has not placed much emphasis on the organic certification of this product but this is likely to change.
q

Tea, coffee, cocoa and by-products.

Cane sugar and other natural sweeteners.

Importers requirements
It is no longer as easy as it was in the past three dec ades to export any organic product of any quality and at any price to Ger many. The exis tence of many organic items which are typi cally imported does not imply by any means that automatic entry for these prod ucts is guar an teed. The German organic market is characterized by heavy competition and has become extremely demanding in terms of quality/price ratios, quan tity and con ti nuity of supply, logis tics, serv ices and com mu ni ca tion. Prior to seeking market entry, the exporter should carry out thorough market research, obtain a basic knowledge of the German organic market and its requirements, and understand that it may be periodically saturated, at least for some products. This will help to prevent unnecessary disillusionment.The exporters organic certification (see section on certification, fur ther below) must be watertight and exporters must ensure that they comply, not only with the compulsory European regulation, but also with specific private standards. To enter the German organic market it is essen tial to assess ones assets, particularly ones USP (unique selling proposition), i.e. What can I offer better or cheaper than others? I can only be successful in the long run in fields where I know I can com pete. The search for a competent importer-partner is quintessential. The partner should be a successful com pany, which is effi cient, reli able and sol vent, and which takes a long-term view rather than that of making money quickly. The partner should also have suf fi cient under standing of the spe cific situa tions and problems facing suppliers in developing countries. Assis tance in finding and con tacting a partner can be sought through Pro trades Green Trade Net. If fur ther investment to develop the project or the product is needed, Pro trade or Fair Trade eV can be contacted for assis tance.

Competition and prices


This section describes the critical role played by com pe ti tion and pricing in the organic food market in Ger many and the way in which pricing policy affects future pros pects for the trade. For organic prod ucts, the highest growth rate occurs in the mainstream supermarket channel which is domi nated by fierce com pe ti tion and price pres sure. Although the natural food shops, direct on- farm sales and the catering industry con tinue to grow, the main expan sion of organic sales is in the mainstream food market, which is dominated by price competition. The food market tends to reflect upward and downward trends in the general economic situation and, as time goes on, households are spending pro por tion ally less of their budgets on food. Hard and soft discount store groups have been constantly growing and eroding the market shares of the other super- and hypermarkets. Competition is so fierce, that large food dis tribu tors are happy when their net profits exceed 1% of their sales. Organic food has to develop within this extremely difficult economic environment; sales have been affected by the price- cutting tech niques imposed by hard dis counters

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like Aldi and Lidl on the entire German main stream distribution. Pricing, merchandising and communication will be deci sive in any effort by super mar kets to suc ceed in mar keting organic food. To date the major strategy of the super- and hypermarket mul ti ples in dealing with organic pro duce has often been to put a higher margin on organic food by comparison with regular food. They saw a chance to make more money by selling small quan ti ties of organic food in niche sec tors that did not seem to be driven as much by competition. This still applies to most slow-selling organic dry food ranges in supermarkets. However, the expanding volume of fresh organic prod ucts entering supermarkets is changing pricing policy. As stated earlier, a store has to sell considerablequantities of fresh pro duce quickly in order to sell it at all, as fresh pro duce ages rap idly and then becomes impos sible to sell. To create the necessary demand, pricing must also be attractive. In addition, there has to be a coherent assortment, well mer chan dised and clearly identifiable, and with more than average efforts to com mu ni cate with the cus tomer. The key mes sage is therefore that to capture a larger share of the main stream gro cery channel, the organic industry has to become more competitive, efficient and able to deliver the best quali ties at lower prices. New chal lenges and oppor tu ni ties for the natural food shops. As the market expands, there is a specialist market oppor tu nity for smaller quan ti ties of upgraded organic prod ucts which can sell at higher prices. This strategy is being adopted by most natural food shops, and the more suc cessful and bigger out lets are able to posi tion them selves as spe cialist retailers with a wider range of organic products, supported by competent service and advice. The major chal lenge for them is to develop more effi cient and less costly pro duc tion and distribution sys tems. How ever, the natural food trade as a whole is still highly frag mented at all levels and, even though margins are high, very few participants make enough profit to pro vide for future devel op ment. Bankruptcy rates have been high and mergers and acquisitions will continue until efficient and viable struc tures are estab lished. The traditionally fragmented German agricultural system and its problems in coping with freer trade. When in the late 1980s the system that protected EEC agriculture became too expensive to support, and with GATT and WTO pursuing the policy of free trade and globalization, pressure was put on the European Union to open its borders and to reduce

subsidies for farmers. In the last 10 years con ven tional grain prices in Ger many have fallen to 40% of their 1988 price levels. Over supply causes price col lapse. Prices, not only of conventional grain since the late 1980s, but also of organic grain (par ticu larly wheat) in the 1990s, have col lapsed to some times less than 50% of their former levels. The reason for this is that the push of organic grain pro duc tion grew faster during this time than the pull of organic demand. According to ZMP, the Central Price Information Office for Agriculture, For estry and the Food Industry, the prices of organic rye, barley, oats and spelt fell by 30% - 40% in the four years to 1998. The drop for organic wheat was less spec tacular but was nevertheless con sid er able. In all cases the drop during this period was even steeper than that for conventional cereals. Converting to organic production was subsidized by EU and, espe cially in the former East Ger many, many larger farms turned organic. Cheap imports from other former Eastern block countries, like Romania, the Czech Republic, Poland and Ukraine, often had a dev as tating effect. A more rele vant example for devel oping coun tries of the effects of oversupply is that of organic vanilla. Until the mid 1990s Mada gascar was the sole sup plier and prices were high. To take advantage of the demand Tonga, Indo nesia, Mexico and other coun tries started to produce organic vanilla. Very quickly an under-supply situation turned into oversupply and prices fell to about half their former level. The positive side of this devel op ment is, of course, the move ment of many organic prod ucts away from their former unre al is ti cally high price levels. ZMP pro vides cur rent prices for some basic German organic agri cul tural prod ucts. Con tact details can be found in annex I. Balancing increasing supply with demand requires well-adapted sales channels. When supply exceeds demand, as has been the case for organic grain, milk and vanilla in Germany, prices fall. When demand outgrows supply, the price tolerance rises. With growth in real demand (not what people say but what they do and buy) for organic produce, distribution sys tems become more effi cient and farmers are able to receive higher organic price premiums. Without the par tici pa tion of the main stream retail food chains, the for mi dable growth of German organic pro duc tion can never be absorbed. It is expected that the

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situations of oversupply described above will dis ap pear in the middle to long term. These simple truths had not been sufficiently understood by many organic pioneers in Germany. Supermarket multiples were seen as a threat rather than an opportunity by small farmers. To market organic food to super mar kets was con sid ered by the organic pio neers to be a sin against their vision of a better world in gen eral and of organic agri cul ture in particular. Their view was to keep the organic movement small but beautiful. This attitude unavoidably slowed down all efforts to establish

appropriate marketing structures as well as a single organic seal in Ger many, and change is taking place at a snails space. Considering organic food as a service product dis rupts organic pricing. The atti tude of con ven tional super market out lets towards selling organic prod ucts is critical. Some important chains have damaged organic price struc tures by car rying organic foods as service products on which they do not make any profit. This makes it extremely dif fi cult to raise prices at a later stage and can therefore cause lasting prob lems for the trade.

Organic certification and food laws and regulations8


EU Regulation 2092/91
The most impor tant regu la tion for the organic market is the EU Regu la tion 2092/91 on organic farming and its amend ments. This regu la tion applies to the whole of the Euro pean Union and is described in Part I of this book. In each of the 16 federal States, a delegated competent authority is responsible for supervising the activities of certification bodies as well as authorizing imports from third countries (i.e. non- members of the Euro pean Union). (One fed eral State has as many as four dele gated authori ties.) A working group named Lnderarbeitsgemeinschaft der ko-Kontrollbehrden (LK) coordinates the activi ties of all com pe tent autho rities. As indicated earlier, the standards required by German organic importers are fre quently higher than those of the basic EU regu la tion. It is there fore often necessary for imports from third countries to be inspected by a local German control or certifying body even if they have obtained equivalency at the EU level.

Organic certification for the German market


In Germany many certifying bodies (private) are accred ited according to the EU regu la tion. Sev eral of these are active in the cer ti fi ca tion of organic imports and the sup plying pro duc tion units. They also pro vide assistance and supervision for setting up national certifying bodies in countries outside the European Union, especially in developing countries. The most active German certifying organizations abroad are BCS ko-Garantie GmbH, Ecocert International, Naturland Verband, Lacon and INAC (International Nutri tion and Agri cul ture Cer ti fi ca tion). The certifying bodies are organized in two groups: Konferenz der Kontrollstellen (Conference of Certifying Bodies) which is currently under the auspices of GfR, and the Arbeitsgemeinschaft der Kontrollstellen (Working Group of Certifying Bodies). The chairmanship of these Groups rotates among their member certifying bodies.

Harmonization of EU food laws


Most food laws and regulations are being har monized in the European Union. However, in some cases per mis sible residue levels (e.g. in baby food), contaminant or pollutant levels (e.g. aflatoxins) or micro-organic counts (e.g. of micro-organisms in spices) are set dif fer ently in indi vidual EU coun tries. This is such a wide field that infor ma tion rele vant to spe cific prod ucts should be obtained from com pe tent com pa nies or con sult ants. Labor Dr Wiertz, an analytical labo ra tory for organic foods, is expe ri enced in

The full names and addresses of many of the organizations and companies mentioned in this section (and throughout the chapter) are provided in annex I.

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residue detection even at the low levels needed for baby food.

non-organic product and makes the use of the cer ti fied ingre dient com pul sory. The list of permitted non-organic ingredients is con tinu ously updated. The list dated 31 July 1998 is pro vided in annex II to give an indi ca tion of the type of ingre di ents cov ered. Since the EU regu la tion on cer ti fied pro duc tion has now been extended to animal products, it will cover organic honey as well. This product plays a sig nifi cant role in the natural food sector and has been one of three items that does not have to be organic, water and salt being the other two. Honey has always been par ticu larly impor tant because of its whole-food quali ties and its use as a sub sti tute for sugar.

Permissible agricultural ingredients of non-organic origin


It may be of interest to exporters to know that some agricultural ingredients of non-organic origin may some times be tem po rarily imported into the German organic sector if sufficient quantities of these ingredients in certified organic forms are not available. When enough supplies of a certified organic ingredient become available, the Bundesanstalt fr Landwirtschaft und Ernhrung is informed; it then withdraws the allowance for the

Distribution channels
The major suppliers of organic foods to the retail trade in Ger many are whole salers/packers. The larger com pa nies tend to import direct from organic pro duction units abroad; others may obtain their supplies from specialized importers. Major organic food manu fac turers are often directly involved in organic projects abroad for the supply of raw mate rials, but many manufacturers obtain their imported supplies from importers and spe cial ized proc es sors. The latter companies provide requirements according to the manufacturers specifications and ensure continuity of supply. The major players in the dis tri bu tion of organic foods in the German market are described below. intro duced the generic organic Le Gourmet brand. Dennree Versorgungs GmbH, with a reported turn over of DM 130 mil lion, is mainly active in fresh pro duce: dairy, fruits and vege ta bles. Both Dennree and Rapunzel supply specialized chan nels, as do similar com pa nies like Byodo Natur kost GmbH (dry prod ucts), and Biogarten Handels GmbH and its sub sidiary Arche Natur pro dukte GmbH. Bio-Zentrale GmbH, with a turnover of DM 73 million in 1998 (partly owned by the Cologne-based Delvena Lebensmittelkontor GmbH, an offshoot of the sugar company Pfeifer & Langen) owns the organic brand Gut & Gerne. The brand can be found in many super market chains in Ger many, including some multiples like Rewe which have their own private organic labels. Delvena also sup plies the dry organic assortment for the private label ranges Fllhorn of Rewe, Grnes Land of Metro, Bio-Wertkost of Edeka and Terra Pura of Globus. Delvina is increasingly involved in the distribution of perishable goods (including dairy prod ucts). Alna tura Pro duk tions- und Han dels GmbH sup plies products (including fresh produce) carrying its generic label Alnatura to Tegut and to DM- Drogeriemarkt. It also runs its own retail chain. Auris Natur kost Ver triebs GmbH mar kets a range of organic prod ucts under the label BIO.

Traders, importers, packers, processors and wholesalers


Rapunzel Naturkost AG, with a turnover of DM 70 mil lion, is the largest importer, packer and whole saler of grocery products. Its wide product assortment ranges from nuts and dried fruits to cereals and mill prod ucts, sugar, cocoa and choco late, pasta, tomato products, oils and fats, spreads and nut butters, bis cuits, coffee and vanilla. It recently added frozen food and ice-cream lines. The Rapunzel brand is named after a girl in a well- known German fairy tale. Internationally, Rapunzel is one of the leading companies involved in organic projects in the developing world; it has sub sidi aries in Turkey and the United States. Together with Allos, it recently

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Rila Feinkost-Importe GmbH & CO KG, based in Stemwede-Levern, puts together and sells the Zonnatura assortment, which was originally a Netherlands brand. However the range has a high pro por tion of non- organic prod ucts of Reform quality (i.e. without chemical additives and mostly unrefined). Lehmann Natur GmbH and its partner organization Biotropic are the largest importers/packers and wholesalers of organic fruits and vegetables sup plying super mar kets. Bergquell Agrar-Naturprodukte GmbH & CO KG supplies a large assortment of fresh produce, including fruits and vegetables, eggs, meat and poultry to supermarkets and specialized stores. It is actively involved in proj ects in devel oping coun tries. Among the other important fruit and vegetable packers and wholesalers are Naturkost Schramm, Landlinie and Ernst Weber Naturkost. The last- named com pany also car ries dates, seeds, tea and juices. The baby food manu fac turer Hipp also runs a fresh fruit and vege table pro gramme. Additional traders, importers and packers selling to both specialized and mainstream retail outlets are Care Naturkost GmbH & CO (grains, seeds, dried fruits), Grner Punkt Naturkost GmbH (fruit prepa ra tions), Georg Rsner Vertriebs GmbH (nuts, seeds, flakes, dried fruits), belhr KG (cereals, pulses, nuts, dried fruits) and Euro Bio Korn (cereals, fruits, seeds, sweet eners). Gepa GmbH, described ear lier in this chapter, imports and dis trib utes coffee, tea, honey, choco late, nuts, rice and other prod ucts. Landlinie Lebensmittel-Vertrieb GmbH & CO KG markets a range of fresh products, including imports from developing countries, to specialized shops and supermarkets. Mhldorfer Naturkornmhle GmbH (commonly known as Prima Vera) and its sister company, Ceralia Getreideprodukte GmbH, process, pack and trade in a large assortment of products, in part imported from developing countries. Products include rice, millet, sugar, oleaginous seeds and nuts. Byodo Naturkost GmbH packs and trades in an assortment of products (including oils) largely imported from developing countries.

As has been men tioned ear lier, con tact details for all the com pa nies men tioned in this chapter are pro vided in annex I.

Food manufacturers
The number of purely organic manufacturers in Ger many is lim ited. The best known is the baby food com pany Hipp. By making organic quality its unique selling poi nt and by insisting on an organic con tent of over 80% long before the regulations demanded a higher percentage, Claus Hipp strengthened his market leadership for wet baby food (in jars), and obliged other big baby food producers like Alete (Nestl) and Milupa (Nutricia) to follow. It is pos sible that soon all of Ger manys baby food in jars will be organic. Hipp employs over 2,000 indi viduals, has an annual turn over of more than DM 300 mil lion, and has fac to ries in Aus tria and France. Hipp is pos sibly the largest organic manu fac turer world wide and has been instru mental in devel oping proj ects in coun tries like Costa Rica. Since 1995 the baby food com pany Gerber in Costa Rica (a sub sidiary of Gerber USA, itself a sub sidiary of Novartis Swit zer land, for merly Sandoz) has been sup plied with organic bananas, not from monocul ture plantations, but from forest intercropping systems run by indigenous farmers in the Talamanca Reservation. In the first years, the Reservations banana pure was exported exclusively to German baby food producers but Gerber has recently introduced it to the American market. This project was started by Milupa, the first conventional baby food pro ducer to launch an organic line. Even though nei ther Milupa nor Alete rely on organics as a major mar keting mes sage, they push organic ingre di ents for two major reasons. The first is that Hipp has set a standard for consumer expectations of baby food. The second has to do with the fact that German food regulation, by setting maximum levels at 10 ppb (parts per billion), in effect allows no pesticide residues in baby food. From 1 January 2000 a similar regulation will be applicable to the whole of the European Union. As detection at such low levels is very difficult and expensive, is not possible at all for some pesticides and growth regulators, and demands extensive auditing of the suppliers, it is often more convenient to go organic. Sdzucker, Germanys largest sugar group, is involved in the organic sector through its subsidiaries Candico in Belgium and Renco in the Netherlands.

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Other major organic manu fac turers or proc es sors are listed below:
q

Ludwig Stocker Hopfisterei GmbH, the bread specialist, processed 15,570 tons of cereals in 1997. It has an annual turnover of DM 93 million and runs over 100 retail outlets, mostly in pre-cashier outlets of supermarkets.
q

Dhler GmbH deals in food ingredients, particularly those that are fruit based.
q

Kanne Brottrunk GmbH & CO KG a bread drink specialist. (This drink is derived from fermented old bread, hence its name.)
q

deal exclusively with organic food processing and trading, continue to hold the lions share of distribution in Ger many, although super mar kets and other mul tiple food retailers are starting to eat away at this share. These strictly organic outlets have the advantage of not being in direct price competition with the main stream food retailers, of being able to communicate the principles of organic farming to their cus tomers and of not depending on only a few extremely powerful customer companies. Ideology forms an inte gral part of their product concept. They have the disadvantage of reaching primarily a core minority of already convinced or militant organic consumers.

Neumarkter Lammsbru produces 60,000 hectolitres of beer per year and two organic soft drinks.
q

Natural food shops (Naturkostlden) and organic supermarkets


There are about 1,700 natural food shops in Ger many, mostly united in the umbrella organi za tion BNN (Bundesverband Naturkostwaren). They hold 35% of Ger manys organic market, equiva lent to DM 1.2 bil lion in sales. These out lets want to supply their main cus tomers not only basic prod ucts but also any imag in able food item in organic quality, whether it is a spice (for example, organic pepper in all its varie ties is required) or a convenience food with many different ingredients. However, quite often the market can absorb only small, sometimes barely economically viable, quantities. The larger natural food stores now carry 2,000 or more items. A key and recent development has been that of organic supermarkets. The first chain of organic supermarkets was created by Gtz Rehn under his Alna tura brand which, as early as 1985, formed the basis for an organic shop-in-the-shop in the Tegut supermarkets. Alna tura first opened its own organic super market in the late 1980s in Mann heim and now runs a total of eight out lets in Mann heim, Karls ruhe, Freiburg and Darm stadt; these have a gross turn over of about DM 4 mil lion. Between 280 and 500 square metres in size, these modern stores have an assortment of 6,800 articles (including non-food organic items like clothing, natural cosmetics and toys) and run small restaurants. Michael Radaus Biogarten Naturkost Handels GmbH has three out lets, two in Osn abrck and one in Mn ster. Dieter Dreher runs Tausend Krner (620 square metres) and Arkaden Natur kost (170 square metres), both in Kiel. In the whole of Germany there are now about 30 organic supermarkets, the newest of which is Basic (400 square metres) in Munich, a pilot unit for a

Beutelsbacher Fruchtsaftkelterei a juice producer.


q q

Voelkel a juice producer.

Lebensbaum Ulrich Walter GmbH deals with coffee, tea, spices and herbs.
q q

Davert Mhle handles milling products.

Allos Walter Lang Imkerhof GmbH deals with fruit and amaranth products, cakes, fruit bars, etc.
q

Bruno Fischer GmbH a major processor of vegetarian products such as soy milk, vegetarian burgers and sausages, and soups.
q

Bauck Demeter Naturkost handles cereals, coffee, oils, spreads and specializes in biodynamic products.
q

Barnhouse Naturprodukte GmbH deals with breakfast cereals.


q

Mnsterlndische Margarine-Werke J. Llf GmbH and Margarinwerk Saar produce margarine. Lebensbaum, Davert Mhle and Allos have been instrumental in setting up large organic projects in devel oping coun tries and their brands are among the best known in Ger many.

Specialist organic retail outlets


Organic farmers and specialist retail outlets, which

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191

franchise system. Whereas some experts forecast rapid growth to some 150-200 outlets by 2000, the entrepreneurs mentioned here believe in more organic growth. The choice of site, in towns with a population of at least 100,000, is critical for the success of a new outlet, as are the competence and moti va tion of its per sonnel. An invest ment of at least DM 300,000 and a turn over of over DM 2 mil lion are also needed. It is believed that the majority of cus tomers of organic super mar kets are new organic consumers.

estab lish ment and growth of natural food stores in the 1950s and 1960s. Reform shops have a major asset in their com pe tence in health food advice. A problem for them are their high prices. Many ill-informed consumers, who do not know what organic really means, assume that all food sold by Reform shops is cer ti fied organic and, because they are not pre pared to pay the pre mium for pro duce in these shops, they are then inclined to reject organic food as being too expensive.

Other specialist outlets; catering Farm shops, food boxes and other direct selling methods
Direct sales account for about 20% of organic sales in Germany (see table 8.4). A high pro por tion of these sales consists of direct farm sales, but during the 1990s new direct selling methods have been intro duced and have grown fast in popu larity. Food box or sub scrip tion sys tems (Abo- Kisten in German) offer consumers the possibility of a weekly home delivery of a given range of prod ucts (e.g. fruit and vegetables) at a set price (e.g. DM 30/delivery). There are now believed to be between 250 and 300 subscription sys tems for organic food boxes, which usu ally offer fruit and vege ta bles as the main product. The minimum value per delivery is typi cally DM 25. The system is run by farmers or by specialized organi za tions, 40 of which allow for on- line ordering via the Internet. The growing importance of home shopping must not be underestimated and sales are expected to grow rapidly over the next decade. The other specialist companies involved in organic food processing and trading in Germany include weekly markets, whole food bakeries, organic butchers, tofu and other vege tarian product makers, and catering services for canteens and restaurants. Catering is rising in importance as an outlet for organic food, especially in the region of Hessen where the local government has obliged official institutions such as hospitals, universities and the admini stra tion to offer at least one organic menu.

Major retail chains


The growth of organic farming and the shift in demand for organic prod ucts from a lim ited number of mili tant or highly moti vated con sumers to a wider seg ment of the popu la tion con cerned with health and food secu rity mat ters have made mar keting through the main stream supermarket channel logical and inevitable. This channel requires much larger and more continuous supplies of uniform quality and usually demands marketing extras from its suppliers. Multiples are much less tolerant than the natural food stores of deviations from external quality specifications, are extremely price sen si tive, and so tightly organ ized that from the first contact to delivery suppliers have to per form to the highest stan dards in all ways. When main stream retailers first entered the organic field, they had no real under standing of organics and merely put some products on the supermarket shelves, which often failed to sell. They failed because they had no master plan, because their staff had not been edu cated on mat ters like the ori gins of the organic products, their legal status, the phi losophy and mar keting strategy behind them, and because no in- house or external exper tise was made available. The result was inadequate and badly merchandised organic assortments. Their con ven tional thinking on com pe ti tion, market shares, easy access to many sources of supply, etc. was

Reform shops
Tra di tional health food shops, known as Reform shops or Reformhuser in Ger many, have been in opera tion since 1893. The roots of the Reform Move ment lay in a reaction to the negative side effects of the Industrial Revolution, as well as in natural medicine and the vegetarian movement. Nowa days Reform shops sell many die tetic prod ucts or prod ucts with health claims, but no meat or alco holic bev er ages. They have always stocked organic products and the emphasis was on whole food (Vollwertkost) in keeping with the motto Keep our food as natural as pos sible. Until the end of the Second World War organic quality was the rule, but then the rule became the exception, though the emphasis on whole food remained. Even with strong and ongoing devel op ments during the last 10 years or so, the organic proportion of sales by Reform shops does not yet exceed 20%. In fact, the rela tive absence of organic food was the major reason for the

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incom patible with the method of opera tion of organic sup pliers. The retailers were con fronted with a lack of effi cient organic sup pliers, with the excep tion of the baby food manufacturer Hipp. They had to understand that carrying organics can succeed only when lasting part ner ships with organic sup pliers are built, so that new prod ucts of the right quality and in sufficient quantities are made available. Moreover the prices must be such as to allow suf fi cient mar gins for all involved to make the whole process sustainable, and the products affordable for the con sumer. Many existing organic sup pliers refused to supply supermarkets for ideological reasons, or because they were afraid to lose their existing customers. Others did a very poor job because they failed to understand that the requirements of the conventional supermarket/grocery trade are much stricter in terms of external product quality, con ti nuity of supply, logis tics and price. This situation gradually changed. Tegut, a com para tively small and regional super market chain with 300 outlets and overall food sales of DM 2 billion, was the first multiple really to understand organics and rapidly became a success in the late 1980s. As early as 1985 Tegut created an organic shop-in-the-shop concept under the Alnatura brand and trained and edu cated its staff on organic farming and ways of communicating the concept to consumers. Teguts organic sales have grown dramatically and are now estimated to account for 4% of its total sales. The shop-in-shop, often considered an organic ghetto, has been abandoned and Tegut has set up an organic bakery.

Table 8.5 provides some information on the involvement of Germanys top 10 food retail organizations as well as Tegut in the distribution of organic food. Rewe, Germanys largest food supermarket multiple owns the pri vate organic label Fll horn (co rn uc opia in Eng lish). Although the share of the Fll horn label in Rewes sales is less than 0.5%, this is equivalent to a value of about DM 200 million (com pared to a total turn over of close to DM 40 bil lion), making Rewe one of the largest distributors of organic products in Germany. Rewe takes particular care in setting up organic production programmes. As a consequence, the Fllhorn organic fruit and vegetable section is growing rapidly and is likely to make Fllhorn the fore most organic label. Rewe was also the first major main stream group to intro duce organic meat, which it did in collaboration with the farmers association Naturland. Edeka, no smaller than Rewe but still in the process of building a more cen tral ized group, has just decided to launch its own organic pri vate label nation wide. Aldi, the third largest food market multiple and discount market leader, has so far carried only a few organic prod ucts. In one of the smaller regions, it has replaced con ven tional car rots with organic car rots and is now selling over 1,000 tons of this product per year. Metro is the largest overall retailer in Ger many, but only the fourth largest in food. It owns the Makro out lets, known in various coun tries around the world. Metros private label for organics is Grnes Land (Green Land).

Table 8.5 Company


Rewe Metro Edeka Aldi Tengelmann Spar Lidl & Schwarz Schlecker Dohle Group Globus Tegut a/ b/

Germany: major food retailers and their involvement in organic food sales Main outlets
Minimal, Toom, Rewe Real, Extra, Metro, Kaufhof Edeka, AVA Neukof, E-center, Marktkauf Aldi Tengelmann, Kaiser, Grosso Spar Kaufland Schlecker Dohle, Marktfrisch Globus Hawege, Okay, Top Market

Organic assortment, fresh


Yes Yes Yes 1 or 2 products Yes Various products A few products Only baby food Different products Yes Yes

Own label, dry


Yes Yes Yes No Yes

Labels
Fllhorn, a/ Gut & Gerne b/ Grnes Land a/ Bio-Wertkost No Naturkind a/

Yes Yes

Terra Pura a/ Alnatura b/

Source: Trade information. Own label/private label. Manufacturers brand.

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Tengelmann is the fifth largest food mul tiple and was the first supermarket chain to launch a completely organic private label, Naturkind (child of nature). It was launched nation wide in 1993 and has been heavily promoted by the owner, Erivan Haub, a keen environmentalist. Each of the top five super market mul ti ples has more than DM 20 billion in annual food sales, but so far none of them has an organic share of more than 0.5%. Image has played an impor tant role up to now, but the super mar kets are expected to step up their efforts to pro mote organic prod ucts. In early 1998 the regional supermarket mul tiple Kriegbaum in BadenWrttemberg introduced a line carrying its private organic label Natur zeit (natures time), in coop era tion with a farmers association of Bioland. As Krieg -

baum has recently been sold to Metro, the future of the line is uncertain. In summer 1998 another regional supermarket mul tiple, Globus of Saarland and Rheinland-Pfalz launched its organic private label Terra Pura with a big mar keting drive. Spe cial mention should also be made of the DM Droger iemarkt, a national drug store chain with 410 out lets all over Ger many and some out lets in Aus tria, which has been selling the Alna tura organic range suc cess fully for more than 10 years. In due course organic foods are expected to be dis trib uted through the new sales chan nels which are quickly becoming a feature of food retailing in Ger many. They include gas sta tions, railway sta tions, cinemas and other lei sure out lets, auto mats and even banks.

Summary and market prospects


Germany appears to offer tremendousopportunities for organic pro ducers, both domestic and for eign, for many rea sons, including the fol lowing:
q

household budget will continue to decline in impor tance rela tive to expen di ture on other goods. The key words used to describe food trends for the year 2000 are convenience, health and enjoyment. Germany has a long tradition in natural medicine, cure resorts and health food. The health-conscious German con sumer increas ingly relates health to food secu rity and a healthy envi ron ment, a sce nario within which organic food obviously has very strong arguments. The organic food sector is discovering con ven ience foods, including frozen foods and ready meals, opening up sales far beyond the people who have traditionally been mainly concerned with buying whole food (Vollwert in German). The future seems to hold out prom ising pros pects for the organic food trade. Nonetheless many people feel that there is, at the same time, reason for serious concern.
q

Its population of 82 million is environmentally aware.


q q

6% of its electorate are green voters.

Germany is the cradle of organic agriculture and hosts the General Secretariat of IFOAM as well as BIOFACH, the biggest organic trade show in the world.
q

The German import promotion organization Protrade/GTZ runs the GreenTradeNet Web site, a formidable tool linking organic farmers in developing countries with the German market. The German organic market is second in size only to that of the United States. In 1998 it had about 8,200 organic farms (1.6% of all farms) and over 400,000 hectares (2.3% of the total agricultural area) which were organically certified or under conversion. In 1997 organic food sales amounted to roughly DM 3.6 billion, only 1.2% of total food sales. The organic market is expected to continue growing for many years, if not at the double digit fig ures of the last 10 years, cer tainly at a rate of 5%-10% per year. This is remarkable because the general food market is gloomy and expenditure on food within the

Jobs have outstripped environmental awareness as primary preoccupations and influences spending.
q

Oversupply, occurring.
q

structural

or

occasional,

is

Oversupply, heavy competition and cheap imports have devastating effects on prices.
q

Super- and hypermarkets continue to have problems in marketing organics and often apply

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conventional purchasing practices.


q

There is, as far as readiness to buy organics is concerned, a huge gap between what the consumer says and what he does. Indeed, the prices of many organic products are drop ping, some times steeply, because of over supply, cheap imports, and merciless competition. Conversion rates are slowing down. Some organic farmers, as well as traders and other suppliers, are discouraged. Developing country suppliers are finding it increasingly dif fi cult to enter the German market and have to be much better pre pared than in the past to do so. Some observers are wor ried because of the tremendous gap between what German con sumers say about their readi ness to buy organics and the pre miums they are pre pared to pay com pared to what they actually do. If people purchased according to their stated principles the share of organic prod ucts in total gro cery expen di ture should

be at least 10% instead of the current 1.2%. Other observers are worried by the fact that core organic values are being increas ingly eroded by the push of a growing market and that mini mal istic approaches are gaining ground on farms, in proc essing plants and in trade. Social values, including lasting partnerships from field to shelf, are more and more under attack, as is the eco logical prin ciple of region ality. For the near future, as the involvement of the mainstream supermarket trade increases, it will be crucial that the organic movement does not squander its ideological message, which is an integral part of efforts to improve organic techniques as well quality issues in general. Price monitoring systems are likely to be established. Both the specialized and the mainstream supermarket channels must continue to improve their organic impact, further lowering the threshold for the new consumer. These developments should help to make Germanys organic future brighter than its past.

Annex I

Germany: selected addresses

TRADERS/IMPORTERS/ PACKERS/PROCESSORS
Allos Walter Lang Imkerhof GmbH Zum Streek 5 D-49457 Mariendrebber Tel: +49-5445 9899-0 Fax: +49-5445 9899-14 E-mail: info@allos.de http://www.allos.de (Honey, fruit preparations, cereals) Alnatura Produktions- und Handels GmbH Darmstdter Strasse 3 D-64404 Bickenbach Tel: +49-6257 93 220 Fax: +49-6257 932 244 E-mail: Alnatura@t-online.de Andechser Molkerei Scheitz Molkereistrasse 5 D-82346 Andechs Tel: +49-8152 370 60 Fax: +49-8152 370 690 E-mail: Scheitz@AndechserMolkerei.de (Dairy processing and trade) Auris Naturkost Verbriebs GmbH D-28091 Bremen Tel: +49-421 396 0180 (Owns the brand BIO) Bergquell Agrar-Naturprodukte GmbH & Co Klosterhof 5 D-38312 Dorstadt Tel: +49-5337 92 510 Fax: +49-5337 925 123 E-mail: BergquellNaturhoefe @t-online.de (Eggs, poultry, fruits and vegetables, milk products, dried goods) Bio-Frost Westhof GmbH Zum Westhof 6 D-25764 Friedrichsgabekoog Tel: +49-4839 9101 Fax: +49-4839 9105 E-mail: bioland-westhof@t-online.de (Wholesaler of deep-frozen food)

BIOTROPIC See Lehmann Natur GmbH Byodo Naturkost GmbH Edisonstrasse 3 D-84453 Mhldorf Tel: +49-8631 32690 Fax: +49-8631 326950 E-mail: byodo-naturkostgmbh@ t-online.de CARE Naturkost GmbH & Co Rudolf-Diesel-Str. 30 D-28876 Oyten Tel: +49-4207 914 444 Fax: +49-4207 7185 (Grain, seeds, dried fruits, nut pips) Davert Mhle Ascheberger Str. 2 D-48308 Senden Tel: +49-2598 6928 Fax: +49-2598 6961 (Cereals, pulses, oils, pasta, rice) De-Vau-Ge Gesundkostwerk GmbH Lner Rennbahn 18 D-21336 Lneburg Tel: +49-4131 98501 Fax: +49-4131187135 E-mail: info@de-vau-ge.de http://www.de-vau-ge.de (Group of organic and Reform manufacturers, traders and importers; brands: Granovita, Eden, Bruno Fischer, Martin Evers and Linusit) Delvena Lebensmittel Kontor GmbH Linnicher Strasse 48 D-50933 Kln Tel: +49-221 498 0387 Fax: +49-221498 0399 (Runs the own Gut & Gerne generic label and organizes several others) Dennree Versorgungs GmbH Hofer Str.11 D-95183 Topen Tel: +49-9295 180 Fax: +49-9295 1850 E-mail: zentrale@dennree.de (Full organic food range, including fruits and vegetables)

Dhler GmbH Riedstrasse 7-9 D-64295 Darmstadt Tel: +49-6151 3060 Fax: +49-6151 306339 E-mail: michael.nocker@doehler.com (Fruit-based ingredients) Ernst Weber Naturkost Postfach 75 09 54 D-81339 Mnchen Tel: +49-89 746 3420 Fax: +49-89 746 34222 E-mail: weberNK@t-online.de (Fruits and vegetables, dates, seeds, tea, juices) Georg Rsner Vertriebs GmbH Regensburger Str. 32 D-94315 Straubing Tel: +49-9421 23619 Fax: +49-9421 81736 (Nuts, seeds, flakes, dried fruits, almonds) Gepa GmbH Bruch 4 D-42279 Wuppertal Tel: +49-202 266 830 Fax: +49-202 266 8310 (Coffee, tea, honey, chocolate, nuts, rice, etc.) Grner Punkt Naturkost GmbH Schwanenkirchnerstr. 28 D-94491 Hengersberg Tel: +49-9901 1842 Fax: +49-9901 1875 E-mail: streit@bayernwald.com (Fruit preparations) Hipp-Werk Mnchener Str. 58 D-85276 Pfaffenhofen a.d. llm Tel: +49-8441 757 481 Fax: +49-8441 757 492 (Baby food) Landlinie Lebensmittel-Vertrieb GmbH & Co KG An der Hasenkaule 24 D-50354 Hrth-Kalscheuren Tel: +49-2233 974510 Fax: +49-2233 9745199 (Trader, packer and importer of fresh produce)

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Lebensbaum U. Walter GmbH Maschstr. 31 D-49356 Diepholz Tel: +49-5441 98560 Fax: +49-5441 985 622 E-mail: info@lebensbaum.de (Herbs; spices; herbal, fruit and black tea; coffee) Lehmann Natur GmbH Am Churkamp 20 D-47059 Duisburg Tel: +49-203 932 550 Fax: +49-203 932 5599 E-mail: Lehmann-Natur@t-online.de (Wholesaler, importer and exporter of fruits and vegetables) Mhldorfer Naturkornmhle GmbH (Prima Vera) GmbH Mhlenstrasse 15 D-8444 Mhldorf Tel: +49-8631 37730 Fax: +49-8631 377349 (Processor, trader and importer of cereals and other foodstuffs) Mnsterlndische Margarine-Werke J. Llf GmbH Postfach 1229 D-48720 Rosendahl Tel: +49-254 7700 Fax: +49-254 77030 E-mail: ma@min.de (Producer and trader in margarine; importer of oils and fats) Naturkost Schramm GmbH Ludwig-Winter-Str. 6 D-77767 Appenweier Rapunzel Naturkost AG Haldergasse 9 D-87764 Legau Tel: +49-8330 910 124 Fax: +49-8330 910 139 E-mail: project@rapunzel.de (One of Germanys leading importers and traders in organic food) Rila Feinkost-Importe GmbH & CO KG Hinterm Teich 5 D-32351 Stemwede-Levern Tel: +49-5745 9450 Fax: +49-5745 945 139 (Manages the Zonatura brand) belhr KG Naturkost Imex Friesenhofen-Bahnhof 23-25 D-88299 Leutkirch Tel: +49-7567 820 Fax: +49-7567 834 E-mail: uebelhoer@t-online.de (Cereals, pulses, nuts, dried fruits, sweeteners)

MAJOR RETAILERS
Edeka Zentrale AG New-York-Ring 6 D-22297 Hamburg Tel: +49-40 63770 Fax: +49-40 63772231 (Supermarket chain with organic programme) Globus Betriebs-GmbH & Co KG Postfach 1420 D-66594 St. Wendel Tel: +49-6851 909 912 Fax: +49-6851 909 610 (Supermarket chain with organic programme) Metro International GmbH & Co KG Postfach 230351 D-40089 Dsseldorf Tel: +49-211 96 250 Fax: +49-211 962 5271 (Germanys overall largest retailer) Rewe AG Domstr. 20 D-50668 Kln Tel: +49-221 1490 Fax: +49-221 149 9000 (Dominant supermarket chain) Tegut Zentrale Gerloserweg 72 D-36039 Fulda Tel: +49-661 104 843 Fax: +49-661 104 496 (Supermarket chain distributing organics) Tengelmann Handelswarengesellschaft Postfach 1020 D-45466 Mlheim a/R Tel: +49-208 5806 Fax: +49-208 6763 (Supermarket chain distributing organics)

Fax: +49-6322 8794 http://www.infogen.org (Data bank on GMO-free production) Arbeitsgemeinschaft der Kontrollbehrden kologischer Landbau Tannenstr. 24 b D-40476 Dsseldorf Tel: +49-211 456 6456 Fax: +49-211 456 6452 (State working group of control authorities) BCS koGarantie GmbH Cimbernstr.21 D-90402 Nrnberg Tel: +49-911 491 73 Fax: +49-911 492 239 E-mail: bcsgermany@AOL.com (Worldwide control and certification) Bioland Bundesverband Kaiserstr. 18 D-55116 Mainz Tel: +49-6131 239 790 Fax: +49-6131 238 7927 E-mail: biloandbv@compuserve.com (Umbrella group of Bioland farmers associations) Bundesanstalt fr Landwirtschaft und Ernhrung Adickesallee 40 D-60322 Frankfurt/Main Tel: +49-69 156 4480 Fax: +49-69 156 4444 (Issues list of allowed non-organic ingredients) Bundesverband Naturkost Naturwaren (BNN) Robert-Bosch-Str. 6 D-50354 Hrth Tel: +49-2233 963 3811 Fax: +49-2233 963 3810 E-mail: bnn-eh.hoeschler@t-online.de (Association of natural food retailers and wholesalers) Bundesverband der Produzenten kologischer Produkte Robert-Bosch-Str. 6 D-50354 Hrth Tel: +49-2233 9633833 Fax: +49-2233 9633830 (Association of natural food manufacturers) Demeter Bund e.V. Brandschneise 2 D-64295 Darmstadt Tel: +49-6155 84690 Fax: +49-6155 846911 E-mail: demeterbd@aol.com (Biodynamic association)

GOVERNMENT OFFICES AND OTHER ORGANIZATIONS


AGL eV Brandschneise 1 D-64295 Darmstadt Tel: +49-6155 2081 Fax: +49-6155 2083 E-mail: agoel@t-online.de (Umbrella organization of the German Organic Farmers Association) ALOG eV Tel: +49-6322 8666

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Ecocontrol Ecocert GmbH Sulte 20a D-37520 Osterode Tel: +49-5522 951 161 Fax: +49-5522 951 164 E-mail: ecocert@compuserve.com (Inspection and certification) Fair Trade eV Bruch 4 D-42279 Wuppertal Tel: +49-202 648 9221 Fax: +49-202 648 9235 E-mail: info@fairtrade.de (Assistance in fair trade) GfR Gesellschaft fur Ressourcenschutz Prinzenstr.4 D-37073 Goffingen Tel: +49-551 586 57 Fax: +49-551 587 74 E-mail: jochen.neuendorff@gfrs.de http://www.gfrs.de (Group of certifying bodies) Green Trade Net Tel: +49-69 811 228 Fax: +49-69 824 684 E-mail: oekologiemarketing @compuserve.com http://www.green-tradenet.de (Protrade/GTZs international database on organic production and trade) IFOAM kozentrum Imsbach D-66636 Tholey-Theley Tel: +49-6853 5190 Fax: +49-6853 30110 E-mail: IFOAM@t-online.de http://www.ecoweb.dk/ifoam (Head office, International Federation of Organic Agricultural Movements) INAC Rudolf-Herzog-Weg 32

D-37213 Witzenhausen Tel: +49-5542 911 400 Fax: +49-5542 911 401 E-mail: inacgmbh@aol.com Labor Dr Wiertz Stenzelring 14b D-21107 Hamburg Tel: +49-40 752 7090 Fax: +49-40 752 70935 (Analytical laboratory for organic goods) Lacon GmbH Hanns-M.-Schleyer-Str. 10 D-77656 Offenburg Tel: +49-781 55802 Fax: +49-781 55812 E-mail: lacon@t-online.de http://www.lacon-institut.com Naturland - Verband fr naturgemssen Landbau e.V. Kleinhaderner Weg 1 D-82166 Grfelfing Tel: +49-89 854 5071 Fax: +49-89 855 974 E-mail: naturland@naturland.de http://www.naturland.de (Certification and control) koprfzeichen (PZ) GmbH Rochusstrasse 2 D-53123 Bonn Tel: +49-228 9777700 Fax: +49-228 9777799 (Company licensing the use of the national organic logo) koWelt Veranstaltungs GmbH Industriestrasse 12 D-91186 Bchenbach Tel: +49-09171 - 9610-0 Tax: +49-09171 - 4016 E-mail: info@biofach.de http://www.biofach.de (The worlds largest organic food fair; has many exhibitors from developing countries)

Protrade/GTZ Dag- Hammarskjldweg 1 -5 D D-65760 Esch born Tel: +49-6196 793 155 Fax: +49-6196 797 414 http://protrade.gtz.de/protrade (Assis ts in the devel op ment of pro duc tion and trade in organic products) Stiftung kologie und Landbau (SL) Weinstr. Sd 51 D-67098 Bad Drkheim Tel: +49-6322 8666 Fax: +49-6322 8794 E-mail: soel@t-online.de (Publisher on organic agriculture) TransFair Germany Remigiusstr. 21 D-50937 Kln Tel: +49-221 942 0400 Fax: +49-221 942 04040 E-mail: transfair@t-online.de Verlag Gesund Essen GmbH Am Eichwald 24 D-64860 Schaafheim Tel: +49-6073 748 251 Fax: +49-6073 748 299 E-mail: naturkost@aol.com http://www.naturkost.de (Publisher on natural food) ZMP - Zentrale Markt- und Preisberichtstelle GmbH Rochusstrasse 2 D-53123 Bonn Tel: +49-228 977 7173 Fax: +49-228 977 7179 E-mail: info@zmp.de http://www.zmp.de (Central Price Information Office for Agriculture, Forestry and the Food Industry)

Annex II

List of approved ingredients of non-organic origin (31 July 1998)

Rum Apricot powder Blackcurrant powder Apple powder Pineapple powder Hibiscus extract Fennel extract Herb extract Egg protein (dried) Lemon powder (spray-dried) Strawberry pieces (freeze-dried) Blackcurrants (freeze-dried) Cherries (freeze-dried) Pepper, white Pepper, green Pepper, green, pickled Nutmeg, milled Mace, milled Horseradish powder Coriander smoke spice Paprika extract Paprika, hot Source: Arbeitsgemeinschaft der Kontrollbehrden.

750 l 875 kg 875 kg 875 kg 875 kg 440 kg 420 kg 350 kg 1400 kg 70 kg 255 kg 77 kg 40 kg 70 kg 24 kg 24 kg 24 kg 24 kg 47 kg 24 kg 12 kg 3 kg

Ready-made spice mix Corned flavouring broth (vegetarian) Freeze-dried cheese Soya croquant Lemon juice powder (freeze-dried) Pineapple pieces (freeze-dried) Apricot pieces (freeze-dried) Kiwi pieces (freeze-dried) Redcurrant (freeze-dried) Glass noodles Bamboo sprouts Curry, hot Curry, mild Crystal protein Protein meringue Ginger White pepper Curcuma Safflower blossom Cats-foot blossom Strawberries (freeze-dried) Paprika pieces (red, dried) 9 x 9 mm

300 kg 1 312 kg 100 kg 400 kg 40 kg 30 kg 30 kg 50 kg 30 kg 200 kg 1 200 kg 704 kg 107 kg 30 kg 30 kg 252 kg 96 kg 405 kg 30 kg 27 kg 375 kg 150 kg

Chapter 9 THE NETHERLANDS

Although its domestic market is small and has been devel oping slowly until recently, the Neth er lands is a major producer, importer and re-exporter of fresh organic fruits and vegetables to the fast growing northern Euro pean mar kets. It is a sig nifi cant sup plier to many EU markets of bulk organic foodstuffs imported from outside the region. SKAL, the countrys only designated organic inspection authority, has offices in seven inter na tional loca tions

and currently operates certification services in over 30 coun tries. This chapter focuses on product sectors in which Netherlands importers play an important European trading role (high lighting key com pa nies) as well as on the state of devel op ment of the domestic organic market.

Supply and demand


Domestic production
The Neth er lands is a major agri cul tural pro ducer and trader and plays a leading role in the import and re- export of a wide range of con ven tional pro duce for the European market. Local production methods are extremely intensive and the emphasis is on horticulture (especially potatoes, vegetables, flowers and bulbs), and animal hus bandry (par ticu larly for the pro duc tion of dairy prod ucts, beef and pork). The scale of organic production is small, accounting for just under 1% of agri cul tural land usage in 1997. Until very recently its rate of devel op ment lagged behind that of most other European countries, despite a strong awareness of the environment which has made the country highly innovative and successful in con ven tional food pro duc tion. Until the mid 1990s the prospective commercial returns from the slow growing domestic demand for organic foods and the lack of substantial financial support deterred many pro ducers from con sid ering organic con ver sion. Since 1995 the rate of conversion to organic production has accelerated. The number of farms increased by under 10% in 1995, by 17% in 1996 and by 20% in 1997. At the end of 1997 790 organic farms with approxi mately 21,000 hec tares were reg is tered with SKAL, the offi cial organic inspec tion authority. About 10% of this area was under going con ver sion. The fig ures for 1998 are given below. There were 587 proc es sors in the same year. In the spring of 1999 the 1000th farmer was reg is tered.
Neth er lands: cer ti fied organic agri cul ture, 1986-1998 Number of farms
1986 1991 1995 1996 1997 1998 278 439 561 656 790 956

Utilized area (hectares)


2 724 9 227 12 789 14 334 21 000 20 270

Sources: SKAL and the Central Statistics Bureau (CBS).

A number of key fac tors are stimu lating a more rapid rate of con ver sion to organic pro duc tion:
q

Government policy. At the end of 1996 the Ministry of Agriculture launched a concerted initiative to stimulate organic agribusiness (the Plan van Aanpak Biologische Landbouw). About f. 60 million were allocated for a four-year period to

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provide increased subsidies and fiscal benefits for conversion, to support marketing and quality improvement schemes and to educate and inform the public about organic foods by means of national publicity campaigns on television and radio. In 1999, an additional f. 9 million were allocated to support organic farming.
q

5,000 hectares. Natuurweide, a dairy cooperative, covers about 70% of all organic dairy farmers and distributes products on their behalf to the major processors. The entrance of the Greenery into the organic sector in early 1999 is changing the organic landscape. A big player in the conventional sector, the Greenery runs nine auctions and groups 7,500 conventional vegetable producers. In the livestock sector, conventional pork production is undergoing structural changes in the face of overproduction, a sharp drop in prices, and heavy environmental problems. One of the largest pork producers, Sturko Meat Group BV, has began to establish an organic programme. The countrys biggest dairy company, Campina-Melkunie, has acquired the two main organic dairies, Zuiver Zuivel and De Zwaluw; the former concentrates on milk, yoghurt, butter and fresh cheese, the latter on hard cheese. The second largest dairy company, Friesland-Coberco (brand name: Natuur Best), opened a fully organic plant in Drachten. Finally the country produces organic seed, which is of great importance to the organic sector.

Growth in domestic consumption. Demand through the main retail channel (specialist organic shops) rose by 10% - 15% in 1997, and most of the major supermarket chains, whose sales were limited mainly to potatoes, carrots and onions until 1995, are increasing their involvement in organic food sales, especially vegetables and dairy products;
q

Rising demand for exports. The Netherlands is the largest exporter of organic vegetables in northern Europe. In 1996 the value of the countrys organic agricultural output at producer prices was over f. 112 million. Livestock-based production is the most significant segment and accounted for about 40% of the total output in that year. In 1998, about 28% of the organic acreage was for fruit and vegetable production, 24% was for arable crops, 39% for livestock production and 9% for mixed production. Of the livestock farming output, the most important product groups are dairy produce (50% of the total), beef (30%), eggs (11%), lamb and poultry meat. In the vegetable farming sector, which covers 827 hectares, the products include carrots, cabbage of different types, chicory, leeks, beetroot, celery and many other items. The national agricultural statistics categorize potatoes and some other products like onions as crops. In this category therefore potatoes for human consumption account for over 33% of the output, wheat 26%, seed onions 18%. The remainder consists largely of seed potatoes, maize, lucerne, onions, sugar beet and marrowfat peas. There were 5,114 hectares under crops in 1996. Over 90% of the countrys output of fruits is made up of apples; pears are the only other fruit of any significance. About 209 hectares are planted to fruit trees. The dominant producer of organic grain and vegetables is Coop Nautilus, a cooperative of about 75 member farmers working a total organic area of

Imports
The Netherlands does not collect official statistics on the production, import and export of organic foods. The trade in certain product groups is substantial in comparison to that of other EU markets, but makes up only a tiny percentage of the volumes traded of the corresponding conventional foodstuffs. The Netherlands is a sizeable importer of organic fresh fruits and vegetables, grains, cereals, dried fruits, nuts and seeds, coffee, tea, spices and herbs. All types of fresh fruits and a wide range of off-season vegetables are imported. The main suppliers are producers in other EU, Mediterranean and eastern European countries because of their physical proximity and ease of access to the market. The main imports from other sources are off-season and exotic products, for which demand is increasing rapidly. Southern European countries, especially France, Italy, Spain and Greece, are significant suppliers of cereals, nuts, dried fruit and herbs. Outside the EU, Turkey is the major source, providing raisins, currants, figs, apricots, plums, almonds, hazelnuts,

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201

walnuts, seeds, lentils, chickpeas, bay leaves, etc. Among the other important supplying countries around the Mediterranean are Israel, Egypt, Morocco and Tunisia. North America is also a well-developed source, especially for cereals, seeds, pulses, raisins and nuts. Imports from central and eastern Europe have grown substantially in the last five years. Important products include buckwheat, millet, wheat, other grains and cereals, berries, fruits and vegetables, herbs, apple juice concentrate, dried fruit, nuts, honey, oil-seeds, wine, coffee substitutes etc. Significant suppliers include Hungary, Poland, the Russian Federation, Slovakia, the Czech Republic and Romania. Supplies of organic produce from many developing countries, especially in Asia and Latin America, are also making an increasing impact. Most imports are delivered in bulk for packing and/or processing in the Netherlands before distribution to Netherlands and European organic trade buyers. The list to the right gives an overview of key sources mentioned by Netherlands importers. It does not aim to be complete (the number of suppliers and certified organic products is increasing all the time) and there is no official statistical information available.

Imports
Cashew nuts Cocoa Coconut Coffee Dried fruits Fruit, processed Fruits, fresh

Key supplying developing countries/areas


Brazil, El Salvador, India, Mozambique, Turkey Belize, Bolivia, Brazil, Dominican Republic Dominican Republic, Sri Lanka El Salvador, Guatemala, Mexico, Nicaragua Burkina Faso, Guinea, Morocco, Sri Lanka, Togo, Tunisia, Turkey Israel, Latin America, Sri Lanka Algeria, Argentina, Bolivia, Brazil, Chile, Costa Rica (bananas), Dominican Republic, Egypt, Guatemala, Honduras (pineapple), Israel, Madagascar (lychees), Morocco, Puerto Rico (banana puree), South Africa, Tunisia, Turkey, Zimbabwe Egypt, India, Turkey, Latin America Argentina, China, Mexico, South Africa Turkey France, Hungary, Mexico, New Zealand, United Republic of Tanzania Benin Pakistan Islamic Republic of Iran Turkey India, Myanmar, Pakistan, Sri Lanka, Thailand Central and South America, Mexico, El Salvador, Burkina Faso, Uganda, Paraguay, China, Malawi, Sri Lanka Argentina, Brazil, China, Paraguay, Argentina, Bolivia, Brazil, China, Dominican Republic, Egypt, Guatemala, India, Indonesia, Madagascar, Malawi, United Republic of Tanzania, Mexico, Morocco, Peru, Comoros, Sri Lanka, Uganda, Zimbabwe Argentina, China, Egypt, Paraguay China (green tea), India, Sri Lanka, United Republic of Tanzania, Viet Nam Egypt, Ethiopia, Israel, Kenya, Morocco, Tunisia, Senegal

Grains, cereals Ground-nuts Hazelnuts and walnuts Honey Palm oil Pine nuts Pistachio nuts Raisins Rice Sesame seed

Soya beans Spices and herbs

Exports
Organic traders in the Netherlands are significant exporters of the following products:
q
Sunflower seed Tea

Vegetables. Three quarters of exports are domestically produced, especially potatoes, carrots, onions, other root and leafy vegetables. The remainder consists of re-exports of imported off-season vegetables.
q

Vegetables, fresh

Fruits. About 80% of exports are re-exports of fruit imported from sources all over the world. (In 1996, the Netherlands exported a total of 1.4 million tons of conventional fruit.)
q

traders in organic spices and herbs in northern Europe.


q

Processed organic foods. About half of the consumer-packed products manufactured in the Netherlands is exported. Belgium, Denmark, France, Germany, Sweden, Switzerland, the United Kingdom and Japan and the United States are the most important export markets.

Dairy products (mainly cheese). About one quarter of domestic production is exported.
q

Grains and cereals. Although the domestic output is small, there is a significant re-export trade in grains from southern and eastern Europe, Latin America, and Asia (rice).
q

Retail sales
Organic foods account for a very small share of total grocery expenditure in the Netherlands. No official calculations are made, but it is estimated that the

Spices and herbs. A major company based in the Netherlands is one of the most important specialized

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sector was worth f. 700 million-f. 800 million at retail prices in 1997, which is equivalent to about 1% of the total grocery market. The organic movement and general demand for healthier foods grew steadily in the 1980s, and Netherlands traders began to play an active role in sourcing organic foods worldwide for sale in the Netherlands and other European countries. Between 1990 and 1996, while retail trade in neighbouring markets such as Austria, Denmark, Germany, Switzerland and the United Kingdom expanded rapidly, retail sales in the Netherlands grew at an estimated rate of only 2%-3% per year. This was despite the increasing pro fes sion ali za tion of the sector and the major contribution by the countrys organic farmers and import- export traders to sup plies for other Euro pean mar kets. The major fac tors that have lim ited growth are discussed below.
q

heavily in environmental protection, individual consumers were slow to support cleaner food production by paying the premium prices required for organic foods. The year 1996 marked a turning point in the countrys organic trade: retail sales increased by 3%-5% in that year and most estimates agree that the rate of increase accelerated to between 10% and 15% in 1997 and 1998. The key changes that are stimulating organic sales are described below.
q

High prices. Netherlands consumers spend a smaller percentage of their disposable income on food than their EU neighbours and price is a key influence on expenditure on groceries. The price premiums for most organic foods were extremely high, owing to the dominance of the retail trade by specialist shops and the fragmented and costly distribution required to service them.
q

The expansion of supply and more efficient distribution of dairy and vegetable produce. This is directly linked to increased promotion through supermarkets and through the subscription system for vegetables (called the groentenabonnement in Dutch). In 1998 Odin, the most important supplier, sold approximately 27,000 vegetable and fruit boxes a week under a subscription scheme; by early 1999 weekly sales had risen to 30,000 boxes. Odin plans to include meat in its subscription scheme. The key factors stimulating consumers to buy organic quality are taste, freshness and a reasonable price premium (today a 20% - 30% premium over the conventional alternative is considered the maximum acceptable). It is estimated that over two thirds of all purchases of organic foods are of fresh produce, i.e dairy products, fruit, vegetables and meat.
q

The marginal involvement of the mainstream grocery trade, including the dominant supermarket chain Albert Heijn. Most supermarkets carried a very small range of organic vegetable products: potatoes, carrots, onions and sauerkraut. For organic foods to attract the man in the street as a regular customer a comprehensive product range in the supermarkets is essential. Specialist organic stores attracted mainly convinced customers. Their prices were perceived as being too high and their product assortment was too limited to be convenient to the many people who wanted to do one-stop shopping. It should be noted, however, that Albert Heijn launched an organic assortment under its own brand in 1998 and is rapidly building up a full range of products.
q

Increased penetration into supermarkets. At least three-quarters of the countrys supermarkets now stock some organic vegetables and they are slowly expanding the range carried. Sales of dairy products, particularly from Zuiver Zuivel and De Zwaluw (both of which have been acquired by the main Netherlands dairy group Campina-Melkunie), are developing successfully in a growing number of stores. Albert Heijn now sells organic potatoes in all its 630 supermarkets, accounting for about 5% of all potatoes sold; organic milk, yoghurt, butter, cheese and a wide range of dried goods are available in 650 branches. Other supermarket groups that are actively introducing organic products are Konmar, Dekamarkt, Vomar and De Nieuwe Wemeand C1000.
q

Consumer attitudes. Despite the appearance of the official EKO label on all certified organic produce in the Netherlands since 1993 and considerable promotional efforts by the Biologica foundation and the trade, consumers were still confused by the wide variety of food products which were supposedly more environmentally friendly and healthier than their conventional alternatives. While on a public level the Netherlands was investing

Uptake of new product groups by supermarkets. While the introduction of new product ranges has heretofore been limited, there are signs of change. In February 1998 Albert Heijn announced the introduction of fresh wholemeal bread, eggs, orange and apple juice. Later in the year wine, coffee, tea, vinegar, jam, biscuits and chicken were added. Konmar already sells a similar range of foods.

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More efficient distribution to specialist organic shops. Rationalization is gradually taking place both in the wholesale and in the retail trade (see section on distribution). Bigger stores, some of which are now supermarkets in size and layout, and the growing range of products stocked are helping shops to attract more casual consumers the number of persons buying at health food shops in 1997 rose by 8%.
q

from only 55% in 1993 to 95% in late 1997. Despite these very positive trends, the domestic market for organic produce, and especially for imported foods, remains small. Its development will depend strongly on the rate of expansion by supermarkets into a fuller range of products and the ability of suppliers to offer organic produce to consumers at price premiums they are prepared to pay. Although supermarkets are introducing more organic products, the stores do not generally have a marketing concept specific to organic foods, and their primary motivation is profitability per square metre, service to customers and preserving a publicly correct image.

Intensified government initiative to stimulate organic production and consumption through the Plan van Aanpak (see above). According to a recent survey by CBL, the central organization for the grocery trade, the number of consumers aware of organic foods and familiar with the EKO symbol rose

Market characteristics
Consumer behaviour
One major difference between the Netherlands and most other EU markets where organic spending has increased at a much faster rate has been the failure of selective and occasional purchasers to increase their expenditure across a wider range of organic food products. Despite fast growing awareness and knowledge of the environment and a conspicuous public policy, the average consumer does not relate food purchases to any principles on production methods. In general, the more time, money and changes in habit are required of customers, the less environment friendly their behaviour is likely to be. This is because product availability, ease of access, product prices and habitual preferences in regard to quality, appearance and taste remain critical factors. The Netherlands food market can be divided roughly into five consumer segments:
Consumer group
Heavy users of organic food Selective purchasers of organic food Occasional purchasers of organic food Non-purchasers aware of organic quality (as represented by the EKO label) Non-purchasers unaware of organic quality (as represented by the EKO label) Sources: estimates. Landbouw-Economisch Instituut

and organic farm ers mar kets. Sele ctive pur chas ers buy some organic prod ucts regu larly and a high propor tion of con ven tional foods at super mar kets. Price and the price/quality ratio are sig nifi cant ele ments in their purchasing decisions; inconvenience, lack of availability or unacceptably high prices are factors which can make them revert to main stream prod ucts. Occasional purchasers are quite well informed about organic quality but tend to do one-stop shopping at large super mar kets and only occa sion ally purchase organic products on impulse. They expect organic produce, first, to meet exactly the same requirements as conventional foods in terms of appear ance, taste, quality and fresh ness and, second, to be avail able at their one- stop outlet. Moreover, the price pre mium they have to pay must be per ceived as reflecting real extra value in terms of quality. The major factors which influence consumer demand for organic foods are briefly analysed below. Value for money. It is said that the Netherlands consumers first loyalty is to their purse: the high pre mium prices of many organic foods have been a major obstacle to the growth of sales. Heavy users place top pri ority on the growing method and origin of their food. However, most other consumers considering shifting from conventional to organic quality need to be con vinced that the pre mium they pay will guar antee them supe rior taste and fresh ness as well as envi ron men tally friendly pro duce. They do not expect to give up any of the quality fea tures they are used to in conventional products, such as

% of all consumers
1 4 34 55 5 (LEI); trade

Heavy users are con sumers who, as far as pos sible, buy only cer ti fied organic quality at health food stores

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uniformity of shape, colour, unblemished appearance, cleanliness and availability of different varieties of the same product. The current new accel era tion in the Neth er lands market is taking place in those product sec tors where these needs are being met, especially dairy products and fresh vegetables. Pota toes are the most suc cessful organic product sold and have an estimated market share of 5%. Fresh vege ta bles are proving instru mental in attracting new organic consumers 60% of subscribers to the vege table abonnement system are people who do not visit organic food shops regu larly. Interest in health matters. The traditional diet is a fairly healthy one, including a high proportion of fresh fruits, potatoes, vegetables, dairy products, meat, fish, wholemeal breads, etc. As in most western countries consciousness about the positive contribution that a balanced diet can make to good health, longevity, physical fitness and the prevention of sickness and disease has been an important stimulus to growing purchases of health foods. Consumers are overwhelmed by the different terms (eco-, bio-, green, natural, functional, light, low-fat, low-salt, gluten-free, etc.), symbols and brands used, all implying healthier, more naturally produced foodstuffs. On an individual basis they do attach importance to the natural preservation of foodstuffs, limited processing and the absence of artificial additives, flavours and colours for their own personal health, but the majority do not consider the purchase of certified organic foods the only way of meeting this need. The astounding success of the Montignac range of health food products (by the end of 1997 their weekly retail turnover was averaging f. 200,000 and the Montignac diet book was the best selling non-fiction book title of the year with sales of 370,000 copies) and the rapidly increasing sales of food supplements in the Netherlands illustrate this view. The promotion of the single EKO label for certified organic products has increased consumer understanding and confidence in the origin, quality and composition of organic foods. Moreover, the publicity and discussion of various food controversies in the last few years (BSE, pig disease, use of growth hormones, genetic manipulation of soya beans, etc.) have contributed to rising distrust of some conventionally produced food and encouraged consumers to purchase guaranteed organic quality. Attitude to protection of the environment. The envi ron mental aspects of prod ucts are a major issue in all European countries and, in addition to price and quality, are a key deter mi nant of the legal accept ability

of all food stuffs for sale. The Neth er lands is one of the leading EU countries in terms of implementing legislation and regulatory measures to protect the environment. Consumer awareness is high and is reflected clearly in areas like car pur chasing, rub bish collection and energy saving. The link individual consumers make between food production and its effect on the envi ron ment is less clear pri ori ties such as price, taste, appearance and convenience often weigh more heavily than environmental arguments. Con sumers are con fused by the dif ferent schemes and sym bols used for envi ron men tally friendly foods and do not support the need to take the costly step of purchasing certified organic produce. Several examples of these schemes are briefly described below.
q

Since 1995 the Netherlands Ministry of Envi ronment has awarded a mark, the Milieukeurmerk, for foodstuffs that are environmentally the least polluting prod ucts of their kind.
q

Many individual supermarket groups have introduced clean logos and terms to indicate minimum usage of fertilizers and pesticides, e.g. Aarde en Waarde (Albert Heijn), Groene Kikker (Aldi) and milieubewuste teelt, which means environmentally conscious cultivation.
q

Fair trade prod ucts, launched in the Neth er lands in 1988 (the Max Havelaar label) and subsequently marketed on a large scale in many other European countries, are widely recognized. Several fair trade product groups like coffee, cocoa and bananas have an impor tant niche market. Sustain able agri cul ture is a primary aim of the fair trade move ment but cannot necessarily be directly identified with (certified) organic production, which is its ideal form. Never the less fair trade and organic issues do tend to converge, and a growing number of products, like coffee and bananas, carry both EKO (organic) and Max Havelaar (fair trade) certi fi ca tion. Demographic and socio-economic factors. Typical purchasers of organic foods are persons between 25 and 50 years old, who have higher than average income and education levels. They tend either to live on their own or to come from households where both parents earn an income and want the best and healthiest food that money can buy for their children. This target group in the Netherlands comprises some 1.3 million persons. The reasons that have been given for the failure of this group to buy more organic produce are:

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They lack real knowledge of organic products and the presentation in shops does not make organic foods easy to recognize;
q

radio are informing the public about organic foods and the EKO symbol as a guarantee of organic quality.
q

They can buy only a limited range of organic foods at supermarkets;


q

They do not visit specialist health food shops, which are perceived as meeting mainly the needs of heavy users and people with special dietary requirements. Over the last two years this situation has changed considerably, as the government-backed promotional efforts of Biologica and the trade have increased consumer awareness and the more widespread avail ability of dairy and vege table pro duce has started to obtain results. Also, the growing product assort ment avail able in organic food shops makes them attrac tive to more con sumers. The eco nomic boom and the high level of economic confidence have stimulated an overall increase in con sumer spending. Availability and convenience. Like most northern European consumers, Netherlands consumers are used to buying their groceries at large modern supermarkets, which offer the convenience of one-stop shopping, a huge variety of products, com peti tive prices and year- round avail ability. Most consumers of organic products with some understanding of the principles of cultivation and pro duc tion will accept some incon ven ience in terms of a smaller choice and (non- seasonal) lack of supply. However, particularly in the case of casual consumers who tend to compare organic products more directly (at face value) with the alternative con ven tional foods, con ven ience and avail ability are highly important. Many natural food shops are currently too small to offer the wide assortment required. The entry of main stream super mar kets and the larger spe cial ized self- service organic food shops into the cost-effective and bigger-scale dis tri bu tion of organic foods is essen tial to attract more cus tomers. Promotion. Important initiatives, backed by gov ernment policy and funding (f. 60 million until the year 2000), are now in place to stimu late the devel op ment of organic cultivation, processing, distribution and con sump tion. Among these ini tia tives are:
q

The umbrella organization Biologica is working hard to motivate supermarket organizations to increase their uptake of organic products and to stimulate consumer interest through many types of publicity.
q

A broad coalition of public organizations, including CBL (the central organization for the grocery trade) and the Consumentenbond (consumers association) are supporting individual and collective organic promotional campaigns.
q

More and more provinces are stimulating organic production and distribution on a project by project basis. For example, the North Holland province is subsidizing the distribution of vegetables by subscription.
q

So-called green financing schemes make it possible for individuals to earn tax-free dividends on investments in approved environmentally friendly projects and for organic farmers to borrow capital at lower interests.

Market segments and end-users


While this study concerns a small niche of the overall grocery trade, it encompasses the whole range of food products. Only general comments on market segments can therefore be made. The retail trade is ultimately the main outlet for imported organic foods, although much produce imported into the Netherlands in bulk undergoes primary processing and packaging before sale to the consumer. The proportion of produce used for further manufacturing depends on the product group, as is indicated below:
q

Fresh fruits and vegetables: primarily for direct consumer consumption, but also for processing.
q

Processed fruits and vegetables: juices, conserves, pulp, pure, soups, pizzas, baby food, fruit yoghurts or desserts.
q

Higher subsidies are available for the conversion of agricultural land to organic production.
q

Dried fruit: about three quarters of the total volume goes to the bakery trade; the remainder is used for the production of muesli and consumer snacks.
q

National publicity campaigns on television and

Edible nuts: mainly for the industrial production

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of peanut butter, other nut pastes, sauces, bakery products and snacks.
q

Grains and cereals: used by the bakery trade (mainly for baking bread, utilization in biscuit- and cake-making is not substantial); by consumer packers for retail sale; and for the production of animal feed.
q

Pulses: mainly for consumer packing and the retail trade.


q

Coffee, tea: mainly for retail. Catering and institutional use is small but growing.
q

Herbs and spices: usage is about 60% for retail and consumer consumption, and 40% for industrial purposes (for the production of soups, ready meals, etc.). The industrial segment is growing.
q

Oil-seeds: mainly for the industrial production of margarine, cooking oil and bread. Oil-seeds have some use as consumer snack foods.
q

At the end of 1997 there were 480 certified organic traders, packers and food processors in the Netherlands, 17% more than in 1996. A wide range of food products is manufactured for the local market and for export. Important categories include dairy products (milk, yoghurt, butter, cheese), vegetable products (conserves, juices, concentrates), nut pastes, bakery products, cereals and baby food. The importance of the food industry as an end-user of organic foods is growing in relation to the two other sectors, because consumers, both local and in export markets, are looking for an assortment of processed foods similar to that available from conventional production. A key development in the last two years has been the rising involvement of the mainstream grocery trade in the sector and the growing number of mainstream processors adding organic production lines to their factory operations. Many of the new registrations are for the organic departments of conventional food companies, rather than for specialist organic businesses. The catering and insti tu tional sector for organic foods is tiny but growing. Organic coffee and tea are regularly available to employees in a number of government departments, banks, provincial offices and town halls, and catering com pa nies have started to offer organic menus as a service in company res tau rants and can teens. About 600,000 indi viduals eat their midday meal on company premises. The asso cia tion for cooks using organic ingre di ents now has 70 members, of which half are top-level restaurants and the other half are institutions (health- care insti tu tions, homes for the aged, etc.) and canteens. One major catering company, Marfo, sup plies nat ural gour met organic meals to the Swiss national air line, Swis sair.

Honey: mainly for consumer retail.

Although domestic demand is fairly small, the Netherlands is a significant primary processor of organic agricultural produce, because of the active role played by a number of large international traders. They import raw produce, which is processed (inspected, cleaned, graded, sorted, blended, roasted, packed, etc.) into a form suitable for direct sale to consumers, for food manufacturing or for re-export to other European markets. It is estimated that over 80% of imported organic products is re-exported. The Netherlands is thus a major trader in grains, cereals, pulses, nuts, herbs and spices, oil-seeds, coffee and tea.

Market requirements
This section describes the main product groups imported into the Netherlands and lists the most important items within each group. The major focus is on products which are not available to importers from European sources and which can be supplied by developing countries. re-exporter, plays a major role in the conventional European fresh fruit and vegetable trade. Its traders are also significant importers of organic fruits and vegetables for distribution not only to the local market but also for re-export to many European countries. Consumers are used to the availability of a wide range of produce in all seasons, and there is growing demand for off-season fruits and vegetables and exotic fruits. National consumer sales of organic fruits and vegetables grew by over 30% in 1997, and

Fresh fruits and vegetables


The Netherlands, as producer, importer and

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the rate of increase is expected to be sustained, owing to the rising uptake by supermarkets and the success of the subscription system. Fruit. The average consumer ate 75 kg of fresh fruits (conventional) in 1996. The most popular fruits are apples and oranges, which together account for about half of consumption, followed by bananas and mandarins. Only about 3 kg of exotic fruit are purchased; kiwi fruit, pineapple and mango are the most important, but there is increasing interest in more exotic items like lychees and passion fruit. Only apples and, to a lesser extent, pears, prunes, cherries, melons and various berries are produced domestically, so all types are imported and over half of imports are re-exported. The main import requirements from non-EU sources are:
q

How ever, as demand grows for an increasing variety of processed organic foods, larger supplies of vegetable and fruit ingre di ents will be required. The food industry is the main end-user. The most impor tant items which can be sourced in devel oping countries are fruit pulp, pure and juice concentrate for reprocessing into juice and fruit ingredients for proc essed foods (e.g. baby foods, fla voured yoghurts, desserts and ice-cream). Single-strength juices are usu ally less inter esting because, in the final analysis, they cost more to transport than concentrated products. Fruit concentrates are also important sweet ening agents in organic food proc essing and in domestic cooking. Tradin, a major organic trader, imports from devel oping coun tries the fol lowing frozen and/or con centrated items: acar illo pure, agave con cen trate, apple concentrate, apricot pure, banana pure, banana slices, frozen bananas, guava pure, mango pulp, orange juice, orange con cen trate, papaya pure, passion fruit juice, pear juice, pineapple juice, tomato con cen trate, and soft fruit pures and con cen trates. (A more complete list of products traded by this com pany is given in Annex IV.)

Off-season fruit: citrus fruit (oranges, mandarins, grapefruit, lemons), apples, pears, kiwi fruit, avocado, grapes, melons;
q

Tropical fruit: bananas, mangoes (the red varieties are more popular than the green), pineapples, papayas.
q

Vegetables. The average inhabitant consumed nearly 60 kg of fresh vegetables (excluding potatoes) in 1996. Consumption is dominated by domestically grown products like cauliflower, carrots, tomatoes, cucumbers and leafy vegetables. A large share of imports originate in other EU countries. The main products which could be of interest to exporters from developing countries are: peas and beans, capsicum, courgettes, eggplants and artichokes. It is essential that poten tial sup pliers of organic fruit and vege ta bles realize that organic cer ti fi ca tion is only one con di tion that fresh pro duce must meet in order to be accept able for sale in Euro pean mar kets. Importers will specify precisely the product profile, quality standards and packaging/labelling requirements against which each delivery will be inspected. An unblem ished external appear ance is essen tial. One of the main obsta cles to sup plying Neth er lands importers lies in the trans port and storage of fruits and vege ta bles which must be in keeping with organic regu la tions and which must ensure that the products reach the final con sumer in a top-quality con di tion.

Dried fruits and edible nuts


Dried fruits. Imports total about 1,000 tons yearly and are intended mainly for the domestic market. Key items are raisins (about two-thirds of the total), currants, prunes, apricots, dates, apples and figs. Demand for tropical items is small but growing, and is mainly for pineapple chips, banana chips, papaya, mango and guava. The bakery trade is the main end-user and demand has recently been stimulated by one major organic bakery commencing production of vacuum-packed raisin and nut breads for export. Other end-uses are consumer retail packs, breakfast cereals and muesli and snacks. Edible nuts. Imports are for the local market and for re-export. The Netherlands has the highest per capita consumption of nuts in the European Union. The major import product is shelled ground-nuts (which make up an estimated three quarters of the total), which are used in the production of peanut butter, snacks, sauces and meals sold both domestically and in export markets. Indonesian and Chinese cuisine have a strong place in the populations eating habits owing to the countrys historic links with the Far East. Coconut, in flaked and desiccated form, shelled sweet almonds, hazelnuts and walnuts are the next most important items, primarily for the bakery trade

Processed fruit and vegetables


Demand for imports of proc essed goods is cur rently much smaller than demand for fresh produce.

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but also for the production of muesli and other processed foods. Demand for other nuts, especially cashew nuts, pistachios, Brazil nuts, pecan nuts and pine nuts is growing. One major importer of organic dried fruits and nuts, Horizon Natuurvoeding, dominates the Netherlands (and the Belgian) market. Horizon is one of the key partners in the Good Food Foundation, a cooperative venture established by European organic companies to stimulate, establish, subsidize, develop and run organic cultivation projects for dried fruits, nuts, seeds and other products, primarily in Turkey but also in Benin, El Salvador, Mozambique, Sri Lanka and Uganda. The Foundations licensee importers in other major EU markets have a controlling share of the market for dried fruits and nuts in France, Germany, the United Kingdom and Scandinavia. It has been estimated that Good Food together with the two major German organic traders (Rapunzel and Morgenland), control about 80% of the EU trade in organic dried fruits and nuts. Horizon produces pastas under three brand names (Horizon, Monki and Jori) and supplies organic bakeries and consumer-packed products to wholesalers.

sunflower seeds, walnuts, almonds, dried apple and currants. There is rising demand for many other additional ingredients for their distinctive flavours and colours, e.g. roasted buckwheat, cashew nuts, sesame seeds, banana chips, dried pineapple and papaya, coconut, dried apricots, and unrefined sugar. Rice. The inhabitants of the Netherlands are traditionally potato-eaters, and households spend about five times more on pota toes than on rice every year. However, changing eating habits and the increasing popularity of all types of international cuisine are stimulating rising demand for rice and pasta. Over 80% of the rice con sumed is long grain, of which more than half is white. There is fast- growing demand for bas mati and Thai rice. The major end use is in retail packs for sale to con sumers, but use in ready meals and baby food is expanding. Imports are mainly of husked rice for processing in the Netherlands. Re-exports are sizeable and a substantial part of the re-exported rice is ready milled. Organic rice cakes are also a popular product, manufactured in the Netherlands for domestic con sump tion and for export, par ticu larly to Ger many. Pulses. The main pulses con sumed are locally grown lentils, split peas, and white and brown beans. Important import items for the home and re-export markets are aduki beans, black beans, chickpeas, flageolets, kidney beans, lentils, mung beans, soya beans and yellow peas. Soya beans are the most impor tant product. Demand for organic soya beans is growing rap idly, and has been boosted espe cially by recent scares arising from the non-differentiation between traditionally grown and genetically manipu lated soya beans. IFOAM basic stan dards do not permit the use genetically modified organisms. Moreover, under EU food laws, the presence of genetically modified ingredients in foodstuffs must be clearly indicated on the product labelling. The Netherlands is a major importer of soya beans for processing into oil (for use in mayonnaise, salad dress ings, mar ga rine, coffee whit eners, etc.), pro tein for human consumption (meat substitutes, sauces, imitation dairy products, desserts, sweets, etc.), animal feeds and for crushing/semi-processing before re- export. Oil-seeds, edible oils and fats. Apart from soya, mentioned above, the main seeds required are sunflower seed, sesame seed and, in smaller quan ti ties, pumpkin seed, saf flower seed and poppy seed. Imports of sunflower seeds are significant because of its use in polyunsaturated oils and

Grains, cereals, pulses and seeds


Netherlands plays a significant role in the trade in this product group, importing from sources worldwide. Over 80% of its imports are re-exported to Belgium, Denmark, Germany, Sweden, the United Kingdom and other European markets. Imports are mainly of bulk raw products cleaning, sorting, quality control, milling and (bulk) packing are carried out according to the customers requirements before re-export. Grains. The most important are wheat, oats, barley and rye, for which southern and eastern Europe are the main sources. Other items are amaranth, buckwheat, maize, millet, quinoa, which are generally imported from the Americas, and durum wheat, which originates mainly in Italy (Sicily). Flour millers and bakers are the major customers for grain. Because of the entry of mainstream bakers and supermarkets into the supply of organic bread and factory expansions planned by existing bakers, demand in the Netherlands is expected to increase considerably in the near future. Manufacturers of cereal-based foods and packers of grains and muesli for the retail trade are also important users. Typical basic ingredients for muesli are oat flakes, barley flakes, wheat flakes, raisins, hazelnuts, rye flakes,

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margarine, which are widely used for commercial and domestic cooking; supply is dominated by European sources. Sesame seeds are imported primarily for use by bakers in or on bread, and in limited quantities for producing cooking oil. Pumpkin seeds are required as a snack product. Import demand for edible oils is small except for olive oil (mainly from Spain and Italy), and palm oil. Because of the high risk of rancidity and loss of quality, most seeds are imported for crushing and further processing in the Netherlands. Coffee. The Neth er lands is a nation of coffee drinkers and per capita consumption is over 8 kg of coffee beans (about 175 litres) per year. The main demand (about three- fourths of the total) is for ara bica coffee and nearly all imports are of green coffee, because coffee blenders need constantly to supply their cus tomers with the same fla vour, aroma and quality under a named brand. The various coffee types blended together may come from a number of different sources, according to availability, quality, harvest levels, etc. A considerableproportion of the bulk organic coffee imported into the Neth er lands is re-exported following cleaning, blending, roasting (the taste requirements of individual EU markets vary), grinding and pack aging in branded or pri vate label consumer retail packs. Demand for organic coffee, now increasing at about 10% per year, is expected to continue growing at a healthy rate, stimu lated by increasing use in insti tu tional catering, by the successful promotion of Max Havelaar fair trade coffee (although it is not all certified organic, Max Have laar coffee now accounts for over 3% of all coffee consumed in the Netherlands) and by the introduction of organic coffee on to supermarket shelves. Tea. Netherlands consumers drink an annual average of 83 litres of tea per person, which makes them the third largest consumers of tea in Europe after the Irish and the British. Black tea dominates and four types of tea account for 75% of organic demand: Earl Grey, India (Ceylon tea), low-tannin tea and Darjeeling. As in the mainstream trade, demand for single-origin teas and for flavoured teas (e.g. cinnamon, forest fruit, lemon, tropical fruit, lavender, lemon grass, aniseed, etc.) is growing. A high proportion of tea is purchased as tea bags (packed in boxes containing 10 or 20 tea bags of 1.75 grams). Loose tea is packed in 100 gram bags. Tea is mainly imported loose in chests, but there is some growth in imports in consumer packing (from

India and Sri Lanka). The efficiency and output of existing suppliers of organic tea and coffee are improving rapidly, according to Netherlands trade sources. These sources say that the best opportunities for first-time suppliers are likely to be in new and unusual varieties. Herbs and spices. Usage of spices and herbs is heavier in organic food preparation than in con ven tional food prepa ra tion and proc essing owing to the many alternative (artificial) flavourings and additives also used in the latter sector. Household usage currently accounts for about 60% of requirements, but demand is growing faster in the food proc essing and catering seg ment. The entry into force on 1 January 1998 of a stricter EU regu la tion on the permitted usage of non-organic ingredients in cer ti fied organic prod ucts has stimu lated an increase in requirements. According to EU Regulation 2092/91, certified organic foods may contain a maximum of 5% of approved non-organic agricultural ingredients, including spices and herbs; the organic foods with such con tent are referred to as 95% prod ucts. The major European importer and developer of organic herb and spice projects in source countries worldwide is located in the Netherlands. Euroherb Bio BV, established in 1989, is a joint venture between Piramide, the Netherlands market leader with an estimated 90% of total sales, and Lebensbaum Krauter, the most important distributor of organic herbs and spices in Germany. The company cooperates with producers of organic herbs, spices, tea, coffee, sugar and cocoa products in many developing countries, providing consultation on growing, processing and certification, as well as contracting to import the resulting organic produce. Euroherb imports about 200 base products and expects demand to increase by 10% - 15% annually over the next few years. Pepper is the most significant spice import; the other important items are paprika, coriander, cinnamon, ginger, nutmeg, mace, caraway seed, cloves, cumin seed and turmeric. The key dried herbs are parsley, marjoram, thyme, bay leaf, oregano, sage, rosemary, basil, mint, tarragon and dill. Because of the climatic conditions required for production, a high proportion of spice imports is sourced in developing countries. The main suppliers of dried herbs are

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southern and eastern Europe, Egypt, Turkey, Morocco and Latin America. Honey and other sweeteners. Organic honey is traded widely, not only as a spread but as a natural sweetener in domestic cooking and in food manufacturing. Because it is a natural food, Netherlands consumers, even people whose grocery purchases are mainly certified organic foods, have not to date placed great importance on approved organic quality for honey. The main requirement is for polyflora honey, which accounts for three-quarters of sales; clover, acacia and sunflower honeys are also popular. Organic food consumers buy a far wider variety of types of honey than mainstream consumers, including such flavours as buckwheat, rapeseed, heather, lavender, thyme, rosemary and eucalyptus. Supermarket honey is sold mainly in 450- and 500-gram jars but organic food customers tend to favour bigger containers of 900 1,000 grams. For re-export to Germany, 2.5-kilogram jars are also popular. According to two specialist organic importers, De Traay and De Rit, demand for organic honey is rising, par ticu larly from German and Scan di na vian customers. De Rit was planning to launch a new range of five types of certified organic honey from New Zealand in 1998. Within its stan dards for the certification of animal-based products, SKAL has laid down conditions for certification of honey producers and honey, but there are as yet no har mo nized EU regu la tions. Demand for certified organic honey from food manufacturers has been increasing since EU imposed the compulsory use of certified organic ingredients in January 1998. It is important for exporters to take account of the fact that the price-quality ratio must be attractive as processors would otherwise replace honey with alternative sweetening products, such as cane sugar and molasses. Other products. Other product sectors, although perhaps significant in demand terms, are less relevant as sectors for export development by producers in

developing countries.
q

Demand for dairy products is among the fastest growing. They are supplied primarily by domestic producers; some supplies are obtained from neighbouring EU countries.
q

There is a small but increasing demand for meat, stimulated by consumer worries about BSE, pig disease, salmonella and growth hormones. Supplies are provided by domestic producers.
q

Agro Eco, a leading Netherlands organic consultancy agency, is working on several organic fish and seafood projects, both in the Netherlands and abroad.
q

Imports of manufactured food products for the retail trade are sourced mainly in other European countries, the United States and Japan.
q

The expanding livestock sector has a growing demand for organic animal feeds. These are pro duced in the Netherlands using both local and imported grains, cereals, soya beans, etc. However, organic feeds are also imported (and re-exported) by Netherlands traders; examples of import require ments are saf flower cakes and pel lets, sesame cakes, and sun flower cakes and pel lets.
q

Interest in organic cut flowers and pot plants is small; an initiative by the Netherlands flower auctions to promote organic products was abandoned in 1997 because sales failed to grow towards the target 3% share of the mainstream market. However, the project is likely to be revived. There is also a growing interest in certified wood and wood products.
q

The production of organic seeds and plants is promoted by several seed companies. Koppert BV is one of Europes most important suppliers of biological traps for biological pest management, bumblebees for pollination and other important aids to organic production, generically called biological systems.

Importers requirements
Organic certification according to Council Regulation (EEC) 2092/91 is only one of the many requirements for attaining import acceptability in the Netherlands and other European countries. Demand for organic produce is expanding fast among new consumers, who are used to buying a huge variety of

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high-quality foods. Their readiness to pay premium prices is influenced not only by the guarantee of certified organic quality but also by the availability of foods which at least match the conventional alternatives in appearance (which should be unblemished), size, variety, taste, uniformity, colour, absence of extraneous matter, etc. Against the background of the food safety and quality standards strictly regulated by the European Union and the individual re-export markets, Netherlands importers clearly specify the quality standards required per product, according to the specifications of their client retailers and food processors. Relationships with new suppliers in developing countries almost always commence on the basis of imports of bulk agricultural produce which has undergone very little processing. As the relationship and trade develops it is quite usual for the exporter to start carrying out more value-adding processes prior to exporting the merchandise to Europe. It was in this way that Turkish organic producers developed into suppliers of consumer-packed dried fruits and nuts, India and Sri Lanka into sources of tea, and Egypt into a source of ready-packed herbs. Many European food manufacturers prefer to obtain supplies from well-known Netherlands, German and other European importers according to their individual specifications rather than to import direct from developing countries. Some Netherlands traders play a crucial role in certain product sectors by importing raw materials, carrying out basic processing and delivering to food producers organic

food ingredients meeting strict quality specifications. Besides being able to produce the item required, a pro spec tive sup plier in a devel oping country must be capable of delivering that product in the condition specified in the contract or agreed on the basis of samples. Netherlands trade sources have indicated that logistics (appropriate packaging, quality preservation during transit, storage, transportation) fre quently pres ent the major obstacle to a suc cessful export trade in organic foods. Many of the instruments available to mainstream food exporters for quality preservation cannot be used by organic suppliers because they are disallowed by environmental protection and certification regu la tions. One example of a logis tics problem cited during the research for this study was that of an excellent organic honey suitable for certification produced by a cooperative in Africa, which the importer could not buy because of the absence of food- quality metal drums for storing and trans porting the honey from the cooperative to the port of shipment. A number of Netherlands organic traders are active not only in the import/export trade but also in working directly with new conversion projects in developing countries. They provide consultancy and advice on the requirements of specific European market sectors and on obtaining certification, which is based on their first-hand experience with other similar projects. Most importantly, they contract to buy and distribute the produce as soon as suitable organically certifiable supplies are available.

Competition and prices


Competition and prices are discussed mainly in Part Two of this survey. Owing to the huge diversity of products covered, it is not possible to give any specific information on prices and margins. The mark-ups at each level are strongly influenced by such factors as the type of product, the processing activities undertaken, the volumes involved, available supply, competitive products, packaging, and promotional activities carried out. Both prices and margins are considerably higher for organic foods than for the conventional articles and this has proved to be one of the major obstacles to growth in consumer sales in the Netherlands. Increased volumes of output by producers and more efficient distribution, as in the case of organic potatoes, vegetables and dairy products, which are now distributed through supermarkets, make economies of scale possible and so reduce the premium charged to consumers. As prices and margins vary considerably for different products and can fluctuate strongly, it is essential to have continuous access to up-to-date price information. An important source of information for exporters is their importer or business partner in the Netherlands. The major wholesalers of organic foods publish detailed price lists which give recommended retail prices and trade discounts.

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Food laws and regulations


In the Neth er lands, EU Regu la tion 2092/91 is implemented through national legislation enti tled Decree on the Agricultural Quality of Organic Production Methods, and concomitant regulations (Landbouwkwaliteitsbesluit and the Land bouwkwal iteits re geling biologische produktiemethoden). This legislationdesignates the organization SKAL as the sole official inspection body for organic farming in the Netherlands. SKALs certification mark, EKO, indicates that the product car rying it origi nates from organic cultivation and has been processed with organic methods. Prod ucts bearing the symbol have satisfied both EU Regulation 2092/91 and SKAL stan dards. Where EU har mo nized regu la tions do not yet exist, as in the case of tex tiles and for estry products, cer ti fi ca tion and inspec tion and the granting of the EKO symbol are monitored according to SKAL standards, which are based on IFOAM standards. When harmonized EU standards come into force, these SKAL standards will no longer apply. Import licences for organic products from outside EU are issued by the Min istry of Agri cul ture, Nature Manage ment and Fish eries. SKAL is one of the main organizations in the European Union offering inspection and certification services to organic producers worldwide. Outside the Netherlands it has its own offices in Germany, Turkey, Hungary, Sri Lanka, Suriname, Peru and India, and currently operates in over 30 countries (see list in Annex II). SKAL inspects and certifies not only to EU Regulation 2092/91 but also to the often stricter standards of major trade groups in Europe. Among these groups is the German organic trade association BNN, which represents organic retailers and wholesalers in Germany and lays down its own standards for admitting food products into its approved list; it commands great respect in the trade. Since 1996 SKAL has been accredited by the Dutch Council for Accreditation which means that it meets the requirements for certification institutions set out in EU norm EN 45011. All foodstuffs offered for sale in the Netherlands must comply with the Food and Drug Act (Warenwet). This is a general law and largely reflects EU legislation. Specific decrees and regulations provide norms for some individual product groups. Exporters are strongly advised to obtain accurate and up-to-date information from Netherlands importers, who are ultimately responsible for ensuring the compliance of their produce with national legislation.

Distribution channels
Most usually, imported organic foods pass from a specialized importer to a processor/packer, then to a wholesaler and thence to a retail outlet, which makes the final sale to the consumer. Food manufacturers receive their imported supplies either direct from importers or through specialized processors. Despite the small size of the domestic organic market, a number of specialized Netherlands traders have become major importers and suppliers of organic produce to northern European markets, especially Germany, the United Kingdom, Belgium, Denmark and Sweden. This reflects the pivotal role which the Netherlands plays as one of the major traders in agricultural produce in the world and as a gateway to Europe. The port of Rotterdam, with its concentration of trading companies and distribution services and its excellent trade infrastructure, renders distribution throughout Europe fast and efficient. The functional distinctions between different types of distribution channel are often not clear because many companies undertake different levels of intermediate processing, according to the type of product and the end use.

Traders, importers, packers, processors


In each of the major product groups a few specialized organic traders tend to dominate imports and these companies are the key (potential) customers for foreign exporters. They import on their own account and sell to packers, processors and food manufacturers. Importers often also perform other functions, such as that of:
q

Packer: packs goods in standard bulk packs;

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Refiner: subjects goods to further processes (e.g. sorting, cleaning, grading, reconditioning, micro bio logical inspec tion, quality control);
q

importer of organic dried fruits, edible nuts and seeds and a manufacturer of nut spreads, pastes and organic syrups. (See page 208, dried fruits and edible nuts.)
q

Wholesaler: supplies bulk-packaged goods to the catering and retail trade;


q

Processor: prepares products as ingredients for the food industry according to specification;
q

Re-exporter: engages in re-exporting, a major activity, mainly to other European markets;


q

Eosta Int. BV. This is a major importer of organic fresh fruit and vegetables from sources worldwide, especially South Africa, Egypt, Argen tina and many other countries in North Africa (Morocco, Tunisia), East Africa (Kenya, Madagascar) and South America. About 70% of its imports are re-exported to other European countries; the remainder is distrib uted to super mar kets and wholesalers in the Neth er lands.
q

Developer: cooperates with growers or producers in origin countries in the process of seeking entry into the European market; activities cover certification requirements, quality standards, market information, etc. In organic terminology the word processor is frequently used as a generic word for packers, primary processors and food manufacturers alike. Among the leading Netherlands organic traders are the following:
q

Simon Levelt BV. This is a specialist coffee and tea trading company with its own roasting, blending and packing facilities. It helped initiate the establishment of Max Havelaar and the fair trade mark, and is the largest Netherlands importer of organic coffee and tea. In 1997, it traded about 200 tons of organic coffee and about 50 tons of organic tea. It supplies 95% of the requirements of the Netherlands retail trade and has significant exports of consumer-packed coffee and tea to distributors and supermarket chains in a number of European markets. The other important traders and packers include: Ariza BV (processed fruits and vegetables); De Traay (honey), De Rit (honey), Doens Food Ingredients BV (grain, pulses, oil-seeds, spices, horticultural seeds, animal feed), Green, Fresh & Anywhere (fresh fruits and vegetables), Koffiebranderij G. Peeze BV (coffee and tea), Neuteboom BV (coffee and tea), ODIN Holland CV (fresh fruits and vegetables) and Trouw BV (buckwheat). Relevant addresses are given in Annex I. Imported organic produce may be processed and (re)packed by the importers themselves or sold to specialist companies for further processing. The mixing and blending of products like muesli, dried fruits, nuts and coffee, and their packaging in consumer packs for the retail trade are important activities. The packaged range of goods may carry the packaging companys own brand or the private label for organic products of a major wholesaler, chain of shops or supermarkets.

Tradin Organic Agri cul ture BV. A major trader specializing in organic imports (all certified according to EC Regulation 2092/91), primarily grains, rice, seeds, nuts, dried fruit, oil- seeds, animal feeds, oils, beans, coffee, cocoa, sweet eners, bakery fat, dairy products, fresh bananas (imported by its sister company Traba nana BV), and frozen fruit and concen trate. It had a turn over of about f. 28 million in 1997. Its largest suppliers are Latin America, North America, Eastern Europe and China. It has offices in Bulgaria and Honduras. It exports to Europe and to the rest of the world.
q

DO-IT BV. This is a special ized distributor of a wide range of processed organic foodstuffs throughout Europe. Its products include pasta, tomato products, nuts and Mexican goods. Greenfood Inter na tional BV is a trading company special izing in the import and export of organic cereals and, to a lesser extent, seeds, nuts, pulses and dried fruit. Both companies are subsidi aries of Mulder Natuur vo eding BV.
q

Euroherb Bio BV. (See the description of this company on page 209, subsection on herbs and spices.)
q

Wholesalers
Because sales of organic foods to Netherlands consumers take place primarily through small specialist shops, the wholesale trade is an important

Horizon Natuurvoeding BV. This is a large

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distribution link between the large number of small producers and suppliers on the one hand and the retail trade on the other. Wholesale distribution of fresh produce, especially fruits, vegetables, dairy products and bread, is carried out by a few major companies. For imported fruits and vegetables the most significant are Odin, BICK, van der Steen and Kroon. Udea BV is the principal wholesaler for dairy products, frozen food and fresh vegetarian products. The distribution of dry organic foods in the Netherlands is dominated by one major wholesaler, Natudis, which has a turnover of f. 120 million and has 130 employees. The company controls an estimated 80% of the dry goods market in the Netherlands and is also the second most important wholesaler in the Belgian market after Reformwaren/Nonkels. Natudis is the exclusive distributor of numerous imported products carrying foreign brands; it also sells a full range of private-label products through its subsidiary Natuproducts. The raw materials for the latter products are bought in bulk and packed in-house or are processed and packed under contract by a third party. Among the important private labels are Ekoland, Akwarius (EKO and Demeter), Fertilia and Molenaartje. The other main national wholesalers supplying dry groceries are De Nieuwe Band, De Rit and Terrasana. Faan Zuidhorn supplies cheese.

carry out common promotional activities. Central buying of the common product assortment and private label foods will be carried out by an independent division, Natural Trade Services. De Natuurwinkel and the other two groups mentioned above are the leading franchise and buying groups for organic shops in the Netherlands. Natuurwinkel currently has about 40 shops in the country and is associated with a cooperative of 30 other organic outlets in Belgium. Gimsel has over 30 stores in the Netherlands and Belgium, including it new flagship supermarket in De Groene Passage in Rotterdam. The supermarket has 2,000 square metres of selling space; other shops in the location include an organic butcher, a natural interiors store, a fair trade shop and an organic caf. De Groene Winkel has about 10 outlets. Supermarkets used to be com para tively unim por tant in the dis tri bu tion of organic foods, but their involvement in the organic trade has expanded con sid erably in recent years and they now have an esti mated 25% of the market. Organic pota toes and other basic vegetables (onions, carrots, cabbage) are available in many super mar kets, and sales of dairy prod ucts, particu larly the brand De Groene Koe of Zuiver Zuivel, are growing the fastest. Taste, freshness, an acceptable price premium and continuity of supply have been significant factors in growing consumer sales. Sev eral super market groups (Konmar, Vomar, Dekamarkt and De Nieuwe Weme) have expanded their organic ranges to include eggs, bread, fruit juices, apple pure, conserved vegetables, tea, coffee and other dry gro ceries. In Feb ruary 1998, the domi nant supermarket chain Albert Heijn, which has 650 stores, launched a wide range of organic prod ucts. Despite these positive trends some major supermarket chains are not yet involved in the strategic marketing of organic foods, and decisions to include organic versions of conventional food products are made largely on purely commercial grounds, i.e. their profitability per square metre of shelf space. The barriers to developing profitable sales (consumer resistance to high prices, lack of continuity of supply and the need for guarantees of excellent quality) continue to be obstacles to the increased participation of these supermarket chains in the organic trade. Farmers organic markets are held weekly in 15 cities, and their umbrella organization expects this number to rise to between 40 and 50 cities by the year

Retail outlets
Organic and health food shops are the most important consumer outlets for organic foods in the Netherlands. They are losing some market share to supermarkets, especially in basic vegetables and dairy products, but retain control of an estimated 65% - 70% at the market. Over half of their sales are fresh produce, and they dominate the retail distribution of all dry groceries. The cooperative NWO, established by the specialist retail and the wholesale trade in 1997, aims to expand sales by improving efficiency in the sector and reducing the price difference between organic and conventional foods. About one-third of its stores, mainly former members of the De Natuurwinkel, Gimsel and De Groene Winkel groups, were initially holders of NWO franchises. In due course, they and other NWO franchisees will all trade under the name De Natuurwinkel and will adopt a common product style and assortment and

CHAPTER 9 THE NETHERLANDS

215

2005. About three quarters of the produce sold is fresh and the markets perform an important function in promoting the image of organic foods and offering a range of produce at considerably lower prices than the specialist shops. Subscription schemes (the groentenabonnement) have become important retail sales outlets for seasonal fresh fruits and vegetables. The bags of produce are distributed weekly to a growing number of consumers through about 250 points of sale. Subscribers currently number between 35,000 and 40,000. The main operators are Odin (the largest supplier), BICK, Konmar and a number of individual organic farmers. Other outlets for limited ranges of organic foods include specialist organic butchers, reform and health food shops (which sell mainly dry foods and food supplements), conventional street markets, direct farm sales and fair trade shops (wereldwinkels).

although trade contacts have indicated that there is a growing trend towards importing certain produce. This trend is likely to become more pronounced as mainstream manufacturers become more involved in the organic sector. Among the leading specialist organic food manufacturers or processors are the following:
Bakery products Chocolate Conserves Dairy products Honey products Muesli Nut pastes Processed foods Verbeek, van der Westen, Keune Bonvita Balthussen, Bio-core Zuiver Zuivel, De Zwaluw, De Dageraad, FEZ De Rit, De Traay De Halm, Natuproducts (Natudis), Mulder, BD Graan Horizon De Vuurdoop, Joannusmolen

Food manufacturers
Organic food manufacturers in the Netherlands tend to obtain their supplies of ingredients from domestic and other European sources, including producers, importers and processors, who can provide requirements according to specifications and ensure continuity of supply. They rarely import directly,

Important mainstream processors now involved in organic processing include: Koninklijke Numico NV (Nutricia) (baby foods), Remia (oils and fats), Marvelo (coffee and tea) and Renco BV (sugar and sweeteners). Several major dairy companies and bakers are expected to introduce organic production lines in the near future. The Cosun group of companies, including Suiker Unie (National Sugar Company), are encouraging producers to convert to organic methods. The renowned fruits and vegetable preserve company, HAK, has started an organic trial programme.

Prospects
The Netherlands must be seen as a significant gateway for prospective exporters of organic foods interested in approaching the growing major markets of northern Europe. The domestic market is small and consumes only a small proportion of total imports. Its development will depend strongly on the rate of expansion in supermarkets and the ability of suppliers to offer organic produce to consumers at price premiums they are prepared to pay. Although supermarkets are introducing more organic products the stores do not generally have a specific marketing concept for organic foods, and their primary motivation is profitability per square metre, service to customers and preserving a publicly correct image. Fresh produce has the best near-term prospects in the domestic market. As indicated earlier in this chapter, Netherlands traders are significant importers and re-exporters of bulk organic produce, especially non-seasonal fresh fruits and vegetables, tropical fresh fruit, preserved fruit (concentrates, pures, etc.), grains, cereals, nuts, seeds, spices and herbs. These traders are highly experienced and are used to working with producers from the initial stages of conversion and certification through to the final supply of food products. These products meet the strict standards required both by European food safety legislation and by Netherlands and other European consumers. Prospective exporters are strongly advised to investigate the markets for specific products in close cooperation with an established importer.

Annex I

Netherlands: selected addresses*

TRADERS/IMPORTERS/ PACKERS/PROCESSORS
Ariza BV Overhorst 9 5707 PP Helmond Tel: +31-492 528 364 Fax: +31-492 545 151 De Traay Platinastraat 50 8211 AR Lelystad Tel: +31-320 282 928 Fax: +31-320 282-028 Doens Food Ingredients BV Oranjestraat 40A Postbus 10 4515 ZG IJzendijke Tel: +31-117 302 020 Fax: +31-117 301 811 E-mail: wdtrade@zeelandnet.nl Do-It BV Prins Hendrikweg 19 3771 AK Barneveld Tel: +31-342 422 829 Fax: +31-342 422 192 E-mail: organic@euronet.nl Eosta BV Postbus 132 3980 CC Bunnik Tel: +31-30 656 6000 Fax: +31-30 656 6040 E-mail: info@eosta.com Euroherb BV Dynamostraat 12 3903 LK Veenendaal Tel: +31-318 543 288 Fax: +31-318 542 458 Good Food Foundation Alike Last Postbus 219 NL-3850 AE Ermelo Tel: +31-341 560 210 Fax: +31-341 562 913 E-mail: goodfood@xsall.nl
___________________________ * List not exhaustive.

Green, Fresh & Anywhere BV Postbus 327 2990 AH Barendrecht Tel: +31-186 668 585 Fax: +31-186 668 588 Greenfood International BV Bellstraat 7 3861 NP Nijkerk Tel: +31-33 247 1030 Fax: +31-33 247 1035 Horizon Natuurvoeding BV Postbus 77 3400 AB IJsselstein Tel: +31-30 688 7730 Fax: +31-30 688 7142 Koffiebranderij G. Peeze BV Ringoven 36 6826 TR Arnhem Tel: +31-26 362 2422 Fax: +31-26 361 3380 Marfo Postbus 137 8200 AC Lelystad Tel: +31-320 293 894 Fax: +31-320 232 096 E-mail: martinairfood@wxs.nl Neuteboom BV Aadijk 41 7602 PP Almelo Tel: +31-546 864 062 Fax: +31-546 864 062 Odin International BV Postbus 225 4190 CE Geldermalsen Tel: +31-345 577 133 Fax: +31-345 576 848 Renco BV Postbox 46 6600 AA Wijchen Tel: +31-24 641 5304 Fax: +31-24 641 5314 E-mail: mderooij@renco.raftir.be

Rhumveld Winter & Konijn BV Postbus 29216 3001 GE Rotterdam Tel: +31-10 233 0900 Fax: +31-10 233 0574 Rijk Zwaan Nederland BV Postbus 40 2678 ZG De Lier Tel: +31-174 532 300 Fax: +31-174 515 334 E-mail: a.van.velden@rijkzaan.nl (Organic seeds) Simon Levelt BV A. Hofmanweg 3 2031 BH Haarlem Tel: +31-23 512 2522 Fax: +31-23 512 2525 Tradin Organic Agriculture BV Latexweg 12 1047 BJ Amsterdam Tel: +31-20 407 4499 Fax: +31-20 497 2100 E-mail: postmaster@tradinorganic.com Web page: http://www.tradinorganic.com Trouw BV Piekstraat 63-65 3071 EL Rotterdam Tel: +31-10 486 6332 Fax: +31-10 4886 0928

WHOLESALERS
De Nieuwe Band Noorderringweg 12 9363 TC Marum Tel: +31-594 644 3355 Fax: +31-594 643 385 E-mail: info@nieuweband.nl De Rit Natuurprodukten BV Retsezijstraat 4 4011 JP Zoelen Tel: +31-344 681 653 Fax: +31-344 681 404

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217

Natudis BV (Natuproducts) Postbus 376 3840 AJ Harderwijk Tel: +31-341 464 211 Fax: +31-341 425 704 TerraSana NL BV Postbus 70 2450 AB Leimuiden Tel: +31-172 503 338 Fax: +31-172 503 355 Udea BV Postbus 478 5400 AL Uden E-mail: jvdboogaard@ekoland.com http://www.ekoland.com

GOVERNMENT OFFICES AND OTHER ORGANIZATIONS


B-D Association (Vereniging voor Biologisch-Dynamische Landbouw) Postbus 17 3970 AA Driebergen Tel: +31-34 353 1740 Fax: +31-34 351 6943 E-mail: Bd.vereniging@ecomarkt.nl http://www.ecomarkt.nl/bdvereniging CBI - Centre for the Promotion of Imports from developing countries WTC Beursbuilding, 5th floor Postbus 30009 3001 DA Rotterdam Tel: +31-10 201 3434 Fax: +31-10 411 4081 E-mail: cbi@mediaport.org Dutch Food Inspection Service Ministry of Welfare, Health and Cultural Affairs Postbus 5840 2280 HV Rijswijk Tel: +31-70 340 5060 Fax: +31-70 340 5435 Fair Trade Association Beesdseweg 5 Postbus 115 4100 AC Culemborg Tel: +31-345 545 151 Fax: +31-345 521 423 Good Food Foundation PO Box 219 3850 AE Ermelo Tel: +31-341 560 210 Fax: +31-341 562 913 E-mail: goodfood@xs4all.nl (Agricultural production, consulting, training/education) Ministry of Agriculture PO Box 965 6040 AZ Roermond Tel: +31-475 355 555 Fax: +31-475 318 939 (Import licences for organic foods) SKAL Postbus 384 8000 AJ Zwolle Tel: +31-38 426 8181 Fax: +31-38 421 3063 E-mail: SKAL@euronet.nl http://www.skal.com

Stichting Biologica - Platform Biologica Postbus 12048 3501 AA Utrecht Tel: +31-30 230 0713 Fax: +31-30 230 4423 E-mail: biologic@xs4all.nl http://www.platformbiologica.nl (Umbrella association for organic farmers, traders, retailers)

Stichting Max Havelaar Lucasbolwerk 7 3512 EG Utrecht Tel: +31-30 233 4602 Fax: +31-30 233 2992 E-mail: maxhavelaar@maxhavelaar.nl http:www.maxhavelaar.nl

RETAILERS
Albert Heijn Project Organic Products Proviancialeweg 11 Postbus 3000 1500 HA Zaandam Tel: +31-75 659 2218 Fax: +31-75 659 8644 E-mail: leontine.gast@corp.ah.nl De Nieuwe Weme BV Postbus 90 8440 AB Heerenveen Tel: +31-513 630 333 Fax: +31-513 650 170 DekaMarkt BV Postbus 86 1940 AB Beverwijk Tel: +31-251 276 600 Fax: +31-251 276 680 Konmar BV De Werf 13 2544 EH Den Haag Tel: +31-70 321 5121 Fax: +31-70 329 1174 NWO (De Natuurwinkel/Gimsel/ De Groene Winkel) Postbus 193 3840 AD Harderwijk Tel: +31-341 464 211 Fax: +31-341 464 204 E-mail: info.nl@denatuurwinkel.com Vomar Voordeelmarkt BV Postbus 217 1970 AE IJmuiden Tel: +31-255 563 700 Fax: +31-255 521 649

ORGANIC PROJECTS/CONSULTANCY
Agriterra Willemsplein 44 6811 KD Arnhem Tel: +31-26 445 5445 (Consultancy/development of organic projects)

Agro Eco Consultancy Postbus 176 3970 AD Driebergen Tel: +31-343 536 137 Fax: +31-343 531 700 E-mail: agroeco@antenna.nl http://www.agroeco.nl/agroeco/ (Organic agriculture consultants)

Koppert BV Veilingweg 17 2651 BE Berkel-En-Roderijs Tel: +31-10 514 0444 Fax: +31-10 514 5203 E-mail: info@koppert.nl (Supplier of biological systems)

LEI-DLO Agricultural Economics Research Institute Postbus 29703 2502 LS The Hague Tel: +31-70 330 8341 Fax: +31-70 361 5624 E-mail: kl.zimmerman@lei.dlo.nl

Annex II

Countries in which SKAL carries out organic inspection services

Belgium Bulgaria Costa Rica Cyprus Denmark Ethiopia France Germany Greece Hungary

India Indonesia Italy Netherlands Pakistan Paraguay Peru Poland Slovakia Sri Lanka

Switzerland The former Yugoslav Republic of Macedonia Turkey Uganda Ukraine United States United Kingdom Viet Nam Yugoslavia

Annex III

Specifications of Euroherb Bio BV

Product designation Article code Certification Trade name Botanical name Product description

PEPPERCORNS BLACK/ZWARTE PEPER KORREL 180231 EKO (SKAL) Piperis nigri fructus Piper nigrum L. Dried, spherical fruits, with a diameter of 2-3 mm. The fruits are harvested before they have fully ripened. They are spherical and wrinkled, black or brown, and 2-3 mm in diameter. Smell and taste are typically aromatic and pure.

Purity

The product has to meet EC regulation 2092/91 concerning organic agricultural production in every respect. The product has not been given any radiation nor has it been grown from DNA-manipulated seed. The product is unrestricted marketable according to European Food Law. This excludes the presence of visible and invisible contaminations. To be qualified for the Deutsche Arzneibuch-quality, the monography of DAB 1996, DAC or the Standard requirements should be met or surpassed in all aspects. Microbiology and aflatoxin: according to requirements by law (see supplements). If the maximum values are exceeded, the product will lose its marketability.

Pesticides Heavy metals Additives Aromatics Detergent Moisture content Total ashes/AIA Essential oil Stems Other (parts of) plants

The product must be free of pesticide residues. Exceptions are regulated in the supplements. Lead, cadmium and mercury: according to requirements by law (see supplements). If the maximum values are exceeded the product is no longer marketable. None None None Maximum 10% Maximum 7% (ISO,WW)/maximum 2% (WW) Minimum 2% (ESA) None Maximum 1% (ESA)

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SUPPLEMENT: LIMITING VALUES FOR HERBS AND SPICES


Bundesgesundheitsblatt Nr. 3 Aerobic plate count Anaerobic plate count Escherichia coli Staphylococcus aureus Bacillus cereus Clostridium Yeasts and fungi Salmonella/25g Aflat. Verordn. (Anlage zu 1en 2) Stand 06-11-90 (German) B1 B2 G1 G2 B1, B2 , G1 , G2 BGVV; Richtwerte fr Schadstoffe in Lebensmitteln, BGB 5-96 (German) Cd Pb Hg Guide value (CFU/g) 1.0 x 106 1.0 x 104 1.0 x 102 1.0 x 104 1.0 x 104 1.0 x 105 negative Detection limit (g/kg) 0.1 0.1 0.15 0.1 Maximum value (CFU/g) 1.0 x 10 7 1.0 x 10 3 1.0 x 10 5 1.0 x 10 5 1.0 x 10 6 negative Maximum value (g/kg) 2.0

Microbiology

Aflatoxin

4.0 * Maximum value (mg/kg) 0.10 2.00 0.05

Heavy metals

* Maximum values in mg/kg based on the fresh weight or in the offered form; in dried products based on the rehydrated product.

Annex IV

Tradin: certified organic products traded

GRAINS Amaranth Barley Buckwheat Buckwheat cracks Buckwheat flour Buckwheat hulled Buckwheat whole Corn Millet Oats Oats hulled Popcorn Quinoa Rye Wheat Wheat, durum RICE Basmati brown Basmati white Extra long Long-grain Pre-cooked Red Round Sweet White Wild FLOUR/STARCH Barley flakes Carob powder Cheese powder full fat Cheese powder low fat Corn flakes Corn semolina Corn starch Demineralized whey powder Milk powder Oat flakes Potato starch Rice flakes Rye flakes Soy flour enzymatic Soy flour toasted Soya granulate Wheat flakes Wheat flour 100% Wheat flour 70% Whey powder SEEDS Alfalfa

Brown flax Cress Fenugreek Mustard Mustard, oriental Mustard, yellow Poppy Pumpkin Safflower Sesame Sesame, hulled Sunflower, hulled Yellow flax NUTS Almonds Almonds flaked Cashew nuts Coconut grated Hazelnuts Peanuts Walnuts DRIED FRUITS Apricots Apricots tinned Banana Currants Dates chopped Figs Figs chopped Figs paste Mango Papaya Pineapple Raisins Raisins (Blue Thompson) Sultanas OIL-SEEDS Rape Safflower Sesame Soya beans Sunflower ANIMAL FEED OILCAKES Safflower cakes/pellets Sesame cakes Soya flour Sunflower cakes/pellets OILS Coconut

Olive Palm Safflower Sesame Sunflower Sunflower, deodorized BEANS Aduki beans Black beans Brown beans Chickpeas Flageolets Green lentils Green peas Kidney beans Lentils, Dupuis Mung beans Red lentils Soybeans Split beans White beans Yellow peas COFFEE/COCOA Carob powder Chocolate chunks, dark Chocolate drops, dark Chocolate powder, dark Chocolate powder, milk Cocoa beans Cocoa butter Cocoa liquor Cocoa powders Dark couverture Hazelnut paste Milk couverture Raw coffee SEASONINGS Alcohol vinegar 10 Cheese powder Cider vinegar Sea salt coarse Sea salt fine Shoyu Tamari Vanilla powder SWEETENERS Agave syrup Beet syrup

Cane sugar raw Glucose syrup Maple syrup BAKERY FAT Cream fat Pastry fat Pastry margarine DAIRY PRODUCTS Milk powder Whey powder Demineralized FRESH FRUIT Baby bananas Bananas Grapefruit Pineapple Red bananas FROZEN FRUIT AND CONCENTRATE Acarillo pure Apple concentrate Apples Apricot pure Apricots Banana pure Banana slices Bilberries Blackcurrants Blackberries Elderberries Frozen bananas Mango pure Orange concentrate Orange juice Papaya pure Passionfruit juice Peaches Pears Pineapple Pineapple juice Plums Raspberries Raspberry pure Redcurrants Rose-hips Sour cherries Strawberries Strawberry pure Tomato concentrate

Chapter 10 SWEDEN

Introduction
Sweden has an area of 450,000 square kilometres. Half of the land is cov ered with forest, and less than 10% is farm land. The country has a population of 8.9 million, with about 85% living in the south. The three largest cities Stockholm, Gteborg and Malm account for approximately 30% of the total population. Since 1990, the popu la tion has grown by 280,000 (+3.3%), including a sub stan tial number of immi grants. Since 1995, Sweden has been a full member of the Euro pean Union. Its share in the EUs popu la tion is 2.3%, which means that it is one of the Unions smaller national markets. However, the Nordic countries Denmark, Norway, Finland, Iceland as well as Sweden are increas ingly regarded as a home market for com pa nies in the Swedish food trade and industry. These coun tries have a total of 23.5 mil lion inhabitants.

Supply and demand


The lack of official data makes it difficult to give exact figures on the market for organic products. Nevertheless, an attempt has been made in this chapter to pro vide an esti mate of market size, mainly based on information from trade sources. These estimates, which cover direct consumption in both the retail and restaurant sectors, are given in table 10.1. As shown, con sump tion of organic foods amounted in 1997 to roughly 50,000 tons in volume and SKr 1,000 mil lion in value ($130 mil lion). Con sump tion is at present dominated by dairy prod ucts and fresh pro duce, which together account for about 70% of the volume and 65% of the value of the market. The market share of organic products has not yet reached 1% of total food sales. In 1997, the esti mated shares were 0.6% by value and 0.7% by volume. It should be noted that these figures cover all con sump tion of food and bev erage in both the retail and restaurant sectors, including consumption of product groups in which no organic items are cur rently avail able. In the market for organic prod ucts, the largest shares were taken by dairy prod ucts and fats (more than 2% by value), fresh produce (1%) and coffee, tea and cacao (1.1%). The bulk of the organic prod ucts mar keted in Sweden is cer ti fied by KRAV, the Swedish Organic Agri cul ture Association. At present about 2,200 food products carry the KRAV certification symbol; of these prod ucts, around 10% are imported. In 1997, 200 new KRAV prod ucts were intro duced into the market.

Domestic production
Sweden has a comparatively large area of organic farmlands. In 1997, about 205,000 hectares of farmland received environmental support from EU and national authorities; this area is equivalent to 7.3% of the coun trys total farm land. A gov ern ment

CHAPTER 10 SWEDEN

223

Table 10.1

Sweden: consumption of organic foods, by volume and by value, 1997 Volume (tons) Value (SKr million) Total
1 000 500 150 50 70 100 70 50 10

Product group Total


Total of which: Dairy products and fats a/ Fresh fruits and vegetables Processed fruits and vegetables Cereal and bread products b/ Meat and cured meats Fish and crustaceans Coffee, tea and cacao Other food products c/ Beverages d/ 50 000 29 000 11 000 2 000 4 000 1 500 800 1 500 200

% share
100 58 22 4 8 3 0 2 3 0

% share
100 50 15 5 7 10 0 7 5 1

fluid milk, which amounted to 23,000 tons in 1997, or 3% - 4% of the total fluid milk output. In addition, small quantities of organic yoghurt, cream, butter, hard cheese and dried milk are produced. The dairies are supplied by about 350 KRAV-certified dairy farms. In 1997, these farms delivered approximately 62,000 tons of organic milk to the dairies, which make up 2.4% of all milk deliv eries. The aim is to raise this share to 5% by the year 2000. The Swedish dairy industry is dominated by five farmer-owned cooperatives. Of these Arla is the largest, with about 60% of both dairy production and the market. The dairy cooperatives are also the leading pro ducers of juices and nec tars.

Source: Fox Research, based on trade sources. a/ b/ c/ d/ Including eggs. Including rice and pasta. Ice-cream, chocolate, confectionery, sauces, sugar, spices, salt and honey. Mineral water, soft drinks, beer, wine and spirits.

Meat
goal is that by the year 2000, 10% of the farmlands should be using organic methods. According to Swedish regu la tions, the output of these farm lands may be mar keted or sold as organic only if pro duc tion has been cer ti fied by either one of the two official national organizations controlling organic farming: KRAV and the Swedish Demeter Association. KRAV is the dominant control organization. The area under KRAV-controlled organic farming amounted to 118,000 hec tares in 1997, cor re sponding to 3.4% of the total farmland. Most of this land was used for growing animal feed. The areas under various other organic crops, total ling 33,000 hec tares, were dis trib uted as fol lows: cereals 30,000 hec tares; vegetables and fruits 2,000 hectares; and oil plants 1,000 hec tares. In total, KRAV had 3,000 affili ated farms. Of these, there were 2,746 plant cultivators; 1,126 livestock farmers; 350 milk producers; 67 egg producers; 70 bee-keepers; 30 mushroom growers; and 162 green house pro ducers. Domestic production of organic meat and cured meats is not well devel oped. Pro duc tion in 1997 can be esti mated at about 1,500 tons, which means that just about 0.2% of all cattle, pig and lamb slaughtering is organic. The market demand is far bigger: it is thought that pro duc tion of organic cattle and lamb needs to double and that of organic pigs should rise at least ten fold. The main sup plier of organic beef, pork and lamb meat is Swedish Meats, a newly formed meat-processing company owned by the countrys large slaughtering cooperatives. Swedish Meats and its marketing subsidiary, Scan Foods, control about 80% of the Swedish market for beef, pork and lamb. Organic meat prod ucts are also sup plied by Ekoktt (EcoMeat). The currently small share of organic meat is mainly due to its low availability and high price differential. The leading coop era tives within Swedish Meats report that the goal for the near future is to increase pro duction of cattle from 5,000 to 7,500 head, pigs from 5,000 to 20,000 head, and lamb from 5,000-6,000 to 10,000 head. As a consequence, the share of organic meat will undoubt edly rise within the next few years. Domestic production of poultry products is dominated by Scandinavian Poultry, which has processing activities in both Sweden and Denmark. Organic chicken was introduced into the Swedish market in 1997, but sales remain insig nifi cant.

Dairy products
The dairy industry is by far the most important domestic pro ducer of organic foods. Since 1990, the output of organic dairy prod ucts has risen by around 30% yearly. Current production mainly focuses on

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Eggs
Of Swe dens 5.7 mil lion laying hens, about 2.5% or 140,000 are organic. The market requires at least twice that number. There is also considerable consumer interest in eggs from farms using alternative production methods. The so-called scratch eggs (produced by laying hens that can scratch freely indoors or outdoors) have already gained over 20% of the total egg market.

products are green peppers, lettuce, and herbs and spices. It is esti mated that organic toma toes account for 5% of all toma toes pro duced in Sweden.

Other products
The other domestic organic prod ucts con sist mainly of sugar and, to a lesser extent, oil-seeds. The cultivation of organic sugar beets is carried out by some 100 farmers. In 1998, they should have produced about 2,000 tons of sugar, equivalent to 0.6% of the coun trys total sugar pro duc tion.

Cereals
Production of organic cereals amounted to about 20,000 tons in 1997, of which 40% was exported. Of the pro duc tion, about half con sisted of wheat and the other half of barley, oats, rye and yellow split peas. The main domestic users are flour mills and animal feed manu fac turers. A small pro por tion of the peas is also dis trib uted to food packers and food manu fac turers. Mills and animal-feed manufacturers import certain quali ties of cereals, mainly those not pro duced in the country. The output of organic flour was esti mated at 7,000 8,000 tons in 1997, equivalent to a market share of about 1%. However, this share has certainly risen since: for 1998, Juvel, the main producer of organic flour, had fore cast a dou bling of its own output from 5,000 to 10,000 tons. Organic flour is produced for both consumers and manufacturers of organic breakfast cereals, bread, pasta, baby food, gruel, etc. With increased avail ability of organic flour, the output of these food items should be sub stan tially higher in the future.

Processed foods
Sweden is a fairly large manufacturer of processed organic products. These include canned fruits and vege ta bles; juices; fruit pre serves (jams, mar ma lade, fruit syrups); dried vegetables (peas and beans); frozen products (vegetables, fruits, berries, readyto-eat meals, ice- cream, etc.); baby food; break fast cereals, gruel and porridge; plain bread, biscuits, crackers, crisp bread; herbs and spices; potato snacks; tomato ketchup and other sauces; roasted coffee; and beer. The list is expanding fast and will undoubt edly cover many more food product groups in the near future.

Exports
Organic foods account for only a fraction of Swedens food exports. The main organic export products are cereals such as oats and malt for pro ducing beer. The other impor tant export items are jams and frozen ber ries. Organic beef is a new export product. Production of organic pork for export to other EU coun tries has started.

Vegetables, fruits and berries


About 1,700 hectares were planted to organic vege ta bles in 1997, of which two- thirds were devoted to pota toes and car rots. Other impor tant prod ucts are beetroot, onions and cabbage. Owing to climatic con di tions, prod ucts such as toma toes and cucumber are dif fi cult to grow organi cally in Sweden. Organic fruits and berries were produced on about 200 hec tares. Half were planted to straw ber ries. Organic greenhouse production covered 56,000 square metres in 1997, of which 90% was devoted to tomatoes and cucumber. The other greenhouse

Imports
Sweden is more or less self- sufficient in basic foods like dairy prod ucts, meat, bread, cereals and sugar. Its primary imports in the food sector con sist of goods that are not pro duced domes ti cally (such as citrus and tropical fruits, nuts, green coffee, spices and wine) and those that are pro duced only part of the year (e.g. vegetables, deciduous fruits and ber ries). Imports of these items depend on how much local produce is available or when importing is more favourable. Sweden has a significant import trade in packaged prod ucts, i.e. canned, dried and frozen foods. All in all, imports account for an estimated 20% of the overall Swedish food market.

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Market requirements by major product group


Since organic foods are not recorded separately in the trade statistics, it is impossible to give accurate figures on imports. However, it is estimated that about 200 different organic food products were imported into Sweden in 1997, mainly within the following product groups:
q q q q

Mali), pineapple (from Brazil) and strawberries (e.g. from Israel). Newly introduced products include plums, nectarines, peaches, melons, grapes and papaya as well as several species of berries. Organic bananas were introduced into the market in 1994. In 1997, imports increased 400% to 900 tons; a rise to 1,500 tons was expected in 1998,which would have been equal to about 1% of the overall market for bananas. As supplies increase and prices go down, this share could reach at least the 5% mark in the near future. Owing to inadequate supplies, imports of organic citrus fruits remain insignificant, well below 1% of the total volume. The current product range consists of oranges, grapefruit and lemons. There is a demand for other citrus fruits, especially clementines and satsumas. Since citrus fruits have a big market in Sweden, fruit importers generally regard organic citrus fruit as having a large potential. Interest in tropical fruit is growing. Consumers are curious about new and exotic products, especially if they are sold at moderate prices so that they can be sampled at not too high a cost. Trade sources are therefore certain that there is a market potential for organic tropical fruits in Sweden. Another product in demand is avocado. The market share of organic avocado has already reached 20% in one of the leading supermarkets in central Stockholm. This figure would have been higher had there been more supplies. Consumption of organic vegetables amounted to an estimated 9,000 tons in 1997, equivalent to 1% of all vegetables consumed. In terms of value, the market was worth SKr 100 million ($13 million) or 1.3% of the total. Potatoes had about half of the market for organic vegetables in 1997, i.e. 4,500 tons. This means that organic potatoes have obtained 3% - 4% of the overall market for fresh potatoes. Organic carrots are also important, and they are thought to have attained a share of 10% of the entire market for carrots. Both these items are mainly supplied by domestic growers. The only real potential for suppliers outside Sweden probably arises during April and June, just before the domestic harvest begins.

Fresh fruits and vegetables; Dried fruits and vegetables; Packaged foods;

Raw materials and ingredients for the food industry (mainly green coffee, herbs and spices, cereals, and vegetable oils and fats). Fresh produce and green coffee account for the largest share in imports, both by volume and by value.

Fresh fruits and vegetables


The total Swedish market for organic fresh fruits and vegetables amounted to about 11,000 tons or SKr 150 million in 1997 ($20 million). This means that organic fresh produce had a market share of 0.8% by volume and 1.0% by value. Consumption of organic fruits amounted to around 2,000 tons in 1997, equivalent to a market share of 0.4%. Consumption by value amounted to about SKr 50 million ($6.5 million), or 0.6% of the market. The Swedish market for organic fresh fruits is fairly new, which also explains why the market share is still below 1%. However, fruit importers say that if more supplies were available, this share would rise substantially. In order to expand the market for organic fruit, more suppliers are needed, especially those that can offer products during more than one season. Most of the fruits consumed are imported. The largest import of organic fruits consists of bananas from the Dominican Republic. Among the other import items are oranges, grapefruit and lemons (from Israel), apples (from France, Italy, Argentina, Chile), peaches (from France), avocado (from Israel, South Africa), kiwi fruit (from New Zealand, Italy), mango (from

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Among the other important organic vegetables and herbs are tomatoes, cucumber, lettuce, onion, cabbage, mushrooms, paprika and fresh herbs. There are no official figures available, but trade sources estimate current imports of these products at 1,000 1,500 tons per year. The domestic growing season for vegetables generally starts in June and ends in August or September. During this period it is normally difficult for foreign suppliers to compete with domestic growers. This is especially true for items such as lettuce, cucumber, cabbage and onions. Owing to climatic conditions, organic tomatoes are difficult to grow economically in Sweden. This item is therefore imported the year round. By contrast, problems of shelf-life make organic products like lettuce, cabbage, celery, asparagus and eggplant (aubergines) difficult to import into Sweden. The best market potential is for vegetables and herbs that are not produced in the country, such as paprika and artichokes, and for products that are not yet imported. There is growing demand for fresh organic herbs (i.e. basil, thyme, tarragon, cori ander, savory, mar joram, oregano and rose mary), as well as consumer- packed mixed and sliced let tuce. The market for alter na tives to pota toes, such as sweet pota toes and cas sava, has expanded in recent years, which means that there should also be a market for the organic forms of these items.

trade estimates, consumption amounted to just 2,000 tons or SKr 50 million in 1997. The Swedish market for dried organic fruits and vegetables is currently modest. Of the market, (estimated at around 100 tons in 1997), household con sump tion accounts for 70% and indus trial use for 30%. Importers pre dict that as sup plies increase, the market for dried organic fruit and vege table prod ucts will grow sub stan tially. All dried fruits consumed in Sweden are imported. Of these, the most important are raisins, dates, figs, plums, apricots, apple flakes and mixtures of dried fruits. There is a demand for other dried organic products such as citrus fruits, bananas, papaya, mango and other tropical fruit, either for use in cereal mixtures, diary products or to be sold as sweets. A range of imported organic nuts is also consumed, including almonds, cashews, hazel-nuts, walnut kernels and macadamia nuts. The present range of organic dried vegetables mainly consists of domestically grown yellow split peas and brown beans. There are also imports of chickpeas; dried kidney, mung, aduki and other beans; lentils; onion and garlic products; desiccated coconut; and soy products (including roasted soy beans). The market for other canned and preserved fruits and vegetable products amounted to about 700 tons (SKr 20 million or $2.6 million) in 1997. Organic canned fruits are rare and are much sought after. The most popular conventional items are pineapples, peaches, pears and mixed fruits, which means there should also be a market for their organic versions. Since all canned fruits consumed are imported, there is an obvious potential here.

Processed fruits and vegetables


The market for processed organic fruit and vegetable products is in general little developed. According to
Table 10.2

Sweden: market for processed fruits and vegetables, by quantity and by value, 1997 QUANTITY (tons) VALUE (SKr million) % share
0.4 0.7 0.3 0.3 0.5 0.5

Product group
Total of which: Dried fruits and vegetables Canned fruits and vegetables a/ Juice and fruit beverages Frozen fruits and vegetables Potato flour, chips, etc. b/

Total
515 100 13 700 231 300 178 200 76 700 20 600

of which: Organic Quantity


2 000 100 700 500 400 100

Value
11 150 320 5 680 2 220 1 700 1 230

of which: Organic Value


50 5 20 10 10 5

% share
0.5 0.6 0.4 0.5 0.6 0.4

Source: Fox Research, information from trade sources. a/ Including jams, marmalades, vegetable soups, instant soups and bouillons. b/ Including instant mashed potatoes and turnips, and potato starch.

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The main organic fruit preserves are jams, marmalades and apple sauce. Jam, an important ingredient in many Swedish dishes, is made mostly from domestically grown berries, such as cowberries, strawberries, raspberries, blueberries, blackcurrants and cherries. The share of imports of marmalades is far larger, since they are mostly based on fruits not grown in Sweden. Canned vegetables are mostly imported. The main import items are tomato products, mushrooms, peas, beans, yellow corn, asparagus, olives and capsicum. However, preserved vegetables, such as cucumber and beetroot, are mainly supplied by domestic manufacturers. The market for organic juice and other beverages made from fruits and vegetables amounted to an estimated 500 tons (SKr 10 million) in 1997. These correspond to market shares of 0.3% by volume and 0.5% by value. The organic juices found in Sweden today are mostly made from carrots, beetroot, mixed vegetables and cereals. This means that there should be a large demand for other and more common types of juices, such as orange, grapefruit, apple, lemon, apricot, grape and mixed juices (like apple and mango, apple and carrot). Almost all fruit juices and nectars are imported in bulk and are repacked for the consumer market by domestic manufacturers. Fruit syrup (which is diluted by the consumer with tap water) is one of the most popular Swedish beverages. The import share is rather low, since a large part of the supply is based on domestic apples or berries. However, fruit squash produced from imported citrus fruits is also consumed. The market for frozen organic vegetables amounted to about 400 tons in 1997. The range includes potato products, spinach, cauliflower, broccoli, peas, haricot beans, yellow corn, carrots, leeks and certain vegetable mixtures. Very few products (cauliflower, mixed vegetables) are at present imported, and this only from Denmark. The range of organic frozen fruit on the market is so far not extensive and consists of just a few products, mainly domestically grown berries. However, organic frozen fruits and berries are used by the food industry for making jams and fruit drinks. Organic potato snacks and similar products have been

on the market since 1995. Potato-based products are in general marketed by domestic manufacturers, which means that it is a difficult product area for exporters to enter. However, snacks based on other raw materials (such as apple, corn, plantain and cassava) should have a much bigger potential.

Cereal and bakery products


Cereal products, such as flour, breakfast cereals, rice, pasta and bread, have a large share of the Swedish diet. However, even though there is an abundance of organic cereal products, their combined market share is still rather low (about 0.5%), partly because of their high prices. Wheat, rye, oats and barley are the main cereals used by domestic flour mills and animal feed manufacturers. Most supplies are of domestic origin, even though imports have increased in recent years. The main import suppliers are Canada, the United States and Hungary. Manufacturers of breakfast cereals also use other processed grains. There is a growing consumer interest in the various varieties of flour and grains, such as quinoa, polenta (maize semolina), couscous, spelt, bulgur and amaranth. Most of the trade is carried out by a specialized company, Eco Trade, which in 1997 handled about 20,000 tons of organic cereals. The company foresees continued demand for basic organic cereals and for other grains, especially if they can claim a high nutritional value. The market for organic bread has grown substantially in recent years; today more than 50 different types of bread are sold in Sweden. The current product range mainly consists of Swedish types of soft and crisp bread. There is also a demand for biscuits (including digestive biscuits) and cookies. Examples of imported bread products are rice cakes and frozen plain bread (baguettes and other products). Rice and pasta products have a rapidly expanding market. Organic rice is imported both pack aged and in bulk from sev eral coun tries, including Italy, Thailand and the United States. The most com monly used types are: long- grain white pol ished rice for boiling, and round- grain white pol ished rice for gruel and desserts. Other types are also becoming popular, such as aviori rice (Italian), jas mine rice and bas mati rice, as well as pre-dried, fast-cooking rice. Brown rice is also sold. Roasted, round-grain hulled rice is a popular ingre dient in break fast cereals.

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There are several types of organic pasta on the market, such as spaghetti, lasagne and noodles. About 60% of the supplies are normally imported.

increased sales in recent years. White, red, and balsam vinegar are imported. Other organic condiments such as salt, mustard, dressings, and ketchup and other sauces, are much in demand. Among recent organic introductions are sesame salt, chilli sauce, pesto and rucola sauces, soy sauce, sesame paste (tahini) and tofu products. The Swedes are among the three highest per capita consumers of herbs and spices within the European Union. Two domestic manufacturers Nordfalks (Santa Maria brand) and Kraft (Kockens brand) have 80% to 85% of the market. Both companies have recently introduced organic varieties of some of the more popular articles. Additionally, the domestic food industry consumes an increasing amount of herbs and spices. Of special interest are manufacturers of ethnic foods (e.g. Nordfalks, one of Europes largest exporters of Mexican specialities), which require items such as coriander, ginger, cinnamon, cloves and pepper. Sweden is an obvious potential market for exporters of organic herbs and spices.

Coffee and tea


Sweden has one of the highest per capita consumption rates for coffee in the world. The countrys roasters use only the highest qualities of arabica coffee. Practically all of them offer organic coffee, some under fair trade labels. Sales of organic coffee have followed a highly positive trend since 1992, when it was first introduced. Sales in 1997 are estimated to have reached about 900 tons (equivalent to 1.2% -1.3% of the overall coffee market), valued at between SKr 80 million and SKr 90 million. Inadequate supplies of organic coffee of high quality are a big obstacle to the future growth of the organic coffee market. Roasted coffee is mainly supplied by domestic roasters, but some quantities are obtained from roasters in Denmark and the Netherlands. The domestic roasters import green coffee from many countries, of which the most important are Mexico, Nicaragua, Honduras, Guatemala, Costa Rica, Colombia, Peru, Brazil and the Dominican Republic. Total imports of conventional tea have in recent years amounted to around 3,000 tons per year. Even though organic tea from Sri Lanka and India has been on the market for a few years, the market share remains small, under 1%. Flavoured and herbal varieties of organic tea have recently been introduced.

Sugar and syrup


Organic sugar, obtained from sugar beets grown in Sweden, has been on the market for only a short period. So far, the market response has been highly positive, partly because the difference between the prices of organic and conventional sugar is small. Some quantities of non-refined organic cane sugar are obtained from Paraguay and Madagascar; raw syrup is also imported. However, import volumes are still rather low.

Vegetable oils, vinegar, and condiments, spices and herbs


The current range of organic vegetable oils and fats includes olive oil and sunflower oil, as well as margarine and palm fat for baking. Several types of oil-seeds are imported, especially linseed. New products are constantly added. One example is a new series of sunflower oils flavoured with herbs (basil, thyme, tarragon and garlic). There is a demand for organic oils (mostly soy oil, sunflower oil and rapeseed oil) for the domestic oils and fats industry, which is dominated by Karlshamns AB. Organic oil-seeds (e.g. rapeseed), copra and shea are also imported. Vinegar is another product group which has seen

Beverages
Organic products have not penetrated the beverage market (for mineral water, soft drinks, beer, wine and spirits) to any significant extent. Even where organic products exist, the quantities sold are almost negligible. Nevertheless, the trade believes that if the tastes are up to standard and the price differential is kept to a minimum (i.e. 10% - 15%), it should be possible to market organic beverages on a much larger scale, especially beer and wine. A domestic brewery has entered into a joint venture with a retailer to market organic beer in

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supermarkets. Organic beer is brewed from organic malt; conventional hops are used as organic hops are not readily available. Sweden currently imports only one type of organic beer, and this from Germany. Five organic varieties of wine (three reds and two whites) are marketed in Sweden. Four are of French origin and one is German. The first organic liquor on the market was introduced at the end of 1998: this is a Swedish type of flavoured vodka made from organically grown domestic wheat. It is interesting to note that this product is marketed mainly as a Chateau Aquavit of the highest quality, and not primarily as an organic product. Among the other organic beverage products in the market of which many are imported are fruitbased still drinks and several alternative products, such as soy- and oat- based bev er ages.

therefore concentrate on complementary products, such as biscuits and meat snacks, which are normally imported. The domestic animal feed industry imports large amounts of protein feed (mainly soy-meal and fish-meal) as well as molasses feed. Some cereals are also imported. Owing to the planned expansion of domestic production of organic dairy and meat products, there is an apparent need for increased imports of organic raw materials for the domestic manufacture of organic animal feeds. Organic honey is today mostly of Swedish origin, but since domestic supplies are not sufficient to meet the growing demand, imports have become rather significant. There is also an expanding market for honey flavours not produced within the country, such as orange honey. Cacao-based products have a comparatively large market in Sweden and the country is also a considerable exporter of chocolate bars and other cacao-based products. However, owing to inadequate supplies of organic cacao, only a few imported organic chocolate and cacao-powder products are sold locally. The food industry imports small quantities of organic cocoa powder and butter. A direct import trade in organic cacao with the Dominican Republic has recently begun. There is no current market for organic confectionery. But since some products within this category such as chewing gum and cough drops can be associated with improved health, interest may grow in the future. Organic baby food products have attained a large market share, as high as 10% for certain products. Nonetheless, since baby food products are almost entirely supplied by domestic manufacturers, this is a very difficult product area for foreign suppliers to enter. There are currently no certified organic fish products in the Swedish market. However, KRAV has started to implement rules for the certification of farmed and wild fish and crustaceans. Since fish and crustaceans have a fairly large share in Swedish food consumption, their organic forms should gain a substantial part of this market in the near future.

Other product groups


The other organic product groups marketed in Sweden primarily comprise dairy, meat and animal feed products, as well as honey, baby food, and cacao-based products and confectionery. With the exception of cheese and of yoghurt to some extent, the dairy market is entirely supplied by domestic dairies. Since about 15% of the cheese marketed in Sweden consists of imports, there is an obvious potential here for exporters of organic cheeses. It should be noted that, while the Swedes have a preference for mild hard cheeses, soft, moulded and fermented cheeses have in recent years also become popular. Foreign meat products are difficult to market in Sweden, and items of organic origin are no exception. Nevertheless, since domestic production is still rather undeveloped, there should be a market potential for certain imported specialities, such as salami, spicy or flavoured sausages, sliced delicatessen products, and French pts. Organic dog and cat food have been on the market for a very short time, but sales are highly promising. However, all organic products are so far supplied by domestic manufacturers. Furthermore, dry dog food, the largest organic category, is mostly based on domestic cereals and imported proteins. Foreign suppliers of organic cat and dog food should

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Market characteristics
Market segments
There are three market segments for imported food products in Sweden: the retail sector, the catering sector, and the domestic food manufacturing industry. The retail sector accounts for 80% of direct food consumption. Two subsectors can be identified: general grocery stores and specialized food stores (including health food stores and ethnic stores). A market characteristic is that organic foods are sold predominantly through supermarkets and other general grocery stores. Most of the larger grocery stores therefore have a wide range of organic foods in their selections. The retail market is dominated by three integrated retail and wholesale groups ICA, KF and D&D. These have 70% of the food retail sector. All three groups promote organic and other environmentally oriented products. The health food sector comprises 800 stores. Even if the specialized health food stores do sell organic foods, they increasingly concentrate on nutritional products, supplements and vitamins. Furthermore, as a rule, health food stores do not sell fresh produce and dairy or meat products, a fact that also explains their small share in organic food sales. There are four national chains within the health food sector, Life (which holds about 30% of the market), Naturapoteket, Hlsokraft and Hlsokost fr Alla. The catering sector accounts for 20% of direct food consumption in Sweden. However, organic food products remain uncommon on menus. In the larger cities, a few restaurants specialize in organic and health food. Some municipal and regional institutions (such as school canteens and day-care centres) have also started to provide organic menus. The domestic food manufacturers produce about 80% of the foods consumed in Sweden and are therefore an important target for foreign suppliers of organic foods. These manufacturers have been quick to adapt to new consumer trends, and offer both ethnic and organic food items.

Market trends
According to several market studies, two out of three Swedes say they often purchase environmentally friendly products, including foodstuff. About 40% buy organic foods from time to time, while 15% do it on a more regular basis. Surveys have also shown that organic foods are especially preferred by young people (aged 15-30 years) and families with young children. Another characteristic is that buyers of organic foods are mainly found in the large metropolitan areas and in university towns. In the Greater Stockholm area, with about 1.5 million inhabitants, the largest fruit distributor reports that sales of organic fruits and vegetables now account for 5% of its total sales. A general problem with organic foods is the price differential with the corresponding conventional foods; this is especially true of newly introduced organic food items. Even though a few organic foods are priced only slightly more than the conventional varieties, the price difference is generally between 20% to 40% and often higher. To enlarge the market for organic foods, the price difference should not exceed 10%, according to trade analysts. Here are some examples of the price differential for various products: beef 20% - 25%, milk 15% - 20%, wheat flour 70%, fresh potatoes 15% -50%, muesli (breakfast cereals) 15% - 25%, and coffee 0% - 20%. It is generally believed that environmental awareness among consumers will continue to be high. With increased availability of organic foods, which will lead to lower unit prices, the market for organic foods should grow substantially. It should also be noted that three of Swedens largest supermarket chains ICA, Grna Konsum (KF) and Hemkp (D&D) have all set sales targets for organic foods, which if implemented, will expand the market four to five times. This means that within the near future, organic foods could account for 4% - 5% of total food consumption in Sweden.

Sales promotion and marketing


Even though food manufacturers and retail chains advertise their awareness of environmental issues and

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their commitment to developing the market for organic foods, individual organic food items are in general not actively promoted. One of the main reasons is the scarcity and irregular availability of certified organic products. Sales promotion and marketing activities include campaigns offering goods at reduced retail prices, which usually raises sales of the promoted products four- to fivefold. It is also a fact that when specific organic products are promoted, sales rise even higher. This means that

active marketing efforts for a particular organic product should be undertaken only when the parties involved can be absolutely sure that problems of availability and reliability of deliveries have been dealt with. It is clear that when active marketing of specific organic food items becomes more common, it will substantially enlarge the market for organic food products as a whole.

Market access
Food laws
EU regulations on food labelling, nutritional infor mation, additives and food con trol are appli cable in Sweden, which is an EU member. How ever, during a transitional period, some Swedish regulations may still be applicable. Additional information can be obtained from the National Food Administration (whose address is given in the annex to this chapter). In order to be imported as organic products into Sweden or to be traded as such, these products have to be certified by a control organization. KRAV, which is owned by parties involved in the production and distribution of organic products i.e. growers, food manufacturers, importers, wholesalers and retailers issues the only organic label recognized by the Swedish retail trade. If other labels are used, they must be accepted by KRAV or comply with EU regulations. However, a few import ers also sell products that are certified by other control organizations. These include SKAL, FVO, Ovana, Ecocert and EKO-BCS. cur rent mem bers are drawn from the farming, trade, processing, animal protection, environmental and con sumer sec tors. The objectives of KRAV are: to formulate standards for organic production; stimulate the development of methods of organic farming; inspect and certify organic production; disseminate information on organic production; and promote organic production. All pro ducers that are mem bers of, and inspected by, KRAV are authorized to mark their organic products with the KRAV symbol. KRAV has the right to inspect the handling of these products at all stages, from cultivation to the retail trade. The KRAV logo indicates, for instance, that vegetable products have been grown without any chemical pesticides or fertilizers, that animal products come from animals that are well taken care of and have free outdoor access, and that pro duc tion does not involve the use of genetically modified organisms. To guarantee these, KRAV inspectors regularly inspect farms, shops, processing facilities, restaurants, etc. KRAV is an active member of IFOAM. In addition to crop production and animal husbandry, KRAV certifies the following: processing, distribution and handling, apiculture, cultivation of wild berries and mushrooms, import operations, shops, restaurants, textiles, and the use of production inputs. Only KRAV-accepted import products can be sold as KRAV certified. KRAV works closely with the IFOAM accreditation system in this respect. These products should have labels which clearly state the country of origin. Products that are sold unpacked should have the following information on the covering invoices and delivery notes: country of

Swedish control organizations


In line with EU regulations, the Swedish Parliament has designated two organic organizations, KRAV (the Swedish Organic Agriculture Association) and the Swedish Demeter Association, as official inspection bodies. KRAV, the domi nant con trol organi za tion. KRAV is a cooperative society consisting of 22 member organizations. Any company or organization with nation wide cov erage and with an interest in obtaining KRAV certification may become a member. Its

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origin, name of the control body, and indication of approval by KRAV. Import products may contain additives made from KRAV-certified raw materials and using KRAVcertified processes. Food additives such as sweet eners, col ouring, pre serva tives, anti oxi dants, emul sifiers, thickening agents and stabilizers must be approved by both the National Food Administration and by KRAV. A list of approved additives is published annually. Wrapping and packaging materials

may not contain preservatives, fungicides or other chemical agents. All wrap ping and pack aging materials should be envi ron mentally friendly. KRAV also inspects and cer ti fies for eign com pa nies which pro duce or package according to its stan dards or those of IFOAM. In addition, it may enter into collaboration agreements with foreign inspection bodies; the latter are evalu ated by KRAV, IFOAM or other third parties. These agreements are reviewed every other year.

Distribution channels
The Swedish distribution system for organic foods consists of three different channels: integrated retail and wholesale groups; importers, agents and wholesalers; and food and beverage manufacturers. ICAs own label for organic products. The ICA organic product range now includes fresh fruits and vegetables, fresh meat and cured meat products, deep-frozen products and packaged food products, such as flour and grains, yellow peas and crisp bread. About 50 new organic products were introduced in 1997. Even though many product groups reported large sales increases during the year (sales of organic fruits doubled and those of vegetables went up by 15%), the market share for organic products remains insignificant. The exceptions are carrots (which have a 10% market share) and baby food (7%). However, an important decision was taken in 1997 to raise to 10% by the year 2000 the proportion of ICA sales of organic products in the product areas where these products are available.

Integrated retail and wholesale groups


As mentioned earlier, the Swedish food trade is characterized by a relatively high degree of vertical integration between the wholesale and retail trade. No less than 70% of both the retail and wholesale market is dominated by three trade groups, all of which also import and distribute organic foods: ICA, KF and D&D.

ICA Group
The ICA Group is the largest retailer and wholesaler on the Swedish market for foods and other daily consumer items and holds about 35% of the market. In Sweden it has 2,100 independent retailers and is joint owner of ICA Handlarnas AB, which handles the Groups purchasing, distribution, marketing, retail development and financing operations. In early 1999, the Group merged with the Norwegian company Hakon. The new ICA Group has more than 4,000 food stores in Sweden, Norway and Denmark and is thus the largest retailing group in Scandinavia. Of the 2,100 Swedish stores, about 500 have been granted special ICA environmental status; they carry a wide assortment of environmental products. The objective is to increase the number to 750 by the year 2000. ICA also has about 100 stores that have been certified as ICA Environmental Stores. ICA has launched some 200 organic food products, of which 70 are marketed under the SUNDA brand,

KF Group
The KF Group, which consists of KF (the Swedish Cooperative Union) and 80 local retail cooperatives, holds about 20% of total sales in the food retail trade. KF started to market organic food products in 1990. Sales have increased rapidly since and are expected to reach SKr 400 million in 1998. This means that KF holds between 35% and 40% of the Swedish market for organic food products. The organic product range con sists of 350 prod ucts, of which 200 prod ucts are mar keted under KFs own brand for environmental friendly products, ngla mark. In 1997, sales of nglamark goods reached SKr 250 million ($52.5 million), corresponding to 1% of all food sales. During the two years to 1998, sales of nglamark prod ucts have risen by approxi mately 50% per year.

Most of these prod ucts are sold with the KRAV logo, with the excep tion of prod ucts not cov ered by organic regulations. Even though nglamark products are not priced higher than the equivalent conventional products, company policy dictates that products carrying the brand have to be as profitable as other brands. In 1998, organic prod ucts accounted for 1% of total sales by value, but KF expects this figure to rise to around 5% within the next few years. In order to reach this target, the nglamark selection has to expand strongly. The KF Group has 1,100 food stores in three retail formats: Grna Konsum super mar kets, Prix dis count stores, and Obs, B&W and Robin Hood hyper mar kets. Grna Konsum runs 450 stores, of which 200 are KRAV-certified to carry non-packaged fresh organic pro duce. Grna Konsum, Swe dens largest supermarket chain, holds 6% of the overall food retail market. Its share in the national organic market is far bigger at around 20%. In terms of value, its sales of organic foods reached SKr 200 mil lion in a recent year, equivalent to 2.5% of its total food sales; the goal is to raise this per centage to 10% by the end of 1999. Each retail chain within KF decides which assortment to carry. To benefit from economies of scale, all deci sions con cerning the ngla mark brands purchasing control, selection coordination, logistics, marketing and quality control are made cooperatively. It should be noted that KF imports only readypackaged goods. All fresh produce is imported by Saba Frukt & Grnt, which KF partly owns.

the Fauna brand. The brand is now used on around 20 products, including pasta, muesli, cornflakes, grains, rice, crisp bread, jam and preserved vegetable products. Importing of both organic and conventional products is carried out by D&D Unil, which coordinates its purchasing activities with United Nordic, a company co-owned by Dagrofa (Denmark), Unil (Norway) and Tuko Spar (Finland). The D&D chain with the largest assortment of organic products is Hemkp, owned by Axel Johnson. The chain has some 100 large supermarkets all over Sweden. Hemkp reports that in 1997 about 2.5% of its total food sales were organic. Its aim is to raise that figure to 10% by the year 2000.

Importers, agents and wholesalers


The two largest importers and wholesalers of fresh produce import organic products. Both companies are directly connected with the dominant retail groups. The importer and wholesaler Saba Frukt & Grnt holds about 50% of the Swedish market for fresh fruits, vegetables and flowers. About 60% of the com pany is owned by the American fruit and vegeta bles group Dole Food Com pany; the other owners are the D&D Group (25%) and KF (15%). The catering sector is one of its impor tant cus tomers. Saba imports bananas through two subsidiaries, Banan-Kompaniet (Chiquita) and Skandinaviska Bananimporten (Dole, Fyffes, etc.). Another Saba subsidiary is FTK in the Netherlands, one of Europes leading importers of tropical fruits. ICA Frukt & Grnt is part of the ICA Group and is the second largest importer and wholesaler of fresh fruits and vegetables in Sweden, of which it has a market share of about 30%. Its main customers are food stores within the ICA Group. It carries a large assortment of organic fresh produce. Biodynamiska Produkter (BP), another important company, is a specialist importer of organic products, both fresh and packaged. BP imports fresh produce from other EU countries and from other countries in Europe, Asia, Africa and Latin America. Besides supplying other wholesalers (including Saba and ICA), BP sells direct to supermarket chains and health food stores, as well as to the catering sector and the food manufacturing sector.

D&D Group
The D&D Group is a newly formed joint venture between the wholesaling and retailing group Axel Johnson and independent retailers. The Group, which started operations in early1999, now comprises both the wholesaling company and the retail group, which consists of 1,000 supermarkets and convenience stores. It has about 18% of the overall market. Dagab is the principal wholesaler for several retail chains within the D-Group (Vivo, Spar, etc.), the Hemkp chain, and convenience stores. However, fresh fruits and vegetables are mainly supplied by Saba Frukt & Grnt. Dagab started to market organic and environmental products in 1995 under

234

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BP has a large range of packaged products of which a substantial part is imported. The total range consists of more than 1,000 different organic products. Other companies importing fresh organic produce are Direkt Frukt & Grnt, Alt-Grnt and Samodlarna. Samodlarna is mainly a buying and marketing organization for domestic farmers and gardens but it also imports some products. In addition, the following companies trade in organic berries and mushrooms:
q q q q

Dagsmeja is a small specialized producer and importer of organic cereal and other products.
q

Ekoktt (EcoMeat) is owned by the cooperative Scan Group; it distributes and markets domestic organic meat products. In addi tion to the above, various agents are active in the market. Some of them are also importers, and deal mainly with either raw mate rials for the food industry or branded products, especially health foods and beverages. It should be noted that in addition to domestically based companies, a number of foreign groups operate in Sweden, mostly from Denmark and the Netherlands.

Norrfrys: wild berries; Olle Svensson: wild berries; BjrnMat: wild berries and wild mushrooms; Samodlarna: cultivated berries.

The catering sector


There are several specialized importers of packaged organic foods, of which the largest are Biodynamiska Produkter and Kung Markatta. Organic products are also imported by a large number of companies specializing in certain product groups. Some companies are described below.
q

Distribution to the catering sector is dominated by a few large and specialized catering wholesalers, which engage to varying degrees in the import of organic foods. The most important of these groups are:
q

Servera (D&D Group); Meny (ICA Group); Martin Olsson; Service Grossisterna.

Kung Markatta is a medium-sized wholesaler and importer. The company sells 800 categories of prod ucts (some of which are marketed under its own label) and has the largest assortment of KRAVlabeled prod ucts. It also markets produce carrying the fair trade label. About 60% of its sales are to the health food sector and 25% to super mar kets. Its sales to super mar kets consist mainly of pasta, dried fruit, rice, seeds, oils, soy prod ucts, herbs and spices, and coffee (which is also fair trade labelled). Its other customers are restau rants and food manu fac turers.
q

q q q

Food and beverage manufacturers


There are about 300 KRAV-certified domestic manufacturers producing organic food products. They include farmers cooperatives, large multinationals and family-owned companies, of which sev eral are small or medium- sized. A selected list of KRAV-certified manufacturers of organic foods and bev er ages is given below.
Products
Baby food Cereal and bread products

Torfolk Grd produces and imports fruit preserves, chilli, pesto and other sauces, tomato products, vinegar and wine, among other products.
q

Sackeus is an importer of organic foods and goods carrying the fair trade label, including coffee (Caf Organico), cacao, tea, peanut butter, honey and spices.
q

Companies
Semper, Nestl Cerealia (flour, cereals, plain bread), Juvel (flour, rice and plain bread), Wasabrd (crisp bread), Gteborgs Kex (biscuits, cookies), Salt Kvarn (flour, grains, bread), SLR (feed) Dairy cooperatives: Arla, Sknemejerier, Milko, NP, Norrmejerier Procordia Foods (Orkla), Nestl, Nutana, Scan Foods (Swedish Meats)

Garbo Food imports and markets several organic products such as olive oil, vinegar, mustard and pasta.
q

Dairy products and juices

Biofood imports several products, including vegetable oils, syrup, sugar, dried fruits, raisins, seeds, pasta, and milk powder.

Canned food, fro zen food, pre pared fruits and vege ta bles, po tato prod ucts, ready- to- eat dishes

CHAPTER 10 SWEDEN

235

Products
Herbs and spices Coffee

Companies
Nordfalks, Kraft Freia Marabou (part of Kraft Foods) Kraft Foods (Gevalia/Maxwell/ Bl Mocca), Arvid Nordquist (Classic), Lfbergs Lila, Zoga (Nestl), Kaffebnan (Neuteboom), Karlbergs (Aroma) Hemglass, Carlshamn Mejeri, SIA Glass Scan Foods (Swedish Meats), Samfood Karlshamns (oils and fats, feed), Carlshamn Mejeri (margarine, ice-cream) Estrella, Chips OLW, Dalslands Chips bro

raw materials or ingredients import all or part of their requirements either direct or through importers. The following wholesaling companies are listed as KRAV-certified importers of organic raw materials and ingredients:
q q q q q

Abr Lundberg Contifood Smith & Co. Appelkvist Fryseri (berries) Eco Trade (cereals) Verner Frang (cacao)

Ice-cream Meat and cured meat products Oils and fats

Potato snacks Water, soft drinks, beer

The food manufacturers using organic products as

For logistic, food safety and environmental reasons, Swedish manufacturers generally prefer to buy their raw materials either from domestic growers and processors or from suppliers in nearby countries.

Market prospects
As shown, Sweden is a relatively large consumer of organic foods, in particular of dairy products and fresh vegetables, but also of many other food products. Furthermore, demand for organic products has increased significantly in recent years and meeting that demand is a problem. That being said, the market share of organic products has not yet exceeded the 1% mark. Since organic foods are sold predominantly through supermarkets, it is of interest to prospective suppliers to note that the leading supermarket chains have all set high targets for their sales of organic foods. If reached, these would raise the current market share four or five times. Additionally, the catering sector has just recently started to show interest in offering their customers organic menus. This indicates that within a few years organic foods could account for 4% - 5% of total Swedish food consumption. The planned expansion of the organic food market also implies that new suppliers are needed, including suppliers abroad. This is especially true of products that are not produced in Sweden, such as citrus and tropical fruits, rice, green coffee, tea, cacao, and spices. Other product groups of interest are vegetables, deciduous fruits and berries, since the domestic output is insufficient to meet demand. There should be market opportunities for exporters of processed food items, such as juices, canned fruits, biscuits, pastas, snacks, oils, vinegar, condiments, honey and confectionery. Another product group with good prospects is organic fish and crustaceans, farmed as well as wild. Though most industry people seem to agree that imports of organic food products will rise substantially in the next few years, the comparatively high consumer prices may impede market development. According to trade analysts, in order to capture a significant market share, the price differential should not exceed 10%. However, it should be possible to market organic products priced at higher levels, but only if value added is associated with the product, such as quality, taste or convenience.

Annex

Sweden: selected addresses*

RETAIL GROUPS
D&D Unil AB Anderstorpsvgen 22 171 78 Solna Tel: +46 8 734 4416 Fax: +46 8 7357756 E-mail: info@dod-dagligvaror.se http://www.dod-dagligvaror.se ICA Handlarnas AB 171 93 Solna Tel: +46 8 585 500 00 Fax: +46 8 585 500 09 E-mail: info@ica.se http://www.ica.se KF PO Box 15200, 104 65 Stockholm Tel: +46 8 7431423 Fax: +46 8 7431575 E-mail: info@kf.se http://www.kf.se

Biodynamiska Produkter PO Box 42 153 21 Jrna Tel: +46 8 55170830 Fax: +46 8 55171337 (Green coffee; also imports fresh produce and packaged foods) Kaffebnans Rosteri AB Kvarngatan 13 784 63 Borlnge Tel: +46 243 23 95 60 Fax: +46 243 23 31 89 (Coffee roaster; also imports roasted coffee) Kraft Freia Marabou AB PO Box 615 801 26 Gvle Tel: +46 26 656230 Fax: +46 26 106369 (Coffee roaster; also imports herbs and spices) Kung Markatta AB Hjlmarsberg 705 90 rebro Tel: +46 19 307300 Fax: +46 19 320201 (Roasted coffee, packaged foods) Lfbergs Lila AB PO Box 1501 651 21 KARLSTAD Tel: +46 54 140100 Fax: +46 54 140135 (Coffee roaster) Merrild Coffee Systems AB PO Box 50594 202 15 Malm Tel: +46 40 936010 Fax: +46 40 187869 (Roasted coffee) Sackus AB Veterinrgrnd 6 121 63 Johanneshov Tel: +46 8 915020 Fax: +46 8 912838

(Roasted and instant coffee, packaged foods) Zogas Kaffe AB PO Box 7073 250 07 Helsingborg Tel: +46 421 93300 Fax: +46 421 47680 (Coffee roaster)

Fresh fruits & vegetables


AltGrnt AB Vargmtesvgen 14 186 30 Vallentuna Tel: +46 8 511 700 60 Fax: +46 8 511 763 64 (Fruits and vegetables) BananKompaniet AB PO Box 27294 102 53 Stockholm Tel: +46 8 6679160 Fax: +46 8 6613607 (Bananas) Biodynamiska Produkter PO Box 42 153 21 Jrna Tel: +46 8 55170830 Fax: +46 8 55171337 (Fresh produce and packaged foods) Direkt Frukt och Grnt AB Flintrnnegatan 21 211 24 Malm Tel: +46 40 180900 Fax: +46 40 180901 (Fruits and vegetables) Frukt & Grnsaksspecialisten 256 69 Helsingborg Knut Pls Vg 8 Tel: +46 42 201160 Fax: +46 42 153727 (Fruits and vegetables) ICA Frukt & Grnt PO Box 713 251 07 Helsingborg Tel: +46 42 189000

IMPORTERS
Animal feed
Foderringen HB, Fori PO Box 814 721 22 Vsters Tel: +46 21 108100 Fax: +46 21 187291 Vnfor HB PO Box 2093 531 02 Lidkping Tel: +46 510 88757 Fax: +46 510 21944

Coffee
Arvid Nordquist H.A.B. PO Box 1285 171 25 Solna Tel: +46 8 7991800 Fax: +46 8 294162 (Coffee roaster; also imports branded packaged foods)

___________________________ * List not exhaustive.

CHAPTER 10 SWEDEN

237

Fax: +46 42 189288 (Fruits and vegetables) Mariannes Farm AB Dalsgrd 2393 262 92 ngelholm Tel: +46 422 07133 Fax: +46 422 07049 (Vegetables) Saba Frukt & Grnt AB PO Box 9065 120 05 rsta Tel: +46 8 6026000 Fax: +46 8 6026038 (Fruits and vegetables) Samodlarna Svea Fabriksgatan 3 684 00 Munkfors Tel: +46 563 52530 Fax: +46 563 52191 (Fresh produce, dried vegetables, cereals, packaged foods) Samodlarna Sverige PO Box 16 263 103 24 Stockholm Tel: +46 8 14 19 01 Fax: +46 8 14 50 06 (Fresh produce, dried vegetables, cereals, packaged foods)

Fax: +46 454 31375 (Margarine, vegetable oils, ice-cream) CHE-BE Trading AB PO Box 247 151 23 Sdertlje Tel: +46 8 55032890 Fax: +46 8 55030277 (Soy products, canned vegetables, jasmine rice, etc.) Dagsmeja Ren Mat HB Verkstadsvgen 24 245 34 Staffanstorp Tel: +46 46 253600 Fax: +46 46 252111 (Cereal and other products) Di Luca Branded Food AB Bondegatan 29 6 TR, 116 33 Stockholm Tel: +46 8 6419569 Fax: +46 8 6404079 (Pasta products, vegetable oils) EnarSahn AB Stenslingan 4 182 34 Danderyd Tel: +46 8 7550706 Fax: +46 8 7550706 (Fruit and vegetable juices, canned vegetables, fruit pures) Falcon Bryggeri AB PO Box 164 311 22 Falkenberg Tel: +46 346 57105 Fax: +46 346 17155 (Brewery owned by Carlsberg, Denmark) Freningen Mana EkoSol c/o Groth, Erikshllsg 40 151 46 Sdertlje Tel: +46 8 55086508 Fax: +46 8 55031967 (Herbs and spices) Formidabel AB Kvarnbyvgen 13 212 36 Malm Tel: +46 40 497470 Fax: +46 40 497420 (Herbs and spices) Frebaco Kvarn AB PO Box 878 531 18 Lidkping Tel: +46 510 86000 Fax: +46 510 86019 (Cereal products) Garbo Food AB Hlleflundragatan 12 426 58 Vstra Frlunda

Tel: +46 31 293650 Fax: +46 31 292943 (Packaged foods) Gsta Appelkvist Fryseri AB Skansen 272 36 Simrishamn Tel: +46 414 12280 Fax: +46 414 14112 (Frozen foods) Helhetshlsa AB 59293 Borghamn Tel: +46 143 20200 Fax: +46 143 20208 (Vegetable oils) Hilda & Hulda AB Folkungavgen 1B 611 34 Nykping Tel: +46 155 286400 Fax: +46 155 286444 (Roasted soy products) HNC Agenturer PO Box 154 147 23 Tumba Tel: +46 8 53030987 Fax: +46 8 53035425 (Bread products) Hkansson Tony Slttkra Grd 230 42 Tygelsj Tel: +46 40 466300 Fax: +46 40 469666 (Fresh produce) JO-Bolaget Fruktprodukter HB Torsgatan 14 105 46 Stockholm Tel: +46 8 7895271 Fax: +46 8 7895480 (Juice and nectars) Karlshamns AB Vstra kajen 374 82 Karlshamn Tel:+46 454 82424 Fax: +46 454 82820 (Oils and fats) Kraft Freia Marabou AB 172 85 Sundbyberg Tel: +46 8 627 10 00 Fax: +46 8 98 61 00 (Chocolate products) PO Box 615 801 26 Gvle Tel: +46 26 65 62 30 Fax: +46 26 10 63 69 (Coffee roaster; also imports herbs and spices) PO Box 156 751 04 Uppsala Tel: +46 18 65 56 00

Other foods
Arvid Nordquist H.A.B. PO Box 1285 171 25 Solna Tel: +46 8 7991800 Fax: +46 8 294162 (Imports branded packaged foods; coffee roaster) Biofood AB Verkstadsvgen 14 137 37 Vsterhaninge Tel: +46 8 50020000 Fax: +46 8 50024215 (Vegetable oils, sugar, syrup, dried fruits, raisins, seeds, pasta products, milk powder) Bjrnekulla Fruktindustri AB Tvrgatan 1 265 31 storp Tel: +46 42 56400 Fax: +46 42 50525 (Fruit preserves, juices, canned vegetables) Carlshamn Mejeri AB 374 82 Karlshamn Tel: +46 454 82500

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CHAPTER 10 SWEDEN

Fax: +46 18 69 27 20 (Sauces and dressings, other packaged foods) Kung Markatta AB Hjlmarsberg 705 90 rebro Tel: +46 19 307300 Fax: +46 19 320201 (Packaged foods) Kvarn AB Juvel PO Box 8878 402 72 Gteborg Tel: +46 31 7791600 Fax: +46 31 220579 (Cereal products, rice) Natura AB Almarkard 242 92 Hrby Tel: +46 415 62107 Fax: +46 415 62035 (Fresh produce) Nordfalks AB PO Box 63 431 21 Mlndal Tel: +46 31 674200 Fax: +46 31 875045 (Herbs and spices, tea, Mexican foods) lands Fr AB PO Box 58 380 62 Mrbylnga Tel: +46 485 40660 Fax: +46 485 40329 (Dried vegetables) Raggrdens Produkter AB Arentorp 534 94 VARA Tel: +46 512 13490 Fax: +46 512 13077 (Fresh produce, preserved vegetables) Risenta AB PO Box 7411 103 91 Stockholm Tel: +46 8 6797680 Fax: +46 8 6115366 (Health foods, dried vegetables, seeds, etc.) Rby Biogrnt AB Rby 4, PL 250 242 92 Hrby Tel: +46 415 311156 Fax: +46 415 311156 (Fresh produce) Sackus AB Veterinrgrnd 6 121 63 Johanneshov Tel: +46 8 915020

Fax: +46 8 912838 (Fair trade labelled and organic packaged foods, coffee) Samodlarna Svea Fabriksgatan 3 684 00 Munkfors Tel: +46 563 52530 Fax: +46 563 52191 (Fresh produce, dried vegetables, cereals, packaged foods) Salt Kvarn AB Salt 153 91 Jrna Tel: +46 8 55150280 Fax: +46 8 55150240 (Bread, flour and other cereal products) Seege AB PO Box 123 311 22 Falkenberg Tel: +46 346 55900 Fax: +46 346 80525 (Flour, grains and breakfast cereals) Semper Foods AB 105 46 Stockholm Tel: +46 8 6773271 Fax: +46 8 6773101 (Baby foods, health foods, herbal salt, raw materials and ingredients) Svenska Nestl 267 81 Bjuv Tel: +46 42 86000 Fax: +46 42 78300 (Packaged foods, raw materials for manufacture) Svenska Nutana AB Ekebyholm 762 91 Rimbo Tel: +46 175 70905 Fax: +46 175 70190 (Canned and frozen foods, cereals and grains) Torfolk Grd AB Skymns 684 95 Hje Tel: +46 563 72368 Fax: +46 563 72066 (Fruit preserves; chilli, pesto and other sauces; tomato products; vinegar; wine) Vingron AB Skogsvgen 1 417 29 Gteborg Tel: +46 31 228860 Fax: +46 31 518351 (Vinegar)

Vrgrda Kvarn PO Box 136 447 24 Vrgrda Tel: +46 322 23085 Fax: +46 322 24273 (Cereal products) Wasabrd AB 682 82 Filipstad Tel: +46 590 18100 Fax: +46 590 18500 (Crisp bread, rice crackers)

Raw materials and ingredients for food manufacturers and packers


B. Engelhardt & Co AB PO Box 49 421 21 Vstra Frlunda Tel: +46 31 490290 Fax: +46 31 455782 Contifood Smith & Son PO Box 104 201 21 Malm Tel: +46 40 71545 Fax: +46 40 236071 Eco Trade AB PO Box 905 601 19 Norrkping Tel: +46 11 218000 Fax: +46 11 126670 (Cereal products, dried vegetables) R. Lundberg AB PO Box 104 201 21 Malm Tel: +46 40 71545 Fax: +46 40 236071 Verner Frang AB Box 313 503 11 Bors Tel: +46 33 12 78 00 Fax: +46 33 10 64 99 (Cacao)

Seeds and planting materials


Frkompaniet Landskrona Bromsgatan 5 261 35 Landskrona Tel: +46 418 16860 Fax: +46 418 28510 (Onion sets, seeds) Lindbloms Fr PO Box 86 277 21 Kivik Tel: +46 414 70880 Fax: +46 414 70009 (Onion sets, seeds)

CHAPTER 10 SWEDEN

239

Olssons Fr AB Mogatan 2 254 64 Helsingborg Tel: +46 42 155540 Fax: +46 42 156390 (Onion sets, seeds) Svalf Weibull Trdgrd AB 276 50 Hammenhg Tel: +46 414 443800 Fax: +46 414 43990 (Onion sets, seeds) Trnvik Grd AB Trnvik 179 65 Stenhamra Tel: +46 8 56024161 Fax: +46 8 56024459 (Onion sets)

Federation of Commercial Agents PO Box 1137 111 81 Stockholm Tel: +46 8 411 00 22 Fax: +46 8 411 00 23 E-mail:mail@agenturforetagen.se http://www.agenturforetagen.se Freningen fr Rttvisemrkt (Member of Fair Trade Labelling Organization International (FLO) Drakenbergsgatan 11 117 41 Stockholm Tel: +46 8 668 03 50 Fax: +46 8 668 03 14 E-mail: handla@raettvist.se http://www.raettvist.se GroLink AB Torfolk 684 95 Hje Tel: +46 56372345 Fax: +46 56372066 http://www.grolink.se (Consultancy) KRAV (Swedish Organic Agriculture Association) PO Box 1940 751 49 Uppsala Tel: +46 18 100290 Fax: +46 18 100366 E-mail: info@krav.se http://www.krav.se

National Food Administration PO Box 622 751 26 Uppsala Tel: +46 18 175500 Fax: +46 18 105848 E-mail:livsmedelsverket@slv.se http://www.slv.se Svenska Demeterfrbundet Skillebyholm 15391 Jrna Tel: +46 55157988 Fax: +46 55157976 Swedish Board of Agriculture 551 82 Jnkping Tel: +46 36 155000 Fax: +46 36 190546 E-mail:jordbruksverket@sjv.se http://www.sjv.se Swedish Federation of Trade and Service 103 23 Stockholm Tel: +46 8 7627700 Fax: +46 8 7627777 E-mail: info@svenskhandel.se http://www.svenskhandel.se

OTHER USEFUL ADDRESSES


Association of Swedish Chambers of Commerce and Industry PO Box 16050 103 21 Stockholm Tel: +46 8 555 100 37 Fax: +46 8 566 316 37 E-mail:yasemin.arhan@chamber.se http://www.cci.se

Chapter 11 SWITZERLAND

Switzerland is a small country with an area of just over 41,000 sq km and a population of about 7 million, of which close to 20% are foreigners. The country has three principal linguistic areas, and approxi mately 73% of its popu la tion speak German, 21% French and 4% Italian. All three lan guages are offi cial lan guages. Of the seven mar kets cov ered in detail by this study, Swit zer land is the only one that is not part of the European Union. However, it is a member of the European Free Trade Agreement (EFTA). Switzerland is one of the pioneers of organic

agri cul ture, having ini ti ated bio- dynamic farming as well as organic (natural) gar dening in the 1930s. The Research Insti tute of Organic Agri cul ture (FiBL) was set up in 1974; it organized the first Scientific Conference of IFOAM in Sissach (near Basel) in 1977. Though organic prod ucts have long been sold through farm-gate sales and other direct sales and later on through Biolden (organic shops), the market started to grow seri ously only after 1993 when the big supermarket chain Coop began to market organic food, followed by another big supermarket chain, Migros, in 1996 ( see sec tion on dis tri bu tion chan nels, pages 246 ff.).

Supply and demand


Production
The area under organic agriculture is expanding rap idly in Swit zer land and reached over 70,000 ha, or about 7% of the total cultivated land, in 1997. In 1998, organic agri cul ture accounted for an esti mated 8% of the total agri cul tural land, which is very high compared with proportions in most countries. The Euro pean (EU+EFTA) average is 1.45%. Since 1991 the number of organic farms has risen steadily from just below 1,000 to about 5,000 in 1998, cor re sponding to an average increase of 28% annually. The highest growth rate occurred in 1995-1996; the figure for 1998 was just 8%. By the end of 1999 the number of farms is expected to reach 5,600, and fur ther expan sion is antici pated. The main crops are cereals for human con sump tion, cereals for animal fodder, vegetables, maize (Indian corn) and pota toes. The countrys output of animal products includes milk and other dairy products, meat and meat products, and eggs. Organic dairy products are an impor tant product group. The big gest dairy com pany is Swiss Dairy Food Ltd, which resulted from a merger between the Toni Group (a company in Ostermundigen) and Sntis Milchver band (Gossau). The next largest is the Emmi Group (Lucerne). There are sev eral smaller com pa nies like Baer Ksnacht. Organic farmers belong to more than 30 organi zations. The main umbrella organization is Bio Suisse the Vereinigung schweizerischer biologischer Landbau- Organisationen (VSBLO), Basel.

Market size
Since offi cial pro duc tion and for eign trade sta tis tics on organic food and bev er ages are either incom plete or non- existent, it is dif fi cult to give an exact pic ture of the Swiss market.

CHAPTER 11 SWITZERLAND

241

How ever, on the basis of data pro vided by FiBL and Bio Suisse, the retail market for cer ti fied organic food can be estimated at Sw F 500 million - Sw F 520 million in 1997 (roughly 2% of the total food market), and between Sw F 560 mil lion and Sw F 580 million in 1998. About two thirds of organic sales consist of items produced domes ti cally; the rest are products not grown in Switzerland. They include

coffee, tea, cocoa, durum wheat, rice, millet, spices, subtropical and tropical fruit, nuts and some dried fruit. The import rate is gen er ally fairly low as market access is difficult, mainly because of the privately controlled labels on organic food and strict requirements.

Import and market requirements by major product group


General
Though demand for organic food in Switzerland cannot be covered by local production, with some exceptions the range of imported products is fairly lim ited. The main rea sons include the fol lowing:
q q

Hazelnuts, figs, almonds, dried apricots and raisins (Turkey, California);


q

Bananas, though consumers do not usually make a distinction between organic and fair trade (e.g. Max Havelaar) bananas;
q q q

The private farmers umbrella organization Bio Suisse controls most of the market (75% today, a share that was presumably even higher up to the period ending 1997 when official legislation on organic products was introduced).
q

Pineapples (from Ghana); Mangoes (from Ghana);

Logistical difficulties with imports (small quantities, insufficient distribution network, etc.).
q

Various berries, especially for the food industry for the production of fruit preparations for dairy products, bakery products, etc. (from Hungary);
q

The concept of organic food implies for many consumers that the product has to be fresh and should be transported to the market by the shortest possible way, preferably from a neighbouring or nearby regional producer.
q

Vegetables (for example, beans from Egypt).

Processed food, which is easier to handle from the logistical point of view, was generally not regarded as fully organic or completely natural by many consumers. Nev er the less, imports of organic food and bev er ages are on the increase, mainly items not produced in Switzerland but also items similar to domestically pro duced goods that are in short supply. Some of the main imports by product group and some supplying coun tries/areas are listed below.

The fact that these items are imported and in some cases trans ported by air leads to regular dis cus sions on whether they are fully organic or ecological. Bio Suisse does not permit prod ucts imported by air to carry its logo.

Dried fruits and nuts


This is the classic range of imported organics. However, the overall Swiss market for dried fruits and nuts is small. An estimated 40% of sales may already be covered by organically or other sustainably grown produce. In addition to organic produce, consumers look for conventional products not treated with SO2 (sulfur dioxide). Imports include dried bananas, apricots, pineapples (small market), man goes (very small market), and various nuts.

Fresh fruits and vegetables


Most fresh fruits and vege ta bles are locally sup plied. Imports include:
q

Processed fruits and vegetables


The market for deep-frozen organic food and ready-to-serve mixes for catering is expanding. Supplies are mainly obtained locally. Schmutz

Lemons, oranges and other citrus fruit (mainly from Italy and Spain);

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Gemse AG processes 8,500 tons of prod ucts in this category. There is a market for other forms of proc essed fruits and vegetables, such as fruit juices, jams and marmalades. Domestic processors include Hero in Lenzburg and Biotta in Tgerwilen. Some raw materials (e.g. tropical fruit juices, con cen trates or pulp/pure, and frozen fruit) are imported. Imports are small and are normally sourced through middlemen in the European Union, notably in Ger many and the Neth er lands.

Sales of organic spices and spice prod ucts are rising fast, and requirements need to be imported. One retail organization is in the process of converting from con ven tional to organic prod ucts to the fullest extent pos sible.

Sugar and sweeteners


The organic market for this product group is small but growing. It is cur rently esti mated at 100 - 200 tons of organic sugar and about 30 tons of organic glucose syrups. In gen eral, prices are very high, often two to three times the price of con ven tional prod ucts. There is also a market for organic honey, which is usually considered a health product in any case. The cer ti fi ca tion of organic honey is not yet fully regu lated.

Cereals, flour and bakery products


Swit zer land has many varie ties of bread. Dark bread and bread made from mixed flours are popular. Pieces of cereals, dried fruits and nuts are often added to bread. The other major end- uses for organics are break fast cereals (e.g. muesli), con fec tionery, snacks and porridge. Though Switzerland has a sizeable domestic production, imports of organic cereals cover about one third of demand, and this despite the fact that these imports are often sub ject to high import duties and spe cial levies.

Oil products
This is a highly pro tected market with spe cial levies on imports of, for example, vege table oils, which are regarded as com peti tors to butter. There is almost no import market for organic products, with the exception of olive and sun flower oils for which the market is growing.

Dairy products Coffee, tea and cocoa


In this sector, organic products have an established though small market share. Herbal teas have the largest share in the market, fol lowed by choco late and coffee. There is also a growing market for organic tea from fair trade programmes (such as Max Havelaar). This is traditionally the most important organic product group in Switzerland and the largest dairy coop era tive, the Toni Group, actively pro motes sales of organic products. In 1997 the Group processed 1,000 tons of organic milk. It has a range of more than 20 products of which the most important are pasteurized whole milk, yoghurt with and without fruits, butter, cream and cheese.

Herbs and spices Other food products


Herbs enjoy a growing and prof it able market. They are used for seasoning as well as for further processing in the food industry into teas, herbal candies, flavours and aromatic extracts. Though some Swiss farmers in the moun tain areas spe cialize in this product group, importing also takes place. The fol lowing prod ucts of impor tance should also be men tioned: baby food, meat and sau sages, fresh eggs, yeast for making bread at home, and wine. Most of these prod ucts offer few oppor tu ni ties for devel oping coun tries, if any.

Market characteristics
Consumer habits
Swiss con sumers buy organic food and bev er ages for a variety of rea sons. According to a survey pub lished by FiBL in 1998, the main rea sons are envi ron mental and health concerns, followed by taste and other factors. Usually, a price premium of 10% - 20% is accepted, though this may be higher for some

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products, say up to 40%. According to another survey, 40% of Swiss con sumers buy organic food at least once a week.

tele vi sion, the Internet, etc.


q

Promotion and advertising


As competition between the two largest super market chains (Migros and Coop) is becoming increas ingly keen, sales pro mo tion and adver tising have become impor tant instru ments in the battle for market share. This applies not only to food stuffs in general but also to organic food and beverages. Typical marketing and promotional techniques include the fol lowing:
q

The supermarket chains are increasingly asking suppliers to pay listing fees when new products are accepted for sale on their shelves.
q

Suppliers are asked to give special rebates or discounts and to participate in promotional activities by offering special packaging. In addition, suppliers are being asked to provide logistical extras in the form of spe cial pal lets, spe cial pack aging, price stickers on retail packs, place ment of EAN codes, taking prod ucts off the shelves when not sold, etc. This fairly aggressive development, which also takes place in other mar kets, makes it more and more dif fi cult for for eign and even the smaller Swiss pro ducers to enter the retail market direct.

Heavy adver tising through national and regional newspapers, flyers, the groups own weekly promotional leaflets and newspapers, radio,

Market access
Customs duties and restrictions
The Swiss customs tariff follows the Harmonized System. Swiss customs duties are specific, that is, they are levied on the weight of the product imported and not on its value. Tar iffs are quoted in Swiss francs per 100 kg gross weight. There are no spe cial tar iffs on organic products which carry the same duties as the equiva lent con ven tional goods. There are high duties and/or spe cial levies on a range of agricultural products such as sugar, cereals, vege table oils and dairy prod ucts. In addi tion, for some of these prod ucts spe cial import licences are nec es sary, which normally can be obtained only by a Swiss importer. For imports of meat and fishery products, sani tary cer tifi cates and the like are also needed. Exports of some prod ucts from devel oping coun tries may be sub ject to pref er en tial rates of duty under the Gen er al ized System of Pref er ences (GSP). A value- added tax, which is cur rently 7.5%, has to be paid by the first importer into Swit zer land. The VAT rate is the same for imported and for domestically pro duced goods. have to meet the general requirements of the Swiss laws and regulations applicable to all foodstuffs (organic and con ven tional), including the fol lowing:
q q q

Food law and regulations; Hygiene law and regulations;

Regulation on weight and declaration which stipulates that the declaration has to be made in at least one of three official languages (German, French or Italian);
q

Regulations on pesticides, herbicides and heavy metals. Although the above regulations largely concern con sumer packs and do not directly affect imported bulk products, exporters should take them into consideration as the end-products processed from imported raw mate rials must con form to them. Since 1 January 1998, the pro duc tion, proc essing and marketing of organic products have been regulated by the Swiss Regulation on Organic Farming (Schweizer Bio-Verordnung), which is modelled on EU regu la tions. The Swiss regu la tion is stricter than EU law on some points and less so on others. In order to be mar keted as organic, a product must be

Food laws and regulations


Organic food and bev er ages, whether imported or not,

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certified by a certification body conforming to European standard EN 45011 (see chapter 2). Swit zer land has the fol lowing cer ti fi ca tion bodies:
q

can label their prod ucts with the pri vate Knospe label. This label is the most com monly used in Swit zer land. The Knospe label consists of a graphic depicting a bud and the let ters BIO. Only farmers, proc es sors and importers of Swiss origin can obtain per mis sion to use this logo. The word Suisse may be added to the logo, indicating that a minimum of 90% of the product is of Swiss origin. Additionally, the word Umstellung must be added to the logo if the product is from farms under con ver sion. There are other labels of lesser but growing importance, such as the MIGROS BIO Production label of Migros, the largest retail organization in Swit zer land. For Swiss prod ucts, Migros applies the same stan dards as BIO SUISSE, but its require ments for imports are less demanding. In total, about 5,000 Swiss farmers and 600 companies are registered as organic units; some com pa nies are reg is tered more than once. Bio Suisse has around 520 reg is tered com pa nies, MIGROS BIO Production about 60, Demeter about 30, others about 75.

bio.inspecta: jointly founded by FiBL, Bio Suisse and Demeter; located in Frick.
q

Institut fr Marktkologie (IMO), based in Sulgen.


q

Schweizerische Vereinigung fr Qualitts- und Management Systeme (SQS), based in Zollikofen. Another body, ABCert, is expected to be accredited in the near future. The Swiss Accreditation Service (SAS) and the Fed eral Office of Agri cul ture carry out super vi sory activi ties in rela tion to cer ti fi ca tion. Until the new law on organic food entered into force in 1998, the private standards of the Swiss organic farmers organization, Vereinigung Schweizer BioLandbau-Organisationen (Bio Suisse) were commonly applied to organic pro duc tion and trade. Those stan dards were and remain stricter than those of the law. Pro ducers and traders who operate according to these standards, and who are cer ti fied against them,

Distribution channels
Importers and agents
As the Swiss market is comparatively small and highly segmented (with numerous small and medium-sized companies), it is usually better to export organic prod ucts through an importer rather than to sell direct to the food industry or the retail trade. Importers can provide the exporter with necessary information on market requirements, quality standards, market access and import for mali ties; they can also offer the logis tical serv ices required by the final customer. Many industrial buyers are not used to car rying out nego tia tions in dif ferent lan guages. They insist on DDP (deliv ered duty paid) terms in Swiss francs. They are less ready to take risks on quality, so they usu ally prefer to buy through inter me di aries they know. Several importers and agents specialize in or have sections dealing with organic food. They include Kndig & Cie. AG (based in Zrich), Trawosa AG (Ror schach) and Var istor AG (Lengnau). The names and addresses of these and other enti ties are given in the annex to this chapter.

Food industry
Though Switzerland is the home country of Nestl, the worlds biggest food company, and several other major food manufacturers, organic food processing is carried out mainly by small and middle-sized units. These units focus on the domestic market, though several also target export markets, largely in the European Union. Among the companies with well-known products are Bio-Familia AG (breakfast cereals), E. Zwicky AG (cereal and muesli mixes) and Bioatta AG (juices).

Retail trade
The Swiss food retail market is dominated by two supermarket chains, Migros and Coop Schweiz, which together control an estimated 70% of the countrys food sales. They are also pre-eminent in the organic food business.

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Coop Schweiz
Coop Schweiz sells the most organic food and beverages and accounts for more than 30% of all organic food sales in Switzerland. It is, however, second to Migros in terms of overall sales. Its turnover of food and non-food items amounted to about Sw F 11 billion in 1997. Its sales of organic food and beverages climbed from Sw F 116 million in 1996 to Sw F 168 million in 1997 and Sw F 200 million in 1998. It expects to attain sales of about Sw F 500 million in the year 2000. Like FDB in Denmark, for example, Coop has clearly stated sales targets (given in terms of percentage of overall sales) for specific organic food items. It also has a policy of minimizing price premiums in relation to conventional food products. Coop owns a number of food processing plants, including Arni AG (confectionery), Panofina AG (bakery products), Pasta Gala AG (pasta) and Stadtmhle CMZ. Some plants produce organic products. Since the mid 1990s Coop has strongly pushed organic food products, which are sold under its own Naturaplan label and with the Bio Suisse (Knospe) logo. Certification is carried out by Bio Suisse. The range currently consists of more than 200 different items (see list below) and is constantly being expanded.

items (produced, for instance, out of 100% recycled material) under the label Oecoplan.

Migros
With total sales of food and non-food items amounting to Sw F 13 billion in 1997, Migros is the largest retail group in Switzerland. However, its share of the market for organic food and beverages is estimated at only 15% (valued at about Sw F 85 million in 1997), roughly half of Coops share. Migros currently offers about 150 organic food items, and is trying hard to expand sales. All organic food products are certified and sold under the Migros Bio logo, usually certified by FiBL or IMO. Migros owns about 10 food processing plants, including Jowa AG (bakery products, pastas), Frey AG (chocolate and confectionery), Estavayer SA (dairy products, drinks, sauces, etc.), Bischofzell AG (canned and frozen food, jams, etc.) and Midor (ice cream, desserts, cookies), several of which produce some organic food products.

In a constant fight for market share, Migros has been promoting strongly for over 20 years its range of M-Sano products mainly fruits and vegetables, and meat and meat products. The focus is on the mass market for healthy and environmentally friendly products with value added. The concept is probably based on the assumption that many, if not most, consumers will not pay much more for Coop also promotes textiles made from organic organic products than for conventional ones. The cotton under the label Naturline and other non-food reasonably priced M-Sano product line has been an alternative to organic products in the minds of many consumers. The turnover in M-Sano products Product group Number of items Product types amounted to about Sw F 650 million in 1997. Dairy 30 Milk, cream, butter, yoghurt, Despite the success of this programme, Migros cheese is considering developing the Sano concept Eggs 2 into another form, inter alia, in order to avoid Pasta and rice 8 Fresh and dry confusion with its Bio label. Meat 30 Fresh meat, ham and sausages,
Frozen products Fruits and vegetables Bread and other baked goods Flour Cereals Wine Fruit juices Baby food Oils Spices and herbs Tea 4 35 20 3 26 10 3 25 4 7 5 poultry Vegetables, potatoes, hamburgers Mainly of Swiss origin

Others
USEGO-Trimerco Holding is a large retail buying group and wholesaler. It supplies about 5,000 retail outlets, including some 285 Primo supermarkets, about 1,200 Vis--Vis stores, and a large number of independent retailers, most of which carry organic products (including goods carrying the Bio Domaine and Knospe labels). USEGO is also a majority owner of the food discount chain Pick Pay AG, which has about 100 outlets.

Muesli mixes and single cereals All of Swiss origin Juices and ready-to-use pure All of European origin Herbal teas of Swiss origin

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A number of other supermarket chains also carry organic food items (including Bio Domaine and Knospe products). Among these chains are Volg AG (based in Winterthur), Manor (based in Basel), and Spar (in St Gallen). Until the early 1990s, Biolden (organic shops) were the main sales outlets for organic food together with farm-gate or direct sales. Reformhuser (health food shops), though of lesser importance, were also amongst the first outlets for organic foods. Since then sales of organic food in these types of shop have stagnated or even declined while supermarket sales have soared.

Sales with other logos Migros Bio Others, including imported organics in retail packs 84 50-70

Catering
Apparently the catering and institutional market for organic food and beverages is not yet well developed, though sales are growing. One company, Delinat AG (of Heiden) is the exclusive supplier of organic wines (of Swiss and other European origins) to restaurants. Bio Suisse started a project in 1998 in cooperation with the company SV-Service in Zrich to deliver organic food products to university canteens and to Coop restaurants. Special mention should be made of Swissair, the first airline to use naturally grown products. It has utilized these products since 1997, when it first applied the concept naturalgourmet to all Swissair flights from Switzerland. According to the plan, 90% of the products needed to prepare meals should be naturally grown by the year 2000 and, to the extent possible, only organically grown products will be purchased. Passengers will have a choice between organic and conventional wines and beers. This important initiative has the additional benefit of making Swissair passengers more aware of health and environmental issues.

Retail sales by sales outlet and certification logo


According to FiBL (based in Frick), the total retail market for organic food and beverages (an estimated Sw F 500 million - Sw F 520 million in 1997) can be divided by sales outlet and certification logo as follows:
Outlet
Sales with the Bio Suisse (Knospe) logo Coop Health food shops Farm-gate and direct sales Spar, USEGO, etc. 170 150 30-50 15

Value of sales (Sw F 000 000)

Market prospects
Overall, the market for organic food products may be expected to grow at a rate of 20% - 40% a year over the next three to five years, the principal reasons being:
q q

To gain an edge over the competition, retailers are offering customers ethical products, including organics. However, the Swiss market is likely to remain a difficult one for exporters for a number of reasons, including the following:
q

The consumers positive attitude to health food, and naturally and ethically produced food.
q

Growing price pressure in the market for conventional agricultural products will persuade more and more farmers to go into organic farming, which will raise domestic supplies.
q

The protective character of Bio Suisse, the most important certification body with its very high standards (on some points, these standards are stricter than EU regulations).
q

Organic farming is promoted and subsidized by the Government. In 1997, support amounted to Sw F 47.5 million.

High quality standards in general and for organic products in particular.

CHAPTER 11 SWITZERLAND

247

For most products with import potential, only relatively small quantities are needed.
q

Growing competition and price pressure. The assumption is that eventually organic products will enjoy a premium of no more than 10% over conventional food as consumers and even retailers think that all food has to be as natural as possible anyway, and producers of foodstuffs, whether fully organic or not, will move in that direction. Nevertheless, Switzerland is an important market that

should not be ignored by exporters in developing countries. The products with the best opportunities are those that cannot be grown in Switzerland, including coffee, tea and cocoa, citrus and tropical fruits, rice, durum wheat and various spices. Other products, such as off-season fruits and vegetables and products in short supply, may also find openings in the market. It should be noted that SIPPO, the Swiss Import Programme (see the annex for the address), provides assistance to exporters in developing countries.

Annex

Switzerland: selected addresses*

IMPORTERS OF ORGANIC FOOD FOR RETAIL AND RAW MATERIALS FOR THE FOOD INDUSTRY
Biofarm-Genossenschaft beim Bahnhof 4936 Kleindietwil Tel: +41 62 957 80 50 Fax: +41 62 957 80 59 (Cooperative/wholesaler handling a large range of products, mainly cereals) Claro AG Schweizer Organisation fr Fairen Handel Byfangstr. 19 2552 Orpund Tel: +41 32 356 0700 Fax: +41 32 356 0701 (Handles fair trade products; imports for organic shops and Reformhuser) Giovanelli Fruchtimport AG Schaffhauserstrasse 200 8500 Frauenfeld Tel: +41 52 728 0909 Fax: +41 52 728 0900 (Specialist importer of fresh fruits) Granosa AG St. Gallerstrasse 117 9403 Goldach Tel: +41 71 841 6423 Fax: +41 71 841 7726 (Importer of cereals and food raw materials) Hans Buob AG Grenzstrasse 26 9430 St. Margrethen Tel: +41 71 747 43 33 Fax: +41 71 747 43 34 (Specialist importer of dried fruits and nuts) Hans Kennel AG Lttichstrasse 4 6342 Baar
___________________________ * List not exhaustive.

Tel: +41 41 761 2727 Fax: +41 41 761 2840 (Specializes in herbs and tea) Heider Teeimport Trockenloosstrasse 45 8105 Regensdorf Tel: +41 1 840 1600 Fax: +41 1 840 1646 (Specializes in tea) Hima la Vie Avenue C.-F. Ramuz 101 1009 Pully Tel: +41 21 729 6566 Fax: +41 21 729 6166 Kndig & Cie. AG Stampfenbachstrasse 38 8023 Zurich Tel: +41 1 368 25 71/368 2525 Fax: +41 1 362 8414 E-mail: info@kuendig.com http://www.kuendig.com (Handles a wide range of organic raw materials and food products for retail and industry) Steiner Mhle AG 3436 Zollbrck Tel: +41 34 496 8781 (Processor of cereals, especially for Demeter) Stutzer AG Seminarstrasse 28 8057 Zrich Tel: +41 1 360 3636 Fax: +41 1 360 3600 Suntra AG Im Brhl 1 4123 Allschwill/Basel Tel: +41 61 487 9100 Fax: +41 61 487 9105 (Trader in dried fruits and nuts, processed fruits and vegetables) Trawosa AG Eisenbahnstrasse 41 9400 Rorschach Tel: +41 71 844 98 40

Fax: +41 71 844 98 49 E-Mail: meili@trawosa.ch (Handles raw materials for the food industry, particularly dried vegetables) Vanadis AG Fischingerstrasse 66 8370 Sirnach Tel: +41 71 966 37 77 Fax: +41 71 966 37 91 (Medium-sized company, often buys via German organizations like Rapunzel) Varistor AG Westrasse 5 5426 Lengnau AG Tel: +41 56 266 50 60 Fax: +41 56 266 50 70 E-mail: vari-food@hotline.ch http://www.hitlne.ch/vari-food (Agent/importer; deals with organic food products, especially raw materials for the food industry) Via Verde AG Brunnmatt 6264 Pfaffnau Tel: +41 62 747 07 47 Fax: +41 62 747 07 37 (Specializes in distributing fresh fruits and vegetables to smaller retailers of organic food)

WHOLESALERS
Biogemse Galmiz Zhrli 9 3285 Galmiz Tel: +41 26 670 4242 (Fresh fruits and vegetables) Somona GmbH Bodenackerstrasse 51 4657 Dlliken Tel: +41 62 354 646 Fax: +41 62 353 259 (Retail packs; handles supplies for Reformhuser, for example)

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FOOD PROCESSORS/ MANUFACTURERS OF ORGANIC PRODUCTS


Bio-Familia AG Brnigstrasse 141 6072 Sachseln Tel: +41 41 666 2555 Fax: +41 41 666 2550 E-mail:info@bio-familia.com http://www.bio-familia.com (Cereal products, including muesli) Bioforce AG Grnauerstrasse 9325 Roggwil Tel: +41 71 454 6161 Fax: +41 71 454 6162 (Vegetable salt and fresh plant extracts) Biotta AG Pflanzbergstrasse 8 8274 Tgerwilen Tel: +41 71 666 8080 Fax: +41 71 666 8081 (Fruit juices) Haco AG Worbstrasse 262 3073 Gmligen Tel: +41 31 950 1111 Fax: +41 31 950 1515 (Cereal products and snacks) Hauser + Cie AG Neumhle Tss Neumhlestrasse 40 8406 Winterthur Tel: +41 52 202 6431 Fax: +41 52 203 7441 (Raw materials for the bakery industry) Hero 5600 Lenzburg Tel: +41 62 885 5111 Fax: +41 62 891 5103 E-mail:informatik@hero.ch (Processed fruits and vegetables) Hgli Nhrmittel AG Bleichestrasse 9323 Steinach Tel: +41 71 446 9292 Fax: +41 71 446 2089 (Bouillons, soups, sauces, yeast) Kentaur AG Gssli 9 3432 Ltzeflh Tel: +41 34 460 6111 Fax: +41 34 460 6166 (Cereals, baking mixtures) Narimpex AG Schwanengasse 47

2501 Biel/Bienne Tel: +41 32 365 0111 Fax: +41 32 365 6226 (Packer of dried fruits and nuts, honey) Neumhle Tss Neumhlestrasse 40 8406 Winterthur Tel: +41 52 202 64 31 Fax: +41 52 203 74 41 (Specializes in cereals and flours) Pronatec AG Frschenweidstrasse 10 8404 Winterthur Tel: +41 52 235 0909 Fax: +41 52 235 0919 E-mail: pronatec_ag@compuserve.com (Sugar, syrups, chocolate, cocoa, vanilla, nuts) Schmutz Gemse AG Dorfstrasse 25 3216 Ried bei Kerzers Tel: +41 31 755 5621 (Processed fruits and vegetables) Schweiz. Schlmhle E. Zwicky AG 8554 Mhlheim-Wigoltingen Tel: +41 52 763 17 44 Fax: +41 52 763 32 14 (Specializes in cereals and muesli mixes, organic pet food) Stadtmhle CMZ Zrich Sihlquai 306 8031 Zrich Tel: +41 1 447 2525 Fax: +41 1 447 2588 Swiss Alpine Herbs Gassenmatte 3763 Drstetten Tel: +41 33 783 2000 Fax: +41 33 783 2083 (Herbs and spices, fruits and vegetables)

Migros Genossenschafts-Bund Limmatstrasse 152 8005 Zrich Tel: +41 1 277 2111 Fax: +41 1 277 2333/ 277 2525 http://www.migros.ch Migros-Genossenschafts-Bund Service Agro-cologique 2, Rue de la Gare 1030 Bussigny USEGO AG Industriestrasse 25 8604 Volketswil Tel: +41 1 947 1414 Fax: +41 1 947 1535 (Bio Domaine)

CATERING
Delinat AG Haus zur Glocke 9410 Heiden Tel: +41 71 898 8070 Fax: +41 71 898 8077 http://www.delinat.ch (Supplier of organic wines) Gate Gourmet Zrich AG The Quality Caterer 8058 Zrich-Flughafen Tel: +41 1 812 1212 Fax: +41 1 812 9192 http://www.swissair.com/ourservices/ air/gourmet.htm (Swissair)

CERTIFICATION BODIES, AUTHORITIES AND OTHER USEFUL ADDRESSES


Bio Suisse/VSBLO Missionsstrasse 60 4055 Basel Tel: +41 61 385 9610 Fax: +41 61 385 9611 E-mail:bio@suisse.ch Internet: bio@bio-suisse.ch bio.inspecta Ackerstrasse 5070 Frick Tel: +41 62 865 6300 E-mail: admin@bio-inspecta.ch http://www.bio-inspecta.ch Demeter-Verband Grabenackerstrasse 15 4142 Mnchenstein Tel: +41 61 416 0643 Fax: +41 61 416 0644

RETAIL ORGANIZATIONS
Coop Schweiz Thiersteineralle 12 4002 Basel Tel: +41 61 336 6666 Fax: +41 61 336 7491 http://www.coop.ch Manor AG Reggasse 34 4058 Basel Tel: +41 61 686 1111 Fax: +41 61 681 1192

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FiBL - Research Institute of Organic Agriculture Department of Economy and Standards Ackerstrasse 5070 Frick Tel: +41 62 865 7253/865 7272 Fax: +41 62 865 7273 E-mail:admin@fibl.ch http://www.fibl.ch Institut fr Marktkologie (IMO) (Institute for Market Ecology) Poststrasse 8 8583 Sulgen Tel: +41 71 644 9880

Fax: +41 71 644 9883 E-mail:imoch@compuserve.com http://www.imo.ch Schweiz. Vereinigung fr Qualitts- und ManagementSysteme (SQS) (Swiss Association for Quality and Management Systems) Industriestrasse 1 Postfach 686 3052 Zollikofen Tel: +41 31 910 35 35 Fax: +41 31 910 35 45 E-mail: Headoffice@sqs.ch

Schweizerische Gesellschaft fr biologischen Landbau (Bioterra) Dubstrasse 33 8003 Zrich Tel: +41 1 463 5514 Fax: +41 1 463 4849 (Small-scale gardening) SIPPO - Swiss Import Promotion Programme OSEC Swiss Office for Trade Promotion (OSEC) Stampfenbachstrasse 85 PO BOX 492 8023 Zrich Tel: +41 1 365 5151 Fax: +41 1 365 5221 E-mail: info.zurich@osec.ch http://www.osec.ch

Chapter 12 UNITED KINGDOM

Introduction
The dedication of some of the United Kingdoms agriculturists and naturalists in the first half of this century led to developments which contributed significantly to the foundations of the organic move ment. It was as a con se quence of this work that The Soil Asso cia tion (SA), which is still the leading organi za tion in the coun trys organic move ment, was formed in 1946 and adopted as one of its aims the fol lowing: to bring together all those working for a fuller under standing of the vital rela tion ships between plant, animal and man. Some years later and at a time when the Gov ern ment and global agro-chemical companies were directing British agriculture towards chemically enhanced farming, a small group of members of The Soil Association established the United Kingdoms first Organic food shop in London (in 1960). This shop was, in effect, the retail outlet for the organic pro duce grown by The Soil Asso cia tions mem bers but, being the only one of its kind at the time, did not pro vide a large enough outlet for such produce. As a consequence organic farmers still had to sell most of their pro duce through normal com mer cial chan nels if they were to make ends meet. The specific iden ti fi ca tion of organic prod ucts came gradually with increasing consciousness of green issues and the emergence of health food outlets, followed by farm shops and, eventually, dedicated organic shops. Producing specifically for the organic market thus began to approach economic viability only over an extended period of time and the percentage of produce bearing the organic label increased very slowly. The growth that could there fore have been expected of the British market did not mate ri alize and, by the end of the 1960s, mar kets in the United States and in other Euro pean coun tries were more diver si fied and widespread. In spite of this, however, the United Kingdom was once again involved in securing the long- term authen ticity of the sector. With the fast growth that was taking place else where and the price premiums that were becoming available, a number of opportunist growers and traders who were not exactly in tune with organic prin ci ples began to appear in the market. It was thus necessary to define the term organically grown to guarantee the purity of the product and protect it during the entire production, distribution and mar keting process. In response, The Soil Asso cia tion established a set of organic standards in 1974; together with the official French standards and IFOAMs Basic Standards, these became the foun da tion of EC Regu la tion 2092/91.

Supply and demand


Retail sales
At the end of 1997, the British retail market for organic foods was valued at $450 million, having practically doubled in size in the two years since 1995. Preliminary fig ures for 1998 indi cate sales of up to $650 mil lion. This trend is set to con tinue at an increasing rate with trade esti mates put ting the retail value of the market at about $10 billion within 10 years, raising the market share of organics from the cur rent 0.4% to 10% - 15%. This appears some what opti mistic and will be fea sible only if there is good

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supply availability, a supportive and more active government policy and the gradual erosion of price differentials (prices still appear to be up to 50% higher on average than those of con ven tional foods in many cases). In terms of domestic con sump tion, a recent survey (by AC Nielsen, Homescan UK, Sep tember 1997) of 105,000 house holds found that, although 25% of the con sumers sur veyed bought organic food, these purchases were hampered by the lack of supply. Furthermore consumers continued to find organic food too expensive in spite of retailer price cuts. This means in effect that 75% of British households do not buy organics despite the large growth in recent years. There is thus poten tial for market expansion. At the same time, there are obstacles that have to be removed before such potential can be fully exploited: 55% of the households interviewed cited high price, and 25% referred to the lim ited range of prod ucts as their rea sons for not buying. The major organic product categories sold are fruits and vegetables, cereals, and meat and dairy products although there are significant markets for products such as processed foods, raw ingredients, beverages and baby foods. Although there has been steady growth in the largest product category (fruits and vegetables), this has been slower than the extremely rapid expansion in products such as organic meat, dairy produce and baby food. These products have benefited from consumers switching away from intensively farmed products in response to recent food scares. The baby food market in particular has seen a rise of almost 50% a year (compared to 30% for all organics) and is now worth almost 6% of the overall baby food market which was valued at more than 145 million in 1997. Trade estimates indicate that fruits and vegetables (including dried and processed goods) account for 45% of the market. The rest of the market is distributed as follows: cereals and pulses 14%; meat 12%; dairy products 8%; processed organic foods 6.5%; baby foods 4%; tea and coffee 3%; wine and other alcoholic beverages 3%; eggs 1.5%; herbs 1.3%; confectionery 1%; and juices 0.7%. The problem of availability has led to a high dependence on imports. Of total organic food sales, an average of 60% - 70% is imported, with percentages varying significantly according to product sector.

Imports
Roughly half of the imports of organic foods comes from other EU countries. The major non-EU suppliers are currently the United States, Egypt, Israel, Argentina and, increasingly, South Africa and Central America. Apart from these main suppliers, trade research reveals a wide and fast expanding range of suppliers of individual products (see annex II for an example of this). Of the total imports of food and drinks, one third is estimated as coming from developing countries. On average, some 80% of organic fruits and vegetables are imported; the estimate for fruits is as high as 85%. Of the rest, 100% of tea and coffee, 90% of wine and alcohol, and 50% of juices and cereals are imported. Most meat products, eggs and dairy products are domestically supplied. Further information on imports by product groups is given further below (market characteristics).

Domestic production
The high percentage of sales attributable to imports is mainly explained by the fact that organic production in the United Kingdom is still comparatively small. According to The Soil Association, there were an estimated 1,200 organic farms out of a total of 100,000 farms of all types in the country in 1997. These 1,200 farms were using 75,000 hectares, an area equivalent to only 0.4% of the total farmed land. This compares with 900 farms in 1996 producing on 50,000 hectares (0.3% of the overall farmed area). In spite of the growth, the total is still less than half the EU average, a little less than in France and considerably less than in Denmark and Germany. Domestic organic production (in terms of total retail sales of 81 million in 1997) is divided into 20% arable crops, 35% livestock products and 45% horticultural produce. Again according to The Soil Association, the highest growth rates between 1995/96 and 1996/97 in terms of specific products were registered by triticale 208% (a growth from a very low base); protected crops 196%; brassicas 111%; barley 95%; rye 76%; dairy production 74%; beef cattle 45%; and pigs 33%. No figures were available for peas, beans or poultry. In 1997, the largest areas (in hectares) were allocated to the production of organic potatoes (836), followed by cabbage (544), swede (275) and cauliflower (189). Most other organic products had a total land assignment of less than 100 hectares each.

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The Ministry of Agriculture introduced an Organic Aid Scheme in 1994; the Scheme is part of an overall initiative taken by the European Union (EU Regulation 2078/92). It is an area-based payments scheme open to any farmer who registers for organic conversion and complies with an inspection system governed by the United Kingdom Register of Organic Food Standards (UKROFS). Any agricultural land not already in organic production is eligible to enter the scheme with a minimum size of one hectare and no maximum except a limit of 300 hectares for which aid will be granted. The Scheme gives payments to alleviate both the costs of conversion and some of the losses in income incurred. In 1996 the Gov ern ment also intro duced an Organic Conversion Information Service, a free advisory service to farmers and growers interested in con verting to organic pro duc tion. It includes a tele phone help line, an infor ma tion pack and a pos sible on- farm con sul tancy for up to one- and- a- half days. The use of the scheme has increased significantly since it was introduced.

Although these terms were improved in new proposals in April 1998 (with payments increasing from 250 to 450 per hectare for land eligible for the Arable Areas Payments Scheme, 350 per hectare for other eligible grassland and 50 for ineligible grassland), the simple flat rate was continued as was the 300-hectare limit for any one organic unit. There also appears to be no realistic allowance for setting land aside, which is an essential part of the organic process. The trade view is that the Government is not truly committed to organic production and takes a more free market interpretation of the Organic Aid Scheme than elsewhere in the European Union. In the United Kingdom, farmers are paid 70 per hectare for the first five years to convert to organic, less than half the average disbursement from the Scheme by other European countries. The Government on the other hand argues that it does not want to encourage a subsidy-reliant mentality among new organic farmers and that the sector needs to be put on a commercially viable footing as soon as possible.

Market characteristics and requirements


Market characteristics
The structure of the retail market has also reduced the opportunity for extensive exposure of organic foods to the British consumer. The market for foodstuffs is dominated by a few multiple chain stores (see below). Their policy towards food retailing has been one of vertical control where possible of most stages of the distribution chain. In essence they have imposed an industrial regime on food production, insisting on strict specifications and time deadlines. This is the antithesis of organic production and distribution, and therefore organic products have not featured significantly (until recently) within their development plans for food retailing. This in turn has meant that the majority of British consumers (over 70% of food retailing is controlled by these chains) have not had ready and regular access to organic products. Furthermore, in those chain stores in which organic products have had a presence, the price differential has been so high as to restrict demand. Thus, nei ther the demand (though growing strongly) for, nor the supply of, local organic products is as large as might be expected from the rela tive afflu ence of the United Kingdom and its early start in the devel op ment of an organic sector. Even today (July 1998) the market is far less devel oped than might be expected, given its importance in international certification and the fact that the people and organizations involved in the organic movement in the country are very active, quite popular with the media and strongly com mitted. One other pos sible reason for the com para tively small demand lies in the cultural traits of the British consumer. The British seem less prone to environmental alarmism than the citizens of other coun tries. Many of them dis like the politi cally cor rect, are scep tical of scare sto ries and are not as respon sive to the so-called wholesome and natural trends as consumers in other European countries. Only a minority of consumers within certain social and age brackets buy organics regularly or respond to scares and media concerns by increasing pur chases of their organics; they number far less than their counterparts in some northern Euro pean coun tries. The cross over of organics to mainline consumption in major food

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out lets is still in the process of occur ring, although it is now increasing its pace with the greater involve ment and com mit ment of the mul ti ples. The United Kingdom has also been experiencing a rapid increase in the number of vegetarians in recent years. Although organic foods are not exclusively vegetarian, consumers now opting to stop eating meat for ethical reasons will be more likely to have an interest in organic foods. A recent survey indicates that the number of vegetarians in the country continues to grow at the rate of around 5,000 per week: there were an estimated 3.1 million in 1997 (a 100% increase on the total for 1990).

main ones are Israel, Egypt, the United States, Argentina, northern African countries and South Africa. The vegetable and fruit trade stresses that British consumers buy produce with their eyes. This applies to all fresh produce. It may always have been the case, but it is probably all the more so nowadays when so much consumer shopping is done in supermarkets where the customer cannot ask questions of staff, and where touching and smelling produce is somehow inhibited. Only in recent years has there been much scepticism among the British that the food offered to them was other than fresh and wholesome, especially if it looked as though it was both. As regards distribution, the fruit and vegetable trade differs from that of some countries in Europe because its major outlets are supermarkets and box schemes rather than health food stores. In terms of actual exposure to customers, the situation varies between type of retail outlet and indeed between parts of the country. First-hand observation in one of the large multiples in the North of England revealed a separate, relatively small, organic fresh fruit and vegetables section with about seven or eight different items, including bananas and avocados, and displaying a notice announcing that organic produce was now priced the same as their conventional equivalent. As seems to be a common occurrence with organic fresh produce generally, however, the boxes for one or two of the products were empty. In some stores visited, each organic item was displayed alongside its conventional alternative, rather than in a separate organics section, and was not easy to find. On the other hand observation in one of the more organically committed multiples in London revealed a wide range of very fresh and abundant fruits and vegetables with premiums averaging around 30% for domestic produce and up to 100% for imported fruit and exotics. A whole section was devoted to them and they were marked with a distinctive organic logo. There is no hard and fast rule as regards pricing, and the practice varies not only between chains but also between stores in different parts of the country. First-hand observation identified price premiums in one store ranging from 50% on organic vegetables (carrots, mushrooms, new potatoes and white cabbage from Spain, the United Kingdom, Italy and the Netherlands respectively) to at least 100% on

Fruits and vegetables


It is estimated that fruits and vegetables (mainly fresh, but including dried and processed produce) make up about 45% of all organic food sold in the United Kingdom. Growth in this product sector has been steady but in recent years less spectacular than that of other products. The reasons are the lack of acceptable supplies and the switching of consumer interest from mainstream products to other organic products as a result of food scares. Vegetables have the largest demand, which is almost twice the size of the demand for fruit. Although this has been assisted by the emergence of vegetable box schemes, it is the recent upsurge in the participation of the supermarkets that is likely to cause growth in the vegetable sector to pick up speed in the near future. The most popular vegetables are the all-year-round domestic products such as potatoes, onions, carrots and other root crops. These often also have a lower price differential than imported and seasonal products. Although only a limited range of organic fruit is grown in the United Kingdom, fresh fruit still ranks in second place in sales by product category (with a share of around 15% in 1997). Apples, pears and bananas are the most popular of the fruits sold although most outlets do have a small range of exotic fruit. As stated above, the United Kingdom imports around 80% of its organic fruits and vegetables. These come from other European countries or from a group of established third-country suppliers, of which the

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organic fruits (apples, pears, grapes, oranges from the United States, Argentina, Chile and Italy). In another store the premiums on a similar range of products from more or less the same countries varied from 10% - 20% to over 100%.

terms of a potential market for third-country suppliers outside EU, this sector thus provides little potential. Having said that, growth prospects are expected to be very good (the market is expected to triple in the next five years). This is particularly so for meat, since the United Kingdom has one of the lowest European per capita consumption levels for organic meat. The BSE scare has already catalysed growth in organic meat consumption and concern over animal welfare has further increased consciousness of animal husbandry practices. Premiums for organic meat and other animal produce can be very high, but consumers seem likely to demand and then to accept the consequences of the development of production systems with a higher than normal welfare component. The variations in premiums reflect production conditions for different types of meat, with organic pork and poultry having the highest premiums because of the low costs of the intensive mass production methods used.

Processed fruits and vegetables


A wide range of processed organic foods incorporating organic fruit and vegetable ingredients is available from some of the wholesalers, in various forms dried, canned, chilled and frozen. The chilled range is reported to be growing quickly. One wholesaler has found that its sales of organic chilled foods (fruit juices, yoghurt, margarine, and cheese) are now growing faster than those of dried, ambient or frozen products. Another wholesaler identified chilled organic fruit juices as one of his significant growth areas. However, observation in one supermarket store revealed a price premium of up to 200% on organic Israeli orange juice, though premiums of up to 50% are more normal. Organic soups are said to be increasing in range and popularity in all their various forms (chilled, fresh, and canned). One of the smaller chains has introduced a limited range of frozen organic vegetables, which are displayed alongside the standard version but with a high price premium. Demand for fruits and vegetables for ready meals and baby foods is growing rapidly and significant market opportunities exist for suppliers of appropriate products. Supplying the processed foods sector requires a long-term commitment to individual processors or intermediate suppliers. It also calls for growing produce to slightly different specifications than the fresh market a possible disincentive to growers. Producing for both markets together should, however, provide some balance in revenue and give more return for products not reaching top grade. This in turn could lead to more competitive pricing. Overall, however, the prospects appear very good for processed organic food products.

Cereals and pulses


Roughly half of the organic cereal supplies to industry in the United Kingdom are from domestic growers, and most of the rest comes from the European Union and the United States. The main imports are hard wheat, durum wheat, maize and rice. Most cereals are milled (sometimes by stone) by some 20 companies in the country. The two largest, Doves Farm and Shipton Mill, produce flour and bakery products. Cereal products include flours, breads, biscuits, breakfast cereals, porridge and cakes. A major grain merchant that has traded in organic cereals for over 12 years said that organic grains, a fifth of which it imports through brokers, currently represents just 1% of its total sales. Wheat and barley are its two biggest purchases and it also deals in oats and oil-seed rape. Its organic imports come mainly from Europe, North America and Australia and none from developing countries. A significant part of the British output of organic cereals is used as feed for organically farmed animals from which meat, eggs and dairy items are obtained. The grain is sold either direct to farmers who mill and mix it themselves, or to compounders who then sell their mixes to farmers for different end-uses.

Meat and dairy products


Although this is a comparatively important segment of the British organic market, most supplies of meat and meat products come from domestic production. In

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The biggest growth area recently has been in organic wheat and soya for use as chicken feed by organic free-range egg producers. There has also been growing interest on the part of the supermarket chains in organic poultry (and thus, poultry feed). Demand has grown somewhat for malting barley for use in the production of organic beer, which sells overseas (particularly in Japan) as well as in the United Kingdom. As grains used for animal feeds undergo little processing and packaging, the cost of raw materials constitutes a high proportion of the price charged by the grain merchant. Because of lower yields, the price premium on the organic variety is high, generally in the region of 80% - 100%. Currently, however, the premium is more likely to be 150% because the growing popularity of organic free-range eggs has produced an excess demand situation. Cereals for bakery products tend to be bought direct by the millers rather than through grain merchants. A bakery (The Village Bakery) whose products are almost entirely organic buys its organic flour from a domestic mill although about half of the raw materials for this originates in Europe and North America. Organic flour is the bakerys most important ingredient. The bakery supplies some of the multiples, independent retailers, caterers and wholesalers with bakery products. A number of importers/wholesalers (Hider Food Imports, Harley Foods and Juniper Fine and Organic Foods) buy and sell organic grains. One buys organic rice from Italy and North America in bulk from Community Foods (see below) and then sells in bulk or in smaller packs to retailers. Another imports organic rice direct from Italy and North America, packed at source with the wholesalers label, and then sells it to other wholesalers which supply it to health food shops. The same importer/wholesaler supplies organic grains to a muesli manufacturer which sells to the multiples. Another stocks a range of organic pastas. It seems clear that the cereals market is established and buoyant. Product innovation and an everincreasing range of uses give it good potential for further growth.

For example, organic nuts (peanuts) and dried fruit (raisins and sultanas from Turkey) are bought in large sacks by one wholesaler who then supplies them to a manufacturer of fruit and nut bars. These bars are then bought back by the wholesaler for resale to the retail trade. One of the key British importers of organic dried fruits and nuts (and other organic ingredients for food products) is Community Foods. In fact, it offers such a wide range of organic products that many of the other major organic food suppliers, packers and processors use it almost as a one-stop shop. The bulk of its organic sales is, however, made up of organic dried fruit, nuts and sunflower seeds, and this despite the fact that the large quantities of nuts and fruit that it prepares and packs for some multiples and independent department stores are not organic because of the large price premium. Indeed, although this wholesaler supplies a wide range of organic products in addition to dried fruit and nuts (olive oil, coffee, rice, etc.), and is regarded as a major British supplier, its organic sales make up only 1% of its business. Some of the dried fruits (mango, pineapple and banana) which a bakery uses in producing non-organic cakes and other products to order for a trade customer are in fact organic at source. They are not however certified as such because they are grown and dried by many small producers in Uganda and Kenya. In this particular case, the bakers customer is not convinced that demand for products containing dried exotics and carrying the organic label is sufficient to justify the costs of having the growers and the rest of the supply chain certified. Dealers in dried fruits and nuts offer a wide range of serv ices. One importer and whole saler imports large quantities of organic raisins from Argentina in con tainers and sells them in bulk quan ti ties to bakers and other food manu fac turers and in retail packs to health food shops, at a premium of 25% over the non-organic variety. It also imports organic dried apri cots, pine apple and dates. Organic prod ucts make up 50% of its overall turnover. Another wholesaler, whose turn over is 30% organic, buys organic rai sins from another whole saler and then sells them to health food shops, delicatessens, smaller grocery chains, etc. A bakery has identified important gaps in the supply of organic nuts. This bakery is almost 100% organic, is certified by The Soil Association and supplies

Dried fruits and nuts


For dried fruit and nut products, supply systems are complex with much intertrading between suppliers.

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organic bread and other bakery products (cakes, flapjacks, etc.) to supermarkets, independent retailers and wholesalers. It buys its dried fruit and nuts in bulk, mainly from Community Foods. It reported that, whereas non-organic nuts can be bought by bakers and other food manufacturers in the numerous forms required for their different products (e.g. ground, blanched, ribbed almonds) the organic range was more limited (organic almonds, for instance, are supplied only shelled or blanched).

Another fair trade organization, Equal Exchange, supplies wholesalers with retail packs of various teas (from India and the United Republic of Tanzania) and coffees with the dual fair trade/organic tag. Percol coffee, produced by the Food Brands Group from sources in South America, is also available. Although the scene appears somewhat disjointed, there are some encouraging signs in the market. One of the major British packers of tea and coffee has decided that for products that are certified as organic at source, it will go through the hoops to have the rest of the supply chain certified so that it can put an organic label on them. This, the company hopes, will enable the product to be sold at a higher price to recoup the higher prices that it has to pay to suppliers of organic produce. Coffee was identified by a number of respondents during the fieldwork for this study as having relatively promising prospects for developing countries wanting to exploit the growing market for organic foods. This is because almost all of the product is grown in tropical conditions. Furthermore, the price premium required for organic coffee to recoup its higher production costs is comparatively low as the cost of the basic product constitutes a small proportion of the total cost of the final product on the retailers shelf. Price need therefore not be a significant limiting factor. The important question that remains, however, is whether or not the overall market for all types of coffee and tea is growing or whether growth in sales of the organic variety would be at the expense of the non-organic, thus resulting in little overall impact on the income of producers in developing countries. As with organic foods generally, a key influence will be the degree of involvement of the multiples. First-hand observation reveals some presence, with most chains stocking the labels mentioned above. At least one, however, now provides own-label organic teas. The scene is set for an expansion generally in this sector especially if the costs of organic certification can be justified by bulk trading and retailing through major retail outlets.

Coffee and tea


Most of the major coffee and tea companies in the United Kingdom do not produce organic blends either for themselves or for the supermarket chains own labels. It appears that the volume of supply is not the limiting factor to market expansion but rather the entire economics of organic certification and the awareness of consumers. Non-certified organic teas and coffees are already used but within traditional non-organic products, e.g. coffee from Cuba, Ethiopia, Kenya, Yemen and the Galapagos Islands, and tea from Kenya. Several wholesalers in the United Kingdom supply organic tea and coffee. One of the countrys biggest importers of organic coffee (Hider Food Imports) is the exclusive importer of organic coffee from the Netherlands roasting house Simon Levelt. The coffee, a South American-Asian blend with the fair trade mark, is bought in retail packs and sold on to other wholesalers, health food shops, delicatessens and department stores. Another wholesaler buys organic tea and coffee from Community Foods. Traidcraft plc, one of several fair-trading organizations in the United Kingdom, sells tea (Darjeeling) and coffee (Peruvian, sourced through the Neth er lands) which are cer ti fied organic at source but which it cur rently does not label organic because the rest of the supply chain has not been certified. Only about 2% of Traidcrafts turnover is currently derived from organic foods. Oxfam, too, sells tea with the fair trade mark but without an organic label, though the tea estates it buys from are con verting to 100% organic gardening under IFOAM guidelines. Caf Direct, which carries the fair trade mark, has achieved the highest market penetration; it had around 4% of the ground coffee market in 1996. Clipper Fair trade Tea has also had a degree of market suc cess since its launch in 1994.

Fish and fishery products


Organic fish (wild and farmed) is also now available in some outlets (e.g. Planet Organic). Such fish are caught by sustainable and environmentally friendly

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fishing methods in unpolluted waters. Although it is difficult to establish a chain of custody,9 some suppliers have been certified. For instance, The Soil Association has registered suppliers from Saint Helena (a British dependent territory in the South Atlantic Ocean) for tuna smoked by a British company it won an Organic Food Award in the fish category in 1997.

Other products
The other products of potential importance to developing countries and which have prospects in the United Kingdom are sweeteners, pulses, oil-seeds, edible oils and fats, wines, and herbs.

Food laws and regulations


As mentioned earlier, the United Kingdom was a major contributor to the formulation of the EU-wide standards and systems, which now regulate the organic market and ensure the integrity of the organic chain from farm to table. As a basis for certification, EU Regu la tion 2092/91 establishes the rules for production, processing and importing, including inspection, record keeping, labelling and marketing. Each country in the European Union is responsible for setting up an inspection system. Each inspection body has a degree of flexibility in interpreting and enforcing the Regulation because the latter provides only the minimum require ments for cer ti fi ca tion. The United Kingdom Government designated UKROFS (United Kingdom Registry of Organic Food Standards) as a control body in 1987. It has pro duced a set of national stan dards and estab lished an independent certification and inspection scheme for organic producers. It has an independent board with exper tise from the pro duc tion, retail, con sumer and trade stan dards sec tors. It has a sec re tariat within the Ministry of Agriculture, Fisheries and Food. UKROFS can operate as a certifying body, but prefers to monitor and safeguard the activities of other certifying bodies rather than undertake that work itself. There are a number of approved certification bodies in the country ( ee Annex I). s They include The Bio-dynamic Agricultural Association, Organic Farmers and Growers Ltd, Organic Food Federation, Scottish Organic Producers Association and The Soil Association. Arguably, The Soil Asso cia tion is pre emi nent. Surveys have demonstrated the importance of a logo in that 85% of the seasoned purchasers of organic produce look for a symbol. Until recently the symbol of The Soil Association was the best known, but this may well change. In the new wave of supermarket activity in the market it has been observed that they are using a range of approved certifiers. Indeed one of the major chains has developed its own logo (a blue circle) for its organic range. British supermarkets are very jealous of their own reputations and branding, and are widely trusted by their customers, so it is quite likely that their customers will accept any UKROFS-registered certifier which the supermarket of their choice cooperates with. However, the importance of a generic logo, e.g. that of The Soil Association, should not be underestimated. As regards imports into the United Kingdom, UKROFS enforces one of the basic tenets of EU Regulation 2092/91 in the country, viz. that ... organic food imported from outside the EC is grown and certified to equivalent standard (to that within the EC) and that the exporting countrys standards and inspection systems must be notified to and assessed by the EC. The Regulation is discussed in some detail in chapter 2.

An expression used in quality control circles to identify the series of links from farming to final product which ensure that products can be identified and segregated from non-certified products at each stage of the processing and distribution chain.

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Distribution channels
Importers, traders and wholesalers
To date the major suppliers of organic foods to the British retail trade have been specialists in various product ranges. Many supermarkets and other outlets deal with a handful of well-established wholesalers which operate with overseas as well as domestic suppliers of fresh organic produce. Some wholesalers also sell on to other wholesalers with whom smaller retailers deal. In the fresh fruits and vegetable sector, the largest and best known is Organic Farm Foods of Wales (now with branches throughout the United Kingdom). This company supplies supermarkets, box schemes, health food shops, specialist organic supermarkets, processors and even customers in other European countries. It has branches and pack houses in the United Kingdom, France and the United States, and agreements with companies in other European countries. It meets its customers requirements through its wide network of suppliers in the United Kingdom, in Europe and in countries in most other regions of the world over 60 suppliers in all. This network was established and is maintained through an active policy of nurturing its suppliers and assisting them with agronomic practices, financing, certification and export servicing. The Organic Marketing Company, also a specialist supplier, is a large organic vegetable production firm in Herefordshire and is cooperatively owned by its members, mostly growers. It now concentrates on supplying box schemes. It is not, however, an importer. Another important company in the fruit and vegetable trade is Congelow Produce Ltd (located in Kent). Wholesalers may deal in pre-packed produce, or operate as a pack house. Perhaps the largest in both these groups (with a turnover of about 30 million) is Community Foods, a leading importer, wholesaler and distributor of natural foods which have gone through a degree of processing. At about 10% of its turnover, organics are a growing part of the business, but in big product lines such as apricots, peanuts and almonds, organics remain a small line. A range of organic produce especially oils and dried or otherwise preserved goods, and including teas is wholesaled under its own or other labels, often after packing in its own warehouse. Although other suppliers proliferate in the United Kingdom, they are either mainly small product specialists or suppliers of conventional produce increasing their participation in organics in response to supermarket demand. Some supermarkets are seeking imported organic supplies from their traditional suppliers on the grounds that such suppliers are familiar with the nature of the supermarket business and have the requisite standards of efficiency. Thus traditional suppliers to supermarkets, such as Sapphir, Mack Multiples and Wealmoor, are attempting to increase their involvement in the organic business. This requires reconciling the rigorous logistics of normal supermarket supply with the more natural characteristics of organic supply operations not a simple conversion. There are a large number of specialist suppliers. Information on some of these companies (e.g. importers of cereals, dried fruits and nuts, coffee and tea) is given in the earlier section on market characteristics (pp. 255 ff.).

The retail sector


The shares of the various types of outlets in the market for organic foods in 1997 are estimated at 60% - 65% for supermarkets, 18% for farm gate and box schemes, 14% for independents, 3% for health food shops and the rest for market stalls. Although the share of box schemes has grown the most in recent years, supermarkets are now likely to gain share faster in the near future. It is clear that any significant future expansion of the organic market in the United Kingdom and a crossover into mainline consumption rests with the supermarkets. This is already happening and growth expectations are high. All in all it can be concluded that the major determinants of development in the organic retail sector are the supermarkets perceptions of what consumers want, the availability of quality supply, a relationship with suppliers who understand the standards of the retailer and can confirm a chain of custody, and a reduction in the price premium for organic foods.

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Developments in various types of retail outlets are discussed below.

Multiples
It is estimated that the top five supermarket chains control over 70% of the food market in the United Kingdom. They have evolved into extremely powerful forces, controlling the range and quality of supply and the level of availability of products to British consumers. Over the last 20 years they have extended their influence all the way through to the original producer, regardless of where it is located, and today not only dictate product specifications and quality but also planting, harvesting, packaging, transportation and delivery. The high degree of competition between them has resulted in increasing stringency and rigour in their expectations of the products they handle and their purchasing power has enabled them to direct their suppliers towards increasingly mechanistic and almost industrial methods of producing food. The United Kingdom is one of the leading countries in terms of the volume of organic products sold through supermarket outlets. However, the supermarkets, because of the very nature of their business and their insistence on control, regularity in specifications and timing of supply, have, until just recently, reduced the consistency and pace of their involvement in the trade. Their requirements do not fit in with organic products which of essence are not uniform in shape, size or colour, are not blemish free and are not produced to a strict timetable. Thus in spite of its strong position, the involvement of the supermarket sector in the organic trade has been characterized by periods of enthusiastic development followed by complete withdrawals from handling organic produce. In the late 1980s, there was considerable media attention on green issues and, anxious to appear green and to command the loyalty of high-spending green consumers, supermarkets began increasingly to devote a good deal of time and space to organic produce. They also identified a gap in the market for organic produce that was not being met because of the incapacity of the health food sector to handle such merchandise. As a consequence, sales increased fivefold between 1988 and 1993 (from a base of 20 million). This period of rapid growth did not continue however. Although the trend was never quite

reversed, some of the large chains started to have doubts about the willingness of large numbers of shoppers to pay price premiums for produce which often looked unattractive and were not regularly available. During the last decade or so this has resulted in something of a pattern among the multiples of venturing into, testing, dropping out of and, after a number of years, re-entering the market for organic fresh produce. Most of them clearly see this as a potential growth area but one with a number of complications to overcome. These are related particularly to reliability and continuity of supply, quality require ments and pricing. The approaches taken to tackling these supply and pricing issues have varied. During the field investigations for this survey, Sainsburys, one of the most active players in the organic sector, stated that it sold twice as many lines of organic produce as its nearest rival. It has committed itself to expanding its range so that wherever possible an organic product is on offer alongside every conventional product. It is pledged to increasing the percentage of organics from 1% to 5% of its total food sales. It is also actively involved in the wider organic movement in the United Kingdom by fostering domestic production and sponsoring conferences, workshops and the like. In associating with the organic supplier group SOURCE, its objective is to raise the quality and increase the quantity of organic supplies and promote R & D. Waitrose, another of the major multiple chains, has gone into organic sales in a big way. One of its stores in London, visited during the field research for this study, had a wide range of clearly presented organic products. There was for example about 6 - 8 metres of individual shelf space given over to organic vegetables and fruit. There were clear Organic signs and the products were all labelled with a large blue O. The average price premium for organics was about 30%; many items were priced 10% - 15% higher than their mainstream counterpart products. Tesco, one of the largest supermarket chains, has created a specialized staff post solely devoted to the development of organic sales from its outlets. It began heavily promoting organics in October 1996, and did so on the basis of near-parity of prices between organic and conventional produce, deciding as a matter of strategy to pass on profits from the

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sector to the consumer in the form of discounts. It says that it has seen a fivefold increase in sales of organic produce in the period and hopes to raise the share of organics from the present 1% of the firms 1.6 billion fruit and vegetable sector to perhaps 5% in three to four years, quadrupling the number of stores stocking organic produce. Safeway, a pioneer in the organics market 10 or 15 years ago, has in recent years concentrated its attention in the area of organics on the young family market. This was particularly motivated by the anxiety of mothers concerning food safety. For one of the major chains (Asda) the experience has not been that encouraging. In 1998 it tested the market for the second time in five years, with the testing restricted to its larger stores. Though significant customer interest was generated, the company temporarily withdrew from the market because its supplier had been unable to meet its quality specification. This supermarket chain is of the opinion that its customers want organic produce to have the same quality and appearance as the conventional variety. In a deliberate effort to secure customer interest, the company earlier this year started to offer its organic fresh produce at price levels similar to its traditional lines, in the belief that customers are resistant to significant price premiums on organic produce.

retailers and dedicated organic shops. An organic supermarket, Planet Organic in London, specifically aims to provide space and facilities for an organic alternative to most products, fresh and processed, and thus offers a full range of organic food and beverages. It is now experiencing good growth after a difficult first year and is planning to set up similar stores in cities in the South. Most British cities have health food stores (chains such as Holland and Barrett) on their high streets which carry an increasing range of organic foods, notably processed foods such as grains, raisins, pasta and pulses. It is unlikely however that they will become significantly involved in the further development of the organic food market.

Box schemes
Box schemes are another significant market outlet and one in which there has also been a dra matic rise in sales in recent years. Members of such schemes pay a fixed price for a box of in- season organic fruits and vegetables, accepting the mixed range, quality and quantities that are provided. It is an attempt to strengthen ties between producers and consumers and pro moting accep tance of the less uni form nature of organic pro duce. Such boxes can be bought at the shop/farm or at a cen tral delivery point; they can be delivered to the home or by mail order. Although accurate figures are difficult to get, The Soil Association has estimated that there were 130 such schemes in operation in 1997, catering to some 40,000 fami lies and involving 30% of growers in the United Kingdom. Although there was good growth in this market segment between 1994 and 1996, it appears that there is now some evidence of a degree of disenchantment with the schemes. Consumers are starting to complain, and journalists are starting to write about the wastage of unwanted produce, the lack of identification of some of the produce and its unattractive appearance. All this is seen as increasing the real price differential. Other outlets for organic produce are farm shops, mainly for fruits, vegetables, meat and dairy products. These arose at a time when health food shops could not handle fresh produce and supermarkets were either reluctant to stock the range or were demanding specifications which were impossible to meet.

Health and organic stores


Unlike in some other countries where health food shops have been important, the British health food trade has never tried to compete with the supremacy of the supermarket as a supplier of fresh organic produce and groceries. In some European countries (as in the United States), health food stores have carried organic produce, especially fresh foods, which has made possible the development of a network of local growers and suppliers. In the United Kingdom, by contrast, organic farmers and growers have had to sell direct to the public (in farm shops), or have developed links with a small number of wholesalers and the small number of supermarket chains in which most people do most shopping. Health food shops have not had the physical capacity to handle fresh produce, although this is now changing. Several other organic retail outlets are more important than health food stores. They include butchers, farm shops, greengrocers, independent

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Processors and food manufacturers


True conversion of organic produce into a processed product is in its infancy in the United Kingdom. The number of companies that can be called true processors is small. The Soil Association does have a large register of processors but most of those listed are packers and re-distributors or family-type kitchen operations. Few large food manufacturers have considered broadening their range of products to include organics. Grain milling is the primary activity of the organic processing sector and Doves Farm Foods, Jordans, Shipton Mill and Morning Foods are the major suppliers of organic flours and cereals. Some large dairies have also gone into processing with, for example, Yeo Valley producing organic yoghurt from milk supplied by the Organic Milk Suppliers Co-op. The significant recent growth in organic baby foods (approximately 50% yearly) as a result of food scares has supported the development of a processing company in the United Kingdom Baby Organix.

This company produces a range of baby meals, cereals, pasta shapes and drinks which are free from additives, added sugar, processing aids and fillers. They source their ingredients from local organic farms. The company, which is still the market leader, faces strong competition from Hipp UK, which claims to have increased market share by 140% over 12 months. Whole Earth Foods, a London-based company which was involved in the genesis of organized organic retailing in the country, has pioneered the manufacture of foods from imported organic produce over many years. Its processed products began to appear in the late 1970s with avowedly healthy and natural foods, sold to a generation of consumers interested in alternatives. Among their products were low-sugar, low-salt versions of traditional foods such as baked beans, jams, peanut butter, chocolate and ketchup. In essence, although British organic retail shelves are stocked with wide ranges of dried, canned, bottled, ready meals, oils, beers and other processed products, most of these are either imported or produced on a small scale by local organic producers.

Market prospects
The United Kingdom is clearly one of the prime markets to be targeted by prospective suppliers of organic foodstuffs. As already mentioned there appears to be enormous prospects for growth in the market for organic foodstuffs. Informed trade sources at all levels anticipate organics taking 10% - 15% of the food market within 10 years compared with 0.4% at present. Steady growth is forecast for fruits and vegetables. The anticipated growth rates of the markets for meat, wine and beer and all processed foodstuffs are among the highest in Europe as a result of the relatively undeveloped state of these markets in the United Kingdom. The current average growth rate for all organics in the country is estimated at around 30% per year by The Soil Association. The trade expects future growth rates for specific produce to be even higher. Achieving this, however, will require a significant increase in supply avail ability. In terms of domestic pro duc tion there will need to be effec tive pro ac tive government support for domestic organic farming because, even if the number of domestic organic farmers were to double, the resultant increase in supply would not meet existing demand. At present the United Kingdom has to import close to 70% of its total organic require ments and this situa tion is likely to con tinue. As explained above, there are various rea sons for the low level of involve ment of British farms in organic production. First, the comparatively large size of these farms makes con ver sion more dif fi cult. Second, government policy has not been viewed as being as practically encouraging as in many other European countries. Finally, the market structure requires specifications which are not easily met by organic production. Although it is reported that the volume of domestic organic supply is increasing steadily and that the number of farmers switching to organic systems is growing, there is still considerable doubt about the commitment of the Government to the process.

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Whatever the interpretation, the fact remains that domestic supplies of organic produce are unlikely to increase at a level that will keep pace with the overall growth of the market. This means that even if growth in overall organic sales were to slow down there will still be an incremental growth in the market for imported organics. This will be reinforced through the increased participation of the supermarkets in the sector and their search for new sources of regular and reliable supply. There are, of course, threats from alternative supply sources. Integrated crop management systems have been actively supported by some supermarkets: these combine the efficiency of intensive systems with organic practices. To tackle the growing public unease with high levels of usage of chemical pesticides, etc., health scares and the increasing concern with related environmental issues, all the multiples have come together to develop crop protocols with which all their United Kingdom growers of fresh fruits and vegetables and now their overseas suppliers must comply and be inspected against. These Integrated Crop Management (ICM) protocols impose lower levels of usage of chemical pesticides and fertilizers, and the use of natural pest control techniques, e.g. the introduction and encouragement of natural predators. One of the top three multiples started a programme to encourage ICM among its suppliers as early 1991. By the end of 1996, over 80% of its domestic fruits and vegetables and 45% of its overseas produce were being grown to ICM protocols and it had plans for further increases in these percentages. At the same time it is involved in assisting the development of the organic sector. Some specialists anticipate that before long this ICM produce could become the standard against which organics will have to compete and that there will be an ever-increasing availability of halfway house producers supplying products with no obvious price premium attached and which are marketed as having features which take account of the growing interest in the environmental, health and social aspects of food production. Indeed, the question has been raised whether the multiples would prefer to see organic

produce remain a niche market because its promotion may be taken to imply that there is something wrong with the standard product. Thus a major issue for organic producers must be whether promotion by the multiples of their ICM produce as a more affordable alternative with more control over supply will limit the growth in demand from consumers for organic produce, or perhaps the competition will force the organics price premium down to a level which consumers will tolerate. The implications of this trend are as applicable to processed products (dried, chilled, frozen, etc) as they are to fresh produce. The other potential threat is from genetically modified foods, which have developed very quickly in the United States and have started to make inroads into the United Kingdom. There is a considerable lobby against them, however, and resistance is strong. Such foodstuffs do have an impressive list of qualities, however, and are available at competitive prices. The attitudes of the major supermarkets will once again be crucial in the forthcoming contest for shares of the changing United Kingdom market for foodstuffs. A four-part market may thus emerge in the short to medium term, divided amongst intensively farmed products, pure organics, ICM protocol products and genetically modified produce. In spite of this struggle for the food market, there is still likely to be a sub stan tial vacuum for sup pliers abroad of organic produce. For prospective developing country suppliers seeking to make an effective and sustainable entry into the United Kingdom, the oppor tu nity does exist and is poten tially sig nifi cant as long as they realize that this is not a trade to enter lightly and that a proper understanding of what organic truly means is essen tial. With pressing competition from alternative systems, it will become increasingly crucial therefore that the development of an organic supply base and distribution system is done properly by developing country suppliers through appropriate national or international certification, state-of-the-art agronomic support and a strong relationship with an established distributor.

Annex I

United Kingdom: selected addresses*

IMPORTERS/PROCESSORS/ DISTRIBUTORS
Anglia Oils Lim ited King George Dock Kingston-upon-Hull East Yorkshire HU9 5PX Tel: +44-1482-701271 Fax: +44-1482-709447 Email: office@angliaoils.co.uk (Importer of raw materials; processor of oils) Baby Organix Organix Brands plc No. 4 Fair fields Close, Christ church Dorset BH23 1QZ Tel: +44-1202 479701 Fax: +44-1202 479712 (Proc essor/importer/dis tributor of baby foods) Clearspring Ltd Unit 19, A. Acton Park Estate London W3 7QE Tel: +44 181 7491781 Fax: +44-181 81118893 (Importer and wholesaler mainly of exotic food products) Com mu nity Foods Brent Ter race London NW2 1LT Tel: +44-181 450 9411 Fax: +44-181 208 1551 (Leading importer, packer and distributor of organic prod ucts including dried foods, pulses, cereals) Congelow Products Ltd Den Farm Lane, Collier Street Tonbridge, Kent TN12 9PX Tel: +44-1892 730447 Fax: +44-1892 730566 (Importer and wholesaler of organic fruits and vegetables) Doves Farm Foods Salisbury Road, Hungerford Berkshire RG17 0RF Tel: +44-1488 684880

Fax: +44-1488 685235 (Importer, distributor, miller, processor of cereals and flour) English Village Salads Camblesforth Grange Brigg Lane, Selby Yorkshire YO8 8ND Tel: +44-1757 617161 Fax: +44-1757 614109 (Importer of fresh salad products and supplier to major multiples part of Geest plc) Gleadell Banks Ltd Lindsay House, Gainsborough Lincolnshire DN21 5TH Tel: +44-1427 421225 Fax: +44-1427 421230 (Large grain merchant cereals and pulses) Harley Foods Blindcrake Hall, Blindcrake Cockermouth GA13 0QP Fax: +44-1900 828276 (Importer, wholesaler dried fruit, pulses, grains, herbs, rice) Hider Food Imports Wiltshire Road Kingston upon Hull HU4 6PA Tel: +44-1482 561137 Fax: +44-1482 565668 (Importer, wholesaler, processor, packer nuts, dried fruits, beans, coffee, pulses, herbs, spices) Hipp Nutrition UK 169 Greenham Park, Newbury Berkshire RG15 8JH Tel: +44-1635 528250 Fax: +44-1635 528271 (Baby food manufacturer/importer) Infinity Foods 67 Norway Street, Portslade East Sussex Tel: +44-1273 424060 Fax: +44-1273 417739 (Importer and wholesaler of a wide range of organic produce)

Juniper Fine Foods Unit 2, Downs Way Industrial Estate Tinwalds Downs Road, Heathall Dumfries DG1 3RS Tel: +44-1387 249333 Fax: +44-1387 249900 (Wholesaler of fresh, ambient, chilled and frozen foods and beverages) Just Wholefoods Unit 2, Cirencester Business Estate Long Lane Cirencester GL7 1YG Tel: +44-1258 651910 Fax: +44-1258 651910 (Food manufacturer of organic instant soup mixes, etc.) Oasis Food & Drink Sunset House Ennis Close, Wythenshawe Manchester M23 9LE Tel: +44-161 283 8888 Fax: +44-161 283 8899 (Wholesale distributor of chilled, frozen and ambient health food products) Organic Farm Foods Llambed Estate, Lampeter Carmarthenshire SA48 8LT Tel: +44-1570 423099 Fax: +44-1570 423280 E-mail: petersegger@off.com (Major importer and wholesaler of all types of organic produce) Organic Marketing Company Unit 1, Leighton Court Lower Eggleton, Ledbury Herefordshire HR8 2UN Tel: +44-1531 640819 Fax: +44-1531 640818 (Packing and pre-packing importer of fruits and vegetables) Suma Wholefoods Dean Clough Halifax HX3 5AN Tel: +44-1422 345513 Fax: +44-1422 349429

___________________________ * List not exhaustive.

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(Wholesaler and manufacturer of organic vegetarian and vegan products) Taylors of Harrogate Pagoda House, Prospect Road Harrogate HG2 7NX Tel: +44-1423 889822 Fax: +44-1423 881083 (Tea blender and coffee roaster) The Food Resource Base Fife Food Centre, Faraday Road Southfield Industrial Estate Glenrothes KY6 2RU Tel: +44-1592 775884 Fax: +44-1592 775955 (Manufacturer of fresh organic soups and sauces) The Quiet Revolution The Coach House, 6 Duncan Street London N1 8BW Tel: +44-171 278 2121 Fax: +44-171 278 1958 (Processor of fresh organic soups) The Village Bakery Melmerby, Penrith Cumbria CA10 1ME Tel: +44-1768 881515 Fax: +44-1768 881848 (Wholly organic bakery, importer and caterer, supplier to major multiples) Traidcraft plc Kingsway North, Gateshead Tyne & Wear NE11 0NE Tel: +44-1914 910591 Fax: +44-1914 822690 (Fair trade food organization) Vintage Roots Sheeplands Farm, Wargrave Road Berkshire RG10 8DT Tel: +44-118 940 1222 Fax: +44-118 940 4814 (Importer and wholesaler of organic wines, beers, ciders, spirits, juices and oils) Whole Earth Foods 292 Portobello Road London W11 1LR Tel: +44-171 229 7545 Fax: +44-171 221 6416 E-mail: 100520.416@compuserve.com http://www.earthfoods.co.uk (Retailer, producer and wholesaler of organic foods throughout Europe under its own labels) Windmill Organic Foods 66 Meadow Close London SW20 9JD

Tel: +44-181 395 9749 Fax: +44-181 395 95749 (Importer of bulk ingredients for on-sale to food manufacturers)

Fax: +44-1344 825072 (Major multiple chain store retailing organic products; see also annex III)

RETAIL ORGANIZATIONS
ASDA Asda House, Great Wilson Street Leeds LS11 5AD Tel: +44-1132 435435 Fax: +44-1132 418304 (Major multiple chain store increasing its involvement in organic products) Cooperative Wholesale Society Hanover Building, Hanover Street Manchester M60 4WS Tel: +44-161 827 5592 Fax: +44-161 827 5495 (Major cooperative with increasing involvement in organic retailing) Planet Organic 42 Westbourne Grove London W2 5SH Tel: +44-171 221 7171 Fax: +44-171 221 1923 (Organic supermarket in London with plans to establish regional outlets in major cities in the United Kingdom) Safeway Argyll House Millington Road, Hayes Middlesex UB3 4AY Tel: +44-171 695 6000 Fax: +44-171 695 7610 (Major multiple retailer involved with organic products) Sainsburys Ltd Stamford House London SE1 9LL Tel: +44-171 695 0024 Fax: +44-171 695 7507 E-mail: robert.duxbury@tmo. sainsbury.co.uk (Major multiple with long involvement in retailing organic products) Tesco Tesco House Delamare Road, Cheshunt Hertfordshire EN8 9SL Tel: +44-1992 632222 Fax: +44-1992 644747 (Major multiple chain store with increasing involvement in retailing organic products) Waitrose Doncastle Road Southern Industrial Area, Bracknell Berkshire RT12 4YA Tel: +44-1344 424680

CERTIFICATION BODIES
Bio-Dynamic Agricultural Association (Demeter) Woodman Lane Clent, Stourbridge West Midlands DY9 9PX Tel: +44-1562 884933 Organic Farmers and Growers 50 High Street, Soham, Ely Cambridgeshire CB7 5HF Tel: +44-1353 720250 Organic Food Federation The Tithe House, Peaseland Green Elsing, East Dereham Norfolk NR20 3DY Tel: +44-1362 637314 Fax: +44-1362 637398 Scottish Organic Producers Association Milton of Cambus Farm, Doune Perthshire FK16 6HG Tel: +44-1786 841657 Fax: +44-1786 841657 The Soil Association 40-56 Victoria Street Bristol BS1 6BY Tel: +44-117 914 2400 Fax: +44-117 925 2504 E-mail: fblake@soilassociation.org

GOVERNMENT OFFICES
Ministry of Agriculture, Fisheries and Food Nobel House, 17 Smith Square London SW1P 3JR Tel: +44-171 238 5803 Fax: +44-171 238 6148 United Kingdom Register of Organic Food Standards (UKROFS) Nobel House, 17 Smith Square London SW1P 3JR Tel: +44-171 238 6004 Fax: +44-171 238 6533

OTHERS
Mintel Market Intelligence 18-19 Long Lane London EC1A 9HE Tel: +44-171 606 4533 Fax: +44-171 606 5932

Annex II

Source countries of a sample of organic products seen at one supermarket outlet in London, March 1998

Apples: Italy, Argentina, Austria Artichoke: Italy (Sicily) Asparagus: Spain Aubergines: Italy (Sicily) Avocados: Spain, especially Andalucia Beans (aduki, haricot, mung, pinto, red kidney, soya): United States Beetroot: Spain Cashews: Sri Lanka Celery: Italy (Sicily) Cherries: Italy (Sicily) Chickpeas: Turkey Chopped tomatoes: Italy Cocoa: West Africa, Belize Coconut chips: Sri Lanka (via Good Food Foundation) Cotton: Egypt, India, Turkey and Peru Dates: Tunisia Dried papaya: Sri Lanka (probably organic, but not certified) Dried apple, apricots: Turkey

Fennel: Italy (Sicily) Ginger: Uganda Grapefruit: Corsica Grapes: Chile Hazelnuts: Corsica Lentils: Turkey, United States Lettuces, various: Italy Mango: Cameroon Medlar: Italy (Sicily) Melon: Italy (Sicily) Onions, white: Argentina Oranges: Spain, Morocco Pears: Argentina Peppers (green): Italy (Sicily), Morocco Potatoes: Italy (Sicily) Prunes: France Raisins: Turkey Raspberries: Italy (Sicily) Sesame: Ethiopia Shelled Bolivian amazon nuts (probably organic but not certified): Bolivia

Silk: China Sultanas: Turkey Sunflower oil: France Teas: India (Assam) and Sri Lanka Tomatoes: Morocco

Organic produce sourced from Israels Agrexco Carmel Organic Department


Avocados Capsicums, red and yellow Carrots Celery Chinese leaf Grapefruit, white and red Lemons Oranges Sweet potatoes Tomatoes, cherry

Annex III

List of organic products sold by one supermarket (Waitrose), March 1998

Baby foods. Beers, wines, ciders, cordials: ales, ciders, lager, red wines, white wines Breads and cakes: loaves white, stone-ground, wholemeal; rolls white, stone-ground, wholemeal; patisserie cakes, pastries and flapjacks. Chilled products: cooked meats, fresh pastas, fresh salads, fresh juices, soups. Dairy products: cheeses, butters, fresh milks, fresh yoghurt and crme fraiche, eggs.

Fresh meat: beef, lamb, chicken. Frozen foods: burgers, ice creams; peas; yoghurt Grocery items: baked beans, biscuits, brown sugar, canned tomatoes, chocolate, cocoa powder, coffee, cornflakes, crisps/chips, flours, fruit and vegetable juices, honey, hot chocolate, jams and marmalades, milks, muesli, oatcakes and rice cakes, olive oil, pasta, porridge oats, rice, soya beverages, tea bags, vegetable oils. Seasonal fresh fruits, vegetables and herbs.

SELECTED BIBLIOGRAPHY*

IFOAM publications
To be ordered from the following address: IFOAM Head Office, kozentrum Ismbach, D-66636 Tholey-Theley, Germany. Tel: +49-6853-5190, Fax: +49-6853-30110, E-mail: ifoam@t-online.dk. Directory of Training and Education Opportunities for Tropical Organic Agriculture. Tholey-Theley: IFOAM, 1995, 140 p. Ecology and Farming. Tholey-Theley: IFOAM. Published six times a year, reports on developments of organic agriculture worldwide; covers production, research, agropolitics and conference reports; each issue has a special focus on organic agriculture in a certain region. IFOAM Basic Standards of Organic Agriculture and Food Processing. Tholey-Theley: IFOAM, 1997, 44 p. Organic Agriculture Worldwide. IFOAM Directory of the member organizations and associates. Tholey-Theley: IFOAM - Annual. 1998/99, 64 p. Organic Farming. Tholey-Theley: IFOAM, 1997, 18 p. Brochure describing principles and aims of organic farming.
th Proceedings from the 4 International IFOAM Conference on Trade in Organic Products, Frankfurt, 1995. Tholey-Theley: IFOAM, 1995, 132 p. th Proceedings from the 5 IFOAM International Conference: The Future Agenda for Organic Trade, Oxford, 1997. Tholey-Theley: IFOAM, 1997, 60 p.

Rundgren, G. Building Trust in Organics: a guide to set up certification programmes. Tholey-Theley: IFOAM, 1998, 150 p. 12th IFOAM International Scientific Conference: Programme/Book of Abstracts. Tholey-Theley: IFOAM, 1998. 237 p. Vaupel, S. and Commins, K. Guide to Regulatory Requirements for Exporting Organic Food into International Markets. Tholey-Theley: IFOAM, 1997, 61 p.

Other publications
Annuaire Vert. Paris: OCEP, annual. Edition OCEP, 11 rue Saint Ambroise, 75011 Paris, France. Tel: +33-1-47004646, Fax: +33-1-47002491. Annual directory, listing producers, suppliers, distributors, wholesalers, retailers, exporters and importers of organic products in France, entries cover full address information, products handled and type of activity. Ausstellung der BIO Fach: Catalogue. Bchenbach: kowelt Veranstaltungs, annual. kowelt Veranstaltungs GmbH. Industriestrasse 12, D-91186 Bchenbach, Germany. Tel: +49-171-96100, Fax: +49-171-4016. Catalogue of the annual organic trade fair, held in Germany, usually in February of each year; lists exhibitors in alphabetical order, as well as under product groups, with contact details and products handled.

Annotations have been provided when possible.

270

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Australia. Department of Primary Industries and Energy. International Market for Organic Food: Survey. Queensland, 1998, 45 p. Department of Primary Industries and Energy, Rural Industry Business Services Group, Suite MG46, Parliament House, Canberra Act 2600, Australia. GTZ-Protrade. Exporting Organic Products: nd Marketing Handbook - 2 ed. Eschborn: Protrade, 1997. 212 p. Protrade, P.O. Box 5180, 65726 Eschborn, Germany. Manual covering the EU and United States markets, outlines legal framework for trade and gives hints on marketing organic products. Health Foods: A Survey of the Netherlands and Other Major Markets in the European Union. Rotterdam: CBI, 1997, 128 p. CBI, P.O. Box 30009, 3001 DA Rotterdam, Netherlands. Gives overview on EU market for organic foods, and gives practical advice on how to access it - also covers packaging, labelling and other trade-related environmental measures, tariffs and relevant trade practices. International Trade Centre (ITC) and Commonwealth Secretariat. Business Guide to the Uruguay Round. Geneva: ITC/CS, 1995, 392 p. Guide explaining rules of the Uruguay Round trade agreements and their implementation. International Trade Centre (ITC) and Commonwealth Secretariat. Business Guide to the World Trading System 2nd ed. Geneva: ITC/CS, 1999, 329 p. Guide explaining rules of the Uruguay Round trade agreements and their implementation. Lampkin, N., and Padel, S. eds. The Economics of

Organic Farming: An International Perspective. Oxen: CAB International, 1994, 480 p. CAB International. Wallingford, Oxen OX10 8DE, United Kingdom. Fax: +44-1491-833508. Neuendorf, J. and Sabel-Koschella, U. Local Certification of Organic Foodstuffs in Developing Countries. Eschborn: GTZ, 1999. 34 p. Deutsche Gesellschaft fr Zusammenarbeit (GTZ), Postfach 5180, 65726 Eschborn, Germany. Tel: +49 6853 5190, Fax: +49 6853 30110, Web: http://www.gtz.de. Organic Production in Developing Countries: Potential for Trade, Environmental Improvement and Social Development. Geneva: UNCTAD, 1996, 48 p. (UNCTAD/COM/88). United Nations, Documents Distribution. Palais des Nations, 1211 Geneva 10, Switzerland. Schmidt, Hanspeter and Haccius, Manon. EU Regulation Organic Farming. GTZ, Eschborn. Published and distributed by Margraf Verlag, P.O. Box 1205, D-97985 Weikersheim, Germany. Van Elzakker, B. et al. Benefits of Diversity: An Incentive towards Sustainable Agriculture. New York: UNDP (Bureau for Programme Policy and Evaluation), 1992. UNDP, One United Nations Plaza, New York, N.Y. 10017, United States of America. Willer, Helga, ed. kologischer Landbau in Europa. Bad Drkheim: Stiftung kologie und Landbau, 1998. 392 p. Stiftung kologie und Landbau, Weinstr. Sd 51, D-67089 Band Drkheim, Germany. Tel: +49-63-22 86 66, Fax: +49-63-98 97 01. Wright, S. Handbook of Organic Food Processing and Production. London: Blackie Academic and Professional, 1994. Blackie Academic and Professional, 2-6 Boundary Row, London, SE1 8HN, United Kingdom.

Periodicals
Consumer Goods Europe (formerly: Marketing in Europe). London: Corporate Intelligence on Retailing. Corporate Intelligence on Retailing, 48 Bradford Square, London WC18 3DP, United Kingdom. Tel: +44-171-6969006, Fax: +44-171-6969004. Monthly featuring short market studies on various consumer goods in Western European countries; occasionally also contains sector reviews on organic foods. Food Institute Report. American Institute of Food Distribution, Inc. P.O. Box 972, 28-12 Broadway, Fair Lawn, NJ 07410-0972. Tel: +1-201-791-5570, Fax: +1-201791-5222. Weekly giving selected news. Comments and data on food products in the United States; occasionally features market information on organic products. FoodNews. Foodnews Company Ltd. 80 Claverley Road, Tunbridge Wells, Kent TN1 2UN, United Kingdom. Tel: +44-1892-533813, Fax: +44-1892-511803. Weekly providing market information on food products, dried and processed fruit and vegetables, worldwide; occasionally covers information on organic products. Fresh News. Fresh and Healthy Foods, 125 West Seventh Street, Wind Gap, PA 18091, United States of America. Tel: +1-610-8636700, Fax: +1-610-8634622. Quarterly newsletter, introduces latest organic products in the United States market. Fruchthandel - Magazin. Dr Rolf M. Wolf Verlag GmbH, Postfach 105551, 40046 Dsseldorf, Germany. Tel: +49-211-991040, Fax: +49-211-663162.

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Weekly occa sion ally providing market infor ma tion on organic fresh fruit. Fruitrop. Cirand-Flhor, 12 Square Ptrarque, 75016 Paris, France. Tel: +33-1-53702165, Fax: +33-1-53702170. Publishes 11 times per year, in English and French; occasionally includes market information on organic tropical fruit. Frozen and Chilled Foods. DMG Business Media, Queensway House, 2 Queensway, Redhill, Surrey RH1 1QS, United Kingdom. Tel: +44-1737-768611, Fax: +44-1737-855470. Monthly featuring news on the United Kingdom frozen and chilled food industry and market; occasionally covers information on organic food products in the sector. Health Food Business. Bestway Designs Ltd, Claremont House, 12-18 Claremont Road, West Byfleet, Surrey KT14 6DY, United Kingdom. Tel: +44-1932-336325, Fax: +44-1932-533670. Monthly highlighting new products, legislation and news on small business; occasionally features news on organic products. Organic and Natural News. Virgo Publishing Inc. 3300 N. Central Ave., Phoenix, AZ 85012, United States. Tel: +1-602-990-1101, Fax: +1-602-990-0819. Monthly covering news and analysis related to the organic and natural products market in the United States. January issue includes an annual Buyers Guide. Organic Trends: Critical Issues and Global News. Agrisystems International, 125 West Seventh Street, Wind Gap, PA 18091, United States of America. Tel: +1-610-8636700, Fax: +1-610-8634622. Bimonthly providing information on market trends for organic products, with international coverage. The Organic Report. Organic Trade Association, 50 Miles Street, Box 1078, Greenfield, MA 01302, United States of America. Tel: +1-413-7747511, Fax: +1-413-7746432.

Monthly providing information on issues affecting the organic food industry, including legislation and regulatory matters, production and trade. Veille Internationale: Fruits et Lgumes Frais. Paris: CFCE. Librarie du Commerce International, B.P. 428-16, 75769 Paris Cedex 16, France. Tel: +33-1-40733460, Fax: +33-1-40733146. Bimonthly featuring market information on fruit and vegetables with international fresh coverage; occasionally carries information on organic products. Veille Internationale: Fruits et Lgumes Transforms. Paris: CFCE. Librarie du Commerce International, B.P. 428-16, 75769 Paris Cedex 16, France. Tel: +33-1-40733460, Fax: +33-1-40733146. Monthly featuring market information on processed fruit and vegetables with international coverage; occasionally carries information on organic products. World Food Regulation Review. BNA International, Heron House, 10 Dean Farrar Street, London SW1H 0DX, United Kingdom. Tel: +44-171-222-559-4801, Fax: +44-171-222-5550. Monthly reports covering food regulations worldwide and issues arising from them; track provisions governing nutrition labels, additives, hormones, pesticide residues as well as packaging and disposal issues. World Horticultural Trade and US Export Opportunities. Washington DC: USDA. US Department of Commerce, Technology Administration, National Technical Information Service, Springfield, VA 22161, United States of America. Tel: +1-703-6056060, Fax: +1-703-6056880. Monthly providing information on the world market situation and outlook for horticultural products; occasionally includes market information on organic products.

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