Implications of U.S.
and Global Organic Dairy, Livestock and Poultry Production
for International Trade
(Part IV of IV)
III. Organics in FAS
A significant and growing interest in organically produced products exists among many key U.S. trading partners. This is evidenced by a strengthening presence of organic products in trade shows and the international market. Not surprisingly, an increasing number of trade inquiries from overseas relate to information about, or request for, U.S. suppliers. Because organically produced products typically sell at a premium relative to their conventional counterparts, this sector is particularly important in the high value, value-added export industry.
FAS Horticultural and Tropical Products Division (HTP) has been designated to act as a central coordinating and information point to handle inquiries and promotional assistance for all organic commodities. Although HTP was chosen because many organically produced products are in the horticultural sector, HTP has established working relationships with designated Organics Contact Persons in several commodity divisions. This arrangement ensures that expertise on other commodities is brought in as necessary.
State/Regional Trading Groups
The State/Regional Trade Groups (STRGs) have been active for a number of years in promoting organics overseas using Market Access Program (MAP) funds. In 1994, the Western U.S.A. Trade Association sponsored the first U.S. trade mission of organic suppliers to Japan. Since then, these missions have been held annually. Missions to Europe were added in 1999 and 2000, with the most recent Europe mission having occurred in February 2000. SRTGs also have become involved in organic trade missions to such an extent that each region has a designated organics coordinator.
To complement their overseas missions, the SRTGs also launched the National Organic Initiative in 1999. The purpose is to encourage and assist in the ongoing development of export markets for the U.S. organic and natural foods industry. National Organic Initiative projects include:
1) Organic & Natural Food News, an email newsletter
for U.S. exporters featuring trade leads, announcements and other
news items of interest,
2) an International Partner list server program to provide updates on the U.S. organic industry to international customers.
The AgExport Services Division of USDA provides oversight of all SRTG organics activities. The SRTGs have budgeted a total of $125,000 of their MAP allocations for organic activities in Europe, and in Japan and Taiwan (Western U.S.A. Trade Association only) for their 2000 MAP marketing year, ending September 30, 2001. While this sum amounts to less than 1 percent of the SRTGs' overall MAP allocation, it does not reflect their matching fund obligations under MAP or other MAP-funded activities organic companies take part in throughout the year.
Organics and the Unified Export Strategy
The Organic Trade Association (OTA) is a business association with a 1,000+ membership representing all sectors of the North American organic industry--producers, processors, certifiers, importers, exporters, retailers, researchers, and others engaged in producing and marketing organic products. OTAs mission is to encourage global sustainability through promoting the growth of diverse organic trade and protecting the integrity of organic standards.
Under FAS Unified Export Strategy program, OTA is the only cooperator representing organic products. Contrary to the traditional "cooperator" definition, where only one or a limited commodity group is represented, OTA represents all commodities being produced organically. The binding factor, or distinguishing commodity characteristic, for OTA is the organic production process.
OTA received FAS funding as a cooperator for the first time in 1999. Oversight was provided by HTP, and a total of $75,230 in MAP funds was allocated. With this amount, OTA undertook two activities--publication of an organic export directory of U.S. suppliers in English, Japanese, and German; and basic market research.
The English-version export directory listed about 200 U.S. companies offering a wide variety of organic products. The directory made its debut in February at BIOFACH 2000, a major organics show held in Germany, and in the spring, copies were sent to most U.S. Agricultural Trade Offices (ATO) and key U.S. agricultural affairs offices overseas. Additional copies are distributed at trade shows attended by OTA. ATO Hamburg and Agricultural Affairs and ATO Tokyo, respectively, have been asked to review samples of the translations before publication of the German and Japanese directories.
FAS overseas post and industry reports indicate a nascent, yet vibrant and strengthening, international organic industry. Moreover, given apparent increases in consumer interest in health and the environment, there is a strong likelihood of continued growth in demand over the coming decade. Most consumers of organic foodstuffs perceive these products to offer specific health benefits and associate the organic process with environmental conservation.
While clearly on its way to becoming a cogent trade sector, international trade of organic products is still relatively undeveloped as many national organic standards, certification, and accreditation programs are yet evolving. However, as the international organic industry moves closer to formalizing its infrastructure and trade patterns, these programs will gain more importance in determining the future size and shape of the global organic industry.
Export opportunities for organic agricultural producers are expected to increase over the next 5 years. According to FAS reports, likely markets for third country exports include Japan, Korea and Canada. Although the EU is a major consumer of organic agriculture, with consumption expected to out-pace the United States by 2010, differences in organic production standards may make it difficult for U.S. exporters to access this market. However, considering that bi-lateral equivalency discussions have yet to take place, and will not take place until the U.S. proposed rule becomes final (expected by year-end 2000), the future of international organic trade for U.S. exporters is yet to be established.
|Links to other Parts:|
I. Overview of U.S. Organic Industry & Organic Livestock Production
II. Overview of Global Organic Agricultural Production