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ORGANIC
PERSPECTIVES
October 1998
Inside This Issue:
1. National Organic Program Update
On October 28, 1998, USDA will publish three issue papers in the Federal Register
to solicit additional public comment as the Agricultural Marketing Service (AMS) works to
develop a revised National Organic Program proposed rule. The issues pertain to animal
confinement, animal medications, and procedures for termination of producer certification.
The public comment period closes on December 14, 1998. Source: USDA press release 0440.98,
10-26-98.
Issue papers are available at the
NOP home page.
2. Focus on Asian Demand for Organic & Health Food
Following are recent articles by Foreign Agricultural Service (FAS) personnel
located in some important emerging Asian markets:
Singapore - As a re-exporting center for many food products shipped to Southeast Asia, Singapore is an especially key market. Often, foods that first appear on shelves in Singapore eventually make their way to markets in Malaysia and other countries in the region. Fueled by changing lifestyles, education, and a government campaign to encourage good eating habits and healthy living, demand for health food and organic products is growing in trend-setting Singapore. Although now the typical health/organic product consumer is 25-50 years old and has spent some time traveling or studying in the United States or Europe where they first sampled these products, expectations are that in time, the health food/organic market will expand from a niche into the mainstream.
Price is a concern however. For example, although most warehouses are equipped with air
conditioning, many retail outlets are not, so only small quantities of organic
produce--mainly from Australia--are shipped in at one time. As a result, organic produce
may cost from 3-5 times the price of conventional produce. Singapore imports macrobiotic
products from Japan, and pasta, olive oil, spaghetti sauce, and coffee substitute from
Europe. However, the United States is viewed in Singapore as the most developed and
innovative source of health and organic products. Best prospects for U.S. exporters
include dried beans, whole grain and rice products, beverages, and healthy snack foods.
See complete text and visit the ATO web site.
Taiwan - Organic foods are becoming
increasingly popular in Taiwan. Demand is growing among mainstream shoppers; no longer do
the products appeal only to consumers with special health needs or certain religious
beliefs. Today, the city of Taipei alone has an estimated 300 specialty stores that carry
imported organic foods, and supermarkets in upscale communities have begun to introduce
organic, locally grown fresh fruits and vegetables, rice, and tea. About 90 percent of
imported organic products are from the United States although products from Australia,
Italy, and Switzerland can also be found. Organic products in demand now include grains,
beans, lentils, dried fruits, tree nuts, herb tea, apple juice, vegetable juice and
low-salt tomato juice, noodles, pasta, canned soups, oil, miso, and soy sauce. See complete text and visit the ATO web site.
Hong Kong - Traditionally, Westerners
were the primary consumers of organic food in Hong Kong, but recently, spurred by food
safety crises, local Chinese and expatriate Japanese consumers have begun to show a level
of interest that may translate into new opportunities for U.S. exporters. Hong Kong's
leading supplier of organic foods, Organic Gardens Ltd., is teaching consumers about the
benefits of organic farming and a healthy lifestyle, and within the last year the company
opened a restaurant, an organic food retail shop, and a natural healing center. Consumers
seem willing to pay a 30-100 percent premium for organic food, and they place a great
emphasis on appearance, preferring rich color and uniform size in produce, for example.
Although some local farmers are trying to grow for the market, labor costs are high and
large scale organic farming is impractical. Mainland China, with its much lower production
costs, is viewed as a potential supplier of fresh organic vegetables. Further development
of this sector will bring opportunities for a host of U.S. organic products. See complete text and visit the ATOweb site.
Source: AgExporter Magazine, USDA, FAS, September 1998.
3. Japanese Food Journalists Promote U.S. Organic Food Products
From our post in Japan comes the following report:
Three Japanese food industry journalists, who recently returned from an ATO/Tokyo
sponsored Reverse Trade Media Mission, published several articles promoting U.S. organic
products and the Natural Products Expo West show scheduled for March 1999 in Anaheim. The
articles received a number of favorable responses from the industry. At least two more
articles will be published within the next couple of months. The trade mission members
visited Natural Products Expo East in Baltimore and met with organic producers in the San
Francisco area.
4. New Zealand's Organic Exports Continue to Climb
According to the New Zealand Trade Development Board (Trade NZ), exports of
organic products rose 45 percent to NZ$29 million for the year ending in June, placing the
New Zealand organic industry on track toward achieving export earnings of NZ$65 million by
the year 2001. Sales of kiwifruit, apples, pears, processed frozen vegetables, and squash
were especially strong last year. However, competition from other Southern Hemisphere
growers, particularly Argentina, but also Africa and Asia, may begin to erode the 10-20
percent price premiums now received by New Zealand organic producers.
Although Japan remained New Zealand's top export market last year, accounting for 61
percent of total organic production, exporters are exploring other markets such as Europe
and Southeast Asia. In fact, despite the challenges of accessing the market, Europe now
accounts for 28 percent of organic exports, up from 10.3 percent last year. To improve
access to the European market, Trade NZ reports that New Zealand and Australia will work
to develop joint standards that will meet European entry requirements.
Source: Trade New Zealand media release, 10-14-98.
5. Unlocking Trade Opportunities for Developing Countries
A UN publication on export success stories in developing countries showcases
sustainable agriculture and environmentally friendly projects in the areas of textiles,
tourism, agriculture, and forest management, among others. Two case studies involve
organics:
Chile Exports Organic Produce - Although the domestic market for organic fruit is small, some Chilean producers began converting to organic production for the export market in the 1980's. In 1992, Chile exported 25 tonnes of organic produce, and by 1995, exports grew to more than 1,000 tonnes. By the end of 1996, 19 farmers with farms of 100-200 hectares (250-500 acres) were producing organically, and a cooperative of small-scale producers was in the process of becoming certified organic. With time, producers have developed greater expertise in organic production techniques and have moved to more challenging crops such as kiwi, asparagus, and raspberries, which are more prone to pest problems than some other crops.
Although individual farmers took the initiative to convert to organics, others have contributed to the effort. FruSur, a major packing company provides advice on pest control and quality issues, and ProChile, the government's export arm, holds seminars, publishes brochures, and helps the sector to identify new overseas markets. Importers and wholesalers from consuming countries also have helped in the areas of product development and certification. IFOAM-affiliated PROA, Chile's domestic organic certifier, has been in operation since 1990.
Acreage is expanding for the export market, whereas domestic demand is expected to remain low, at least in the short term. One challenge to further expansion faced by farmers is the lack of on-farm fertilizer which instead must be hauled long distances at great cost.
Organic Cotton Project in Uganda - In 1995, the Swedish International Development Agency (SIDA) initiated a project to help diversify exports and improve agricultural sustainability in Uganda. The project involved a range of production initiatives including food crops for home consumption, cash crops for the domestic market, and organic sesame and organic cotton production for the export market. In 1996, 400 tonnes of organic cotton (2 percent of total cotton harvested that year) were produced and shipped to Europe and Asia for processing. Cotton is Uganda's second major export crop after coffee.
An important aspect of the project was to assure that all participants in the production and marketing chain receive a 'fair' price, and that the producer receives as full a benefit as possible from the organic price premium.
Source: Unlocking Trade Opportunities-Case Studies of Export Successes from Developing Countries, International Institute for Environment & Development (IIED) for the UN Department of Policy Coordination & Sustainable Development, May 1997. See complete report. To request a free copy, contact Erik Brandsma (fax 212-963-4260) or email brandsma@un.org
6. USDA Opens Regional Export Outreach Office in Atlanta
On October 1, Agriculture Secretary Glickman announced the opening of a new
export outreach office to serve the southeast states of Georgia, Mississippi, Alabama,
South Carolina, North Carolina, and Tennessee. Citing the importance of exports to the
U.S. economy, Mr. Glickman indicated that through outreach efforts, USDA hopes to
"alert business to trade opportunities and reduce the negative perceptions about the
difficulty of exporting products overseas." USDA's FAS will develop active
partnerships with key groups in the region to help cooperatives, new businesses, small
companies, and minority-owned businesses achieve exporting success.
Donald Van DeWerken of FAS will head the new office located at 285 Peach Tree Center Avenue, Northeast, Suite 200, Atlanta, GA 30303-1229; (tel) 404-657-1900; (fax) 404-657-1970; (email) vandewerfen@fas.usda.gov
FAS already has export outreach offices in Des Moines, IA, Portland, OR, Sacramento,
CA, and plans to open another office soon in Dallas, Texas.
Source: USDA press
release 0398.98, Oct. 1, 1998.
7. USDA Creates Small Farms Office
On October 7, Agriculture Secretary Glickman announced plans to create a Council
on Small Farms and a new office at USDA to deal specifically with small farm issues. The
office will coordinate USDA agencies' responses to the recommendations of the Small Farms
Commission and will help to institutionalize the progress and interest in these issues.
Source: USDA press
release 0406.98, Oct. 7, 1998.
Note: For a summary of recommendations made by the Small Farms Commission relating to organic and sustainable agriculture, see Organic Perspectives, Aug. 28, 1998, Item #6.
8. New Directory of Export and Trade Assistance
USDA's Agricultural Research Service, National Agricultural Library, recently
issued a comprehensive new listing of export and trade contacts such as foreign chambers
of commerce, state agricultural departments, domestic and international trade
associations, lists of electronic resources and data bases, and more. To request a free
copy, send a self-addressed, gummed label to USDA/ARS/NAL, Agricultural Trade &
Marketing, Information Center, room 304, 10301 Baltimore Avenue, Beltsville, MD
20705-2351. Ask for the publication by name and reference number (SRB 98-03). The complete guide
is also available on Internet.
9. Upcoming Events
TRADE SHOWS & CONFERENCES
1998
Domestic
International
1999
International
Domestic
FAS OVERSEAS PROMOTIONS
1999
For a more complete listing of food and trade shows including those for conventional products, visit the FAS Trade Show site.
This newsletter was compiled by HTP's Organics Staff:
Janise Zygmont - Analysis, zygmont@fas.usda.gov
Tel: (202) 720-1176; Fax: (202) 720-3799
Kelly Strzelecki - Marketing, strzelecki@fas.usda.gov
Tel: (202) 690-1341; Fax: (202) 690-3346)
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