ORGANIC PERSPECTIVES
July 1999

Inside This Issue:

1. Codex Approves Organic Food Guidelines
International guidelines for the production, processing, labeling and marketing of organically produced food were approved by the joint FAO/WHO Codex Alimentarius Commission during the recent meeting in Rome June 28 to July 3.
Source: FAO press release, 7-4-99.

2. Israel's Organic Sector
Organic crop production in Israel rose about 19% from 3,100 hectares (7,700 acres) in 1997 to 3,700 hectares (9,100 acres) last year. The 1999 season estimate of 4,200 hectares (10,400 acres) represents a 14-percent increase from the previous year. The value of organic production rose from US$16.8 million in 1997 to an estimated US$27 million for the 1999 season.

Israel, with its varied climatic conditions and soil types, produces a diversity of agricultural products throughout the season. The breakdown by crop and percentage of total organic acreage for 1998 is as follows: field crops - 63%; fruits (excluding citrus) - 18%; citrus - 11%; vegetables - 8%; and spices - <1%. Estimated plantings for 1999 indicate reductions in fruit and citrus acreage that are more than offset by increases in other categories.

Growers are organized under the Israel Bio-Organic Agricultural Association which provides training, inspection, and certification services, and was instrumental in helping standardize the quality of Israel's organic produce for export. The majority of organic horticultural production is exported to Europe by Agrexco, Israel's leading shipper of fresh produce, under the brand name Bio-Top. Exports consist of nearly 20 different fresh organic vegetables including cherry tomatoes, potatoes, peppers, carrots, tomatoes, and cucumbers, as well as white and red grapefruit and avocados. Agrexco avoids competing with European production directly, creating instead a niche in Europe's specialty and off-season markets.

Israel is one of only five countries that have "third-country" status with the European Union (EU), a factor that greatly eases entry of organic products into that US$4.5-billion organics market. Until now, there was no specific government support for organic agriculture. Recently, a government committee studied how to develop organic agriculture in Israel. Acting on the committee's recommendations, the Ministry of Agriculture agreed to provide aid amounting to about US$500,000 for research and development, and grants during the conversion from conventional to organic production methods.
Sources: Information provided by the Israeli Ministry of Agriculture & Rural Development, and "Israel answers call for more organic produce" by Stephanie Sanders, EuroFruit Magazine, April 1999.

3. EU Organic Farming on the Rise
A comprehensive report just released by Eurostat on agriculture and the environment noted that although organic farming is still a "minority activity" in the EU, there has been a dramatic increase in the number of organic farms during the 1990s, spurred in part by Council Regulation 2078/92, which encourages organic farming through subsidies. In general, livestock farming (despite delays in adopting Community legislation for organic livestock) followed by fruit and vegetable production seem to attract organic farmers more than arable farming. Currently, just under 2% of all EU agricultural area and more than 1% of all EU farms are engaged in organic production, although figures for individual member states vary widely. Growth has been especially strong in Greece, Spain, Italy, Austria, Finland, and Sweden, all of which have experienced annual growth in organic farm numbers of 50% or more over the last few years. In 1996, 1,583,100 hectares (3,910,300 acres) were in organic production, with land use by percentage of total as follows: grassland/pasture - 55%; arable - 19%; horticulture - 8%; and other - 18%. Plans call for gathering more detailed information on the composition of organic production in the 1999/2000 farm census.
Source: Eurostat press release. Also see full report - Agriculture, Environment, Rural Development: Facts & Figures - A Challenge for Agriculture.

4. Organics in Mexico
According to the U.S. Agricultural Counselor's office in Mexico City, Banamex, a large Mexican bank, reported that organic agricultural production in Mexico has reached 50,000 hectares (124,000 acres). Of this area, 30,000 hectares (74,100 acres) are in coffee, while the rest are dedicated to apples, beans, vanilla, and a wide array of other products that sell for premium prices in the export market. Although total acreage dedicated to organic farming in Mexico is relatively small, demand for these products in developed countries is growing. The report emphasized that Mexico should plan to further develop its organic agriculture to capture the benefits of this growth sector. The report also highlighted the need for research and extension services for organic farmers, and the need for government aid and financial incentives for farmers interested in organic farming.

Agricultural business experts from Banamex noted that those who are involved in organic farming and who sell to foreign markets have found a very attractive financial niche. They foresee countries eventually will arrive at a consensus to accept certification agencies and criteria that will harmonize quality and production standards on a worldwide scale.
Source: El Financiero, 6-29-99, as reported in attache report MX9083.

5. New Zealand's Organic Kiwifruit Production
Production of certified organic kiwifruit in New Zealand has grown rapidly through the 1990s, and now constitutes almost 2% of the total crop. During the 1998 season, 959,000 trays of Class I organic kiwifruit, 40,000 trays of Class II organic kiwifruit, and 767,000 trays of transitional organic kiwifruit were sold. (The main difference between Class I and Class II is cosmetic.)

The organic premium was 42% for Class I organic fruit which averaged NZ$9.20 (US$4.88) per tray compared to NZ$6.48 ($US3.43) per tray for conventional/KiwiGreen Class I fruit. (Most New Zealand kiwifruit is grown under the "KiwiGreen" orchard management system which involves close monitoring of pests and application of chemical controls only as needed instead of by the calendar.) Historical data for the 1990s indicate the organic premium has ranged from a low of 27% to a high of 89% over the period (see table).

Production and Price - Class I Organic Kiwifruit, 1991-1998

* 1 tray = 3.6 kg or 7.9 lbs.

Kiwifruit is not a particularly difficult crop to grow organically, given its tough skin and natural resistance to many pathogens, but production costs average 10 to 20% above those for conventional kiwifruit. Organic orchardists often buy fertilizer from certified organic fertilizer producers rather than making their own or to supplement their own production, and they apply it at 1.5 to 2 times the rate of conventional fertilizers. Savings gained from eliminating chemical inputs are offset by purchases of Bt and mineral oil sprays which are accepted organic pest control substances.

According to AsiaFruit Magazine, an estimated 1.35 million trays of organic kiwifruit will be packed during the 1999 season. Of total organic volume exported, about half goes to Japan and the rest to Europe and the United States. This season, Taiwan also will take a small quantity.
Sources: Attache reports NZ9003, NZ9042, additional information provided by FAS's staff in Wellington, and "Zespri embarks on new Japanese promotions" by Alison Kay, AsiaFruit Magazine, May/June 1999.

6. "Organics in Argentina" Presentation
A presentation entitled "Organics in Argentina" given at the Summit on Organic Food Technology '99 show on May 19, 1999, by Randall Hager, agricultural attache, Buenos Aires is now available on the Internet at: www.usia.gov/abtusia/posts/AR1/wwwh0516.html

7. Organic Coffee Association
A new trade association for organic coffee wholesalers, roasters, retailers, traders and farmers of certified organic coffee called "ORCA" recently formed to "promote and educate consumers and the coffee industry on the value of organic farming practices, and how they benefit the environment, the farmer, and the consumer to create a wholesome value added product." According to ORCA, organic coffee is grown in about 10 countries, much of it by small-scale farmers who market their coffee through cooperatives. As an example of how organic coffee is grown, ORCA listed the organic principles applied by one such cooperative in Guatemala: the farm must be actively managed; three years must pass before coffee grown on land to which any prohibited agrochemical was applied can be considered organic; both coffee trees and shade trees must be pruned annually; soil conservation practices such as terracing, mulching or contour planting must be carried out; and growers must compost their own coffee pulp and return it to the farm as fertilizer. According to ORCA, the practice of growing coffee under shade trees provides erosion protection and a thick nitrogen-rich mulch that helps control weeds and virtually eliminates the need for chemical fertilizers and herbicides. Shade trees also support a large bird population that helps provide insect and pest control. However, in regions where shade growing is impractical, other sustainable cultivation practices are employed. Third-party oversight, usually by an international certifier, is required to ensure the integrity of the organic production and handling processes.
For more information, contact Adam Teitelbaum at 415-864-3830 or aoc@sirus.com

8. Trends
* Japanese Trade Advisor Posted to Canada - Under a joint agreement between the Japan External Trade Organization (JETRO) and the Canadian government, a senior Japanese trade advisor will work closely with Canadian firms over the next three years to help expand the Japanese market for Canadian processed foods, organic and traditional crops, functional foods with health benefits, food ingredients, products for the food service industry, and pet foods. Other activities may include trade missions between the two countries and educational seminars for Canadian exporters seeking opportunities in Japan. In 1997, the value of Canadian agricultural and food products exports to Japan reached C$2.5 billion (US$1.7 billion), a 50% increase since 1994. Japan is Canada's second largest foreign market for agri-food and seafood products.
Source: Attache report CA9087.

9. New Attache Reports

• Canada Introduces National Standard for Organic Agriculture (CA9082) - Text from a wire report about Canada's new organic standards
• Japan: Health & Functional Foods (JA9047)- Trends in consumer demand for health food, nutritive food, vitamins and herbs, and U.S. export potential
• Japan: New Age Beverages (JA9048) - Trends in consumer demand for tea drinks, mineral water, canned coffee, and sports drinks, and U.S. export potential
• Organic Farming in Poland Update (PL9022) - Updated contact information included in a previous report on organics in Poland (PL9011)

10. Upcoming FAS Promotional Activities
FAS activities listed below represent opportunities for U.S. organic and/or natural foods exporters to showcase their products in overseas markets. The events listed may be entirely devoted to organic foods or products, or may be part of a larger activity. See also Other Marketing Events.

11. Upcoming Events
International - 1999

• Sept. 10-13 - SANA, Bologna, Italy
• Sept. 14-16 - Food Ingredients Europe, Paris
• Oct. 9-14 - ANUGA 1999, Cologne, Germany*
• Oct. 16-18 - DIETEXPO '99, Paris*
• Oct. 20-23 - IFOAM 6^th Intn'l Trade Conference on Organic Products, Florence, Italy
• Oct. 29-Nov. 1 - Biocultura, Madrid, Spain
• Nov. 14-16 - Exploring Organic Alternatives, Saskatoon, Saskatchewan, Canada (contact: Hart Haidn, 306-956-0832 (tel), 306-956-0834 (fax))
• Nov. 18-21 - IFOAM - Asia '99, Tagaytay City, Philippines
  

International - 2000

• Jan. 27-30 - 19^th Annual Organic Conference & Eco-Products Trade Show, Canada
• February - International Food & Drinks Exhibition, Athens, Greece
• Feb. 17-20 - BIOFACH, Nurnberg, Germany
• March - FOODEX, Tokyo
• May 31-June 2 - Natural Products Expo Europe, Amsterdam, The Netherlands
• Aug. 27-31 - IFOAM 13^th Int'l Scientific & Technical Conference, Basel, Switzerland

Domestic - 1999

• Aug. 1-3 - Organic Farming Research Foundation Conference, Oakland, CA
• Oct. 12-15 - USDA's National Small Farm Conference, St. Louis, MO
• Oct. 20-24 - Natural Products Expo East, Baltimore, MD
• Nov. 11-14 - SupplySide West, Las Vegas, Nevada

Domestic - 2000

• May 7-9 - U.S. Food Export Showcase, Chicago, IL

* Indicates a USDA-sponsored show. For more information and a complete listing of food and trade shows including those for conventional products, visit the FAS Trade Show site.

Last modified: Tuesday, May 08, 2001