EU’s hunger for organic produce grows

Organic food production is one of the undisputed success stories in EU agriculture. The area of land devoted to organic production rose from 0.7 million hectares in 1993 (in EU15) to nearly six million in 2003 (for EU25), accounting for 3.6% of all ­cultivated land.

The market for organic food products was estim­ated to represent around €11 billion in 2004, around 1% of the entire EU15 ­market for food. Some ­analysts believe that the ­figure could now be over €20bn.

This means the market for organic foods is bigger in the EU than in the US, which has the next largest sales of organics. Demand for organically produced produce has been growing at double digit rates in many countries across the EU. In the UK, the market grew by 30% last year, three times faster than the year before that, to reach €2.4bn. This compares with an annual 3% increase in all UK food and drink sales, according to figures from the Soil ­Association, the UK’s ­organic food promotion and certification organisation.

Organic food accounts for 5% of all food sold in Denmark, 3% in Sweden and 2.6% in Germany. Such is the popularity of organic food that major food multinationals have launched their own brands or bought established products to get a share of the fast-growing market. Cadbury Schweppes bought Green & Black’s, Europe’s leading organic chocolate brand, while Heinz has launched its own range of organic products.

This has all been achieved thanks to consumer demand and a strategic decision by European retailers to stock organic goods, which has an enormous ­effect on the market because of their massive purchasing power. Organic food production receives no specific subsidies from the Union’s annual €60bn spending on support to farmers and rural areas although farmers using organic methods can benefit from a range of financial incentives to make production more environmentally friendly under the so-called agri-environ-mental schemes.

The popularity of organic food has run ahead so fast that, despite the rapid increases in production using organic methods, demand has outstripped supply with imports needed to meet the gap. But this has led to fears that standards are being undermined as retailers offer product lines which cannot be traced to provide guarantees about how they were produced. Last week, MEPs approved a report by German Green Friedrich-Wilhelm Graefe zu Bahringdorf on Commission proposals for rules for imported organic products designed to avoid the import of "unreliable products".

Despite the success of organic foods, the market remains largely fragmented along national lines, partly because the different approvals schemes in member states vary widely in their requirements and technical specifications.

Efforts at agreeing EU-wide standards are currently stalled in working groups in the Council of Ministers but officials are hopeful that some agreement will be reached on a common baseline for specifications which retain sufficient flexibility for well-established national schemes to impose additional conditions. The EU has had an organic logo since 2001 which can be used by producers who have been inspected and found to have met the scheme’s qualifying criteria. At least 95% of the product’s ingredients have to have been organically produced. The product must comply with the rules of the official inspection scheme and has to come directly from the producer or be prepared in a sealed ­package.

Even in the absence of agreement on common definitions, the rise in popularity of organic food is set to grow even though growth rates are starting to slow in countries where organic produce has a significant market share.

As the Commission says in its 2004 action plan for organic food and farming, organic production fits well with the aims of Common Agricultural Policy (CAP) reforms by promoting "environmentally friendly, quality products" which match consumers’ requirements. It also delivers "public goods" such as environmental improvements, a boost to rural development and, in some cases, higher animal welfare standards. Nevertheless, despite the advantages of organic production and the appeal of such products, it is clear that organic foods will always form only a small proportion of overall food output.

Organic food production is one of the undisputed success stories in EU agriculture. The area of land devoted to organic production rose from 0.7 million hectares in 1993 (in EU15) to nearly six million in 2003 (for EU25), accounting for 3.6% of all ­cultivated land.