Organic farmers hear a call: If you grow it, they will buy
WEDNESDAY, MARCH 24, 1999
GLOBAL REPORT
Peter Ford (fordp@csps.com)
Staff writer of The Christian Science Monitor
THORNBURY, ENGLAND
Mary Long
stretches her hand
past piles of yogurt
containers on the
supermarket shelf and picks out one with
a natural green label: Yeo Valley Organic
Yogurt.
"It tastes nice and it's healthier," she says.
The fact that it costs a bit more than its
conventional counterparts "doesn't
matter."
Mrs. Long, a housewife in the west of
England, is part of a swelling global wave
of consumers who are turning to organic
foods in unprecedented numbers. And
farmers from Arkansas to Argentina are
racing to catch up in a global business
worth $10 billion a year.
Far from a passing fad, organic food,
produced without pesticides or synthetic
fertilizers, is exploding out of the niche
market and into the mainstream, say
retailers in Europe and the US.
Four years after the so-called "mad cow
disease" scandal erupted in Britain, and
with public attention in many countries
focused on the possible dangers of
genetically engineered foodstuffs,
industrialized-country consumers
increasingly are playing it safe and going
organic, adding to those who believe such
products simply taste better.
(MELANIE STETSON FREEMAN - STAFF)
"Globally, the main factor behind the
growth of the organic food market is
health," says Ulrich Hamm, an expert on
organic produce sales at the University of
Neubrandenburg in Germany.
"The organic market is growing all the
time," says Melodie Schuster, a
spokeswoman for the Tesco's
supermarket chain. Britain's largest food
retailer now stocks 250 different organic
products - from fruit and vegetables to
dairy products to bread and meat - and
plans a major expansion of its lines next
month. "We have told our suppliers that
this is the way forward," she says.
Billion-dollar market
The UK market for organic food is
rocketing by 40 percent a year, and has
shot up from $160 million in 1993 to $640
million last year, according to the Soil
Association, the principal organic farming
group in Britain.
This is still well behind other European
countries such as Germany, however,
where organic retail sales are close to $2
billion a year. And the US alone, with
sales of more than $4 billion in 1997,
consumes as much organic produce as the
whole of Europe.
Organic holdings still make up only a
minuscule part of the agricultural
landscape. They account for less than 0.5
percent of farmland in Britain, bottom of
the league in Europe where the overall
figure is 1.3 percent, and far behind
Denmark and Sweden where as much as
10 percent of the land is organically
farmed.
The rising demand for natural produce
among well-heeled consumers in the rich
industrialized world, however, is
encouraging farmers around the globe to
switch to organics.
Growers in Argentina, for example, have
increased the acreage under organic
cultivation by 4,600 percent since 1992,
and sales of organic fruit, grain, and beef
have been rising by 25 percent a year.
In China, the "green food" movement has
swept the country, and tropical farmers in
Africa and Asia are being encouraged by
United Nations agencies such as the
International Trade Center (ITC) to start
meeting international demand. In a report
to be published next month the
Geneva-based agency foresees a "very
large long-term potential" for third world
growers able to supply out-of-season or
exotic goods to European and American
consumers.
But the booming market for healthy
produce is also beckoning small and
medium-size conventional British farmers
who are struggling to make ends meet
with standard crops that fetch poor prices.
BUMPER CROP: Varick Warren
of Pure Pacific Organics looks
over a cauliflower in Salinas, Calif.
Organic food sales top $4 billion
in the US, which consumes as
much as all of Europe.
(ERIC RISBERG/AP)
Richard Watts, for example, who keeps a
herd of dairy cows and grows wheat on
his 330-acre farm near here, says he has
"done the figures, and organic looks very
interesting. It would increase my absolute
bottom line by 75 to 100 percent. "I'd love
to dive into it," he says. But he is hesitating
because "there's a whole management
structure behind it, and there's a two-year
herd conversion period to get over" before
his milk would qualify as organic.
The government this year introduced
higher grants to encourage farmers to
convert to organic production, helping
them through the in-between period when
yields have dropped because they are not
using chemical fertilizers, but they cannot
yet charge organic prices.
Those grants, Mr. Watts reckons, would
cover only about 75 percent of his initial
losses. And Britain lags behind most other
European nations in fostering more
organic farming: With France and Greece
it is the only country that doesn't pay
organic farmers an annual subsidy for as
long as they forswear artificial fertilizers
and pesticides, and intensive farming
techniques.
A few miles away at Newhouse Farm,
John Cullimore didn't wait for government
grants to change over 10 years ago. The
shifting economics of farming threatened
to make his holding unprofitable, he
recalls, and a request from a
pharmaceuticals company that he take
part in testing a drug to increase his cows'
milk production "rang alarm bells with
me."
If supply matched demand for organic
produce in the early 1990s, it has lagged
far behind in recent years, Mr. Cullimore
points out. Though crop yields are about
half what he would harvest with
conventional methods, he has fewer input
costs and his wheat, beef, and lamb
command more than twice the normal
price.
Whether consumers would go on paying
those higher prices if hard economic times
hit Britain is a question Arthur Pullin asks
himself. Standing by his cowshed
surrounded by 40 black-and-white Friesian
dairy cows, Mr. Pullin remembers how he
first took his herd organic in 1991.
He was earning 25 percent more for his
milk than conventional neighbors, but then
"the country hit a recession, people said
they weren't prepared to pay extra, and
the organic market went flop."
He started again in 1996, and feels that
nowadays the popularity of naturally
grown food is broad and deep enough to
sustain the market under any
circumstances.
"People started getting worried about four
years ago," Pullin says. "[The 'mad-cow'
scare] triggered it, then the medical people
said that too many antibiotics in animal
feed was creating resistant bugs. A lot of
things are used that we don't know the
long-term effects of, so people prefer to
buy organic stuff, where there is less risk."
International market studies, says
Professor Hamm, suggest that in countries
where organic food is a novelty, sales
follow economic trends but "when
organics have higher market shares, it is
not important if people's income goes up
or down a bit."
The recent debate in Britain over the
possible effects of genetically modified
organisms (GMOs) gave another boost to
organic food here: Tesco's organic sales
went up by 20 percent in February alone
"most definitely because of the GM scare,
there's no doubt about that" says Ms.
Schuster.
Saturation point?
As more and more conventional farmers
ponder making the switch to take
advantage of this booming market, though,
the economic advantages could grow
slimmer. Dairy and beef farmer Colin
Pierce, for example, has invited one of the
groups that certifies growers as organic to
visit his farm, as he considers his options.
"The only thing that worries us," he
explains, "is that if we all do it we will
reach saturation point, and you really need
the premium" over standard prices to
make organic agriculture profitable.
But with Britain currently importing 70
percent of its organic foodstuffs, and the
market growing by leaps and bounds, the
time when supply will match demand
closely enough to bring prices down seems
a long way off, even if the government
does more to encourage conventional
farmers to take the plunge.
"The UK market is seen as a jewel in
Europe," says Simon Brenman, manager
of producer services for the Soil
Association. "The consumer has seen the
advantage of organic foods ahead of the
government."
Elsewhere too, market opportunities
beckon, according to the ITC, which is run
jointly by the World Trade Organization
and the UN Conference on Trade and
Development. In the medium term, its new
report predicts, demand in the US is likely
to grow by as much as 30 percent a year,
and by 40 percent a year in much of
Europe.
What's organic?
An organic farmer uses soil, insects,
plants, microorganisms, animals, and
humans to create a coherent and stable
whole. A farm's production is integrated,
humane, and environmentally sustainable.
- Welsh Institute of Rural Studies,
University of Wales
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