Permanent Link: http://ufdc.ufl.edu/IR00002678/00001
 Material Information
Title: World Markets for Organic Fruits and Vegetables
Physical Description: Fact Sheet
Creator: Ferguson, James J.
Publisher: University of Florida Cooperative Extension Service, Institute of Food and Agriculture Sciences, EDIS
Place of Publication: Gainesville, Fla.
Publication Date: 2004
Acquisition: Collected for University of Florida's Institutional Repository by the UFIR Self-Submittal tool. Submitted by Melanie Mercer.
Publication Status: Published
General Note: "Publication date: May 2004."
General Note: "HS977"
 Record Information
Source Institution: University of Florida Institutional Repository
Holding Location: University of Florida
Rights Management: All rights reserved by the submitter.
System ID: IR00002678:00001

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HS977 World Markets for Organic Fruits and Vegetables1 James J. Ferguson2 1. This document is HS977, one of a series of the Horticultural Sciences Department, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida. Publication date: May 2004. Please visit the EDIS Web site at http://edis.ifas.ufl.edu. 2. James J. Ferguson, professor, Horticultural Sciences Department, Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, 32611. The Institute of Food and Agricultural Sciences (IFAS) is an Equal Employment Opportunity Affirmative Action Employer authorized to provide research, educational information and other services only to individuals and institutions that function without regard to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For information on obtaining other extension publications, contact your county Cooperative Extension Service office. Florida Cooperative Extension Service / Institute of Food and Agricultural Sciences / University of Florida / Larry R. Arrington, Interim Dean Increasing sales of organic foods, changes in dietary habits, major food safety concerns, and greater personal health awareness have led to greater consumer interest in documentation of production practices for fresh fruits and vegetables, especially for certified organic crops. Since international Customs agencies and related trade and regulatory agencies do not now distinguish between conventionally grown and organic produce, reliable data are not readily available on market development and international trade of organically grown fresh fruits and vegetables. Accordingly, Pascal Liu and others at the International Trade Center, Food and Agriculture Organization (FAO) of the United Nations, reviewed available literature, conducted surveys and interviewed key players in international organic marketing in 2000 for a report entitled "World Markets for Organic Fruit and Vegetables Opportunities for Developing Countries in the Production and Export of Organic Horticultural Products." The full text of this report is available at http://www.fao.org/docrep/004/y1669e/ y1669e00.htm#Contents. To emphasize the breath and depth of this report, I have listed the contents and have summarized the main findings in this fact sheet, much of the material for which has been taken directly or indirectly from this FAO report. Hopefully, this information will aid Florida organic fruit and vegetable growers and others in assessing their export potential for European and Japanese markets. Topics in the FAO report include: Findings and Identified Opportunities for Developing Countries Requirements for Producing and Exporting Organic Produce to Major Markets Main Markets for Organic Fruit and Vegetables in Developed Countries (each country report is 20-30 pages): Austria, Belgium, Denmark, France, Germany, Italy, Japan, The Netherlands, Sweden, Switzerland, United Kingdom, United States Case Studies of Countries Producing and Exporting Organic Fruits and Vegetables (each country report is 20-30 pages): Argentina, Cameroon, Chile, Dominican Republic, Madagascar, Papua New Guinea, Zambia


World Markets for Organic Fruits and Vegetables 2 FAO Assistance to Developing Countries in Organic Agriculture Within each of these above market and case studies, topics covered include: organic production figures government policy marketing and sales data premiums for organic products distribution channels trends and attitudes market growth constraints to market development market access import data major suppliers and products market characteristics strategies and recommendations for export development references listings of importers organic farmer organizations organic certification bodies trade and governmental organizations FAO has focused on encouraging sustainable agriculture and rural development by building partnerships in developing countries such as Asia, Africa, the Mediterranean and the Caribbean and national and international research centers, national organic programs, and other institutions. This assistance includes web-based material, institutional support, policy advice, field projects, training, and research. A series of case studies on the following topics, some of which may be of interest to Florida growers, provided technical information on production requirements and marketing opportunities: The Potential Contribution of Organic Agriculture to Sustainability Markets for Organic and Fair Trade Bananas A Socio-Ecological Analysis of Opportunities and Constraints of Organic Agriculture Food Safety and Quality of Organic Products Factors Influencing Organic Agriculture Policies, Especially in Developing Countries Spices and Medicinals as Bioactive Protectants for Grains Cost-Benefit Analysis of Organic Versus Conventional Production Organic Pastures and Feed Processing of Organic Fruits and Vegetables These reports are listed and can be accessed at http://www.fao.org/organicag/faodoc-e.htm. Opportunities for Developed Countries The USA had the highest level of organic food sales in 2000, followed by Germany, the United Kingdom (primarily England, Scotland, Wales, and Northern Ireland) and Italy. Belgium, Austria, and Sweden had the lowest sales. Organic fruits and vegetables had a higher proportional share of the total fruit and vegetable market than organic crops generally had of the overall food market. Organic fruit sales were estimated at 3-5 percent of total market share in developed countries but vegetable sales were greater than 10 percent of overall vegetable sales in countries like the UK and Switzerland. Denmark had perhaps the highest organic share (2.5 3%) of a domestic food market, followed by Switzerland, Austria, Germany and the USA. When only fruit and vegetable sales are considered, the United Kingdom, Austria, and Switzerland led other developed countries with the highest percentage of organic fruits and vegetables


World Markets for Organic Fruits and Vegetables 3 consumed in terms of total consumption of these commodities (Table 1). Sales of organic fruits and vegetables increased 20-30% annually during the 1990s, especially in countries like Italy where mad cow disease was detected in 2001, triggering a surge in overall fruit and vegetable sales and a greater than 85% increase in organic produce, generally. On the other hand, sales in Austria and Denmark, with well established organic markets and organic market share, showed little if any growth. Supermarkets were the fastest growing organic sales outlet in most countries studied in 2000 but their marketing position varied in different countries, with approximately 70 percent of all organic sales in the UK, Switzerland and Denmark handled by supermarkets but only 20 to 30 percent handled by supermarkets in Germany, the Netherlands, Austria, and France. The authors of this study note that although the European Union (EU) has been integrating markets and organic regulations, a uniform EU market for organic fruits and vegetables has not been clearly defined. Potential exporters to these markets should therefore pay careful attention to market differences, trends, consumer profiles, and distribution channels in targeted market countries. Organic Production in Developed Countries Among developed countries, Italy had the greatest area in current organic production, with 2,570,772 acres, followed by the USA with 1,368,934 acres (Table 2). According to this report, southern Argentina has huge production potential with an estimated 3 million hectares (7,413,000 acres), already certified organic. However, 99 percent of this acreage is cattle pasture and some land is not in production at all. Wheat, sugar cane, fruits and vegetables are produced on the remaining 1 percent, about 60,000 acres. Other estimates of world wide organic acreage should also be examined carefully in assessing production potential. For example, Table 3, from an online publication by the International Federation of Organic Agriculture Movements, lists almost 22 million hectares (54,362,000 acres) under organic management in 2002, including 10.5 million hectares (26 million acres) in Australia and 3.2 million hectares (7,907,200 acres) in Argentina. Extensive grazing land in these countries, especially under dry land conditions, can support large livestock operations but may not be suitable for horticultural crop production. Uncultivated woodlands and other wild areas from which wild plants are harvested are also included in estimates of organic acreage. The USDA formalized National Organic Standards in 2003, partially subsidizes organic certification costs, and sponsors sustainable and organic farming research. However, the authors of this FAO report indicated that most countries in western Europe have stronger, more specific governmental policy and financial support to encourage growers to convert to organic farming, with some countries targeting as much as a 10 percent of all farmland for organic production by 2010. Demand for fresh organic produce is expected to exceed supply in developed countries, but already established consumer preferences may limit the growth of imported organic produce. For example, in virtually all countries surveyed, consumers distrusted the authenticity of imported organic produce. In Switzerland the domestic organic label, Bio Suisse, actually prohibits air transport of organic products. Austrians prefer domestic produce bought at the farm and tend to purchase imported organic produce only during the off season when local produce may not be available. Surveys in Denmark indicate that consumer confidence in imported organic produce decreased with geographical distance from Denmark. In the USA and Japan, consumers prefer locally grown produce. However in some countries like the UK and Belgium where domestic production can not match demand, consumers do not readily discriminate between domestic and imported produce. Clearly, those countries exporting organic produce to developed countries must gain buyers' confidence by working closely with organic importers, wholesalers, and retailers, even by using the domestic organic label, if possible, to encourage consumer acceptance. Some marketing trends observed in the survey included small supermarkets that sell only organic produce; biodegradable packaging; convenience organic foods like


World Markets for Organic Fruits and Vegetables 4 pre-packaged salads; internet sales; organic food sales through public canteens, and catering. Complete farm gate, fob3, and retail prices are generally not available partially because traders who dominate markets may consider this proprietary information. However, as markets become more competitive and transparent, pricing information may become more available and the differential between organic and conventional produce may decrease, depending on supply and demand. Produce prices vary widely over time and by location, with organic produce sometimes selling between 20 to 40 percent higher than conventional produce. Lacking a complete price series, potential producers and exporters of organic fruits and vegetables should cautiously examine potential future market supply and demand and consider near term organic fresh and processed fruit and vegetable production capacity of countries like Argentina and Brazil. Developing Countries Domestic production of organic produce in developing countries is expected to increase but may not be able to supply local or regional demand, with the best export market opportunities in off-season fresh temperate-zone produce and non-temperate zone produce. Countries with Mediterranean climates like Italy, Spain, Israel, Morocco, and Egypt will have a geographical and in-house EU advantage in supplying EU temperate zone countries with tropical and subtropical produce compared with non-EU producers like the USA, except for off-season produce. Developing countries may also have to develop competitive producer and fob prices and a greener fresh produce export image while continuing to improve crop quality, phytosanitary and organic standards, post-harvest handling procedures, and importer/marketer/trade relations. With supermarkets being the fastest growing sales outlet for organic produce in developed countries, organic producers in developing countries may have to adapt to the purchasing strategies and standards of buyer-driven global commodity chains, including requirements for continual supplies, price, quality, delivery, food safety, and related issues. Related Topics Other related FAO publications on the following topics can be accessed at http://www.fao.org/organicag/faodoc-e.htm. World Markets for Organic Citrus and Citrus Juices: Current Market Situation and Medium -Term Prospects (May, 2003) Economic and Financial Comparison of Organic and Conventional Citrus Growing [in Spain] (November, 2001) Handling and Processing of Organic Fruits and Vegetables in Developing Countries (September, 2002) The International Federation of Organic Agriculture Movements The World of Organic Agriculture 2003 Statistics and Future Prospects http://www.soel.de/inhalte/publikationen/s/s_74.pdf Additional Notes: 3. F.O.B. (Free on Board) The prices of goods on board the specified vessel at the specified port of shipment. If you have quoted F.O.B. prices, you are responsible for the shipment until it is loaded on board.


World Markets for Organic Fruits and Vegetables 5 Table 1. Value and shares of international organic markets in 2000 (average 2000 exchange rates). Missing data were not available. Country Estimated value of total organic sales ($ million) Estimated share of organic in total food sales (%) Value of organic fruit and vegetable sales ($ million) Estimated share of organic in total fruit (F) and Vegetable (V) sales (%) Austria 195 1.8 29 3 F and 5V Belgium 138 1 34 Denmark 372 2.5 3.0 France 846 1 169 Germany 2 ,128 1.25 1.5 378 2.6 Italy 978 1 264 2 Japan 350 Netherlands 210 1.2 Sweden 175 0.9 31 1.7 Switzerland 457 2 5F and 10V United Kingdom 986 1 300 5-10 USA 8,000 1.5 1, 450 Source: World Markets for Organic Fruit and Vegetables at http://www.fao.org/DOCREP/004/Y1669E/Y1669E00.HTM Table 2. Organic area under production in 2000. Country Area Percent of total production area Organic fruit and vegetable production area ha acres ha acres Austria 272,000 672,112 Belgium 20,663 51,058 0.9 612 1,512 Denmark 165,258 408,353 6.2 1,912 4,725 France 371,000 916,741 1.3 27,945 69,052 Germany 546,023 1,349,223 3.2 7,118 17,584 Italy 1,040,377 2,570,772 Japan 1,000 2,471 0.02 Netherlands 27,820 68,743 1.4 2,100 5,189 Sweden 139,000 343,469 5.1 2,300 5,683 Switzerland 95,000 234,745 9.0 1,238 3,059 United Kingdom 472,500 1,167,548 2.5 3,000 7,143 USA 544,000 1,368,934 0.2 41,266 101,968 Source: World Markets for Organic Fruit and Vegetables at http://www.fao.org/DOCREP/004/Y1669E/Y1669E00.HTM


World Markets for Organic Fruits and Vegetables 6 Table 3. Land area under organic management (SOEL-Survey, February 2003). Country Organic Hectares Organic Acres Argentina 3,192,000 7,887,432 Australia 10,500,000 25,945,500 Austria 285,500 705,470 Azerbaijan 2,500 6,177 Belgium 22,410 55,375 Belize 1,810 4,472 Benin 81 200 Bolivia 19,634 48,515 Brazil 275,576 680,948 Bulgaria 500 1,235 Cameroon 2,500 6,177 Canada 430,600 1,064,012 Chile 273,000 674,583 China 301,295 744,490 Colombia 30,000 74,130 Costa Rica 8,974 22,174 Croatia 120 296 Cuba 8,495 20,991 Cyprus 52 128 Czech Republic 218,114 538,959 Denmark 174,600 431,436 Dominican Republic 14,963 36,973 Ecuador 60,000 148,260 Egypt 15,000 37,065 El Salvador 4,900 12,107 Estland 20,141 49,768 Fiji 200 494 Finland 147,943 365,567 France 419,750 1,037,202 Germany 632,165 1,562,079 Ghana 5,453 13,474 Greece 31,118 76,892 Guatemala 14,746 36,437 Guyana 425 1,050 Honduras 1,769 4,371 Hungary 105,000 259,455 Iceland 5,466 13,056 India 41,000 101,311 Indonesia 40,000 98,840 Ireland 30,070 74,302 Israel 7,000 17,297 Italy 1,230,000 3,039,330 Jamaica 205 506 Japan 5,083 12,560 Kenya 494 1,220 Laos 150 370


World Markets for Organic Fruits and Vegetables 7 Table 3. Land area under organic management (SOEL-Survey, February 2003). Country Organic Hectares Organic Acres Latvia 20,000 49,420 Lebanon 250 617 Liechtenstein 690 1,704 Lithuania 6,769 16,726 Luxembourg 2,141 5,290 Madagascar 1,230 3,039 Malawi 298 736 Malaysia 131 323 Mauritius 175 432 Mexico 143,154 353,733 Morocco 11,956 29,543 Nepal 45 111 Netherlands 38,000 93,898 New Zealand 63,438 156,755 Nicaragua 7,000 17,297 Norway 26,673 65,908 Pakistan 2,009 4,964 Panama 5,111 12,629 Papua New Guinea 4,265 10,538 Paraguay 61,566 152,129 Peru 84,908 209,807 Philippines 2,000 4,942 Poland 44,886 110,913 Portugal 70,857 175,087 Republic of Korea 902 2,228 Romania 18,690 46,182 Russia 5,276 13,036 Senegal 2,500 6,177 Slovakia 58,706 145,062 Slovenia 5,280 13,046 South Africa 45,000 111,195 Spain 485,079 1,198,630 Sri Lanka 15,125 37,596 Suriname 250 617 Sweden 193,611 478,412 Switzerland 102,999 254,510 Syria 74 182 Tanzania 5,155 12,738 Thailand 3,429 8,473 Tunisia 18,255 45,108 Turkey 57,001 140,849 Uganda 122,000 301,462 Ukraine 164,449 406,353 United Kingdom 679,631 1,679,369 Uruguay 678,481 1,676,526 USA 950,000 2,347,450 Vietnam 2 5


World Markets for Organic Fruits and Vegetables 8 Table 3. Land area under organic management (SOEL-Survey, February 2003). Country Organic Hectares Organic Acres Yugoslavia 15,200 37,559 Zambia 5,688 14,055 Zimbabwe 40 98 SUM 22,811,267 56,366,640 The World of Organic Agriculture 2003 Statistics and Future Prospects http://www.soel.de/inhalte/publikationen/s/s_74.pdf