DEVELOPMENT: UN Recommends Organic Farming in Poor Countries

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Jul 17 2001 (IPS) - Organic foods could be a key for developing countries, hemmed in by the protectionism of the industrialised world, to open a space in the global market, say United Nations experts.

The market for organic foods and beverages – that is, produced without pesticides, herbicides or chemical fertilisers – is growing rapidly in most industrialised countries, and even in some developing countries, says Rudy Kortbech-Olesen, of the International Trade Centre (ITC), a UN agency.

The annual sales of these products totals 17.5 billion dollars, similar to that of the global coffee trade.

Favourable predictions for the sector’s expansion are backed not only by the growing awareness of consumers about environmental and health matters, but also by the marketing and aggressive promotion of the big retail traders.

Further contributing to the significant rise of the organic market are the fears spawned by mad cow disease, foot-and-mouth disease, the detection of dioxin in foods and even the genetic modification of food crops, said Kortbech-Olesen.

A study by the UN Conference on Trade and Development (UNCTAD) underscores the influence the evolution of the world agricultural market has had on the organic farming boom.

Since the early 1970s, the value of global trade has increased 15-fold, while that of agricultural trade expanded by a factor of just 7.5.

Meanwhile, the participation of developing countries in their traditional raw materials markets declined by one-fifth since the beginning of the 1970s.

Only a limited group of developing countries has benefited, with the growth of some of the more dynamic products, such as vegetable oils, fish, vegetables, flowers and poultry.

The UNCTAD document observes that there appears to be a certain correlation between subsidised products and the loss of participation in the market by developing countries.

Based on 1998 subsidy levels, every farmer in the United States, Japan and the European Union received an average of 20,000 dollars annually. Together, the industrialised countries spend nearly a billion dollars a day to sustain their inefficient agricultural sectors.

These fiscal resources in the industrialised world have been used to penetrate the food import sector of developing countries, causing a significant discrepancy in their trade balances.

The liberalisation of the farming sector and the increasingly important role of foreign companies in local markets have strengthened the competitiveness of imported products and hurt revenues of locally-based companies, says UNCTAD.

In the international arena, there has been a growing concentration of trade and greater emphasis on product quality and on merchandise, reducing the role of differentiated prices.

As far as concentration of trade, Geoff Tansey, an UNCTAD consultant, remarked that the world grain market has been left in the hands of just three private companies: Dreyfus, of France, and the US-based Cargill and Bunge. In addition, the publicly held Mitsui/Cook firm of Japan, plays a major role.

Just one year ago, there were six top grain-related enterprises, but the US-based Continental has now been absorbed by Cargill and the hundred-year-old Andre/Garnac, of Switzerland, went bankrupt.

With respect to product quality, the new concept is one that includes concern about food safety and environmental impacts.

The sales of organic products in most industrialised countries represent one or two percent of the entire food sector.

The United States is a leader in this area with sales of 8.0 billion dollars in organic foods annually, or 1.5 percent of the food trade. Germany follows, with 2.2 to 2.4 billion dollars, a portion that varies between 1.25 and 1.5 percent of that country’s food market.

But the nations with greatest relative expansion in the consumption of organics products are Denmark, with 2.5 to 3.0 percent of the domestic food market, Switzerland, 2.0 to 2.5 percent, and Austria, at 2.0 percent.

Certified organic production of foods exists in more than 140 countries, including 90 from the developing world, of which 20 are found on the UN list of least developed countries (LDCs).

Despite the rather limited absolute figures, the organic foods market has expanded in recent years at rates varying from 10 to 30 percent, pointed out Kortbech-Olesen during an UNCTAD-sponsored meeting of experts this week in Geneva.

The UN body recommended that developing countries should adopt policies to foment products involving niche markets, and organic foods and beverages in particular.

This entails the creation of greater awareness of trade opportunities for organic products, as well as of the environmental, economic and social benefits of this mode of production.

UNCTAD proposes stepping up research to promote organic farming in developing countries through the development of region-specific disease or pest resistant varieties of crops that are also high- yield.

The UN experts, however, are concerned about the high costs of certifying organic products, saying it constitutes a major obstacle for expanding organic farming in the world’s poorer countries.