Experiences with Organic Agriculture

1
Experiences with Organic Agriculture

• Dr. Sophia Twarog, UNCTAD
• Standards and Trade Workshop
• 16 May 2002

2
Opportunities

• Demand growing 10-20 in most major markets
• US 17.5 billion market in 2000
• Economic,social, health and environmental
  benefits for DCS
• Possible DC comparative advantage
• Over 100 DCs produce certified organic products

3
Production Constraints

• Limited governmental support
• Lack of technical know-how
• Lack of organic inputs
• Little RD on plant varieties and prodn methods
  best suited to DCs
• Conversion period- smallholders have limited
  financial reserves

4
Export Constraints

• High certification costs
• Lack of market information and marketing
  strategies
• Limited physical transport and storage
  infrastructure
• Complex import procedures
• Tariff and non-tariff protection

5
Certification

• Most DC exporters depend on certification by
  international certification bodies
• National certification infrastructure limited in
  most DCs
• Unaffordable for smallholders
• Smallholder group certification SGC not
  recognized in importing C regs

6
Standards and import regulations

• Multitude of private standards and government
  regulations
• No well-functioning mechanisms for mutual
  recognition
• Multiple certification/accreditation is costly
• Obtaining import permits-cumbersome and time
  consuming

7
Market information and channels

• Limited market information available at producer
  level
• Sometimes DC certified organic products get sold
  as conventional

8
Other market risks

• Organic market is fairly small
• (LT 2 of total food market in most devd Cs)
• Devd C efforts to promote OA production,
  including subsidies
• Eastward enlargement of EU could increase OA
  supply
• Increasing consumer preference for locally
  supplied food

9
EU Regulation 2092/91

• Para 1 third country list (6 Cs)
• Para 6 importer derogation
• Importer submits documentation that products are
  produced and certified according to rules
  equivalent to EUs
• Permit takes several weeks or months
• Over 80 of EU OA imports, from over 85 countries
• Due to expire 31 December 2005

10
Other EU Regulations

• No. 1788/2001 aims to harmonize import
  procedures throughout EU
• from 1 July 2002
• requires an original certificate of inspection
  for each consignment
• Is expected to increase delays
• Since July 1999, certification bodies must
  conform to EN 45011 or ISO 65

11
USA Regulations

• Standards adopted December 2000
• Certifiers operating in foreign countries may
  apply for USDA accreditation.
• In first round (April 2002), 37 foreign
  certifiers applied, incl. 12 from 10 DCs.
• 4 were accepted, including 1 from Peru
• The other applications are pending.

12
USA Regulations, contd

• Otherwise, certifiers seek recognition
• USDA determines, upon the request of a foreign
  govt, that its authorities are able to assess
  and accredit certifying agents as meeting the
  requirements of the National Organic Programme
  (NOP),
• Or as meeting requirements equivalent to the NOP
  under an equivalency agreement

13
Costa Rica

• 1.9 of land under permanent cultivation is under
  organic production or in conversion
• Small producers (94 of certified farms are LT 5
  hectares)
• Exports to EU and USA
• Main exports coffee bananas

14
Costa Rica

• Institutional support
• National Programme for OA (est. 1995)
• Dept. on Accreditation and Registration of OA in
  Ministry of Agriculture, deals with issues
  related to inspection
• National standards
• Procedures for accreditation of certifiers
  regulations for inspection

15
Costa Rica

• Good certification and accreditation
  infrastructure
• 3 authorized inspection agencies
• (2 national, 1 German)
• These have arrangements with import market-based
  certifiers
• Expected to be soon included in the EU third
  country list

16
India

• National Programme for Organic Production
• National StandardsMarch 2000
• Tea, Coffee, Spices Boards and APEDAaccreditation
  agencies for products under their responsibility
• Applied for EU third country list

17
India

• Key role of NGOs and farmer organizations
• Commodity-specific boards providing some support
  to OA
• Spices Board meets 50 of certif. Costs
• Price premiumsdifficult to secure
• Ex organic pepper

18
Uganda

• Small scale producers
• Exports include cotton, sesame, coffee, fruits
• No national standard
• No clear government policy or support
• No locally-based certification body

19
Recommendations

• Raising awareness and promoting policy dialogues
• Research and development
• Training (farmers, agricultural extension
  workers)
• Development of national legislation and standards
  (for Cs with larger OA sector)

20
Recommendations, contd

• Develop domestic markets
• Improve access to market information
• Develop marketing strategies
• Appropriate government support

21
Recommendations, contd

• Reducing certification costs
• Assistance in meeting certification costs
• Local certification/inspection body
• Inspections done by local staff charging local
  fees
• Provisions for smallholder group certification
  based on Internal Control Systems (ICS)

22
Recommendations, contd

• Reduce expensive multiple certification through
  harmonization and mutual recognition of OA
  regulations, standards and certification
• Among governments
• Among accrediting agencies
• Among private/public certifying bodies

23
Recommendations, contd

• Facilitating imports of OA products
• Regulations reflecting the needs of DCs, e.g.
  provisions for SGC
• Transparent and understandable procedures
• Mutual recognition of OA regulations
• Providing information (standards, market
  opportunities, etc.)

24
Recommendations, contd

• Bilateral and multilateral aid agencies can
  provide/finance technical assistance to
• Promote OA production
• Obtain certification
• Identify business partners

25
Trade rules issues

• Implications of developed country subsidies to OA
  production
• Need for transparent and non-discriminatory
  labelling
• Possibilities to grant special differential
  treatment, incl. trade preferences, to OA
  products fr. DCs

26
Trade rules issues,contd

• Post-Doha could the mandated negotiations aimed
  at reducing or eliminating tariff and non-tariff
  barriers to environmental goods and services
  benefit DC exports of OA products?

27
Possible follow-up activities

• By UNCTAD and UNEP/UNCTAD CBTF, working closely
  with IFOAM, FAO, ITC and other relevant
  institutions

28
Possible follow-up activities

• Assisting DCs in designing and implementing
  appropriate govt support for OA production
  export, through
• Studies, including identifying promising
  products, ways to reduce certification costs,
  overcoming constraints
• Policy dialogues, incl. to create awareness of
  benefits of OA and promoting multi-stakeholder
  committees

29
Possible follow-up activities

• Exploring mechanisms for recognition of organic
  guarantee systems of DCs
• Promoting mutual recognition
• Examining ways to promote the practical
  application of the concept of equivalence,
  including through Task Force involving
  Governments, IFOAM, FAO, UNCTAD and others.

30
Possible follow-up activities

• Promoting transparent and simple rules governing
  OA imports
• Exploring trade preferences for OA products from
  DCs
• Examining market strategies (ITC) incl.
  disseminating market research to DCs, explore
  e-commerce opportunities, promoting partnerships
  w/ buyers, donors