Press Release
For use of information media - Not an official record

Geneva, Switzerland, 15 March 2002

Major markets for organic products are growing at rates of 10-15% per year, but tightening rules on the import of organic products, and the increasing preference in major developed country markets for local rather than imported production, are posing obstacles for would-be organic exporters in developing countries, they said at meetings last week.

Abroad, developing countries are faced with hundreds of different private sector standards and frequently cumbersome government regulation and import procedures. At home, these problems are compounded by other hurdles related to finance, infrastructure, transport, certification, and lack of information on markets and organic production practices.

In some developing countries, agricultural yields are deteriorating due to overuse of chemical inputs on land that is already marginal. For these, choosing organic agriculture is a "strategy for survival", said El Hadji Hamath Hane, an organic farmer from Senegal who, along with peers from a number of other developing countries, met last week in Nuremberg and Brussels with representatives of governments, certification bodies and the European Commission to tackle these challenges.

To some extent the challenges are offset by the growing demand in developed countries for organic produce, which creates an opportunity for organic producers in the developing world. "In the current depressed commodity markets, we can sell our organic ´apple bananas´ but not our conventional ´apple bananas´", said Samuel Nyanzi, representative of a rural community development organization in Uganda. In addition, organic products can command a higher price than their conventional cousins, thus increasing producers´ profits. This means a lot to countries dependent on single commodities and their depressed markets. Other benefits include improved soil fertility, reduced water erosion, enhanced biodiversity and, in the social sphere, rural employment generation, improved household nutrition and local food security.

But the new tastes in developed countries for organic produce are not necessarily being met by imports. Farmers at the meetings heard about the growing preference in major markets for local or regional produce - a trend that can be variously attributed to the recession, protectionism, and a growing consumer and environmental concern with reducing "food miles", or the cost in terms of air pollution and CO2 emissions of long-distance transport of food goods. This trend was confirmed at the Nuremberg meeting when a major European food retailer announced plans to source 100% of its meat and dairy products within its country of origin by 2004. In light of this, developing countries may need to focus more on counterseasonal and tropical products, said participants.

Domestic markets in developing countries are often too small to sustain a vibrant organic farming sector, making exports all the more vital. But regulations are a major hurdle for organic exporters - particularly to the European Union, where they will become even stricter this year. Regulation there operates on the basis of equivalence, but only one developing country, Argentina, has been recognized as having regulations and certification infrastructure equivalent to its own; several others have requested to be added to this "third country list". Exporters from all other countries must submit documents to confirm that the products are produced and certified according to rules equivalent to those of the EU - an option which some 70 developing countries have used thus far. Much paperwork and delays are involved, in some cases causing lost business. Delays will likely increase as from 1 July, when an original certificate of inspection must be submitted for each consignment.

Another major problem highlighted at last week´s meetings is the proliferation of private sector standards and governmental regulations facing the organic market and the lack of appropriate mechanisms to establish equivalence. To sell in different markets or even in different stores in one market may involve multiple certification and high costs. "Without concerted action, the situation will only get worse", said Gunnar Rundgren, President of the International Federation of Organic Agriculture Movements (IFOAM). According to a survey undertaken by the International Organic Accreditation Services (IOAS), some 56 countries have either fully implemented, or are in the process of drafting or implementing, their own organic agriculture regulations. Of particular importance is the new regulation in the US - the second largest organic market after the EU - slated for full implementation by October of this year. While regulations can give a boost to the domestic organic sector and increase consumer confidence, having so many different regulations to comply with can make exporting much more complex and costly.

Both meetings called for developed countries to ensure transparent and understandable import procedures and to take the special circumstances of developing countries into account. Provisions could be made, for example, to recognize smallholder group certification based on internal control systems. There were also calls for allowing the official EU organic label to be used by non-EU producers, and for establishing mechanisms of "mutual recognition", by which countries would agree to recognize one another´s organic agricultural standards and certification systems. Negotiation of bilateral mutual recognition agreements can be cumbersome and time-consuming, said experts, who felt that a multilateral mechanism would be much more effective, citing the multilateral agreement among IFOAM-accredited certification bodies as a good working model.

The Brussels meeting mentioned that the upcoming WTO negotiations on reducing or eliminating trade obstacles on environmental goods and services could enhance trading opportunities for organic agricultural products. Ways to increase market access for such products, including through tariff preferences for developing countries, were proposed. Reducing agricultural subsidies, including those aimed at lowering the costs of chemical inputs, could make organic products more competitive. "If conventional agriculture were to pay for the environmental and social damage it ends up causing, it would be much more expensive than organic agriculture", noted IFOAM´s Gunnar Rundgren.

The Brussels meeting was organized in the framework of the UNEP-UNCTAD Capacity-building Task Force (CBTF) on Trade and Environment from 21-22 February and hosted by the secretariat of the African, Caribbean and Pacific countries. Financial support was provided by the EU and the UNCTAD LDC Trust Fund. Experts from 15 developing countries, 35 representatives of ACP missions in Brussels, and representatives of the European Commission, IFOAM, certification bodies, and other members of civil society exchanged practical experiences and discussed means of promoting developing country production and trading opportunities for organic products.

In Nuremberg on 18-19 February, UNCTAD joined forces with IFOAM and the Food and Agriculture Organization (FAO) to discuss international harmonization and equivalence in organic agriculture. The 200-odd public and private sector participants included focal points for organic regulations in the US, EU and other countries, as well as producers, certifiers, NGOs and international organizations. A major topic was how to enhance effective public-private interaction - i.e. between the relatively recent governmental regulatory schemes and the private sector production, certification and marketing organizations and approaches that have developed from the grassroots up over the past few decades. The Nuremberg meeting recommended the establishment of a task force comprising IFOAM, FAO, UNCTAD, the EU, US, Japan, and some developing country governments to work on a mechanism for mutual recognition of organic agricultural standards and certification systems.

Other follow-up activities will include a workshop in Peru next month on production and marketing opportunities for organic products and a number of CBTF initiatives.