Agriculture Reference
In-Depth Information
consumer prices as a result of decreased marketing costs (economies of scale) with a resulting
increase in demand for organic food, and confidence of conventional farmers to convert. The
detailed study on the Danish agricultural sector assumed initially that 80% of farmers con-
verted to organic agriculture, and also analysed what happened at lower levels of conversion
(Wynen 1998). The results showed that with prevalent input and output prices, and assump-
tions of reducing premiums with an increasing number of farmers across all industries, the
total receipts to the farming community would start to fall only after about 25% of farmers
had moved to organic farming. If that situation were reached, the political and social climate
within the agricultural sector would have changed substantially, warranting new estimations
with assumptions closer to reality than those available now.
In summary, studies have been undertaken to examine the consequences of large-scale
changes towards organic management among farmers. Total production is usually the main
factor considered, although total returns to farming and to farmers were also analysed. Studies
mentioned here indicate that conversion to organic management, especially when the conver-
sion rate is not taken to extremes, would generate few changes that cause adjustment problems
to the agricultural sector.
SWOT analysis
The market for organic produce has developed considerably. In 2000, the global retail market
was estimated to be around US$16 billion, with an estimated annual growth in demand of
about 15% to 20% in several markets. Estimates for 2001 were closer to US$20 billion, and
forecasts for 2003 for the world organic food and beverages market were between US$23 billion
and US$25 billion (ITC 2005). Organic food and non-food sales grew by about 20% during
2003, and reached US$10.8 billion in one of the main markets, the USA (Organic Trade Asso-
ciation 2004). The ITC estimate for the organic retail market reached US$30-32 billion in
2005 (Kortbech-Olesen 2006). A general upward trend can be detected, which shows that both
the demand and supply of organic products are growing.
Strengths and opportunities
Significant body of knowledge and expertise
Organic farming has become more popular since the 1980s (Foster and Lampkin 1999, Tuson
and Lampkin 2006). This growth has been stimulated by, and has stimulated, an increase in
know-how and managerial skills on farms. Although globally there may not yet be many
people who have a profound knowledge of organic agriculture, experience in many kinds of
applicable disciplines such as farm management (farmers), soil science, plant pathology, ento-
mology, veterinary science, plant and animal husbandry, marketing, economics and political
and social science is now available.
Standards and certification in many countries
For farmers to be able to sell their products, consumers require sufficient confidence in the
organic production and marketing processes to be willing to buy. Over the last 20 years, con-
siderable effort has been expended by both public (state authorities) and private (e.g. farmers'
associations) organisations into developing a well-functioning certification scheme. As a
result, many countries have credible organic standards and certification procedures.
Availability of markets
The demand for organic products has increased especially during crises in conventional agri-
culture. Examples include 'mad cow disease' since the late 1980s, the presence of dioxin in feed
