Annex 4: Case study “Organic Farming” - ITAS

Future Organic Agriculture projects should also improve the framing conditions by the
support of basic social services in areas such as improvement of water facilities, provision of
support materials for local storage facilities and housing.
3.2. Availability of markets, agricultural product prices
Sahota 2008 reports in Willer, Yussefi-Menzler, Sorensen 2008 p.53ff:
„Organic Monitor estimates international sales to have reached 38.6 billion US Dollars in
2006; this is over double that of 2000 when sales were at 18 billion US Dollars. Consumer
demand for organic products is concentrated in North America and Europe; these two regions
comprise 97 % of global revenues. Other regions like Asia, Latin America and Australasia are
important producers and exporters of organic foods.
The global organic food industry has been experiencing acute supply shortages since 2005.
Exceptionally high growth rates have led supply to tighten in almost every sector of the
organic food industry: fruits, vegetables, beverages, cereals, grains, seeds, herbs, spices, etc.
The organic meat & dairy sector have been adversely affected because of the lengthy
conversion process to organic methods and shortages of organic inputs. Organic feed
shortages are preventing farmers to raise production levels. Indeed, a large rise in organic
milk production in the US in spring 2007 was directly because of farmers completing their
conversion period before a new ruling on organic feeds went into effect.
With supply lagging demand in most sectors, growth in the global organic food industry is
expected to be stifled by supply shortages for a number of years. Organic Monitor expects
supply-demand imbalances to continue throughout this decade.
Europe
Europe has the largest and most sophisticated market for organic food & drink in the world,
valued at about 20 billion US Dollars in 2006. Its leadership is partly because of the
depreciation of the US dollar in the foreign exchange; North America generated over half of
global revenues until 2005. The growing weakness of the US dollar is expected to make
Europe more prominent in the coming years. Even within Europe, organic food sales are
concentrated with the bulk of sales coming from Western Europe. Indeed, four countries -
Germany, France, Italy and the UK - comprise over 75 percent of regional revenues. Other
18