Best Practices for Organic Policy - What developing country - UNEP

Best Practices for Organic Policy
• Nationwide professional promotion.
A common mark (label) that is actively promoted has much more impact than a common standard or a
government regulation (but they can obviously be mutually supportive), as most consumers can easily
recognize a mark, while they normally have little knowledge or even little interest in the standards and
regulations. Such an organic mark can have many forms. It can be a governmental label accessible for
producers certified by an approved body (USDA, JAS or Denmark), it can be a mark of the organic
association available for its members, it can be a mark owned by the trade, or it can be the mark of a
certification body (e.g. BioSuisse or Demeter). In Denmark, 92 per cent of consumers recognize the
governmental label for organic products; in Sweden, 96 per cent of consumers recognize the private
KRAV mark (KRAV 2005). Initially, the ownership or the underlying construction around a mark is
not very important. More important is that it is widely used on all organic products. Therefore, an
accessible “marketing mark” is likely to be most successful 43 . By public ownership or collective
ownership (e.g. by an organic sector business association or organization), the future policies for its
use can be adapted to the various stages of development.
In Europe, some countries have applied a push strategy for the expansion of the organic markets, and
others a pull strategy. A push strategy focuses on measures to enlarge production, assuming that once
there is more supply, market demand will be created. The pull strategy has market demand as the
driving force. The push strategy is based on generous payments to organic farms, something that is
out of reach for most developing countries. Also, the push strategy has the potential to seriously harm
a small and volatile organic market, at least in the short term. On the other hand, too forceful efforts in
marketing can fail if there are no products to sell. A combination of market supply and demand
measures is more promising (Hamm, Groenfeld and Halpin 2002). From East Africa (Taylor 2007),
Thailand, Costa Rica and Malaysia, lack of supply is mentioned as a factor limiting domestic market
development. It is apparent that policies seeking to influence the market need careful design and
adaptation.
Pricing of organic products is, as shown above, a relevant factor. Also in developing countries,
sometimes very high premium prices are quoted for organic products, often up to double the price
compared to conventional, and in the case of Malaysia up to 400 per cent – much higher than the
premiums in OECD markets. On the other hand, there are also a number of examples where there is
no particular premium charged for organic products (Rundgren 2007). To a large extent, the premium
prices in organic are a result of inefficient distribution of small quantities rather than high farm-gate
prices. Most important for a decent pricing level is probably to organize the supply and the
distribution, which requires collaboration by the actors. With growing volumes, distribution can be
more efficient and retail prices are likely to go down, not necessarily putting pressure on farm-gate
prices. Distributing organic products through mainstream channels such as supermarkets will help in
this, but supermarkets are also very demanding clients and an emerging organic sector may not be
able to fulfil their stringent quality and just-in-time delivery demands. The need for better market
information is highlighted in several of the case studies.
Supply chain management and processing
Producer organizations are often under-resourced and the lack of proper distribution infrastructure can
be fatal both for export and local markets. This is not particular for organic, but as a “new” sector, one
can assume that there will be more obstacles for organic producers than for their conventional
colleagues, especially as organic standards require proper separation of organic products and organic
markets are generally more demanding. Training can be of value, as can direct government support
(grants or credits) for joint efforts by the producers, such as establishing proper packing facilities,
joint shipments and labelling, and purchasing of certain machinery for grading or sorting.
Organic farming in KwaZulu-Natal
In South Africa, organic producer groups have started to work together, and the first group of Zulu farmers was
certified in 2001. This group has grown from 27 farmers to more than 200 currently in the group. Several other
43 groups,
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all
under
in KwaZulu-Natal,
the section of
have
regulation
been established
and certification
since then, and are in the process of organizing themselves as
primary cooperatives, while establishing Zulu Organics as a secondary cooperative to set up a quality management
system, coordinate logistics and packaging, and assist with marketing (South African case study).
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