Organic Agriculture: A Trade and Sustainable Development Opportunity for Developing

Countries

Sophia Twarog, Ph.D.

What is organic agriculture?

Certified organic production: over 30 million hectares, 138+ countries

4Why Should Governments Care?

• Market failure in agriculture

• Private costs and benefits are not equal to public costs and benefits

• Externalities lead to suboptimal solutions

5Why Should Governments Care?

International Assessment for Agricultural Science and Technology Development (IAASTD) Report:

Over 400 experts co-sponsored by FAO, GEF, UNDP, UNESCO, WHO and World Bank

Conclusion:

We cannot continue business as usual

6IAASTD Report

“the way the world grows its food will have to change radically to better serve the poor and hungry if the world is to cope with growing population and climate change while avoiding social breakdown and environmental collapse.”

OA as a national sustainable development opportunity

• Economic benefits• Food security benefits• Environmental benefits• Social & cultural benefits

Economic benefits

Net income = (price x quantity) – total costs

Generally, organic farmers earn more.

Food security benefits

• Higher incomes• Higher yields • Diversified production• Improved nutrition

Food security benefits• 114 case studies in Africa

conversion to organic or near organic

• 116% increase in productivity

• Sustainable: OA builds human, social, natural, financial and physical capital

Environmental Benefits

• Less pollution• Improved soil, incl. increased water

retention and less soil erosion

• Enhanced biodiversity• No genetic contamination

Environmental Benefits, cont’d

• Mitigated climate change• Reduced energy consumption• Landscape services

Social & cultural benefits

• Benefits for smallholders• Women’s empowerment• Builds on traditional knowledge• Reduced rural-urban migration• Improved health & safety• Community revitalization

OA as an export opportunity—rapid global market growth

Growth of the global market for organic food and drink 2002-2006 (Billion US Dollars)

23.1 25.5 28.733.2

38.6

0.05.0

10.015.020.025.030.035.040.045.0

2002 2003 2004 2005 2006

Billio

n US

Doll

ars

Source Source: The Global Market for Organic Food & Drink, Organic Monitor 2007

OA as an export opportunity

• Global sales growth rates at least double those of conventional food products

• Acute supply shortages 2005-2008, more balanced 2009

• Developing country exports rising fast• Price premiums

Regional Distribution of Organic Food Sales 2008

Region %Europe 51North America 46Other 3

TOTAL 2008: 50.9 billion USD ( double the 2003 value of 25 billion USD)Source: Sahota (2010)

Regional distribution of certified organic production 2006

Export opportunities include

• Fresh and processed tropical products• Counter-seasonal fresh produce• Other products with demand-supply

gaps• Ingredients for food processing

industry

Production challenges

• Little or no government support (policies, ag extension, R&D)

• Conversion period• Knowledge intensive• Sometimes lack of organic inputs• Lack of secure land tenure

Export challenges

OA exports must:• Meet SPS requirements in import mkt

(same as for convent’l products)• Meet requirements of OA regulations

& be certified by approved cert. body• Meet additional requirements of private

standards (sometimes)

Export challenges

• Agric. Subsidies in import markets• Need for market information• Consumer preferences for local food• Lack of harmonization, equivalence &

mutual recognition

Recommendations to developing country governments

• Assess national organic sector & policies

• OA action plan• Consider supporting OA R&D,

extension services, certification costs, development of domestic market, exports, harmonization

Other factors contributing to success

• Community organization• Group certification

Recommendations at international level

• Pursue harmonization and equivalence• Take into acct special conditions in

developing countries • Provide market info• Support TC/CB in OA

UNCTAD initiatives

• Publications• UNCTAD-FAO-IFOAM Global Organic

Market Access project• UNEP-UNCTAD Capacity Building Task

Force on Trade, Environment and Development (CBTF)

For more information

www.unctad.org/trade_envwww.goma-organic.org

Sophia.twarog@unctad.org

Thank you!