Program Overview

Background and Long-Term Strategy

Organic products are produced and consumed in over 130 countries. They represent the fastest growing food sector worldwide. Growth of new farms, products and number of consumers has been steadily increasing over the last 20 years. In the last 10 years the rate of growth has consistently increased in all of the advanced economies. Market analysts forecast annual growth rates between 10 per cent and 30 per cent around the world. The United States Department of Agriculture expects that the organic industry will be worth US$100 billion by 2010 in just three markets, the USA, Europe and Japan. Major food corporations worldwide are developing organic product lines.

In Australia, the organic sector is worth between $250 - $400 million per annum at retail level. Demand is currently outstripping supply. Production in Australia has been increasing at between 6 -15% per annum whereas consumption is growing at between 25-40%. The balance is imported. Australia is one of the world's leading grain exporters, however organic grains are being imported to meet the shortfall in production.

Rising domestic and overseas demand for Australian organic products is prompting a greater number of conventional farmers and processors to consider and adopt organic systems. Typically the attraction is either improved market access and/or higher prices from niche markets, together with recognition by the marketplace of better and more sustainable farming practices. Concern by both consumers and producers of the need for more sustainable farming practices is growing strongly and there is the potential for organic farming systems to play a role in this across agriculture as a whole.

The Organic Systems R&D Program operates through a mixture of commissioned and submitted projects.

A significant advance for Australian organic agriculture in 2007-08 has been recognition of The Organic Federation of Australia (OFA) as the peak body for the industry. In the past, industry fragmentation has meant that it has been difficult for the industry to strategically co-invest in R&D. The OFA's Industry Business and Marketing Plan outlines the future directions of the industry. A key strategy is industry co-investment for R&D, to complement RIRDC investment. However industry co-investment in the new Organic Systems R&D Plan did not eventuate in 2007-08, a prerequisite in the plan for any future increases in RIRDC investment. The Queensland Department of Primary Industries convened a meeting on Organics, and is writing a submission to the Primary Industries Standing Committee (PISC) which may lead to more federal and state agency support for the industry.

While the current development of an Organic Domestic Standard (through Standards Australia) potentially provides the impetus for enhanced industry cohesion, the industry is currently operating in a divisive political environment. It is at a critical and fragile phase of its development. The entry of new large corporate stakeholders to the industry also has potential to have a positive impact on the unity of the industry.

Key long term strategies

Use R&D to resolve key knowledge gaps in the following areas to:

• improve organic farming system performance by increasing productivity and improving product quality and consistency of supply. Priorities will be to increase knowledge of the role of soil in organic production systems and to improve the methods for protection of plants and animals against pests and diseases in organic production systems
• address supply chain constraints, including the development of robust supply chains for organic products, technical barriers to market access and food safety risk management
• validate organic farming system performance
• focus on grains, horticulture, meat and dairy as priority sectors over the course of the RIRDC R&D Plan for the Australian Organic Industry 2006-2011 with consideration of other sectors on a case by case basis.

Key adoption issues will be addressed through the Australian Organic Knowledge Hub, which will:

• map and screen conventional farming system knowledge for potential application within the organic industry
• collect and manage scientific knowledge and translate it into user friendly packages and tools for the organic industry
• communicate the scientific case for organics
• facilitate the adoption of organic best practice