The
              Report

No. 86: Strategic plan seeks opportunities for Australian organic dairy production and marketing

RESEARCHER CONTACTS

This short report is a result of research carried out by Fiona Chambers of Rendell McGuckian. Contact details are: Phone 5441 4821; Fax: 03 5441 2788. Email: rm@rendellmcguckian.com.au

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A working group is developing an industry strategic plan aimed at ex-panding the organic dairy sector of the Australian dairy industry to capitalise on export and domestic market oppor-tunities.

The group was set up at the National Organic Dairy Forum in Melbourne, which was jointly organised by the Rural Industries Research and Development Corporation (RIRDC) and the Dairy Research and Development Corporation. Dairy foods are an integral part of Australian’s lives. Eaten fresh as liquids, or processed into many forms, they can be fat free, high calcium, low cholesterol, and offer many other product options. Increasingly they are now organic and biodynamic.

In a report to RIRDC, researcher Fiona Chambers says the organic industry in Australia is currently estimated by industry sources to be worth around $A200 - 250 million. But the world market for organic products is expected to rise to $US100 billion by the year 2006.

Australia’s access to arable farming land and the government’s push towards increased food exports, provides great potential for an increased share of this huge international demand.

The Forum

About 75 people from around Australia Attended the forum. Fifty of them were dairy farmers and the rest dairy product processors, policy and R&D representatives, and other industry service providers.

Six speakers gave presentations.They emphasised Reasons for expanding the organic dairy sector of the Australian Dairy Industry. These Included the world wide demand for organically grown produce, which isgrowing at between 20 – 30 per cent a year and is providing new opportunities for countries that can supply a certified organic product.

Australia is well positioned already with a clean and green image to capitalise on this growing market. With an Australian Quarantine Inspection Service (AQIS) accredited national standard for organicand bio-dynamic produce, Australia has a good international reputation for the quality and integrity of its organic products.

After the presentations, participants formed three workshop groups with separate facilitators to determine how the Australian Dairy Industry could develop its organic sector.Their findings are detailed in Table1.

Table 1: Key priorities as identified by each forum working group
 
Group
Facilitator
1
Sue Titcumb
2
Liz Clay
3
Fiona Chambers

Priority

1
Establish a national organic dairy industry group with representation on the Organic Federation of Australia (OFA).
 Establish a national organic dairy industry network. Establish a national organic dairy industry group.
2
 Establish a national dairy industry network. Initiate a national organic dairy benchmarking program. Develop an organic dairy industry plan.
3
 Work with OFA to establish a single logo to brand Australian organic Produce. Document the existing knowledge about organic dairy production. Support a single Australian logo to brand Australian organic produce.
4
 Increase consumer awareness about ‘Organics’. Provide information and education to farmers about organic dairy production to facilitate conversion (possibly Target 10 organics). Establish a national network of organic dairy industry stakeholders across all levels of industry including consumer and retail.
5
 Develop a database of organic dairy industry stakeholders, contacts. Increase consumer awareness about organics. Identify funding streams to assist implementing the forum recommendations.

The Results

The forum identified issues currently preventing expansion of the organic dairy sector within the Australian Dairy Industry. These included the absence of:
 

There also was poor accessibility to the existing information about organic dairy farming practices.

At the conclusion of the workshop process, the national dairy industry working group was formed to address issues identified at the forum. It was given eight months to December 31,2000 to facilitate the expansion of the organic dairy sector within the mainstream Australian dairy industry.

The forum felt strongly that at this stage it did not require any of the certification bodies on the working group. At the conclusion of the scoping phase, it is likely that a group with broader industry representation will be formed in keeping with priority two.

The working group – made up of producers, processors and a consumer representative – will focus on the key overall forum priorities shown in Table 2.

Table 2: Key priorities as identified by the forum as a whole
 
1.
 Establish a national organic dairy industry group, with representation on the OFA
2.
 Establish a national organic dairy industry network across all levels of the industry including consumer and retail
3.
 Develop an organic dairy industry plan
4.
 Initiate a national organic dairy benchmarking program
5.
 Work with OFA to establish a single logo to brand Australian organic produce
6.
 Document the existing knowledge about organic dairy production to facilitate conversion

Summary

Since the forum, there have been more than 30 inquiries from around Australian from people expressing their interest in converting to organic production systems or sowing a range of organic products.

Product sourcing inquiries have ranged from skim milk powder to organically reared poddy calves for organic veal production.

Organic dairy production is being viewed as an opportunity amidst the uncertainty of the deregulated market environment.

Organic farming practices can provide long-term security to farmers through sustainable use of their natural resources, and the increased prices that can be received for their product. In Britain consumers have shown they are prepared to pay a ‘fair’ price for organic produce.

One example cited during the forum was how a UK co-operative – the Organic Milk Suppliers Co-operative (OMSCo) last year negotiated with major supermarkets for a five-year price guarantee of 29 pence per litre, which is about a 100 per cent premium over the conventional milk price of 13-16 per litre.


Other RIRDC organic produce reports: