|| Home || SEARCH || Contact || Free Research Publications  || Eshop || Privacy Statement ||

Summary Report of
Australian Organic Agriculture – Prospects for Growth?

By Jason Alexandra and Rod May

October 2004

RIRDC Publication No 03/112 RIRDC Project No AHM-3A

Executive Summary
The Changing Context of Organic Agriculture
Community, government and market support for organic agriculture is rising². This rise in support for organic farming represents a marked change in the trajectory of modern agricultural development as increasing attention is being devoted to the sustainability and multi-functionality³ of agricultural systems.

Therefore, organic agriculture needs to be understood not simply in terms of another production technology, but as a fundamental shift in the relationships between producers and markets; producers and technology; and producers and the environment.

There is increasing adoption of organic growing systems within Australian agriculture, partly because many people wish "to do agriculture differently" and partly due to strong and growing demand for organically produced food and fibre products, particularly in major export markets.

Growing domestic and export demand
Throughout the world demand outstrips supply for many organically produced products. Growth in Australian organic production is estimated at 15% to 25% pa. Continuing growth is expected because of strong domestic demand and because Australia is in a good position to supply expanding markets overseas, particularly in Asia. World sales in 1997 were estimated at US$11 billion with this figure estimated to increase to US$100 million by 2006 (OFA 1999).

Recent estimates put the value of the Australian organic food industry at between $250 and $500 million, and therefore it currently constitutes a minor part of Australia's total agricultural production.

About one third of Australia's organic food and fibre produce is exported. However, domestic sales rose from $100 million in 1995 to approximately $250 million in 1999 (OFA 1999).

Constraints to growth in organic production include the following factors: risk and uncertainty; insufficient expertise and skill; lack of high quality technical advice; real technical and production constraints; unclear market signals and the ambiguous policy environment.

Despite the image of independence, few farmers make decisions in isolation. They are in fact part of a complex information and value chain, so while organic production may appear attractive it will take a major shift in policies, programs and R&D to stimulate a sizeable shift to organic farming practices.

The importance of government policies is best illustrated by contrasting different European countries: Austria, Sweden and Denmark aimed to have 10 per cent of their farming organic by 2000 with substantial government support, while Britain only hoped to achieve 1 per cent.

In Australia, there has generally been an absence of government support for organic farming systems. Only recently has the Rural Industries Research and Development Corporation (RIRDC) established a dedicated R&D program to fund work which focuses on organics, and this only has a tiny fraction of the total agricultural R&D budget.

This project set out to explore the lessons the industry has learnt and the challenges facing it.

The project
This is the report of the RIRDC funded project: "Identifying organic farming practices with wider significance to science or agriculture". The project examined the prospects, impediments and R&D needs of five Australian industries - rice, vegetables, wine grapes and viticulture, sugar and dairy - through holding one-day workshops accompanied by interviews and field trips in 1998 and 1999.

Five workshops were held in four states with representatives of growers, researchers, industry and agencies. Attendance averaged about 30 people per workshop. Workshop reports were circulated to those who attended. Two are reproduced here as appendices to this report.

At the workshops prospects for refining farming practices in areas such as soil management, pest and disease management, sustainable production, and IPM were discussed. Research and industry development needs and/or marketing possibilities were identified.

The project readily gained the support and involvement of industry and research organisations, State agencies, growers and processors, consultants and agricultural input suppliers. The workshops provided an important forum for:

• Exchanging ideas on organic farming systems;
• Exposing organic systems to a wider audience;
• Identifying techniques worthy of adoption, adaptation or further investigation;
• Assisting communication on EPM (ecological pest management); and
• Documenting successful alternatives to chemical intensive systems.
Project findings – constraints and opportunities
This project found that in all industries investigated there is growing activity and confidence in organic production systems and markets. In each industry, both individual producers and major agribusiness entities are involved in exploring, supporting and trialling organic production methods.

However, it is important to note that for each commodity investigated there are real risks and technical impediments to adopting organic production systems.

In several industries there are only minor differences between current practices and those used in organic systems, although the nature and potential significance of those differences should not be underestimated. For example, these differences include an inability to use most curative fungicides in viticulture, the need for cost effective nitrogen sources for sugar cane production, and for longer rotation times in rice.

In addition to the agronomic issues listed above, the following factors were identified as constraints to adopting organic practices:

1.An image problem - organic is perceived as fringe;
2. Uncertainty about markets and mixed market signals;
3. Risks of conversion losses and pest and disease problems;
4. Limited access to advice on agronomic practices;
5. A phobia of pest and weeds; and
6. A clean and tidy aesthetic preference that determines weed and pest management practices.

While most industries have a core of established organic farmers there is much scope for increasing production, processing and marketing capacity in order to fulfil the growing domestic and export demand. Australia’s rural industries' capacity to supply the increasing global demand for organic products could be greatly enhanced by further R&D investments. These need to be focused on both refining production systems to reduce risk and uncertainty, and to ensuring effective links along the value chain.

Several factors account for increasing interest and confidence in organic production systems:

1. Most industries reported a strong market demand for organic products, with several reporting an inability to satisfy the demand.
2. There is increasing acceptance of QA, HACCP and EMS across agriculture and this makes adoption of transparent and independently verified standards seem a far less daunting task.
3. The capacity of Australia's rural industries to innovate and adapt to new market requirements confers advantages.
4. Australia's favourable climatic conditions and abundant land resources also represent a competitive advantage to those industries wishing to expand organic production.


Project findings - growing and certification systems
This section summarises common findings across the five industries investigated:

• Concerns about chemicals, food safety, health, the environment, ethics and corporate agriculture tend to dominate the reasoning behind many organic practitioners' adoption of organic practices.
• Organic agriculture involves a combination of interdependent philosophy, psychology and practice. The psychology or belief systems of many organic growers is "independent and ecological", while others are motivated by "a spiritual or holistic" belief system.
• Markets are people - people are markets. There are growing markets for ethical products because sustainability concerns (both social and environmental) are growing around the world (New Internationalist 1999). Consumers are looking for signs of hope, wanting their purchases to be an investment in a better future. Many consumers are want to be able to purchase the "the ideal of sustainable agriculture" along with the products- they want to "vote" with their cash.
• Organic agricultural techniques are a manifestation of 1and 2 above, but also largely aligned to conventional production practices in many respects - but "being recognisably different is also important". Much of the obvious difference is derived from accepting a cautious approach to the application of technology⁴.
• Organic Standards play a central role in defining acceptable production practices. Production within the constraints of the Standards is important in driving innovation (within the overall innovation occurring in agriculture), and maintaining the confidence of the markets.
• The certification systems play a critical role in linking the producers to the markets. Faith in the certification systems is capable of being eroded.
• The integrity and credibility of the certification systems and the organic standards represent important "moral capital" for the organic industry.
• Maintaining the links between 1-6 above are probably more important than whether organic farms are demonstrating improvements in the biophysical aspects of production. Over time this system should drive continuous improvement in organic agriculture if it is as transparent as it claims.
• R&D investments are needed to determine whether organic farms are "models of sustainable agriculture". A standard set of "sustainability criteria and indicators" should be applied to comparing and measuring farming systems (see chapter 5 on R&D). These should include as a minimum:
• Pest predator relationships;
• Impacts on biodiversity;
• Nutrient cycling;
• Water and energy;
• Pollution; and
• Social and economic impacts.
An important feature of organic farmers and organic farming organisations is that they have attempted to define the nature and characteristics of sustainability and attempted to guide farm practices accordingly. While the specifics of organic standards are both debatable and evolving, the process of applying the standards is critically important. They set an important precedent of firstly trying to define sustainability, and then requiring producers to voluntarily agree to a code or management regime. For example, NASAA certified producers in Queensland have accepted specifications that restricted further tree or scrub clearing well in advance of government controls. Other contracts specify effective contour bank and erosion control methods, crop rotation and restrictions on continuous cropping. Thus this represents an example of self-regulation in the Australian rural industry. Research is needed to gain an understanding of the motivational factors that contribute to the decision to farm organically.

An important aspect of organic agriculture is the inclusion of environmental and health issues, and sustainable land management ideals into a coherent set of principles expressed as a set of explicit standards. The standards play a key role in ensuring a precautionary approach to the application of technology⁵ and in defining the relationships between the farmer, nature and the market.

Organic farmers have been at one of the vanguards of this process, pioneering not just innovative growing techniques but also ways to place limits to their actions, to articulate their values and to be contractually committed to adhere to them. In this regard organic farmers provide a strong model of industry self-regulation aimed at achieving sustainability.

Recommendations
Consumer and market confidence in the standards and labelling system is of paramount therefore:

Recommendation 1 - Australian Governments are advised to:

• Protect the integrity of the terms organic and biodynamic in both export and domestic markets and to ensure clear and coherent understanding of labelling terms used to imply that a product is produced organically.
• Ensure that the standards that apply to organic exports are applied to domestic markets in Australia.
The farming systems that organic farmers apply are usually analogous to the conventional systems in a majority of features. There are powerful arguments for facilitating greater exchange in information between the organic and conventional growers, on how to improve their management and farming systems. The key features distinguishing organic growers are their precautionary use of chemicals and their use of a certified quality assurance system with the necessary inspection and auditing.

Recommendation 2 - Relevant agricultural agencies and R&D organisations should facilitate greater exchange of information between organic and conventional growers on how to improve their management and farming systems.

Pest and disease management did not feature as a major concern for most industries - those pests and diseases which pose a problem are generally quite specific and are also usually a major problem for the conventional growers as well - for example the fungal diseases of grape vines. In some cases the organic farmers noted a marked reduction in pest and disease problems once they managed problems as part of their organic system rather than relying on curative chemical approaches, notably the virtual eradication of botrytis in grapes.

Recommendation 3 - Commodity R&D corporations need to focus R&D projects on the specific constraints or factors limiting expansion of organic production in their sector.

A range of issues that relate to the scale of centralised processing and marketing arrangements that deserve to be further investigated. These include the issues that relate to the economies of scale in modern processing facilities and whether there are alternative appropriate scale technologies that could be dedicated to organics eg medium scale dairy products plants, and the prospects of scheduling processing within existing capital intensive plants eg sugar mills.

Recommendation 4 - Options for generating efficient scales for processing and marketing organic produce need to be further investigated

Existing organic industry structures and networks provide important communication functions and they are an important feature of the industry. Government initiatives, which seek to accelerate the development of the organic industry, should, where possible, use these networks. They should be supported and strengthened rather than duplicated by new government programs.

Recommendation 5 - Any new government initiatives or programs that aim to support organic industry development should work through and strengthen existing organic industry structures rather than duplicate their efforts.

Recommendation 6 - A range of targeted, focused and industry specific training programs are required to support the expansion of the organic industry in Australia. Educational and training initiatives must be targeted to the nature, structure and culture of the industry sector.

Detailed R&D on organic farming systems needs to be undertaken within a specific industry context, therefore it is appropriate that the commodity RDCs get more involved. The RIRDC Organic program should focus on attracting R&D, marketing and industry organisations to invest in research and development. The RIRDC Organic program should aim towards joint projects with other RDCs or ideally towards establishing a CRC or joint venture program with a number of industry RDCs.

Recommendation 7 - The RIRDC Organic program should focus its efforts on attracting mainstream R&D, marketing and industry organisations to contribute to the research and development tasks via joint projects with other RDCs or through a joint venture program with a number of industry RDCs.

Recommendation 8 - RIRDC should commission a feasibility study or initiate a process to investigate support for a CRC or joint venture organic R&D program with RDCs and other research bodies.

While there are many agencies that could potentially be involved in organic R&D there are potential benefits that would flow from a coordinated national program.

Recommendation 9 - A new CRC or another National Research, Development and Demonstration Program should be established as a way of focusing the research effort on the challenges and opportunities of sustainable organic production in Australia

An ongoing process is required to design and refine any proposed research and to consider the practicality, feasibility and benefits of investing R&D funds.

Recommendation 10 - The RIRDC organic program should convene an R&D planning workshop with experienced researchers to consider future research investments including consideration of the questions identified in this project.

Changes in the research culture are needed that will take the focus of the R&D effort out of the labs and research farms and into a new era of collaboration with practicing farmers. Many of the benefits of such an approach are derived by the increased interchange between researchers and practitioners, with them both learning from each other. This approach corresponds with fifth generation innovation processes based on "systems integration and networking models" (IC 1994 p A.7) and is in direct contrast with the linear models of innovation based on technology- push (IC 1994).

Recommendation 11 - A greater proportion of the National primary industries research investment needs to be focused on understanding the potential of production systems developed by innovative farmers, including organic farmers.

Recommendation 12 - Systematic programs of research, development and extension into whole farming systems should be undertaken in cooperation with progressive organic farmers.

Recommendation 13 - It is recommended that each of the RDCs and other R&D agencies investigate the opportunities for establishing systematic programs, either independently or as part of a future CRC, that focus on whole farm research, development and extension to support organic agriculture. Where possible the basis of the R&D programs should be in collaboration with progressive farmers.

Recommendation 14 - A framework for assessing, comparing and describing farming systems using standard indicators of basic ecological processes is required. A consistent, rigorous methodology for determining the environmental impacts of farming systems should build on efforts to develop indicators of sustainable agriculture.
 

1 "Organic agriculture" and "organics" are used throughout this report to mean production systems that are "certified and accredited".

2 Organic agriculture was frequently referred to in the Food and Agriculture Organisation of the United Nations (FAO) electronic conferences of 1999 that explored examples of successful agricultural systems and multifunctional agriculture.

3 Multi-functionality refers to the productive, economic, social, cultural and ecological functions of agricultural landuse. The concept hit the headlines during the World Trade Organisation (WTO) meeting in Seattle.

4 Organic certification avoids the use of a wide variety of technologies but uses a precautionary approach to determining their safety. The term "precautionary" is used in the sense of ESD principles.

5 Organic certification allows the use of a wide variety of technologies but uses a precautionary approach to determining their safety. Precautionary is used in the sense of ESD principles.
 

Site map Contact us Feedback Links Disclaimer Privacy Statement

Last updated: October  2004
Copyright RIRDC
http://www.rirdc.gov.au/reports/ORG/03-112sum.html