Commission sees sharp growth in organic food trade

Imports of organic food products into the European Union are likely to increase sharply as demand outstrips domestic supply, a report published by the bloc's executive said on Friday (16 July).

Higher demand for organic produce in more affluent western EU member states could also see a rise in intra-EU trade, as organic production has grown much faster than demand in Central and Eastern European countries in recent years, the report said.

"In these conditions, it is no surprise that trade between member states and imports from third countries would increase at a fast pace," the European Commission said.

Retail spending on organic food averaged a total of 14.4 billion euros a year in 2006 and 2007, data quoted in the report showed.

More than 80% of total retail spending was concentrated in four EU countries: Germany, Britain, France and Italy.

Organic consumption in Britain was badly hit by the economic recession, falling by 13.6%, the European Commission said.

By contrast, demand remained stable last year in Europe's largest organic market, Germany, and continued growing sharply in both France and Italy.

"This strong growth has been spurred by the entry of all major retailers, including hard discounters, in the market," the report concluded.

In terms of production, organic farming accounted for 4.3% of the bloc's total agricultural area in 2008 at 7.7 million hectares.

Italy has long had the largest area planted to organic farming in Europe, but was overtaken last year by Spain, with 1.1 million hectares.

"Some of the 'pioneers' in the sector such as Denmark, Finland, Sweden or Italy seem to have reached a plateau or display only slow growth," the report said.

Production in other pioneer countries including Austria and Germany continues to grow at a sustained rate, it added.

Despite the availability of export markets in Western Europe, production in the 12 countries that joined the EU since 2004 could be threatened by low domestic demand, the report warned.

"This may imply some difficulties for producers to sell their products and may endanger the sustainability of the overall sector," it said.

(EURACTIV with Reuters.)

Organic farming is a method of production which emphasises environmental protection and animal welfare considerations. It avoids or drastically reduces the use of synthetic chemical inputs such as fertilisers, pesticides, additives and medicinal products.

When the EU's Common Agricultural Policy (CAP) was created, there was no such thing as organic farming. Organic agriculture received official recognition in 1991, when the first EU regulation on organic farming and a corresponding labelling system were adopted.

In response to "the rapid increase in the number of farmers producing organically and strong demand from consumers," the European Commission adopted an EU action plan for organic food and farming in June 2004.

The action plan set out initiatives aimed at developing the market for organic food and improving standards by increasing efficiency, transparency and consumer confidence.

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