The rapidly growing demand for naturally grown and uncontaminated food is pushing agriculture and retail industries to think bigger and to develop mutually beneficial business.
Camille Howard talks to growers, sellers, and analysts to find out how things are, and where the business of organics is heading.
No longer associated as the sole domain of self-sufficient greenies, the organics industry has established itself as a viable alternative in the grocery market.
A method of sustainable farming, organics promotes techniques used to regenerate the soil, free from chemicals. Organically farmed produce, then, is that which is free from additives such as pesticides, fertilisers, hormones and any genetic modification (GM); where growth is encouraged through better soil management techniques.
There is a growing trend in farming and consumption towards organically produced food. Although there is conflicting data on the size and value of the Australian organic food industry, all figures indicate the industry has come a long way since it first came into focus approximately two decades ago.
In 2004, the value of the Australian organics industry was estimated at $300 million, with 12.5 million hectares of certified farming land, the largest in the world. Although it continues to grow, this industry measures at about one percent of the total food consumed in Australia. In the US and Europe, this is much higher, at six to seven percent.
While the industry has come a long way, according to experts there is still a long way to go.
Dr Andrew Monk, CEO of Biological Farmers of Australia (BFA), says the Australian market is tipped to grow at up to 30 percent in the foreseeable future. And interest in the industry is growing because of a greater understanding of how food is being produced, as well as people being more concerned about their food supply and their health, concerns they feel are addressed by organically farmed produce. "Organic foods when produced in accord with the standard and in nutritious soils, should be more nutritious, better quality and better tasting," he says.
In its Organic Annual Report 2004, (available at www.bfa.com.au) the BFA notes: "This past year has seen an ongoing growth in farmers’ markets and independent retailers which offer a viable alternative for many smaller organic farmers wishing for greater returns for their quality produce, while delivering a growing consumer demand for locally produced organic foods."
The Organic Federation of Australia (OFA) is Australia’s peak body representing and promoting the certified organic industry. In its Strategic Plan for the Australian Organic Industry: 2001-2006, the OFA found many industry stakeholders believe the industry is falling short of its potential and, in doing so, are failing to mature from niche industry status.
The report outlined strategies to grow the organics industry, with a focus on improving the professional image of the industry; providing adequate support for non-organic farmers to convert; capturing more rural funding; communicating the benefits of organics to the wider community; winning government support; and enhancing environmental sustainability.
By 2006, the OFA aims to have four percent of Australia’s agricultural production certified organic; $1 billion of domestic and exported organic sales; four percent of all foods consumed certified organic; and a 30 percent reduction on 1999’s synthetically produced inputs.
The BFA has projected this growth will increase further still. "We project the potential for the industry to grow to 10 percent of the retail market and 10 percent of farmers by 2020," says Dr Monk.
Currently, the organic food industry is largely self-regulated, with the Australian Quarantine and Inspection Service’s (AQIS) organic and biodynamic program managing produce for export via a co-regulatory arrangement with its approved certifying organisations. Part of AQIS’s role is to monitor the certification bodies, carrying out regular audits to ensure the regulations are followed.
One of the biggest concerns within the industry is although Australia’s national organic standard for export is one of the highest in the world, there is no domestic legislation requiring products to be certified.
The industry is self-regulating, which means there is no government protection on the word ‘organic’, aside from the AQIS-approved organisations. Industry leaders are fighting to ensure any products labelled organic are certified, for consumer protection as well as to set a benchmark for domestic accreditation. At the moment it is at the discretion of wholesalers and retailers
to stock goods from certified farmers and processors.
And, because there are seven different certifying organisations in Australia approved by AQIS, there are as many different standards and logos verifying organic produce.
The organisations are: Australian Certified Organics (ACO, which is the certification arm of BFA), Bio-Dynamic Research Institute, Organic Food Chain, National Association for Sustainable Agriculture Australia (NASAA), Organic Growers of Australia, Safe Food Production Queensland and the Tasmanian Organic Producers.
To become a certified organic producer there are stringent procedures and standards to meet from each AQIS-approved certifying organisation, including application and farm inspections—before certification, and routine audits—and may include soil and plant testing. Farmers converting to organically grown food can get an ‘in conversion’ certification while making the transition.
The certifying bodies are also required to monitor those producing and marketing organic food, to ensure their standards are met on application for certification and maintained thereafter.
On top of requirements for farming organically certified produce, there are also certification requirements for processing and preparation, non-land based production such as aquaculture and bee-keeping, and marketing and handling practises.
For a complete list of requirements, contact one of the seven certifying organisations.
Search AQIS’ organic and biodynamic program at www.affa.gov.au for a list of approved certifying bodies.
Pure Farming
Rob Bauer and his son, Anthony, run Bauer Organic Farm, a 250-hectare property that farms carrots, potatoes, sweet corn, capsicum, broccoli, other vegetables and some beef.
After taking over his father’s farm around 20 years ago, Bauer made the health-conscious choice to move from the conventional farming methods his father used, to organic methods. At this stage there wasn’t a standard to follow; he just knew he didn’t want to be getting sick from farming with chemicals, like his neighbours. Then, about 14 years ago, he decided to become organically certified, applying for certification through ACO. It took about five years and he has never looked back.
"It was a dead place to be," he says of the farm before he made the switch. The soil was dead, he adds, with virtually no wildlife in the area. Since converting to organics, the farm is practically a wildlife park for local critters and insects. He doesn’t use pesticides, instead letting nature take its course—the bats and other wildlife keep insects under control—and the lifeless soil has become rich, thanks to the green mulch he makes and uses after harvesting a crop.
With a focus on freshness, Bauer’s vegetables are picked in the morning, cooled down, packed in ice, loaded on trucks that evening and delivered to stores by a distributor the next morning, within 24 hours of being picked.
At the end of 2004, the Bauer farm produced around 1400 tonnes of fresh produce. "We’re a big player in a small industry!" Bauer explains. They employ around 15 staff at any one time.
Perhaps because they are a relatively large ope
ration, Bauer dismisses the notion that organic crops do not produce as much as conventionally farmed produce. "Our yield per acre is as good, if not better." But he finds organic farming can still be an expensive exercise. "Our most expensive problem is getting rid of weeds." In fact, Bauer recently spent around $120,000 to have them pulled out by hand.
Education on the industry is important to Bauer, who arranges organised tour visits to the farm. On average, two busloads a week—largely students, seniors, conference groups and dignitaries—take a guided tour of the facilities.
One-Stop Shop
Pierce Cody is also keen to drive the popularity of the organic movement.And as owner of the newly-opened Macro Wholefoods in Chatswood, Sydney—the largest organic store in the southern hemisphere—he believes he has started the ball rolling.
Cody sees the growing popularity of organic food consumption occurring all around the world, as a move towards clean food, clean living. "There’s been a major backlash against the additives that have been put in food, and the pesticides," he says.
One of the reasons Australia is lagging behind the rest of the world in the organic food industry, he says, is because there has never been an offering like Macro before, operating
as a one-stop shop, much the same
way that large supermarket chains operate. "It’s always been very much small corner store operations," he says. "I think that has been an inhibitor to
[the industry’s] growth."
Macro has set itself the role of meeting the needs of the established organic shoppers but is more focused on educating the first-timers and growing the supply base. "We’re trying to find good staff that get, for one, the customer focus, but who are also educated in this space," Cody says of winning over transitional customers. "That will be one of our big differences—people will be able to ask for advice at any point
in time."
He would also like to improve issues around the supply chain, which means getting the existing growers to grow more and encouraging the ‘crossing over’ of conventional farmers to take on organic methods. Cody believes farmers will be more willing to do this when there is more retail demand. "Their incentive will be driven by retail demand, and that’s our role."
Cody says each new store will have a key focus on produce, and will have complete grocery, meat and poultry, dairy and deli sections, as well as the onsite cafÈ and naturopathy area, which combine to foster both grower and consumer communities. Further stores will also feature Macro Wellbeing centres, complete with yoga, pilates, massage, aromatherapy and cooking classes. "So it’s more than what you consume, it’s how you live
your life."
The Australian Consumer Association (ACA—www.choice.com.au) recently reported the farming methods used in the industry are better for the environment and are less likely, though not guaranteed, to be contaminated with pesticide residue. The watchdog argued, however, that there is not enough evidence to qualify the industry’s claims that organic foods are more nutritious and tastier. The ACA also found the higher price paid for organic food was not justified.
Cody dismisses that claim. "Studies have shown that in oranges, for example, there is a minimum of 40 percent more nutrition in an organic orange than in a conventionally chemically farmed orange, and that’s before you even get into taste."
While he believes existing devotees of organic foods are not concerned with price they will become more competitive. "If only by the scale of our operation,
we will be able to give volume economies of scale."
Market Niche
David Whyle runs the Northey Street Organic Market in Brisbane on Saturday mornings and the Gold Coast Organic Market on Sunday mornings, with local and out-of-town suppliers of certified organic produce and non-profit or information stalls.
He says the growth of the industry is due to organic foods being more readily available, as well as a growing number of consumers seeing organic foods as a safer and healthier option.
The markets offer an avenue for growers to get immediate payment for their produce at the best prices, which particularly helps small family farms. "Many do not or are not able to deal with wholesalers and have found that a dedicated organic market is the best option for them."
Customers benefit, too, with fresh produce available—24 hours after picking—at affordable prices. But Whyle says the biggest advantage to the customer is the knowledge sharing and customer education to dispel misconceptions about organics, which he says brings usually positive results.
"We can sell items that the shops find difficulty with [selling] by sharing recipes and direct knowledge with our customers. The direct feedback is invaluable for any product development by producers," he says. "It has become a meeting place, a family outing, a shopping experience like no other, an information exchange, an employment opportunity for many—the market has created work directly and indirectly for over 50 people each week."
Whyle polices the markets to ensure all growers display their certification details, requiring ‘proof of purchase’ information and guidelines that each stallholder must agree to and sign. "If anyone chooses not to comply they are moved on."
Whyle is keen to ensure the industry continues to grow, with legislation to protect the word ‘organic’ so it can’t be misused to mislead the public.The toughest part of running his business is maintaining a continual supply of produce, dictated by the seasons and weather, but customers understand when a product is unavailable.
And for any green-thumbed entrepreneurs wanting to get in on the action, Whyle recommends you go ‘WWOOF’-ing—willing workers on organic farms, a worldwide organisation where you work on a farm for food and keep.
