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Eastern Europe to unleash organic farming potential

04-Mar-2005

Europe's blossoming organic food production, already benefiting from the world's biggest organic food research budget, is predicted to grow fastest in the EU's new member states over the next few years, presenting new opportunities for food processors and retailers to cash in on rapidly growing western European markets, reports Chris Mercer.

More than 5.8 million hectares (3.4 per cent) of EU agricultural land were under organic management by the end of 2003, up from 4.4 million a year earlier and a mere 100,000 back in 1985, according to newly released figures from the Research Institute of Organic Agriculture (FiBL) and the Welsh Institute of Rural Sciences.

And the report, presented at a recent conference in Germany, says EU accession has "triggered major growth" in Eastern Europe and that this region will become increasingly important for organic food production over the next few years.

The Czech Republic continues to lead the way among new member states after converting six per cent (255,000 hectares) of its agricultural land to organic; a higher ratio than the UK, Europe's second largest market for organic food but with only around 4.5 per cent of farming certified organic.

The next biggest players in Eastern Europe are Hungary (114,000 hectares), Slovakia (55,000) and Poland (49,000), although western countries remain significantly ahead with Italy leading the way on around one million hectares.

Poor domestic consumption rates of organic food, less than 0.1 per cent of total food intake in the Czech Republic and generally blamed on a lack of marketing, have so far hampered markets in Eastern Europe.

But the promising predictions and growth potential across the region offers opportunities to domestic and foreign food firms looking to supply the surplus organic food needs of lucrative western markets, at least until eastern markets begin to develop.

For example, around 20 per cent of organic meat sales in the UK come from imports, whilst the geographical position of Germany, easily Europe's biggest organic food market with €3.1 billion annual sales, makes it a good logistical target for food firms based in the neighbouring east - where production and labour costs are also cheaper.

Total European sales of organic products rose by around five per cent in 2003 to almost €11 billion, and the larger EU accession countries in Eastern Europe will also have a better chance of capitalising on this increase through their subsequent inclusion in the EU's Action Plan for Organic Farming; brought in as part of the CAP reforms.

Matthius Stolze, of FiBL, said the action plan showed the Commission viewed organic food production as an important part of EU agricultural policy, though he criticised the plan for its lack of clear development targets and non-allocation of financial resources for its implementation.

However, organic food producers in Europe also have the potential to exert a massive advantage in domestic and foreign organic food markets due to the €80 million worth of annual research funding going into the continent's industry, four times more than funding for organic food innovation in the rest of the world.

The German government provides about a fifth of that funding for its domestic industry, yet some Eastern European countries are beginning to make moves. Hungary now spends almost €2 million on organic food research and Poland allocates around €500,000.

And former Slovenian government minister Janez Potocnik, now EU Commissioner for Research, recently gave his support for funding to develop Europe's organic agriculture at a UK conference. "I believe that the importance of research into organic and low-input food production can be a perfect example of how science can unlock potentials for human well-being," he said.

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