Strong growth in Czech organics

- Last updated on GMT

Related tags: Organic agriculture, European union

US moves into the emerging East European organic market were
highlighted this week in a new report from the US government that
reveals the market potential for US organic products in the Czech
Republic.

The report published in December asserts that the organic market in the Czech Republic is currently growing at 25 per cent to 30 per cent a year. Products with particular potential, claims the US department of agriculture (USDA) Foreign Agriculture Services, include snack food ingredients, lentils, vegetables, nuts and products from organic soybeans.

In 2003 there were over 800 certified organic farms in the Czech Republic. Approximately 240,000 ha(5.5 per cent of total agricultural land) are farmed organically with a 15 to 20 per cent increase in organic acreage predicted for the next five years.

According to the USDA​ report, Czech goals for organic agriculture are focused on increasing the area to 8 per cent of total agricultural land by 2006and 10 per cent by 2010, higher subsidies for production on arable land, increased quality of processing, andmarketing and export support.

Between 2004 and 2006 organic agriculture should receive €29 million, out of which 80 per cent would be from the EU budget - following EU accession in May this year - and 20 per cent from Czech budget.

On the back of 92 registered organic producers and 164 distributors, last year over 1,100 products were registered as organic, and a further 300 items were imported.

So which are the accelerating markets? The report maintains that the fastest growing products include grains,vegetables, milk and eggs.

At 60 per cent, the majority of organic products are sold in supermarkets and hypermarkets that have special sections for organic products and over 35 per cent is sold in special stores for nutrition products.

Repeating a pattern seen in other European countries, consumers buying these products usually have a higher education and higher income.

The biggest player on the organic market in the Czech Republic is a company called Country Life which carries over 400 organic products and is also the biggest importer of organic products.

Organic products have to bear the 'Bio-product' label, according to Act 242/2000 on ecological (organic)agriculture and use of the label is controlled by the independent organisation, the Control of ecological agriculture(KEZ), which lists certified producers.

According to the report, the organic agriculture 'boom' in the country is the result of increased government subsidies in recent years. Between 1993 and 1997 there were no subsidies for organic agriculture, however this figure dramatically changed between 1998 and 2002 when subsidies for organic agriculture rose from €1.4 million to €6.3 million.

In the eyes of the US, although the market potential in the Czech Republic is strong, price sensitivity - the country still bases most purchases on price - could be an obstacle. "This price sensitivity may change after EU accession in May 2004 when purchasing power is expected to increase,"​ concludes the report.

Related topics: Market Trends

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