ORGANIC GOLD RUSH.

• Author: Halweil, Brian
• Position: Organic farming boom - Industry Overview - Statistical Data Included

As people become more aware of the ecological and health costs of chemical-dependent agriculture, the market for organic food is booming. But as it does, small-scale organic farmers are watching the form of agriculture they crafted around simple living and local economies take on a very different appearance.

Forty years ago, when John Haberern joined the Rodale Institute, an organic farming research organization in Kutztown, Pennsylvania, professors at the local agricultural university, Penn State, dismissed him and other organic pioneers as "the counterculture kings of the compost heap." Times have changed. The same professors and deans who wouldn't return calls a decade ago are now contacting Rodale to partner on major grant proposals. And agriculture agencies from a number of countries, including Egypt and Ethiopia, are talking to Rodale about developing nationwide organic-farming programs. "It's a good time for organic agriculture," said Haberern, who is now Rodale's director, during a recent phone conversation.

Spurred by unprecedented consumer demand for healthy, environmentally friendly foods, organics have carved a noticeable stronghold in the conventional foods market, especially in Europe, where organic food now accounts for 3 to 5 percent of sales. This bull market is buoyed by the concerns of people who are fed up with the way most food is grown: British mothers worried about mad cow disease; French families concerned they may be eating foods that contain genetically modified ingredients (GMOs); California parents frustrated by what their children are being served in school lunches; chefs in the culinary vanguard looking for greater variety, freshness, and flavor in their dishes; farmers everywhere tired of applying expensive and toxic agrochemicals to the fields around their homes; conservationists trying to reconcile agricultural and environmental goals; food companies like SEKEM, Egypt's largest tea producer, demanding premium ingredients for their products in a nation that takes tea very seriously.

The growth of the organic market is now reshaping the face of modern agriculture. Millions of hectares of land that were once sprayed with chemical pesticides and fertilizers, coated with sewage sludge, or planted with genetically modified seeds, are now being farmed using ecological interactions to boost harvests. Farmers are rotating crop varieties and composting to return nutrients to the soil, for instance, or attracting beneficial insects to reduce pest outbreaks and disease. But, as production of organic food scales up to meet growing demand, a rift is developing in the organic landscape: small-scale organic farmers, processors, and retailers--the current lifeblood of alternative agriculture--are watching closely as giant farms get certified and multinational food conglomerates rush to unveil organic brands. As the organic market continues to skyrocket to a larger scale, some farmers and consumers are beginning to look a lot more closely at what "organic" really means.

A BULL MARKET

Driven by a $25 billion global market for organic products, the total area of farmland devoted to cultivating organic crops has grown to an estimated 11.5 million hectares--roughly the size of Cuba. Although this is still well below 1 percent of the world's cultivated area, the growth trajectory dwarfs that of conventional foods. In every nation for which data exist, farmers are bringing between 10 and 40 percent more land under organic cultivation each year, and a recent U.N. survey found commercial organic food production in every inhabited nation on the planet.

The global organic explosion revolves around Western Europe, where organic area has ballooned 35-fold since 1985--increasing roughly 30 percent each year (see figure, page 24). Organic area now accounts for nearly 3 percent of all the farmland in the European Union. In Sweden, Denmark, Finland, Italy, and Switzerland, it accounts for 5 to 10 percent. In Austria, the organic share has reached 10 percent, and in some Austrian provinces it has reached 50 percent. Europeans are spending nearly $10 billion on organic products each year.

Australia, with 5.3 million certified organic hectares, is the nation with the most organic area. But compared to Europe, this land is relatively low yielding--used mostly to raise pasture-fed beef for export to Japan, where the organic market is now worth $3.5 billion. In the United States and Canada, organic area in cultivation has grown between 15 and 20 percent each year during the 1990s, and now stands at roughly 550,000 and 1 million hectares, respectively. Organic crops now grow on 0.2 percent of U.S. croplands, and in 1.3 percent of the fields in Canada. Retail sales of organic produce and products in North America have registered similar 20 percent annual growth rates since 1989, and were estimated at $10 billion in 1999.

Statistics for the developing world are spotty, although anecdotal evidence points to rapid growth. In Argentina, the total area devoted to organic production jumped 7,000 percent since 1992 to an estimated 350,000 hectares today. Argentina exported more than $100 million of organic products in 2000. Over 7,000 small farmers in Uganda--up from 220 in 1995--now produce about 10 percent of the organic cotton on the world market. Under the green food development plan, Heilongjian Province in China has expanded land cultivated in organic foods to half a million hectares. Most of this production is pegged for export, though domestic markets are emerging as local awareness and demand increase.

On both sides of the Atlantic, a series of food safety, ecological, and other troubles associated with the conventional food sector has also inspired strong demand for organic food. Among the British, recent concerns over genetically engineered crops caused a flood of consumer inquiries about organic and an avalanche of farmer applications for conversion. In just the last two years, the United Kingdom's organic acreage surged eightfold, from 50,000 hectares to 400,000 hectares. The well-publicized recall of genetically engineered Starlink corn inspired a similar reaction in the United States.

While consumer demand has driven growth in organics around the world, Europe's sector is outpacing markets elsewhere because it has enjoyed broad government support. Eighty percent of the growth in EU area has occurred in the last six years, spurred by the 1993 establishment of a common EU definition for "organic" and subsequent EU-wide policies to provide financial support for farmers to convert to organics. After the first reports of "mad cows" in Germany, the new agriculture minister pledged to increase organic production from 2.6 percent of farmland today to 20 percent by 2010. Agricultural universities across Europe have opened organic farming departments, and farm ministries have built up organic extension services.

In contrast, growth in the United States--where the total market for organic produce is roughly the same as in Europe--has come despite a lack of conversion assistance and little government support in general. A study by the Santa Cruz, California-based Organic Farming Research Foundation (OFRF) found that less than one-tenth of 1 percent of U.S. Department of Agriculture (USDA) research projects in 1995 had any...