GLOBIZZ13

ORGANIC FOOD : AN EMERGING GLOBAL MARKET

Presented by:
MD SIKANDAR AZAM (PhD Scholar)
BALAJI DUBEY (MBA II Year)
MOHD OZAIR ANSARI (MBA II Year)
ARIF AHMAD (MBA II Year)
NAVED ASAD (MBA I Year)


DEPARTMENT OF INTERNATIONAL BUSINESS
SCHOOL OF MANAGEMENT
PONDICHERRY UNIVERSITY
Abstract
By 2050 the worlds population will reach 9.1 billion. In order to feed this
larger, more urban and richer population, food production must increase
by 70% (FAO, USDA). The bulk of the decrease is expected in the worlds
top producing countries, particularly in the Europe, and US. With the
several researches, it is scientifically examined and confirmed that
organic food is quite healthy, more nutritious and beneficial for soil
health than a highly chemical and pesticide used conventional food.
This study explore the global emerging organic market and attempt to
understand the growth pattern in organic farming practices worldwide.
In 2011, around 40 million hectares land are being cultivated as organic
which was just 10 millions in 1998. Similarly, Numbers of organic
farm/producers has increased drastically from 2.5 lakhs (2000) to 18
lakhs globally. Organic food market has showed a tremendous growth
(six fold) specially in US, Germany, France, Canada, UK Italy etc, in just
one and half decade from 10 Billions US Dollar (1996) to 63 billions US
Dollar (2011). This significant growth of organic market has created an
opportunity for the farmers which are ultimately beneficial for the
Consumers, Soil Health, Animal welfare, Environmental Benefit etc.
Global Agricultural Outlook
According to the Rabobank report, demand for the 4 Fs (food,
fuel, feed and fibre) is set to continue to increase worldwide.
Slower growth in production and rapid growth in demand
contributing a sharp downward trend in world aggregate stocks of
grain and oilseed (Ronald 2008).
World Food crises estimated by many economists & To meet with the
Global Tsunami in coming decades the World Bank Group has set up the
Global Food Crisis Response Program (GFCRP) in May 2008.

Organic Farming
Organic farming is the production of crops and livestock without the
use of synthetic chemicals and in-organic fertilizers.
Conventional/ Modern Farming
Modern agriculture uses pesticides, herbicides, fungicides, rodenticides
and harmful chemicals to produce the food we eat.
Reason for Consumers demand
Global Issues of Adulteration in food.
Growing Incomes for Middle Class worldwide.
Private Sector Initiatives in Agriculture Business.
Technological innovations in Agriculture & Food.
Benefits of Organic Farming
Organic Farming discourages the pesticides & Chemicals
Consumer Benefits Nutrition, Poison-free food, Food Tastes Better
Organic Farming Supports Water Conservation and Water Health
Organic Farming Fights the Effects of Global Warming
Organic Farming Supports Animal Health and Builds healthy Soil
Major International Organic Standards Country
National Programme for Organic Production (NPOP) India Standards
National Organic Program (NOP) US Standards
European Economic Commission (EEC) 834/2007 European Standards
Japan Agricultural Standards (JAS) Japanese Standards
International Federation for Organic Agriculture
Movement (IFOAM)
International (Based in
Germany)
Canadian Food Inspection Agency (CFIA) Canadian Standards
Methodology of the Study
Objectives of the Study
1. To study the growth pattern of global market of organic food.
2. To highlight the emergence of organic farming practices worldwide
Secondary Data
Global and Region wise Organic Food and Agriculture Data (1997-2011)
Number of Organic farmers, Organic agriculture land, and Organic Food Markets
List of Presented data
1. Global Market : Distribution of total sales vale by country
2. Organic products by region 2011
3. World Organic land in 2011
4. Ten Countries with the largest No. of organic producers 2011
5. Ten Countries with the largest Organic Agriculture land 2011
6. Ten Countries with the largest Market of Organic Food 2011
7. Growth of Organic Agri land & No. of producers 1998-2011
8. World Market for Organic Food : Market growth 1997-2011
Source of Data
FiBL, IFOAM, USDA, FAO, WTO Agricultural Report , RNCOS, BIOFACH etc
Indicator World Leading countries
Countries with data on
certified organic agriculture
2011: 162 countries
Organic agricultural land 2011: 37 million hectares
(1999: 11 million hectares)
Australia (12 mio. hectares, 2009)
Argentina (3.8 mio. hectares)
US (1.9 mio. hectares, 2008)
Share of total agricultural
Land
2011: 0.86 % Falkland Islands (Malvinas) (35.9 %)
Liechtenstein (29.3 %) Austria (19.7 %)
Further, nonagricultural
organic areas (mainly wild
collection)
2011: 32.5 million hectares
(2010: 43 million hectares;
2009: 41 million hectares)
Finland (7 million hectares)
Zambia (5.9 million hectares; 2009)
India (4.5 million hectares)
Producers 1.8 million producers
(2010: 1.6 million producers;
2009: 1.8 million producers)
India (547591),
Uganda (188625),
Mexico (169570)
Organic market size 63 billion US dollars
(2010: 59.1 billion US dollars
1999: 15.2 billion US dollars)
*Source: Organic Monitor
US (29 billion USD),
Germany (9.2 billion USD)
France (5.2 billion USD)
Per capita consumption

2011: 9.02 US dollars Switzerland (250.4 USD),
Denmark (225.7 USD)
Luxemburg (187.3 USD)
Number of countries with
organic regulations 2011
86 countries (2010: 84
countries)

Organic certifiers 2011 2012: 576 certifiers
(2011: 549; 2010: 532)
South Korea, Japan, USA
Number of IFOAM affiliates 1.1.2013: 766 affiliates from 117
countries

Germany: 96 affiliates; India: 46 affiliates; China: 40
affiliates; US: 33 affiliates; The Netherlands: 31 affil
Organic Agriculture 2013: Key Indicators and Leading Countries
Region wise Organic Food Market 2011
Africa : Export-geared (Less consumption). South Africa is the largest
market. EU is the major recipient of agriculture exports of Africa.
Asia : Increasing at a healthy rate and rising consumers awareness &
expanding distribution are the major drivers of market growth. Organic
Producers are China, India, Thailand, Indonesia etc. Large consumers
are Japan, South Korea, Taiwan, Hon kong, Singapore.
Europe : 2
nd
largest market with 21.5 billion euros; 9% more than in
2010. largest market is Germany with 6.6 billion euros, followed by
France (3,756 million euros) and the UK (1,882 million euros).
Latin America : Most of the products are sold in the EU, North
American or Japanese markets. Important crops are tropical fruits,
grains and cereals, coffee, cocoa, sugar, and meats.
North America : In the US, 29.22 billion USD spent i.e., 4.2% of total
food market. In Canada, sales were 2.6 billion Canadian dollars (2010).
Oceania : Australia and New Zealand export significant volume.
Highest land in world i.e., 33 percent (12.2 million he) but the share of
global organic food sale is around 2 to 3%
World : Organic Land in 2011
24,161
32,195
42,041
43,661
43,716
122,359
145,430
169,570
188,625
(2010)
547,591
0 200,000 400,000 600,000
Dominican Rep.
Spain
Italy
Peru
Turkey
Ethiopia
Tanzania
Mexico
Uganda
India
Ten Countries with the largest number of
Organic Producers 2011
Numbers of Producers
Source : FIBL-IFOAM Survey 2013, Based on national
data sources
0.9 (2006)
1
1
1.1
1.1
1.6
1.9
1.9 (2008)
3.8
12 (2009)
0 5 10 15
Uruguay
France
Germany
India
Italy
Spain
China
United State
Argentina
Australia
Ten Countries with the largest Organic
Agriculture land 2011
Million Hectares
Source : FIBL-IFOAM Survey 2013, Based on
national data sources
965
1,000
1,065
1,411
1,720
1,882
1,904
3,756
6,590
21,038
0 5000 10000 15000 20000 25000
Spain
Japan (2010)
Austria
Swetzerland
Italy
United Kingdom
Canada (2010)
France
Germany
United States
Ten Countries with the largest Market of
Organic Food 2011
Sale in Million Euros
Source : FIBL-IFOAM Survey 2013, Based on national
data sources
10.5
11.8
15.2
17.9
20.9
23
25.5
28.7
33.2
40.2
46.1
50.9
54.9
59.1
63
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
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5
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6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
World Market for Organic Food :
Market growth 1997-2011
Global Revenue (Billions US Dollar)
Source : Compiled from FIBL-IFOAM Annul Reports, The
World of Organic Agriculture
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
Growth of Organic Agricultural land
& Number of producers 1998-2011
Organic Land (Milllion Hectares)
No. of Producers (in Lakhs)
Source : Compiled from FIBL-IFOAM Annul Reports, The World of
Organic Agriculture
Major Findings
There are 162 countries have data on organic agriculture from every
region. Around 37.2 million hectares of land are being practices as
organic method of farming (11 million hectares in 1999).
Only 0.90% of total agriculture land (4167 million ha) is being
practices as organic method of farming worldwide.
In 10 countries more than 10% of the total agriculture land is being
practiced as organic farming method.
1.8 million producers/number of farm land has been reported
worldwide which was only 0.25 million in 2000.
86 countries with 549 certification bodies have organic (Fully
Implement) and 26 Countries in the process of drafting legislation.
The global market reaches 63 billion USD from 10.5 billion USD in
1997. 90% alone from 3 regions -US (44%), EU (42%) & Canada (4%).
India is the largest No. of organic produces in the world with 5.5 lakhs
Australia, Argentina and US is the largest land cultivating as organic.
Most of the organic food in Africa & Latin America are being
exported to other countries and consumption is comparatively less.
Discussion
Global sale of organic food reached 63 billion USD in 2011 which was
10.5 billion USD in 1997. The market has expanded over six-fold in last
15 years. Practice of organic farming and the demand of organic foods
have increased in all regions, however demand for organic products is
concentrated in two regions: North America and Europe comprise 44%
and 42% respectively in 2011. As organic farming is growing in every
continent, similarly demand also need to spread outside North America
and Europe too, then organic food industry can be considered to have
become truly global. Rising price of food products and agricultural
inputs are deterring grower to convert to organic agriculture. However,
rising production level and growing awareness are expanding the
organic food market.
Supply-demand imbalances remain a feature of the organic food
industries, numerous opportunities are evolving for the farmers and
exporters specially in developing countries like India whereas ample of
business prospects are also emerging in various developed countries like
US and Europe.
THANK
YOU
References
1. FIBL and IFOAM, ((2000-2013) The world of organic agriculture Statistics & Emerging trends,
Research Institute of Organic Agriculture, Ackerstrasse, 5070 Frick, Switzerland
2. Annual Reports (2000-2012) International Federation of Organic Agriculture Movements (IFOAM),
Charles-de-Gaulle-Str. 553113 Bonn, Germany.
3. FAO Report (2009), How to Feed the World in 2050. Food and Agriculture organisation (FAO), United
States Department of Agriculture, USA
4. Niggli, A Slabe, (2005), Vision for an Organic Food and Farming Research Agenda to 2025, IFOAM
Regional Group EU, Rue du Commerce 124, 1000 Brussels, Belgium
5. Carolyn D and Lydia O (2009), Marketing U.S. Organic Foods: Recent Trends from Farms to
Consumers, Economic Research Service, US Department of Agriculture, USA