Australian Organic Agriculture – Prospects of Growth?

Ref: A report for the Rural Industries Research and Development Corporation  By Jason Alexandra and Rod May

Executive Summary
The Changing Context of Organic Agriculture
Community, government and market support for organic agriculture is rising?  This rise in support for organic farming represents a marked change in the trajectory of modern agricultural development as increasing attention is being devoted to the sustainability and multi-functionality of agricultural systems.

Therefore, organic agriculture needs to be understood not simply in terms of another production technology, but as a fundamental shift in the relationships between producers and markets; producers and technology; and producers and the environment.  There is increasing adoption of organic growing systems within Australian agriculture, partly because many people wish “to do agriculture differently” and partly due to strong and growing demand for organically produced food and fibre products, particularly in major export markets.

Growing domestic and export demand
Throughout the world demand outstrips supply for many organically produced products. Growth in Australian organic production is estimated at 15% to 25% pa. Continuing growth is expected because of strong domestic demand and because Australia is in a good position to supply expanding markets overseas, particularly in Asia. World sales in 1997 were estimated at US$11 billion with this figure estimated to increase to US$100 million by 2006 (OFA 1999).

Recent estimates put the value of the Australian organic food industry at between $250 and $500 million, and therefore it currently constitutes a minor part of Australia’s total agricultural production. About one third of Australia’s organic food and fibre produce is exported. However, domestic sales rose from $100 million in 1995 to approximately $250 million in 1999 (OFA 1999).
Constraints to growth in organic production include the following factors: risk and uncertainty; insufficient expertise and skill; lack of high quality technical advice; real technical and production
constraints; unclear market signals and the ambiguous policy environment.

Despite the image of independence, few farmers make decisions in isolation. They are in fact part of a complex information and value chain, so while organic production may appear attractive it
will take a major shift in policies, programs and R&D to stimulate a sizable shift to organic farming practices.

The importance of government policies is best illustrated by contrasting different European countries: Austria, Sweden and Denmark aimed to have 10 per cent of their farming organic by
2000 with substantial government support, while Britain only hoped to achieve 1 per cent.

In Australia, there has generally been an absence of government support for organic farming systems. Only recently has the Rural Industries Research and Development Corporation (RIRDC)
established a dedicated R&D program to fund work which focuses on organics, and this only has a tiny fraction of the total agricultural R&D budget. This project set out to explore the lessons the industry has learnt and the challenges facing it.

Full details of this report are available at this url


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