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US-Switzerland deal another sign of blossoming international organic trade
A unified, global market for organic food supported by internationally agreed standards and criteria may still be a rather distant prospect but international trade in organic produce has been greatly facilitated by equivalency deals, the most recent of which has been signed between the US and Switzerland.
The US-Swiss deal followed three years of negotiations and sees the establishment of a mutual trading relationship in organic produce between the two countries. Prior to the signing of the deal, Swiss producers could export to the US by gaining US organic accreditation but, because the Swiss certification body, Bio Suisse, is a private-sector organisation grouping together Swiss organic farmers, US organic producers could not access the Swiss market.
The new agreement provides mutual market access. Organic products certified in the US or Switzerland can now be sold as organic in either country, with effect from 10 July. Chiefly, it eliminates the need for a company to undergo two sets of inspections, paperwork and fees.
Bob Anderson, senior trade advisor for the US Organic Trade Association (OTA), which played an active role in advising and providing technical assistance to US government negotiators working on the deal, says the now "mutually beneficial" arrangement is "more simple, easier and less expensive". Anderson says believes the agreement not only opens up the Swiss consumer market to US-produced organic brands but will also foster the trade in both directions in organic ingredients, notably commodity grains and dairy products. Among the processed organic products Anderson expects to benefit from the deal are ready-to-eat meals and organic snack foods.
It is little wonder US food producers, whether organic specialists or mainstream food manufacturers with organic product lines and variants, are eyeing the Swiss market. Having grown steadily over recent years, Switzerland boasts the largest per capita consumption of organic food in the world when measured in euro sales at EUR210 (US$231), followed by Denmark at EUR163 a year and Luxembourg at EUR157.
According to Bio Suisse, organic retail sales in 2013 in Switzerland rose by 12% in 2013, reaching nearly US$2bn. The largest growth areas have been organic meat, fruit, processed products and cheese.
Seen from the other side of the Atlantic, easier access to the US organic market will also be a tempting proposition for Swiss organic farmers and food manufacturers. Organic food sales in the US reached US$35.9bn in 2014, up 11% from 2013 and representing an all-time high.
The OTA also points out the robust growth in organic sales in the US has meant the US organic market has created jobs at four times the national rate. Anderson believes the growth in organic food and ingredients fostered by equivalency deals will further support rural economies and employment on both sides of the Atlantic.
Equivalency deals, such as the Swiss deal and the agreement the US signed with the EU in 2012, are fundamentally "good news for consumers", Anderson says. "In the end consumers are the winners because there is access to more and more food organic foods that they can buy with confidence because we agree that each other's control systems are fundamentally the same. And manufacturers can buy ingredients with confidence."
Anderson adds: "There's a global shortage of organic commodity grains and anything we do that makes it possible for countries and companies to trade internationally is very important."
Bio Suisse also welcomed the signing of the agreement with the US. Switzerland already has equivalency deals with Canada, Japan and with the EU. "The Swiss organic sector welcomes these deals as long as the common protection mechanisms for agriculture as a whole apply. Examples include restricted imports during the vegetable season, or tariffs on important crops," Bio Suisse says. "Equivalency agreements are mostly good because they offer opportunities for Swiss producers and processors. They contribute to a diversified and extended offer of organic goods for consumers."
The international organic food market has changed significantly over recent years thanks to the signing of equivalency deals.
The first deal the US signed was with Canada in 2009. However, the accord signed with the EU in 2012 is described by the OTA as a "landmark" agreement. Negotiations on that deal actually began in 2000 but stalled. While Canada and the EU are the two largest trading partners for the US organic sector, the US has also looked to establish such arrangements with other countries, signing equivalency deals with Japan and South Korea in 2013 and 2014.
These relationships will allow further growth in the already expanding US organic export market. The OTA estimates US organic food exports were worth around $3.2bn in 2014. More such deals are in the pipeline. Most recently, New Zealand and Taiwan have requested equivalency deals with the US. The US is "looking forward" to completing a deal with Mexico, Anderson says. Mexico has released its organic standards though implementation has been delayed. This could now take place in April 2017, Anderson believes, though this is yet to be confirmed.
While the US may be the largest organic market in the world and Switzerland boasts the highest spending consumers of organic food, the 2014 annual report from IFOAM Organics International, a body that claims it is the "only international umbrella organisation of the organic world", there are now 82 countries with organic regulations, constituting a global organic market worth EUR54bn in 2013.
After the US, Germany is the next largest market with sales of EUR7.6bn in 2013, with France the third largest. Organic food sales in France rose by 10% in 2014, according to local body Agence Bio, to reach EUR5bn, while the Italian organic market grew by 12% in 2014 to EUR2.5bn, according to Italian organic trade body, AssoBio.
In the longer term, emerging markets offer significant potential for organic food exports as consumer markets in those countries develop, as underlined by a report on the organic sector in Guatemala published by the US Department of Agriculture in June.
"Although the Guatemalan organic products market is small, there are consumers looking for what they believe to be healthier and environmentally friendly products," the report states, identifying product areas such as processed fruits and vegetables, juices, cooking oils, dairy, snacks, breakfast cereals, condiments, sauces and confectionery as areas that could offer potential for US organic food exporters.
As Anderson points out, the proliferation of inter-country equivalency deals opens up the prospect of multi-lateral equivalency arrangements, and viewed collectively the deals agreed over recent years represent a burgeoning international organic market.
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Other news in this sector:
- 2019-11-19 “Our storage capacity allows us to offer organic squash all winter”
- 2019-11-19 First small volumes of Chilean organic blueberries arriving
- 2019-11-18 Italian organic fruit exported all over Europe
- 2019-11-12 Norway: No demand for organic fruit or vegetables
- 2019-11-12 "Organic fresh produce prices often more stable than for conventional products"
- 2019-11-11 White grapes: One in ten sold was organic
- 2019-11-08 Organic cultivation in India : Acreage, export, facts and figures
- 2019-11-07 China helps Murray River Organics grow
- 2019-11-01 Extension of the organic range: red onions at Aldi Süd
- 2019-10-30 Little & Fresh: Small organic vegetables for small families
- 2019-10-29 “Made in Nature”: 25% more organic crops in Europe than in 2012
- 2019-10-28 The sale of organic fruits and vegetables in Spain grows by 15%
- 2019-10-25 Somerset's organic farmers could be hit hard in event of no-deal Brexit
- 2019-10-24 "Merger was foundation for development of the organic sector in Austria"
- 2019-10-23 "Going entirely organic could mean food emissions up 70% in England and Wales"
- 2019-10-22 "Breeding of organic varieties is driven by market needs"
- 2019-10-22 EcoEspaña, Spain's national organic production association, will be based in Almería
- 2019-10-22 "We are the only ones able to supply organic fruit for 20 consecutive weeks"
- 2019-10-22 Bayer launches crop protection solutions for organic crops
- 2019-10-21 Chile: Biodynamic production of blueberries in the spotlight