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Oct. 27 — Organic farmer groups in Latin America say the European Union's emphasis on expanding organic compliance rules rather than organic equivalence arrangements could cause them to reduce their production of organic produce for the EU market.
The issue has come to a head over the last two weeks, after the European Parliament's Agriculture Committee Oct. 13 backed a European Commission plan to phase out equivalence arrangements signed between the EU and third party states over five years (See previous story, 10/13/15).
The EU is the second largest organic market with 22.2 billion euros ($25.5 billion) in annual revenue and 40 percent of global organics demand (the U.S. is the largest organics market in the world), according to the organic farmers organization IFOAM. Some 90 percent of all global trade in organics occurs between the U.S. and the EU, with the U.S. importing 284 million dollars worth of organic products from the EU in 2014, according to U.S. Department of Agriculture data. The EU does not collect similar data.
Demand for organic food in the EU is growing at 6 percent per year. But conversion of non-organic farms in the EU to organic isn't keeping up, according to the European Commission.
This has meant the EU needs to import organic produce and raw materials. To satisfy demand, the EU has accepted 12 countries into its organic equivalence program: Argentina, Australia, Canada, Costa Rica, India, Israel, Japan, Republic of Korea, Switzerland, Tunisia, the United States and New Zealand.
It is unclear whether the EU will ultimately end the 12 existing organic equivalence arrangements. But experts consulted by Bloomberg BNA say the door seems to have closed for adding new countries to the program.
As a result, third-party countries outside the system need to farm according to EU rules—think organic wine growing rules suitable to France's Burgundy region or organic apple growing rules suitable for Italy's South Tyrol—if they want to gain EU organic certification. And that's proving burdensome in Latin America.
“We have more than anecdotal evidence that farmers have stopped trying to gain EU organic certification because the administrative burden of having it is too great and the yields too low,” Laura Ullmann, communications director of organic farming group IFOAM EU, told Bloomberg BNA Oct. 22.
Despite the rules' complexity, Costa Rica did manage to create a compliance regime based on EU rules starting in 2002, as did Honduras and the Dominican Republic in the last decade.
For crops like cocoa, the effort has paid off: Almost 90 percent of the world's organic cocoa-growing land is in Latin America, IFOAM said. In countries like Bolivia, 82.7 percent of cocoa is organic, while similar numbers are reported in Dominican Republic (77.3 percent), and Nicaragua (57.7 percent).
But for crops that have an EU equivalent, the cost of complying with both EU and the USDA's National Organic Program (NOP) guidelines is proving prohibitive.
“When we first decided to create an organics export industry, there was only the EU model,” Gabriela Soto, a soil scientist and organic inspector with Costa Rica's National Organic Farmers Association (ANAO), told Bloomberg BNA in a phone interview Oct. 23. “Our main goal was to be able to export to the EU. The USDA's National Organic Program (NOP) wasn't in place at that time.”
Soto said Latin American farmers prefer the USDA's program because it allows them the flexibility of adapting growing techniques to local conditions. In some cases that means using hydroponics, a method of growing plants in water using vitamins.
Soto says the ideal way to help small farmers in Latin America increase their exports would be if the EU and the U.S. had one common organic standard—or for the EU to grant equivalence status to a Pan-American organics platform created by the Inter-American Institute for Cooperation on Agriculture (IICA).
But that looks unlikely at present because, Soto says, the EU signaled to Costa Rica that if it adopted the IICA standard, it would lose its coveted Third Party status in the EU's organics program.
For the farms she inspects, meanwhile, the costs are mounting.
“When Latin American producers plant a crop like cocoa, they don't know what the market will be,” Soto said. “So they try to comply with all regulations: Costa Rican, Swiss, EU, U.S., Korean, and Japanese. As one farmer in Nicaragua told me when I came to inspect his farm, he said ‘every time you come, you change something.’”
On some occasions, European organics traders have helped Latin American farmers shoulder the EU regulatory burden.
“Producers have asked for help in dealing with the cost of complying with EU regulations,” Volkert Engelsman, CEO of Netherlands-based Eosta, one of Europe's largest importers and distributors of organic produce, told Bloomberg BNA Oct. 26. “And in those cases, we give them financial support.”
Engelsman said the U.S. and EU organics systems are “largely equivalent, but in a few cases there are a few big differences” like on hydroponics and the use of ethanol to ripen organic bananas and pineapples, which are banned in the EU, and on the use of antibiotics in sick animals, which is completely prohibited under the USDA's organics program, but allowed under very specific conditions and circumstances in the EU.
The hydroponic issue remains the biggest sticking point for the EU, Engelsman said.
“European consumers say ‘I fail to understand how that's a natural product if it's not grown in soil’,” Engelsman said. “If someone is growing in Costa Rica or in the region, he has to comply with that. If he doesn't want that, then he can sell to the U.S.”
But Soto disagreed, and said that in some regions of Latin America, hydroponics is more suitable to local conditions.
For this reason, she is calling on the EU to create an appeals system—much as exists in the USDA's NOP program—to allow farmers from around the world to travel to Brussels to make their cases directly to lawmakers for their own regionally appropriate organics standards
“The USDA has done an excellent job,” she said. “They receive Latin Americans in Washington. We are able to send letters and present our positions. They listen to us. There is a channel of communication. That's what the EU should have.”
She says that in a time of growing demand for organics in the EU, the EU needs to listen to its import partners if the goal is more organic products on European store shelves at affordable prices.
“Our farmers aren't being heard, and that's constraining production,” she said. “EU politicians don't understand how much the decisions they make in Brussels affect farms in Latin America.”
To contact the reporter on this story: Michael Scaturro in Brussels at firstname.lastname@example.org
To contact the editor responsible for this story: Heather Rothman at email@example.com
IFOAM's World of Organic Agriculture report available at https://www.fibl.org/fileadmin/documents/shop/1663-organic-world-2015.pdf.
Implementation rules of Council Regulation (EC) No 834/2007 as regards the arrangements for imports of organic products from third countries can be found at: http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:02008R1235-20150501&qid=1434706088267&from=IT.
EU organic import rules are available at: http://www.ifoam-eu.org/en/organic-regulations/import-export-rules.
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