PRINCIPLES AND ADOPTION OF ORGANIC AGRICULTURE
PRINCIPLES AND ADOPTION OF ORGANIC AGRICULTURE
Historical Background
The idea of organic agriculture evolved in the early twentieth century in the context of urbanization and the increasing use of agrochemical inputs in farming. The organic movement started in German- and English-speaking countries and was influenced by different groups that promoted rural traditions and the use of biological (instead of synthetic) fertilizers (Vogt 2007). For several decades, the organic movement remained very small, but it has gained popularity since the 1970s with rising public concerns about health and environmental effects of industrialized farming (Lockeretz 2007). In the following decades, governments in several rich countries started to subsidize the organic sector. As a result, the market share of certified organic products increased. In the European Union and the United States, policy measures to support organic farming include governmental regulations and standards, direct subsidies to organic producers, research funding, and sponsorship of communication instruments such as promotion campaigns and organic labeling. The rationale for government interventions is to reward organic farmers for their superior environmental performance and compensate for related increases in production costs or decreases in yield (Stolze & Lampkin 2009). More recently, policy support has also facilitated the adoption of organic standards in developing countries. Domestic governments and western development agencies have launched a number of projects to link smallholder farmers to organic export markets.
2.2. Principles of Organic Agriculture
Today, more than 100 countries publicly support organic standards (Seufert et al. 2017). Additionally, several private organic standards exist. Governmental and private standards are typically based on the standards developed by the International Federation of Organic Agriculture Movements (IFOAM) (http://www.ifoam.bio/en). Hence, most organic standards are similar, even though they can differ in specific details.
Organic standards cover different areas such as crop production, animal husbandry, wildlife collection, beekeeping, aquaculture, and processing, among others. The standards involve activities that are prohibited or restricted and other activities that are required or recommended (Table 1). The cornerstones of organic production systems are balanced crop rotations with legumes, recycling of nutrients (e.g., through mixed farming), and the use of organic fertilizers. Use of synthetic fertilizers and chemical pesticides is prohibited. In livestock production, the animals must be fed with organic fodder, preferably from the same farm, and provided with sufficient space and access to outdoor areas.
Table 1
Summary of prohibited and required activities in organic agriculture
Compliance with organic standards is verified on an annual basis through farm inspections undertaken by accredited certification agents (Seufert et al. 2017). For this purpose, records on all farming activities must be kept. In developed countries, certification of individual farms is commonplace. In developing countries, certification is often group based, especially in the small farm sector. Group certification reduces the costs for individual farmers as well as the transaction costs for certifiers and buyers (Jena et al. 2012, Meemken et al. 2017b).
2.3. Adoption of Organic Agriculture
Over the past 15 years, the global area under certified organic agriculture has increased substantially, from 15 million ha in 2000 to 51 million ha in 2015 (Figure 1a). Nevertheless, in 2015, organic agriculture accounted for only 1% of the total agricultural land worldwide. With almost 23 million ha, Australia is the country with the largest certified organic area; most of the organic area in Australia is extensively managed grassland. Other countries with relatively large organic areas include Argentina, the United States, and Spain (Figure 1b). A breakdown by crop species shows that organic production plays a larger role for permanent crops, such as berries, coffee, and olives, than for annual crops such as cereals and vegetables (Figure 1c).
Figure 1 Adoption of organic agriculture. (a) Development of certified organic area worldwide from 2000 to 2015. (b) Top ten countries with the largest certified organic areas in 2015. Figures indicate the percentage of total worldwide organic area. (c) Certified organic area by crop in percentage of total cropland worldwide in 2015. Based on data from Willer & Lernoud (2017).
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While the largest share of the global organic area is found in developed countries (Figure 2a), 88% of the organic farmers (2.1 million out of 2.4 million) live in developing countries in Asia, Africa, and Latin America (Figure 2b). The countries with the largest number of organic farmers are India (0.6 million), Ethiopia (0.2 million), and Mexico (0.2 million). Organic farmers in developing countries mainly produce traditional export crops, such as coffee and tea (Willer & Lernoud 2017).
Figure 2 Production and consumption of organic food by geographic region in 2015. (a) Distribution of certified organic area by region. (b) Distribution of certified organic farmers by region. (c) Distribution of organic retail sales (in value terms) by region. Based on data from Willer & Lernoud (2017).
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Several studies have analyzed factors that influence farmers’ decisions to switch from conventional to organic practices in developed and developing countries. Access to government subsidies for organic farming tends to play an important role (Brenes-Munoz et al. 2016). However, government subsidies can also add to policy risk, which may reduce adoption under certain conditions (Kuminoff & Wossink 2010). In addition to policy risk, organic farming may be associated with higher production risk, because certain risk-reducing inputs are not allowed (Serra et al. 2008). For instance, chemical pesticides help to reduce pest damage but are prohibited in organic agriculture. Indeed, studies showed that adopters of organic practices tend to be more risk loving than nonadopting farmers (Kallas et al. 2010, Serra et al. 2008). Other important adoption determinants include access to information and to high-value certified markets in which buyers are willing to pay significant price premiums for organic products (Läpple 2010, Wollni & Andersson 2014). Especially in the small farm sector of developing countries, adoption of organic standards crucially depends on development initiatives to provide training and marketing support to farmers (Bolwig et al. 2009).
In line with the increase in the global organic land area, sales of organic products have also increased. Since 2000, global organic retail sales have quadrupled, reaching US$82 billion in 2015. Demand for organic products is concentrated in North America and Europe (Figure 2c). In Europe, the largest organic markets in terms of total retail sales are Germany and France. However, in terms of per capita expenditures on organic products, the leading countries are Switzerland, Denmark, and Sweden (Willer & Lernoud 2017). In most developing countries, demand for organic products is negligible, although increasing in certain high-income segments of the population. Poor people can hardly afford organic products due to significantly higher prices. On average, organic products are priced 50% above conventional products, reflecting higher costs in production, processing, and distribution (Seufert et al. 2017). Price differences between organic and conventional tend to be more pronounced for animal products than for fruits, vegetables, and processed foods.
