1. 1 Experiences with Organic Agriculture Dr. Sophia Twarog, UNCTAD Standards and Trade Workshop 16 May 2002

2. 2 Opportunities Demand growing 10-20% in most major markets US$ 17.5 billion market in 2000 Economic,social, health and environmental benefits for DCS Possible DC comparative advantage Over 100 DCs produce certified organic products

3. 3 Production Constraints Limited governmental support Lack of technical know-how Lack of organic inputs Little R&D on plant varieties and prod’n methods best suited to DCs Conversion period- smallholders have limited financial reserves

4. 4 Export Constraints High certification costs Lack of market information and marketing strategies Limited physical transport and storage infrastructure Complex import procedures Tariff and non-tariff protection

5. 5 Certification Most DC exporters depend on certification by international certification bodies National certification infrastructure limited in most DCs Unaffordable for smallholders Smallholder group certification SGC not recognized in importing C reg’s

6. 6 Standards and import regulations Multitude of private standards and government regulations No well-functioning mechanisms for mutual recognition Multiple certification/accreditation is costly Obtaining import permits- cumbersome and time consuming

7. 7 Market information and channels Limited market information available at producer level Sometimes DC certified organic products get sold as conventional

8. 8 Other market risks Organic market is fairly small ( LT 2% of total food market in most dev’d C’s ) Dev’d C efforts to promote OA production, including subsidies Eastward enlargement of EU could increase OA supply Increasing consumer preference for locally supplied food

9. 9 EU Regulation 2092/91 Para 1: “third country list” (6 C’s) Para 6: “importer derogation” –Importer submits documentation that products are produced and certified according to rules equivalent to EU’s –Permit takes several weeks or months –Over 80% of EU OA imports, from over 85 countries –Due to expire 31 December 2005

10. 10 Other EU Regulations No. 1788/2001: aims to harmonize import procedures throughout EU –from 1 July 2002 –requires an original certificate of inspection for each consignment –Is expected to increase delays Since July 1999, certification bodies must conform to EN 45011 or ISO 65

11. 11 USA Regulations Standards adopted December 2000 Certifiers operating in foreign countries may apply for USDA accreditation. –In first round (April 2002), 37 foreign certifiers applied, incl. 12 from 10 DCs. –4 were accepted, including 1 from Peru –The other applications are pending.

12. 12 USA Regulations, cont’d Otherwise, certifiers seek recognition –USDA determines, upon the request of a foreign gov’t, that its authorities are able to assess and accredit certifying agents as meeting the requirements of the National Organic Programme (NOP), –Or as meeting requirements equivalent to the NOP under an equivalency agreement

13. 13 Costa Rica 1.9% of land under permanent cultivation is under organic production or in conversion Small producers (94% of certified farms are LT 5 hectares) Exports to EU and USA Main exports: coffee & bananas

14. 14 Costa Rica Institutional support –National Programme for OA (est. 1995) –Dept. on Accreditation and Registration of OA in Ministry of Agriculture, deals with issues related to inspection –National standards –Procedures for accreditation of certifiers; regulations for inspection

15. 15 Costa Rica Good certification and accreditation infrastructure –3 authorized inspection agencies (2 national, 1 German) –These have arrangements with import market-based certifiers Expected to be soon included in the EU “third country list”

16. 16 India National Programme for Organic Production National Standards—March 2000 Tea, Coffee, Spices Boards and APEDA—accreditation agencies for products under their responsibility Applied for EU “third country list”

17. 17 India Key role of NGOs and farmer organizations Commodity-specific boards providing some support to OA –Spices Board meets 50% of certif. Costs Price premiums—difficult to secure –Ex: organic pepper

18. 18 Uganda Small scale producers Exports include cotton, sesame, coffee, fruits No national standard No clear government policy or support No locally-based certification body

19. 19 Recommendations Raising awareness and promoting policy dialogues Research and development Training (farmers, agricultural extension workers) Development of national legislation and standards (for C’s with larger OA sector)

20. 20 Recommendations, cont’d Develop domestic markets Improve access to market information Develop marketing strategies Appropriate government support

21. 21 Recommendations, cont’d Reducing certification costs –Assistance in meeting certification costs –Local certification/inspection body –Inspections done by local staff charging local fees –Provisions for smallholder group certification based on Internal Control Systems (ICS)

22. 22 Recommendations, cont’d Reduce expensive multiple certification through harmonization and mutual recognition of OA regulations, standards and certification –Among governments –Among accrediting agencies –Among private/public certifying bodies

23. 23 Recommendations, cont’d Facilitating imports of OA products Regulations reflecting the needs of DCs, e.g. provisions for SGC Transparent and understandable procedures Mutual recognition of OA regulations Providing information (standards, market opportunities, etc.)

24. 24 Recommendations, cont’d Bilateral and multilateral aid agencies can provide/finance technical assistance to: –Promote OA production –Obtain certification –Identify business partners

25. 25 Trade rules issues Implications of developed country subsidies to OA production Need for transparent and non- discriminatory labelling Possibilities to grant special & differential treatment, incl. trade preferences, to OA products fr. DCs

26. 26 Trade rules issues,cont’d Post-Doha: could the mandated negotiations aimed at reducing or eliminating tariff and non-tariff barriers to environmental goods and services benefit DC exports of OA products?

27. 27 Possible follow-up activities By UNCTAD and UNEP/UNCTAD CBTF, working closely with IFOAM, FAO, ITC and other relevant institutions

28. 28 Possible follow-up activities Assisting DCs in designing and implementing appropriate gov’t support for OA production & export, through Studies, including identifying promising products, ways to reduce certification costs, overcoming constraints Policy dialogues, incl. to create awareness of benefits of OA and promoting multi- stakeholder committees

29. 29 Possible follow-up activities Exploring mechanisms for recognition of organic guarantee systems of DCs Promoting mutual recognition Examining ways to promote the practical application of the concept of equivalence, including through Task Force involving Governments, IFOAM, FAO, UNCTAD and others.

30. 30 Possible follow-up activities Promoting transparent and simple rules governing OA imports Exploring trade preferences for OA products from DCs Examining market strategies (ITC) incl. disseminating market research to DCs, explore e-commerce opportunities, promoting partnerships w/ buyers, donors