- 1 Purpose of the position paper
- 2 Potential Contribution of Organic Farming to the Sustainability of NZ Agriculture
- 3 Potential Contribution of Organic Farming to increased producer returns and export earnings
- 4 Constraints to the further development of organic farming
THE ROLE OF ORGANIC FARMING MAF POSITION PAPER
EXECUTIVE SUMMARY
1 - Purpose of the position paper
This paper states how MAF views the contribution that organic farming can make to achieving more sustainable agriculture, better returns to producers and increased export opportunities. The paper identifies constraints on the further development of organic farming, and states MAF's position and the actions MAF will take in regard to organic farming.
2 - Potential Contribution of Organic Farming to the Sustainability of NZ Agriculture
MAF has already released a policy position paper on sustainable agriculture. That paper set out Government's commitment to achieving sustainable land management. Sustainable agriculture is defined as:
The use of practices or systems which maintain or enhance:
(a) the ability of people and communities to provide for their social and cultural wellbeing;
(b) the economic viability of agriculture;
(c) the natural resource base of agriculture;
(d) other ecosystems influenced by agricultural activities; and
(e) the quality and safety of food and fibre.
Sustainability is the ability of a system to endure and the absence of unacceptable effects on people or the environment. Organic farming is one of several systems that can move NZ farming practices towards the goal of sustainability. MAF recognises that the organic viewpoint and practices can help to achieve more sustainable outcomes for NZ farming.
The ability of communities to provide for their social and cultural well-being depends to a large extent on having sufficient income. The extent to which organic farming provides this income depends on market returns and how successful it is in maintaining basic farm resources, in particular the soil, in a condition that ensures sufficient ongoing production.
Organic farming is an approach to farming which relies primarily on biological processes, rather than the purchase of chemical inputs, to maintain soil fertility and plant and animal health. Various practices, such as the recycling of nutrients, contribute to sustainability. The degree of sustainability of organic farms varies according to soil and climate type and the management ability and outlook of the farmer. Organic farms, when run effectively, generally provide similar or slightly lower financial returns than conventional farms. However, taking into account external costs and benefits would indicate that sometimes organic farming can provide better net returns to society than conventional agriculture.
Several organic farmers have remained viable over many years and long-term overseas research results have validated many organic methods. The limited research information for New Zealand conditions indicate that organic methods can result in good soil structure; financial returns often similar to returns on conventional farms. Research suggests that some soil nutrients have to be imported from off-farm. Off-farm impacts are generally less for organic than conventional farms, but organic standards do not address all off-farm impacts and non-renewable resource imports. Technological advances could improve the financial viability and physical sustainability of organic methods.
Adoption of organic practices and values will help to maintain overseas market access as consumers increasingly demand that food be produced in an environmentally sustainable system.
While it is unlikely that large numbers of farmers will convert to organic farming in the near future, the organic approach can indirectly contribute to sustainability. This can occur through changing attitudes to farming and impacts on the environment, and through specific methods and technologies that conventional farmers can adopt. MAF will encourage the adoption of practices that are more sustainable. Organic farming is one option for farmers.
3 - Potential Contribution of Organic Farming to increased producer returns and export earnings
There is a trend in consumer demand towards buying food that is perceived to be healthy, with low chemical residue levels, and produced in environmentally friendly ways with concern for animal welfare. Many reports have qualitatively identified this trend, but little quantitative evidence is available. Many consumers perceive that organic products fulfil this demand. Some consumers are committed to buying certified organic produce: however a larger number are less committed and do not appear to understand organic production methods. Market growth will depend largely on how much of the market for environmentally friendly, low residue products is supplied by organic products. Whatever the future growth, opportunities exist now for New Zealand farmers to supply organic products to export markets as well as the domestic market.
A Trade Development Board working group made a preliminary review of available data on the export market potential for organic products. They found much of the data to be incompatible or unreliable. They concluded that NZ export earnings from organic products could rise from the present $3 million to anywhere between $8m and 125m by year 2000. The earnings will depend on the rate of market growth and how well NZ can overcome production difficulties and develop markets to increase its market share. The TDB working group identified horticultural and processed products, dairy and beverages as providing the greatest opportunities for development. If technological and structural constraints on producing and exporting organic products can be overcome, organic products could provide a significant added value contribution to export earnings.
Several private businesses are exploring opportunities for export of a wide range of fresh and processed organic products. Most of the marketing boards and other marketing institutions generally consider that marketing resources are better invested in the larger market for lower residue products rather than in organic products.
The generally lower output of organic compared to conventional products can mainly be offset by lower input costs and price premiums on organic products. However, price premiums are expected to decline as markets develop. Conversely, markets increasingly require lower residue levels and more environmentally acceptable production. Some of the technologies developed by organic farmers could be used by conventional farmers to maintain their product prices and markets.
4 - Constraints to the further development of organic farming
The small number of organic farmers limits their ability to supply markets. The perceived risks, lack of social acceptability, and different technology inhibit conversion to organic farming. Farm and market development are also limited by the lack of marketing, research and information infrastructure; attitudes of marketing and government bodies; and technological problems such as fulfilling export phytosanitary requirements.
Contact for Enquiries
Kay Brown
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0695
Fax: +64 4 4 894 0746
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