| Strategic
thinking By Laura Sayre |
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August 9, 2007: New Zealand's organic export sales are currently estimated at just under NZ$95 million (US$74.3 million), growing at 10 percent per year; domestic sales are valued at more than NZ$100 million, about half of which is produced in-country with the remainder imported. Ten years ago, export sales were pegged at just NZ$12 million while the domestic market was negligible. That's huge expansion by any measure, but if organic supporters have their way it will be just the beginning. A national Organic Sector Strategy report, commissioned by the government in 2003, proposed a target of NZ$1 billion in annual sales by 2013, which would require a considerable increase in the rate of growth. Is this possible? The atmosphere at the BioGro headquarters (www.bio-gro.co.nz), a barn-like space on the sixth floor of a modern building in downtown Wellington, the nation's capital, feels cautiously optimistic. Michelle Glogau, BioGro's chief executive, is buoyed by a recent trip to BioFach in Germany, where IFOAM (the International Federation of Organic Agriculture Movements) has been publishing jaw-dropping statistics on the growth of global organics while tirelessly seeking to establish some kind of baseline equivalence across individual countries' standards. Seager Mason, the group's technical director, is well used to running through the benefits, challenges and vital statistics of organics in New Zealand. These facts and figures paint a portrait in which the potential is enormous, but its fulfillment of such a lofty goal is by no means guaranteed. Trends in the making With its subsidy-free farm sector and many environmental advantages, New Zealand makes an interesting test case for organics on the global level. The origins of the organic movement here date to the 1940s, but significant growth began only in the mid-1990s, when Wattie's—a leading canned fruit and vegetable label—introduced its first organic line, and Zespri—the kiwifruit marketing group—began encouraging organic production to meet growing demand in Japan and other overseas markets. Organic apple growers were quick to learn from Zespri's success, and other sectors, including lamb, dairy and viticulture, have followed, albeit more slowly. Organic production now accounts for 5 percent of total New Zealand kiwifruit output and nearly 10 percent of N.Z. apples. Demand across all these sectors remains strong. There are "still not enough farmers" to supply Wattie's and other processors, Mason says; demand for organic meat for export is considerable, "particularly for lamb going to the U.K.," while the pipfruit sector (apples and pears) "could easily handle a 20- to 30-percent growth rate" for the next several years. N.Z. organic apple producers are currently enjoying "massive premiums," Mason says; there's even a strong market for transitional fruit.
As in the United States, however, when you look at the actual numbers of organic farms they seem surprisingly low. Current figures show a total of around 850 organic primary producers in New Zealand, including some 140 organic kiwifruit orchards, 100 organic pipfruit orchards, 60 or so organic dairy producers and about 50 farms raising organic beef, lamb and wool. As an export-focused country, New Zealand's organic evolution has been strongly influenced by the establishment of organic regulations in other parts of the globe. First came the European Union Regulation 2092/91, then Japan's organic standard in April of 2001, followed by the United States' National Organic Program implementation in October 2002. "There's been a big shakedown period each time in terms of what's required, because these things can be read in a lot of different ways," Mason says, but by now most of these market-access and certification-equivalence issues have been resolved. Today New Zealand enjoys Third Country Listing with the EU and recognition by the USDA; BioGro is IFOAM-accredited and recently received official foreign certification status from the Japanese government. The main challenge for the organic sector now is to figure out how to encourage more farmers to make the transition so supply has some chance of keeping up with demand. There have been no direct subsidies for transitioning here, as there have been in the E.U. and U.K., nor even payments to help defray the costs of certification, as there are in the United States. But there is some government money now available to provide technical support to transitioning farmers and other types of outreach efforts for organics. Funding for the national Organic Sector Strategy study was authorized under a parliamentary coalition forged between the Green and Labour Parties after the 2002 elections; one of the principal outcomes was the formation of an umbrella organization known as Organics Aotearoa New Zealand (www.oanz.org.nz), which has since been granted another NZ$2.15 million to work toward the $1 billion organic sales target. The hope, Mason says, "is to help the organic sector move up to the next level." (OANZ has a mandate to be self-supporting within three years.) A natural fit? New Zealand's advantages in organics are largely synonymous with its advantages in the farming sector generally: A temperate maritime climate that favors grass-based farming, favorable island biogeography combined with strict biosecurity protocols to limit importation of new pests and diseases, relatively low labor rates, a strong overall agricultural economy with well-developed infrastructure and support services. Not to mention what's referred to here as "Kiwi ingenuity," a cultural tradition of innovation and technical expertise developed through decades of colonial making-do in the farthest corner of the globe.
One strong point made by the Organic Sector Strategy document has to do with the enormous natural synergy between organic farming and New Zealand's "clean, green" image. The N.Z. economy has two main pillars: tourism and agricultural exports. Since the tourism economy relies heavily on that pristine ecological image (witness the highly successful "100% Pure NZ" overseas advertising campaign), enhancing the extent to which the farming sector lives up to that ideal is doubly valuable. Like the United States and Britain, New Zealand has also witnessed a culinary revolution over the past decade or so, with terrific knock-on benefits for farmers. Although the CSA model has been slow to take hold (Mason suggests this is because Kiwis "prefer to shop"), farmers' markets are undergoing a renaissance, with year-round, producer-only markets springing up in towns large and small. There are outstanding restaurants everywhere you go, many of them emphasizing fresh, local, organic ingredients. The number of Slow Food chapters is also on the rise. A final plus for organics in New Zealand comes from the country's GE-Free status, although the continuation of that status is by no means taken for granted here. A 2001 Royal Commission on Genetic Modification crystallized both the near-universal popular rejection of GMOs and the government's perplexing unwillingness to take a strong stand against them. A nationwide moratorium on commercial release of GMOs was allowed to lapse in October 2003, but so far has been maintained in practice (although there have been a handful of research trials). In a twist of political justice, it was public opposition to genetic engineering that largely contributed to the success of the Green Party in the 2002 parliamentary elections, which in turn led to the coalition with Labour and the funding of the Organic Sector Strategy planning. Getting on the bandwagon So what is holding farmers back from making the transition to organic? Mason cites a lack of information, conflicting advice from agricultural leaders and lingering prejudices among the non-organic farming sector. An article by Mike Butcher, technical officer for Pipfruit NZ, in the February 2007 issue of Horticulture News provoked outrage among organic supporters by declaring that New Zealand's temperate maritime climate was "too wet" for organics. (Pipfruit NZ is funded by a levy that applies equally to organic and non-organic producers.) On the other side of the aisle, Green MP Sue Kedgley's outspoken advocacy of organics has raised concerns about alienating mainstream farmers, the very constituency that needs to be convinced. Organic farmers in New Zealand, as elsewhere, run the gamut from those motivated by philosophical reasons to those motivated primarily by economics. Still, Mason says, many farmers here "seem to think it's a flash in the pan." Chalking this up to farmers' natural conservatism doesn't quite wash in a country in which farmers have gotten used to following market demand in the absence of subsidies. In fact, N.Z. farmers are sometimes criticized for being too faddish, leading to boom-and-bust cycles in niche sectors. Olive orcharding, to take one example, has expanded from being more-or-less non-existent 20 years ago to almost a million-tree industry today, with small-scale producers selling farm-pressed olive oils at farmers' markets from one end of the country to the other.
Vineyards are another case in point. Successive regions of New Zealand have been transformed into wine country over the past two decades, with bare land in promising areas now selling for NZ$100,000-NZ$200,000 per hectare (roughly US$30,000- US$60,000/acre) and higher, not including the price of the vines, posts, trellising, machinery, buildings or other facilities. Meanwhile, wine industry observers from Australia to France are contending with a mounting wine-grape glut that threatens to send prices plummeting and small-scale producers out of business. "It's funny why wine is so much more attractive" to would-be owner-investors than organics, Mason agrees. (Viticulture is another growth category within N.Z. organics.) "It could be that some people see it as too hard of work if you can't do it with chemicals." It may also be that people fail to grasp the sheer magnitude of the demand. "If groups of farmers could be taken over to see these Whole Foods Markets in the U.S. and the U.K.," Mason muses, they would swiftly be convinced. Critical needs: research, outreach In terms of production, the biggest challenges faced by N.Z. farmers converting to organic vary by sector, Mason says. For vegetable growers it's weed control; for kiwifruit producers, yield; for apples, it's black spot (the fungal disease Venturia inaequalis, better known in the U.S. as apple scab) and to a lesser extent yield. "For dairy, it's getting through the conversion period; with sheep it's changing breeds, typically to get through worms and lice." With guidelines to these and other basic realities available via the websites of BioGro and other groups, like the New Zealand Soil & Health Association, "The questions we get from farmers are different than what they were a few years ago," Mason says. "It's rare now to have to really take their hand at step one." Nowadays farmers come to organic "either because they've got a strong market demand, or because they've seen someone else doing it. Their questions are not, 'What is organic?' but 'How can I make my own farm/orchard situation work?' So they're looking for quite a high level of information."
It seems reasonable to look to the country's agricultural researchers for some of this advanced advice. New Zealand's ban on agricultural subsidies doesn't mean there's zero government support for agricultural research (the heady dreams of Cato Institute pundits in the U.S. notwithstanding), although funds are limited. Four government-owned Crown Research Institutes—Crop & Food Research, AgResearch, HortResearch and Landcare—do primary and applied research on farm-sector-related questions, and there are some initiatives afoot relevant to organic farming systems (and certainly many concerned with agricultural sustainability). Educational institutions are also recognizing the shift. Massey University set up the country's first organic dairy research facility in 2001, and a number of schools and polytechnics now offer practical courses in organic and biodynamic management. Still, Mason would like to see more. "There's never been a
political recognition that all agriculture benefits from research
that's been done in organic," he points out. "In terms
of value for money, that's where research dollars should be spent."
Many of the management practices central to Zespri's "KiwiGreen"
reduced-input program, for example, grew wholly or partly from organic
research. Other crucial innovations have originated among pioneering
organic farmers. All eyes are now on the work to be coordinated
under Organics Aotearoa New Zealand to recognize those achievements
and spread their successes more widely throughout the country.
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