Prime Movers sector report: Organics

New Zealand's organic sector is exciting and fast-growing. Reporter KEVIN TAYLOR talks to organic farming supporters keen for people to put their money where their mouths are.

The only hint Scott Lawson's 150-hectare Hawke's Bay farm is organic are workers hand-tilling the soil in one field.

In all other aspects it could be any farm. Utes come and go. Tractors work the land.

Lawson is an animated proponent of a sector that is challenging conventional farming but is also sensitive about how organic farming is portrayed.

There is much hype about organics, fuelled in part by the debate over genetic engineering (GE).

But organics still make up only a minuscule part of the agricultural scene in New Zealand. Last year we exported more than $16 billion worth of products. Organic products totalled about $70 million of that.

The domestic market is similar in scale, at about $70 million. Even this information is based on an extrapolation of a survey of Dunedin organics retailers.

But there are an estimated 900 enterprises now certified for involvement in organics, with about 700 being primary suppliers.

The sector appears on the edge of bigger things. A recent US report on the New Zealand organics scene for the US Department of Agriculture says exports are forecast to reach US$240 million ($515 million) by 2006.

This, the report says, would be mainly driven by dairy giant Fonterra's planned entry into organic production and processing.

Many processors are also reportedly awaiting more primary producers to convert from conventional production so they can increase their range of organic products.

But a threat is looming - the prospect of fields of GE crops and livestock being allowed in New Zealand after the moratorium on commercial release is lifted in October next year.

Organics champions say allowing such a release would kill the huge marketing advantage New Zealand would have if it turned wholly organic.

Some organics farmers have threatened to rip out GE crops.

Lawson and Jon Manhire, the executive director of Organic Products Exports of New Zealand (Openz), clearly think such comments are extreme.

Lawson is mainstream in his views. He sees value in environmentally sustainable farming for both current and future generations.

But he still sees the release of GE into the environment as a big threat to organic farming - and he thinks the biggest monetary impact will be felt on conventional farming.

He argues a GE-free New Zealand offers the chance of increasing our export earnings to markets demanding GE-free food.

"Purely on an economic equation, I believe the numbers stack up. New Zealand should be protecting a GE-free environment.

"I still hope there's some sanity in the Beehive."

Seager Mason, chief executive of organics certification body Bio-Gro, says if GE is released, compliance costs will increase as more testing will be needed.

The value of organic produce will fall - as has happened in North America, where organic farmers have lost markets in Europe for their canola, corn and soy.

The requirement for buffer zones around GE sites will cut the amount of land usable for organics.

Lawson says persuading conventional farmers that it is a viable way to go is another challenge to the organics sector. He believes many farmers are too production-focused and are not listening to what the market is saying.

"The organics industry has struggled because it has not had critical mass," he says.

It is only just starting to achieve that, and only in a few sectors. Apples is one. Ten per cent of Hawke's Bay applegrowers are now certified organic.

Another challenge is getting supposedly environmentally conscious consumers to put their money where their mouths are, and buy organic.

Lawson's main crops are onions, carrots, potatoes and sweetcorn. He also grows strawberries, asparagus and squash.

He supplies domestic and export markets, and the likes of Watties' and Moore Wilson. The farm also makes the True Earth brand of fresh vegetables and preserves.

Lawson has been farming the block, part of a family farm, for 10 years. Certification as organic is now nearly finished with only two fields remaining to be passed.

Openz's Manhire says organic farming tends to become more attractive when a sector becomes less profitable.

"In 1990 we saw a lot of people go into organic kiwifruit production because the conventional market had collapsed and the prices were pretty low.

"We saw the same in organic pipfruit in the late 1990s. It went from about six growers to about 80 growers now."

Dairying may be the next big sector to start organic conversion in earnest.

Farming commentators argue changing to organics would significantly cut New Zealand farm production as we cater to niche markets in a few wealthy countries.

Lawson says yield is often lower than conventional farms, but he thinks the equation should be about dollars per hectare, not tonnes per hectare.

Manhire says one of the biggest issues facing organics is trade barriers.

"Openz has just paid MAF $250,000 to develop a market access programme to get our access into the US, Europe and Japan simplified ... but I don't anticipate that's going to be the end of it."

Mason says overseas models indicate the potential for growth in organics.

In Denmark, 26 per cent of the fresh milk market is certified organic, and in Austria, 9.4 per cent of farms are organic.

Lawson says the biggest impact will be on conventional farming, which will swing towards lower-input practices.

Apple and kiwifruit growers have moved to more targeted spray programmes. Dairy and livestock farmers will follow. "It makes sense to me," he says.

He says the organics sector could do better by supplying farmers more information about the opportunities in organics. Certification costs should also be held.

"Consumers want food safety, environmental integrity, and animal welfare. Those are all values supported by organic production," says Manhire.

Facts:

Export value: $70 million

Key exports: Fresh fruit, processed food

Key markets: Europe, Asia, North America

Number of certified enterprises: 900

Further reading:
nzherald.co.nz/primemovers