Organic Agriculture and Certification: An Overview

A. Organic Agriculture

Organic agriculture is a farming system which excludes the use of synthetic chemicals such as fertilizers, pesticides, or antibiotics in both crop and livestock farming. Unlike conventional agriculture, which relies heavily on external input, organic agriculture relies on ecosystem management. More formally, IFOAM¹ (2005) defines organic agriculture as a “holistic production management system which promotes and enhances agro-ecosystem health, including biodiversity, biological cycles, and soil biological activity. It emphasizes the use of management practices in preference to the use of off-farm inputs, taking into account that regional conditions require locally adapted systems.”

Increasing food safety and climate change concerns have led to a growing demand for socially and environmentally produced food such as organic food. Based on estimates by the International Trade Center, in the medium-term, the world market for organic products is expected to grow at an average rate of 15–20% per annum.

The supply-demand gaps in developed countries generate opportunities for developing countries to produce and export organic products. The substantial price premium that this market segment offers is its most important initial pull upon developing countries. More recently, developing countries have begun promoting organic agriculture in view of its other non-income benefits such as improved household health, food security, and environmental conservation.

There has been an increase in research supporting the environmental and climate change benefits of organic farming. Heppery et al. (2008) found that carbon sequestration rates in organic farming greatly exceed rates for conventional farming and also utilize 33% less energy than conventional farming. A study done by Granstedt and Kjellenberg (2008) concluded that compensating humus degradation through the incorporation of harvest residues and farm manure can potentially serve as an important carbon sink, reducing surplus carbon dioxide (CO₂) in the atmosphere.

Bandel and van den Bos (2008) projected that the production of 50,000 tons of compost would lead to the reduction of CO₂ by 25,000 tons. Although composting lead to soil carbon sequestration, farmers have difficulty monitoring the amount of sequestered carbon in order to potentially receive the carbon credit payment. In this regard, it is easier for certified organic farmers, with their established farm inspection systems, to monitor and claim carbon credits compared to conventional farmers who have no such practices. This can be an added incentive for farmers to adopt sustainable practices which generate global public goods.

B. Types of Organic Certification

Since consumers cannot visually distinguish between OA products and chemically-grown products, a certification system is required. The organic certification systems can be classified as follows:

1. First-party certification: In the 1980s, organic agriculture was promoted by grassroots organizations or NGOs composed of consumers and farmers who sought alternative methods of food production, as well as product distribution system. At that time, organic food was sold directly to consumers through community-supported events such as box schemes or farmers' markets. This type of arrangement emphasized face-to-face relationships and trust rather than formal certification, and was critical in building confidence in the integrity of organic products. This arrangement is classified as first-party certification or self-claimed organic certification, done at the community level or by individual groups of farmers. Self-claimed certification can suffice if the market size is small and concentrated in a local area. The group-claimed certification or community-based certification is sometimes known as a “participatory guarantee system.” These participatory systems are perceived as more credible than individual ones, and are able to deliver a higher volume of produce to a wider market.

2. Second-party Certification: As markets expanded beyond local areas, face-to-face relationships become less feasible. As a result, many NGOs and traders who continued to maintain close contacts with farmers acted as trading agents, and provided consumers with information about farmers and their production processes to consumers. This type of arrangement wherein a trading agent ensures product quality is classified as second-party certification. The degree of effectiveness of second-party certification depends largely on the trading agent's reputation. This concept may be compared to the branding of products or the so-called franchising of agriculture. Many supermarkets are using this system for their organic products.

3. Third-party Certification: As the international trade of organic products continued to expand, a more standardized system of certification was developed. This system developed a more efficient process of providing information across borders, and in so doing, reduced time and costs. Through this arrangement, national and international organic standards were introduced to OA farmers. To ensure that all certification standards were adhered to, an impartial third-party certifier reviewed the production process. This is known as third-party certification.

Today, these three certification systems coexist in the market. However, in the context of international trade and developing global partnerships for large-scale poverty reduction, third-party certification remains the most efficient. The remaining part of this paper focuses on issues and standards essentially used in the structuring of third-party certification.

C. Organic Standards

The earliest organic standards were developed independently by private associations. Some groups started their own certification systems to assure buyers that organic products were produced according to the supposed standards (FAO 2001; Rundgren 2002). Standardized international guidelines were nonexistent until IFOAM published its Organic Standards in 1980. The IFOAM Basic Standards (IBS), together with the Codex Alimentarius Guidelines for organic agriculture were adopted in 1999, and have since been the international guidelines used by national and private standard-setters (Rundgren 2002).

As the demand for organic products increased and more conventional distribution networks such as supermarkets entered the market, the development of organic standards and certification has gained momentum. Many countries have defined their own standards, while certain private associations continue to develop their own organic labeling systems.

The current organic certification system requires third-party certification before a product can be labeled organic. Organic certification verifies that the product has been produced, stored, processed, handled, and marketed according to the appropriate organic standards (IFOAM 2005; FAO 2001).

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1. Lauren
   (posted 23 November 2008 / 08:28:08 AM)
   
   The Australian Government needs to listen to this article and put into place an actual timeframe for when they are going to meet all the MDGs.