Tuesday, November 6, 2012

How Much Are South Africa's Organic Farms Worth?

As the battle for the soul of the organic food sector continues to rage across the world, South Africans have not been spared from the conflicting data and inflamed exchanges that have underpinned the debate.
As in much of the world, the food sector in South Africa has been sharply divided over whether organic production methods offer benefits. Both sides are now hoping that they can find more common ground as the country moves closer to developing a national policy. 

With so many vested interests, especially those of big fertilizer companies and large-scale commercial farmers, it has been a difficult road to negotiate. And this has not been helped in recent months by a series of conflicting reports and marketing data on organic foods. These have not cleared the uncertainty of an industry said to be worth over $50 billion globally and which is expected to grow to $104,5 billion by 2015. 

Organic foods are produced without using synthetic pesticides, chemical fertilizers or animal antibiotics. Many countries now require strict food labeling to distinguish organic food from those produced by large commercial farmers using synthetic methods. 

Raymond Auerbach, professor of soil science and plant production at the George campus of the Nelson Mandela Metropolitan University, is one of the few academics in South Africa working in this field and is founder of the Biodynamic Agricultural Association of South Africa. 

Auerbach says the country has a long history of producing organic foods, largely because in the rural areas most of the food comes from smallholdings and the private gardens maintained by subsistence farmers. 

According to Auerbach, South Africa had only about a hundred large-scale commercial farmers until the late 1990s and, even though there appears to be a strong consumer demand for organically produced foods, the country has been slow to catch on. 

"There is the common misconception that organic farming doesn't work on a big scale," says Auerbach. "But with fertilizer becoming so expensive, organic farming is becoming more mainstream." 

According to the organisation Inspired Evolution Investment Management, South Africa's organic sector comprises about 250 certified farms and 45,000 hectares of certified organic land. It accounts for just a fraction of the land used for agriculture. Yet this area remains one of the fastest-growing sectors in the food market, driven mostly by the private, independent organisations. 

Government has developed a policy for the organic food market that was launched earlier this year. Now a number of private organisations are attempting to draft a set of protocols and standards that will regulate the sector. 

"We have more than 100 farmers who farm organically but the certification process remains a headache," says Auerbach. 

And because only a few supermarket chains, such as Woolworths and Pick n Pay, have dedicated organic food sections, South African consumers are mostly buying organic food at private markets. This could be detrimental for large food stores as research shows that South Africa has the potential to be one of the largest markets for organic foods on the continent. 

A market survey by the African Organic Farming Foundation undertaken in 2005 estimated the South Africa's organic food market was worth $100 million across all categories of produce, and predicted that this would grow by 30% by 2010. 

But the sketchy data and poor policies may also have cost South Africa a foothold in a expanding global market. Uganda is now the world's leading organic food-producing nation, with Ethiopia, Tanzania and Zambia featuring in the top 10 alongside India, Mexico and Peru. 

In the US, organic food and drink sales totaled more than $27 billion (4% of the overall market) and market research shows that customers are prepared to pay higher prices for organic produce. 

One of the chief selling points of organic food is that because of the way it is produced it tastes better and may offer some health benefits although this has been disputed by research from Stanford University that found organic produce, including meat, isn't any better when it comes to vitamin and nutrient content. 

It does reduce exposure to pesticides and antibiotic-resistant bacteria but the risks of these are minimal in mass produced foods. 

Using the data from more than 200 studies comparing organic and regular food, researchers found that the latter did not have more nutrients or minerals, nor did it have any significant effect in preventing infections or diseases. 

However, Auerbach says there are reasons beyond the nutritional benefits for organic foods to remain a better choice. 

"The environmental factors alone should be cause for concern," Auerbach says. "We can show that just because of the use of chemicals there are 15% fewer proteins [in meats] and 15% more calories in vegetables and grains," he added. 

The main problem, he says, both in South Africa and in the rest of the world, is that there should be better marketing, research and training around the production of organic foods. 

The question is - can organic farming be commercially viable? 

Just a fraction of those farmers producing organic products is doing so commercially. Production by small emerging farmers could have a significant impact on the demand for their produce. A study undertaken three years ago by the Department of Trade and Industry found that there was enormous potential for the development of small-scale organic farmers. It said this could be extended to large-scale ventures. 

In Europe and the US, organic foods can cost between 30% and 50% more than those using major production methods whereas in South Africa the price differential is closer to 50%. For many people a major concern is that because of its limited scale organic farming cannot address the serious challenges of food security and world hunger. - Biz Community

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