Apr 7, 2015


An open letter on better organic sector policies for New Zealand

Category: General
Posted by: admin

I am writing on behalf of Organics Aotearoa New Zealand,1the organisation which represents the organic sector in New Zealand, to wish you and your party all the best for the forthcoming election. OANZ also wants you and your party to know that New Zealand urgently needs a new suite of policies – along with judicious investment – to grow the organic sector significantly in order to enhance national well-being by growing the national income without harming our natural environment. We hope your party supports these goals, and sees how they are intimately related. We ask you to share this communication with your party spokespersons on primary industries, food safety, business, employment, environment, conservation, and Maori affairs.


As you will be aware, in 2009 the Government adopted an 'Export Double' strategy for primary industries, with the aim of doubling the value of primary exports by 2025. As you will also be aware, this doubling of value can not be achieved merely by a doubling of volume. There are economic reasons for this (growth in value in primary commodities markets does not follow a simple linear upwards pattern, but is subject to market forces, which impose a drop in value whenever the volume of supply exceeds demand); and also environmental reasons (some forms of primary production have already pushed beyond sustainable ecological limits, and others are close to doing so). Therefore doubling in volume is not the way to go, and a lot more attention needs to be paid to how doubling in value can be achieved from lower volumes of primary exports.


The obvious way to go is by increasing both the economic (market) and environmental (sustainability) value in the product so that we can take our goods to market with an authentic story about quality products, grown with care for the health of consumers and for the health of the environment. Organic primary products tick all those boxes. Countries with a strong organic sector also show a significant association with increased rural employment, increased on-farm processing, and increased value added to raw products. (See, for example, a 2006 University of Essex survey of employment on organic farms in the UK which found that organic farms generate 30% + more jobs per farm than equivalent non-organic farms.) 2


A growing number of consumers are prepared to pay a premium (as high as 20%) for food, beverages, textiles, and health and hygiene products that are free from pesticide, herbicide and veterinary chemical residues, synthetic processing chemicals, and genetically-modified organisms. (For figures on the steady growth in export markets for NZ organic products - an average of 8% per annum in 2010, 2011 and 2012 - see the New Zealand Organic Market Report 2012.) 3 Markets for raw organic products often pay much higher premiums. For example, for linseed the regular price is currently $800/tonne whereas organic linseed sells for $2600/tonne – a 325% premium.


Why are increasing numbers of people prepared to pay more for organic products? Research shows that in addition to personal and family health concerns there are now growing numbers of consumers (especially younger ones) who factor the environment into their purchasing decisions. The Colmar Brunton Better Business Better World 4 surveys show a significant increase in those buying organic products regularly between 2011 and 2013, and the reasons given include concerns about pollution of lakes and rivers, mistreatment of animals, conservation of nature, and genetically-modified organisms.


They also include climate change – and there is now robust data, accepted by the UN Food and Agriculture Organisation as the basis for its promotion of organic agriculture as a significant way to mitigate and adapt to climate change 5 - to show that the organic approach conserves water, soil, energy and carbon, and maximises their sustainable use.


Yet although New Zealand claims to be a world leader in farming, the organic sector in New Zealand is far smaller than in other OECD countries, where it is recognised as being a vital part of sustainable agriculture. In Australia the land area being farmed organically is 2.9% of total farmland – nearly 3 times as much as New Zealand at only 1.1.%. In Europe, as the graphic at the end of this letter shows, it's 5.4% overall, with some countries being much high than that. Austria and Sweden lead the way with percentages of total farmland under organic management (19% and 15.7%) while Spain, Italy and Germany lead in terms of total area in organic production, with a million or more hectares. Furthermore, the trend has been consistently upwards, with the area farmed organically increasing by an average of 500,000 ha/year in the decade between 2002 and 2011.


Other countries have much bigger organic sectors because those countries' governments have invested in organics. For example, the number of certified organic farms doubled in Canada between 2001 and 2011 thanks to wise government investment and also policy changes (such as regulation of the term organic). The Canadian government continues to invest in growing the organic sector, recently announcing an $8 million CAD investment in an organic science cluster based at Dalhousie University that will “help the sector respond to market demand and capture new opportunities” and “bring the best and brightest together, from academia, government and industry, to focus on cutting-edge research and development that will improve the organic sector’s competitiveness, market potential, adaptability and sustainability.” 6


Yet despite the proven potential of organics to make the biggest sustainable contribution ever to doubling the value of primary exports, it has been largely ignored and neglected by government in New Zealand in the past seven years. There has been no new funding for research, education, market assistance or sector capacity building in that time, and very few of the goals envisioned in the Change Table set out on p. v of government and organic sector created document Organic Sector Strategy 2003 7have been achieved.


Without any assistance from government some individual organic businesses have nevertheless managed to grow, but it has been a hard struggle with many setbacks, and the organic sector is nowhere near realising its full potential. Due to lack of structural support for the sector overall growth is much lower than envisioned and planned for in the Organic Sector Strategy 2003. The loss is New Zealand's – if organics had grown at the rate envisaged in 2003 it would have created $1 billion worth of exports by 2013 – instead of falling a long way short with only $217 million in 2012. Organic farmers pay annual levies to primary industry sector support organisations yet none of that money has so far been invested in helping them achieve their sustainable and profitable production goals.


It is clear that unless the sector receives the same level of support that other primary industry sectors receive (for example, the level of research and other investments in the sector overseen by bodies like DairyNZ or HortNZ) it will continue to under-perform, and New Zealand will continue to lose a huge opportunity to meet that Export Double goal sustainably.


Therefore it is vital that the next government of New Zealand gets serious about growing the organic sector, including making the investments required to do so. OANZ would be pleased to hear from you that your party intends to get serious. A coherent suite of policies is urgently needed in order to support the sector and our members wish to help design them. If you are in government after the election we look forward to working with you on achieving the sustainable growth goals that are in New Zealand's best interests, and will be seeking the earliest opportunity to present our 'NZ Inc' business case for more investment in organics to the relevant ministers.

Brendan Hoare