Asia's Farmers Struggle for Bigger
Slice of Organic Market

ASIA'S ORGANIC FARMERS STRUGGLING TO GRAB
A SLICE OF THE MARKET
4 September, Yahoo.com

Asian consumers are joining the global trend towards organic produce but it
is American, European and Australian producers that are reaping the
benefits.

High start-up costs, climatic difficulties and the shortage of reliable
labeling schemes have conspired to leave Asia's own organic farmers
struggling to grab a slice of the fast-growing market.

"People are more aware of health issues now," said Angus Lam of the Hong
Kong Organic Farming Association (HOFA). "They've seen the food disasters in
Europe; mad cow, foot and mouth. They are concerned about GM foods and this
has helped awaken their awareness about healthy food."

Last year the international market for organic food reached US$ 20 billion,
with Japan eating up nearly three billion of that, according to IFOAM and
Taiwan gobbled up $ 50 million worth of organic food and Singapore $ 3.5
million, according to the Organic Trade Association (OTA). Figures were
unavailable for Hong Kong and Thailand, but the OTA has put them on its hot
list of emerging organic markets where high start up costs and low yields
for local farmers meant there was "little domestic competition".

Some supermarkets in Thailand say demand for organics jumped 60 per cent
last year, while in Hong Kong, local supermarket chain ParknShop said demand
was "encouraging". But while supermarkets that stock their shelves with
organic vegetables from around the world are providing customers with more
choice, the issue of imports has split the industry.

"The basic foundation of organic farming is respect for the environment,"
says HOFA's Lam. "The extra use of petrol and energy for transport, to keep
things dry and cold in a refrigerated truck, goes against this. Also you
see extra packaging on imports, including non biodegradable foam containers.
This is a very controversial subject."

"We are also very much worried that organic imports might drive Japanese
organic agriculture to the wall," said Sanae Sawanoburi, International
division head at the Japan Organic Agriculture Association, a private sector
organization with some 3,000 members. She adds that the biggest threat to
Japanese organic agriculture is imports from China, where cheap labor, a
knowledge of old-style farming and vast tracklands of arable fields enable
it to offer cheaper prices.

But for Lee Chun-chung, who owns one of the 12 organic farms scattered
across the hilly hinterland of Hong Kong, imports are invaluable. The hot
and humid climate and torrential rainstorms that descend on the territory
from May to September leave plants vulnerable to pests and weeds, all of
which must be treated naturally according to organic farming guidelines.
In the meantime to keep his customers loyal - including the territory's only
organic vegetarian restaurant - Lee has to supplement his own crops with
imports from Australia to ensure a year-round supply.

The problems of producing in a sub-tropical climate, also mean that the
price of Lee's fruit and vegetables are at a premium. Organic apples from
Lee's farm, Organic Country Ltd., retail for HK$ 5 (US$ 0.64 ) apiece, three
times the cost of organic applies imported from the United States. It
would be even more expensive if Lee wanted to sell his produce in one of
Hong Kong's supermarkets where he says he would have to pay a "shelf fee"
and cough up costs for packaging and labeling.

Imports also have the edge on local produce here because they carry a
recognized, well respected label of organic authenticity, says HOFA's Lam.
Japan first had an organic label in 1992. Taiwan introduced its own
government certification scheme in 1999 and an independent network of
farmers and NGOs in Thailand have only just started to award organic
licenses.

Hong Kong's HOFA hopes to launch the first organic stamp of authentication
later this year that will provide farms with credibility and customers with
a quality guarantee. This would be a great help says Patricia Wong, Lee's
marketing manager. She says that there are some farms that call themselves
organic in Hong Kong but which use chemicals. She won't name them but says
it allows them to cut costs and sell at a cheaper price.

Yet there are concerns that in its attempt to hasten the development of
organic agriculture, Hong Kong will do itself a disservice. Last year the
Hong Kong Agriculture, Fisheries and Conservation Department inducted 20
conventional farms into a one-year organic conversion scheme.

New Zealand organic dairy farmer Allan McKenzie says this is outrageous.
"This conversion time is far too short to be considered organic. The
absolute minimum is three years to enable the chemicals to be eliminated
from the soil," he said. "All a fast-track classification system will do is
give the consumer a false sense of security and allow shoddy growers and
merchants to provide sub-standard food under an organic classification."