GON « Global Organic Network International

Heinz W. Kuhlmann

Representative of NürnbergMesse in Japan

Organic Agriculture in the World

The demand for organic products was not much affected by the global economic crisis.
Organic agriculture is continuously growing. According to recent surveys presented at BioFach 2011 in Nuremberg, Shanghai and the IFOAM World Congress held in Korea in September 2011 in well over 120 countries more than 35 million hectares are managed organically by an estimated 1.5 million producers. The true figures would be more than double taking into account that the majority of farmers using organic methods are not yet certified. In addition to organic farmland, there are over 65 million hectares of registered areas for organic wild collection projects, mainly in Europe, Africa and Asia. The total collection area is probably much larger because not all regions and projects have been surveyed and identified.

The countries with the largest organic areas are Australia, China, Argentina and the USA. With the support of the government and international organizations the organic agriculture and production in India is rapidly increasing and serves as a base for BioFach India which will be held for the third time in November in Bangalore.

Due to many new EU member states and growing demand, organic farming in Europe showed a steep increase. The leading countries are still Italy, Spain and Germany, but there is also much growth in Eastern Europe, especially in Ukraine. In Japan not much has changed and the estimated organic farmland is still somewhere between 5,000 to 6,000 hectares. Due the damages caused by the earthquake in March, organic farmland is developed in other regions.

The International Organic Market

According to Organic Monitor, the global market for organic food and beverages is recovering from the economic slowdown, with revenues of about US$ 60 billion in 2010.
The European market for organic food and beverages is the largest in the world, followed by North America. Both markets continue to grow and represent over 80% of global revenues.
Raw materials and increasingly also processed goods are imported in large volumes from Australia, Africa, Asia and Latin America.

The consumer demand for natural and organic products is increasing all over the word, and the retail sales volume is estimated with over 60 billion US-Dollars. It is difficult to obtain exact figures because consumers and retailers in many countries (especially in Asia) do not distinguish clearly between organic and natural products.

The Organic Market in the Asia-Pacific Region

The organic movement in the region is making good progress, often with the support of central and regional government organizations. For 10 years FAO, IFOAM and UNCTAD have worked in partnership to address and reduce barriers to the trade of organic products resulting from differences in organic standards and regulations. Many conferences and meeting in several countries have brought much progress for achieving these goals.

Market and New Developments in Japan

The growth of organic agriculture and the demand for organic products in Japan are still moderate. Nevertheless, the Japanese market is (perhaps after China) still the largest in Asia and has a big potential, especially if natural non-food products are included. According to recent surveys and estimates the current total volume of domestic and imported organic products represents a value of over 150 billion Yen (approx. 1.8 billion US$). The market for so-called green food (grown with reduced agrichemicals and pesticides) is much larger and estimated at around 600 billion Yen. These are impressive figures, even though they present only a fraction of the total market for conventional food and beverages.

Until now the demand and market for organic products in Japan has been increasing at a slower pace than in Western and some Asian countries. Major obstacles are a limited range and variety of available products in supermarkets and other shops and especially the comparatively high prices. With few exceptions organic products, whether from domestic production or imported, are 2-3 times more expensive than comparable conventional products. This is similar in other Asian countries and quite different from Europe and North America where the price gap is much smaller (20-30% and sometimes more, depending on the product) and organic products are affordable for people with an average income. This unfortunate situation will only change if and when major food companies and retailers go organic and offer a larger variety of organic products. There are already some indications that this will happen in the not too distant future. A major reason and motivation for both producers and consumers is the growing concern about safe food and reliable sources for raw materials.

Like elsewhere, Japanese consumers are concerned about food safety, and the government values a high ratio of self-sufficiency. Revitalizing domestic agriculture is an urgent national priority. Promoting full-fledged organic agriculture which provides safe, healthy and quality foods that secure a stable income for producers and sustainable food production should be the responsibility of Japanese agriculture. Nevertheless, Japan will always depend on a large share of imported food and must avoid international critic and problems resulting from unreasonable restrictions in food imports.

The earthquake on 11 March 2011 and subsequent disasters have caused many human losses and great damage to the Japanese economy, including organic farming. Rebuilding and recovery are progressing, and the production and demand for organic products will also gradually increase.
As a result of the earthquake (s. below) and even more because of the accidents in the nuclear power plants and resulting in radiation and destruction of a large agricultural area, the awareness and demand for safe and healthy organic products is increasing.

Organic JAS

A major reason for the current stagnation of the organic market in Japan is the general lack of awareness about organic products among Japanese consumers. Ten years after its introduction Organic JAS is still not well and widely known.

Organic JAS which was introduced in 2001 (when the first BioFach Japan was held) is based on EU standards. From the beginning Japan and the EU have held many meetings and negotiations about the equivalence status, and in May 2010 Japan has finally been added as the eighth country to the EU list of third countries whose organic certification and regulatory programs are deemed to be equivalent to the EU Organic Regulation. The other approved countries are: Australia, New Zealand, Argentina, Costa Rica, India, Israel and Switzerland.

Japan more or less accepts organic products which have been certified according EU regulations. However, such products are still subject to Organic JAS regulations, a process which is time-consumingand expensive, before they can be sold on the market.

Some organic products which can be certified and sold in other countries are not yet covered by Organic JAS. Among them are, for example, fish and marine products and many so-called “organic wild collection” products. Organic wine, sake and other alcoholic beverages cannot carry the label “Organic JAS” for tax reasons, even though the ingredients, such as rice or grapes, can be certified.

In 2010 the Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) started a project for the promotion of organic products and support of Japanese organic farmers.
As a part of this project MAFF has organized and subsidized a large group pavilion where organic farmers from many regions can display their products and find through the matchmaking program potential buyers and distributors. After this project was successful last year, the stand and matchmaking continue at BFJ 2011.

There are several indicators that Japan will make progress with organic products.
IFOAM Japan (IFJ) in cooperation with a team of experts has conducted an extensive survey about the Japanese organic market. The results were published last summer (in Japanese).
In the global context Japan is ready for organics. The future of organic products mainly depends on the choice of consumers. The IFOAM report illustrates opinions and preferences of the consumers, the degree of cooperation on the organic market between agriculture, trade and industry on one hand and the administration, research institutes and private enterprises on the other hand. Furthermore, a broad clarification of the focuses of the food chain is intended. This Organic Market Research Project originated to gather suggestions for political measures to enlarge the organic market and to possibly develop a social movement.

In cooperation with IFJ and other experts ABC Enterprises has prepared the (probably) first comprehensive English report of the Japanese organic market. This report is based on the Japanese version plus an appendix with additional articles, information and an article about the earthquake disaster in March and the aftermath.

Triple Disaster

In the afternoon of March 11 a series of powerful earthquakes up to a magnitude of 9 hit the Tohoku region in northeastern Japan. A subsequent huge tsunami caused serious damages to the coastal area and the nuclear power facilities located in Fukushima. In combination this has become one of the worst disasters in Japan’s history.

Human losses and material damage

During the following two weeks the media reported estimated losses and later actual figures (based on data from the National Police Agency)Schnappschuss (2014-10-17 12.51.20)

Rebuilding is in full process, will require much effort, money and will take a long time. Assistance and support is provided by the government, many Japanese and international organizations, NGOs and private people. — IFOAM/IFJ is also participating in these efforts with several programs and projects for organic farmers.

In the afternoon of March 11 a series of powerful earthquakes up to a magnitude of 9 hit the Tohoku region in northeastern Japan. A subsequent huge tsunami caused serious damages to the coastal area and the nuclear power facilities located in Fukushima. In combination this has become one of the worst disasters in Japan’s history.

Reaction by foreigners and foreign media

After the triple disaster — earthquake, tunami and accidents in the atomic power plants — many foreigners were scared and left the Tokyo region and/or Japan. Most foreign media presented a very negative and one-sided picture — based on the situation immediately after the disaster. This added to the scare and neglected important facts, such as the efforts to repair the damage and bring relief to the affected people and region.

Furthermore, most people abroad were and still are not aware that the damage, risk and potential danger is limited to Fukushima and neighboring prefectures… and that there is little danger in the Tokyo area and prefectures further south.
Japanese people and long-time foreign residents know this, but abroad it is different and many foreigners are reluctant to come to Japan for tourism, business and/or participation in trade fairs and other events.

Damage to agriculture and organic farming

Many conventional and organic farmers suffered great losses and/or lost everything.
Farmers are also facing heavy losses from boycotts and bans on their produce. Growing domestic and international unease about the spread of radioactivity has led to bans on the sale of products from the affected region. Many farmers will lose this year’s harvest, and those who were living in the evacuation zone will not be able to return for many years. However, there are plans to grow oil seeds, such as sun flowers and rape, which absorb cesium and may be used for bio fuel.

More than most other nations Japan has experienced and overcome many natural and man-made catastrophes: vulcanic eruptions, earthquakes, tsunami, taifuns, nuclear bombs and minor and recently major damages in atomic power plants. With combined effort, including support from foreign countries and experts, Japan will recover and rebuild and also learn from the disaster.

Cherry Blossoms and Radiation Fear

Spring is one of the most beautiful seasons in Japan when the cherry blossoms are moving from the south to the north. This year, however, it is the time of the worst crisis since the end of the Second World War. But despite all problems and worries many Japanese all over the country have enjoyed the short-lived cherry blossoms and gathered with friends in parks under blooming tress, enjoying drinks, snacks and singing together. By doing so, they could at least for a while forget the still serious situation, especially in the Tohoku region.

Rebuilding and Recovery

Rebuilding is in full process. It will require much effort, money and will take a long time. Assistance and support is provided by the government, many Japanese and international organizations, NGOs and private people. — IFOAM/IFJ is also participating in these efforts with several programs and projects for organic farmers. One of these projects is “Fukushima Goro”, initiated and run by IFJ and associated experts and volunteers. This project has several aims and targets, such as helping organic farmers who lost their land to start again at a new place, perhaps on idle lands abandoned by the owners or on islands with vacant land.
With the support of producers and retailers, matchmaking and networking with organic farmers and a new organic brand “Fukushima Goro” will be estalished.

Outlook . . . What good can/may come out of the disaster

Japan was technically and otherwise better prepared for the disaster, but the magnitude of the earthquake, the destructive power of the tsunami and the resulting accidents in the nuclear power plants where overwhelming and more than the county could cope with.
Forewarning systems and high-tech facilities, such as the nuclear power plants, were supposed to be safe, even in case of a very strong earthquake. However, this proved to be a wrong assumption, and the destructive power of the tsunami was underestimated.
The danger and risk of nuclear energy is nowadays a major topic in Japan and abroad.
The Japanese government has already taken some action and hopefully will do more for developing alternative energies.

In the weeks after the earthquake there was a shortage of food, mineral water and other daily necessities and people began hoarding such products. Partly, this shortage was caused by damaged facilities and interrupted supply chains. Another major reason is the “just-in-time” system where industrial parts and other products are delivered on an efficiently organized tight schedule, so that manufacturers and shops have to keep only a small inventory. While this system works well in normal times, it obviously is week to cope with demand and needs after a natural or industrial disaster.

Another inefficiency and weakness is the traditional consensus building before anything is decided gets done. This typical Japanese system has some merits, but is certainly not suitable for disasters where quick decisions and action are required.
Also in normal times the too long decision process is often a disadvantage in the global world which requires clear and quick communication.

As usual, foreign governments, organizations and media criticized the lack of information and transparancy. This time, however, also many Japanese strongly voiced their displeasure and sometimes even anger. This may lead to a more open interaction between government, big companies and the general public.

Japan will import more

The enormous damage to agriculture, fishery and processing facilities has caused shortages in domestic food supply. Therefore, even more food than in the past must be imported.
As a result of the earthquake and even more because of the accidents in the nuclear power plants resulting in radiation and destruction of a large agricultural area, the awareness and demand for safe and healthy organic products is increasing.
Organic agriculture and production in Japan will eventually recover and probably also grow to some extent, but a larger volume of organic food and non-food products will be imported.

Growing demand and offer

As a result of the earthquake and even more because of the accidents in the nuclear power plants and resulting in radiation and destruction of a large agricultural area, the awareness and demand for safe and healthy organic products is increasing.
Nowadays, not only small and specialized shops, but also chain stores and supermarkets are offering a wider range of organic products. This trend is gradually spreading from stores downtown areas with more affluent customers to outskirts and other areas where ordinary housewives are shopping. Some high-end supermarkets, such as Kinokuniya, have more than 200 domestic and imported organic products on their shelves.

Sources : Japanese and other media

Conclusions and Outlook

Organic Agriculture in the World

The demand for organic products was not much affected by the global economic crisis.

Organic agriculture is continuously growing. According to recent surveys presented at BioFach 2011 in Nüremberg, Shanghai and the IFOAM World Congress held in Korea in September 2011 in well over 120 countries more than 35 million hectares are managed organically by an estimated 1.5 million producers. The true figures would be more than double taking into account that the majority of farmers using organic methods are not yet certified. In addition to organic farmland, there are over 65 million hectares of registered areas for organic wild collection projects, mainly in Europe, Africa and Asia. The total collection area is probably much larger because not all regions and projects have been surveyed and identified.

The countries with the largest organic areas are Australia, China, Argentina and the USA. With the support of the government and international organizations the organic agriculture and production in India is rapidly increasing and serves as a base for BioFach India which will be held for the third time in November in Bangalore.

Due to many new EU member states and growing demand, organic farming in Europe showed a steep increase. The leading countries are still Italy, Spain and Germany, but there is also much growth in Eastern Europe, especially in Ukraine. In Japan not much has changed and the estimated organic farmland is still somewhere between 5,000 to 6,000 hectares.

Due the damages caused by the earthquake in March, organic farmland is developed in other regions.

The International Organic Market

According to Organic Monitor, the global market for organic food and beverages is recovering from the economic slowdown, with revenues of about US$ 60 billion in 2010.
The European market for organic food and beverages is the largest in the world, followed by North America. Both markets continue to grow and represent over 80% of global revenues.
Raw materials and increasingly also processed goods are imported in large volumes from Australia, Africa, Asia and Latin America.

The consumer demand for natural and organic products is increasing all over the word, and the retail sales volume is estimated with over 60 billion US-Dollars. It is difficult to obtain exact figures because consumers and retailers in many countries (especially in Asia) do not distinguish clearly between organic and natural products.

Because of high retail prices and low incomes for the majority of the population the markets for organic products are only growing slowly in developing countries. However, there are also some exceptions in Asia, in particular in the Middle East, Japan, Korea, Taiwan, Singapore and major cities in China including Hong Kong.

In Japan (and other Asian countries) most consumers think about organic products — even if they can clearly distinguish between natural and organic — mainly in terms of consumables. However, there are many other non-food natural products, such as cosmetics and body care products, remedies and supplements as well as natural textiles, such as organic cotton.

Market and New Developments in Japan

Japanese people have a strong interest and long tradition in consuming natural, healthy and nowadays in particular “safe” food. Therefore, there is a potentially huge market for such products. However, the awareness for certified organic products is still rather low and the retail prices of most items are too high for the ordinary housewife. Other obstacles are a rather limited range of organic products which are available in specialized shops and (to an even lesser degree) at major super markets and retailers.

The earthquake on 11 March 2011 and subsequent disasters have caused many human losses and great damage to the Japanese economy, including organic farming. Rebuilding and recovery are progressing, and the production and demand for organic products will also gradually increase.

There are several indicators that Japan will make progress with organic products.
IFOAM Japan in cooperation with a team of experts has conducted an extensive survey about the Japanese organic market. The results were published this summer 2010 (in Japanese), and an English version with additions and updates was prepared by ABC Enterprises in 2011.
In the global context Japan is ready for organics. The future of organic products mainly depends on the choice of consumers. The IFOAM report illustrates opinions and preferences of the consumers, the degree of cooperation on the organic market between agriculture, trade and industry on one hand and the administration, research institutes and private enterprises on the other hand. Furthermore, a broad clarification of the focuses of the food chain is intended. This Organic Market Research Project originated to gather suggestions for political measures to enlarge the organic market and to possibly develop a social movement.
The Japanese Ministry of Agriculture, Forestry and Fisheries has started in 2010 a project for the promotion of organic agriculture and products. In an effort to bring farmers/producers and buyers together, this project includes a group pavilion at BioFach Japan where both sides can meet.

Japan has been added to the EU list of third countries whose organic certification and regulatory programs are deemed to be equivalent to the EU Organic Regulation.

The Organic Market in the Asia-Pacific Region

The organic movement in the region is making good progress, often with the support of central and regional government organizations. For 10 years FAO, IFOAM and UNCTAD have worked in partnership to address and reduce barriers to the trade of organic products resulting from differences in organic standards and regulations. Many conferences and meeting in several countries have brought much progress for achieving these goals.