Consumers fearful of cancer and infertility wonít settle for less
The dramatic growth in global demand for organic food is beginning to make an impact on SA markets. And itís prompting an increasing number of local farmers to leap on to the bandwagon. But organic farming ó once the preserve of hippies in tie-dyed sarongs ó is a risky and costly business in SA where there is little technical assistance, and growers must often work by trial and error. For those who get it right, though, organic farming offers exciting rewards.
"We donít lust believe the demand for organics is going to take off in SA, we know it," says Mark Swilling, director of the Spier estate outside Stellenbosch which boasts the largest organic vegetable farm in the Western Cape, Go Organic.
"The global growth in organic agriculture is 20% a year. We think thatís an underestimate based on what weíve seen locally and the opportunities weíve had for export," says Swilling. "We canít meet a third of our current demand." The farm sold organic produce worth R50 000 in December alone. Organic products are grown, processed and packaged without using synthetic chemicals and in a manner which does not harm the environment.
Estimated at US$21,4bn/year, the or-ganics industry is the fastest-growing agricultural segment in the world, In the UK, farmland under organic production increased live-fold between 1998 and 1999 in response to insatiable consumer demand fanned by the backlash against genetically modified food. With demand for organic food growing almost twice as fast as supply in the UK, more than 80% of its organics have to be imported, creating new opportunities for farmers around the world.
Some fear that unless SA farmers shift to organic production, they will soon be struggling to compete on world markets, But the growing international demand for organics hasnít dented the traditional exports of SAís largest fruit exporter, Cape-span, which topped RS,Sbn last year. Nevertheless, some Capespan growers are converting to organic production because of the 20%-30% premium it fetches internationally and the huge demand from UK and EU supermarkets.
Capespan is keen to add organic produce to its range but is cautious about urging its farmers to go this route because of the high risks they face in converting, and because it believes organics will always be a small part of the global agricultural market.
Capespan environmental affairs manager Kobus Hartman expects organics to grow from 1% to 5% or even 10% of the EU agricultural market, but to no more than 5% of the SA market because of the populationís limited buying power.
"The fact is that most consumers buy with their eyes," says Capespan corporate affairs manager Fred Meintjes, "and as long as a countryís safety regulations are strict, so consumers have confidence in the fruit: they will buy on price and appearance." This may once have been true, but with the decline in Western fertility and increase in cancers, consumers are beginning to distrust blemish-free but tasteless food, their fears fanned by the row over genetically mod-fled foods.
In SA, government does not offer sub sidies to farmers to shift to organic production. But the UK government has allocated £140m in organic farming subsidies over the next six years. So price is becoming a critical factor in whether SAís fledgling organics industry will survive,
A month ago, Agriculture DG Bongiwe Njobe rebuffed calls to scrap the growing of genetically modified crops, saying governmentís vision was to go the hi-tech route and that it was not obliged to protect historical farming systems such as organic farming. Supermarket chains, on the other hand, have distanced themselves from genetically modified food, with Woolworths undertaking to remove all such products from its shelves this year. Woolworths food director Hilton Stem says the group pays about a 20% premium for organic food.
"At this stage, organics are still a small share of our total sales but are growing rapidly," he says. "We are watching the demand closely and are going to continually plan our procurement to match."
In turning virgin land into organic production, Spier has found that it is possible to break even after one year and estimates that Go Organic will achieve a 100% gross profit after three years. Converting a conventional farm to organic production, however, is far more costly and difficult
"There are no short cuts. It takes two to three years depending on the crop," says Ralph Peckover, an inspector for Ecocert, a German agency that certifies whether organic farmers meet the global standards laid down by the International Federation of Organic Agricultural Movements (IFOAM). Organic farmers have to pay a certification agency to conduct an annual inspection of their activities This costs R5000-R70000, depending on the size of the farm, and involves a comprehensive audit of a farmís activity, including water and soil analyses. Even the farmerís books are scrutinised to ensure no undesirable chemicals have been bought. "We note any deviation and, depending on how bad it is, they either have to go back to year one or remedy it," says Peckover. Converting is not for the fainthearted, say Catherine and Stuart McLennan, whove spent three years converting their small fruit and vegetable farm in Riviersonderend in the Western Cape. "All our neighbours think weíre crazy."
The McLennans converted to organic farming because they were disappointed with conventional fruit prices and the condition of their farm, which required ever-increasing amounts of chemicals to keep pests at bay Itís been a hard slog and though their organic stone fruit has received an enthusiastic response internationally, negotiating with Woolworths and Pick Ďn Pay has been tough, while smaller supermarkets have been hesitant to put their products on the shelves.
"At the moment, I donít think anyone goes into organics for the price because no-one is achieving that 20%-30%," says Catherine McLennan. "You get about 7% more than the going rate on non-organics if the product is in season Sometimes you donít even get 7%"
An unexpected and positive spin-off from the shift towards organics is that for farmers to be certified by FOAM as organic producers, they must ensure their workers have access to housing, education and health services and receive maternity, sickness and retirement benefits Thus any significant shill to organic farming in SA should provide a significant boost to governmentís efforts to elevate working conditions on farms. Spier is using the Go Organic project to develop the local community. It is managed by Gerrit Hendriks, a black farmer, and will eventually be 75% owned by the black farmers who work the land.
"This is the future for us, not to enrich ourselves, but to be proper farmers," says Hendriks. ĎI have always worked to a ceiling when the landís ready to produce, they bring in a white guy who takes control of everything youíve done. I packed it in and was without work for two years because of that"
Go Organic is also a dream come true for Hendriksís right-hand man, Tommy Farao, who too, has lived in the area his whole life and watched in frustration as his fatherís generation failed to progress.
"I dreamed of being a farmer but in 1972, when I was getting ready to study agriculture at university, I had doors slammed in my face. They said blacks would never run farms in this country."
Eventually, the whole Spier estate will go organic; it is gradually moving that way and, in the process, helping other farmers to follow suit. Emerging farmers have been especially interested, believing conventional methods are too costly and unsustainable. Spier provides regular assistance to organic black farmers from the west coast and Northern Province. Many conventional farmers are sceptical of the enthusiasm for organics; they argue it is impossible to farm profitably on a large scale without chemical spraying. For Capespan, the solution lies neither in organics nor in excessive chemicals, but in a system of integrated crop management that seeks to minimise the environmental impact of modern farming methods by ensuring chemicals are used responsibly. Integrated crop management is not new, but Capespanís accreditation system is; it allows the company to audit its growers to see if individual farms are damaging the environment. The system was introduced under pressure from leading European supermarkets that demand proof their products are produced in environmentally friendly ways. With a glut of fruit on world markets, the only way to compete internationally is to offer something special Hartman says the system impressed inspectors from UK supermarket chain Tesco last year
"We do it because we want to preserve our ecosystem and because we need to," he says. "SA fruit growers will eventually be marginalised if we donít."
Financial Mail 3, 2000