Podcast Transcription: Organic Certification Part 1

1.1. Introduction
Good day and welcome! This podcast is one in a series of podcasts developed to increase the
knowledge and strengthen the capacity of the private sector and civil society in the Southern
African Development Community (SADC) to understand and utilize the potential of the
Economic Partnership Agreement (EPA) with the EU. This podcast focuses on the
practicalities of organic certification.

Economic Partnership Agreements pronounced "EPA" aim to extend beyond the scope of
traditional trade agreements by creating partnerships that implement trade to foster
sustainable development and regional integration.

The EU signed an Economic Partnership Agreement on 10th June 2016 with the SADC-EPA
group comprising Botswana, Lesotho, Mozambique, Namibia, South Africa and Eswatini.
The EU-SADC EPA is a reciprocal but asymmetrical agreement. Meaning that the EU provides
SADC EPA countries with a greater degree of preferential and duty-free access to the EU
market. Also, SADC EPA countries are allowed to protect sensitive industries or sectors from
full liberalization and to deploy safeguards when EU imports are going too rapidly. Although
the EU-SADC EPA currently only covers trade in goods. Trade in services may be negotiated
later.

The project supporting sustainability aspects in the implementation of the EU Economic

Partnership Agreement was commissioned by the German Federal Ministry for Economic
Cooperation and Development (BMZ) and it's been executed by the GIZ. It is aimed at
supporting regional organizations, member states, businesses, and civil society to implement
the EPA with the EU in the interest of sustainable development.

This podcast series prepared by Euromonitor International on behalf of the German Federal
Ministry for Economic Cooperation and Development (BMZ) and the GIZ is an output of this
project.

1.2. Organic Certification Overview

In this podcast section on Organic Certification Overview, we will briefly examine the
background and origins of organic certification, what organic agriculture is all about and the
implications of organic farming from both the perspectives of the farmer and the consumer.
We will also examine topics related to how the COVID-19 pandemic affected the organic
markets and how to convert to organic agriculture. Other indicated sections on obtaining EU
organic certification, EU organic regulations, and organic certification in practice are covered
in another podcast available on this platform.

Now, we begin with a quick overview of the origins of "organic" and "organic certification".
Organic agriculture is traceable from the 1880s through to its developments in the 1990s by
Sir Albert Howard and others. It was then picked up due to the shift from the use of
synthetic nitrogen fertilizers and pesticides for industrial agriculture. On the other hand,
organic certification began in Europe and America. The reason was to provide standards for
the rising global demand for organic foods with assurance of quality, compliance, and
authenticity. The respective local certification bodies on organic products provide this proof
of authenticity.

The key message here is that organic agriculture arose due to the demand for use of non-
synthetic fertilizers and pesticides. While organic certification arose due to the need to
provide assurances to consumers, that organic products are compliant with the needed
standards.

Next, we will discuss what the parameters or defining factors of organic agriculture are. As
stated in the previous slide, organic agriculture is a production system, in which the use of
chemical pesticides and fertilizers is prohibited. Organic agriculture is further assured
through organic certification, which ensures documentation, monitoring, inspection, and
issuance of certification of the operations or facilities of the proposed organic farm. If
certification is successful, the farmer is then able to sell his or her produce locally or
internationally for a premium price, which is justified by the exclusion of artificial ingredients
in the nurturing of the products.

The key takeaway here is that there is a distinctive benefit to organic farming in the form
of a premium price compared to conventional farming. This is especially so in the EU,
where organic products are in high demand.

Let's now examine some key perspectives for both consumers and farmers next. From the
consumer's perspective organic products are generally better for health. That is, they are
safer due to the absence of toxins and have higher quality due to the natural presence of
high-quality vitamins and minerals as well as a high taste and a flavor profile. Consumers
also regard organic products being sustainability-friendly in terms of not having a negative
impact on the environment and/or on the workers involved in its production.

From the farmer's perspective organic products bring multiple benefits, including being
niche segments with higher profitability. This is mainly driven by the organic trend being on
the rise in terms of it being a growing consumer segment with more opportunities across
retailers and food service as well as among health and animal concerned advocates.
The utilization of healthier soil yielding stronger crops that can better withstand droughts
compared to conventional alternatives is also a plus for organic farming. However, some
challenges that may arise with practice in organic farming relate to the need for higher costs
of initial investments. Costs relating to equipment, operations and certification as well as the
recurrent costs of maintaining organic practices and renewing the organic certificates.

The key takeaway here is that organic agriculture gives you higher profits in terms of a
premium price. But there are also higher costs that need to be incurred, in order to obtain
these higher profits. Therefore, organic production requires proper planning and a
balanced production process.
1.3 Covid-19: Impact on EU Organic Market
In the next section we will discuss the impact of COVID-19 on the organic markets by
examining trends, opportunities and challenges for consumers, producers, and retailers of
organic products.

From a consumer trend perspective COVID-19 has caused a strong increase in demand for
organic and sustainable products. Worldwide, there has been an observed increase in
organic sales with double digit growth in Europe, for example 12 % in Spain. The pandemic
has shifted health on sustainability to the forefront for consumers who have been looking to
also boost immunity and general health during the pandemic. Importantly, these behavioral
changes are expected to be long term and more permanent post COVID-19.

However, consumers have faced some challenges. As a result of COVID-19 there have been
some supply chain challenges leading to shortages. A large part of this is increased demand,
which can exceed supply in some instances. Finally, as a result of shortage and higher
demand, prices for organic products have risen for the consumer. Although this has more
deterred consumers from seeking out these organic products for their immune-boosting
benefits.

The key point here is that in terms of consumer trends, there has been a large increase in
demand for organic products. Due to COVID-19 consumers are more health-conscious,
looking to boost their well-being during the pandemic. However, shortages and higher
prices also resulted from the pandemic, making it more challenging for consumers to
access organic products.

We will now examine the impact of COVID-19 on key producer trends.

Producers of organic products have seen an increase in demand, largely due to increased
demand for healthier and more sustainable products. Despite higher prices, there has been
considerable growth in the organic sector, particularly for grocery stores and online
marketplaces.
In Europe a lot of farmers have adapted by making their products available on online
platforms. Given lockdowns, many consumers resorted to ordering groceries and other
products online for deliveries to their homes.
On the other hand, producers of organic products have faced significant challenges due to
the pandemic. These challenges include supply chain constraints due to lockdowns in
different regions. As lockdown began, some countries halted exports of agricultural products
to ensure their own food security. Or the supply chain challenges included general
uncertainty with farmers and producers but also distributors facing uncertainty with
lockdowns on labor shortages, sometimes due to illness of their workers or COVID
regulations. Transport challenge is also caught due to limited capacity of cargo operations
resulting in longer delivery times.

The key takeaway here is that producers have enjoyed increased demand and higher
prices during the pandemic. However, the increase in demand combined with the various
supply chain problems pulls a major challenge to producers or farmers of organic products.
Next, we will briefly examine some data and trends for the EU organic markets in light of
COVID-19.
Using the organic packaged food category as an example, we see that retail volume
increased significantly over the period from pandemic start in 2020 into the year 2021.
In Eastern Europe retail volume for organic packaged food increased by 6,000 tons, while in
Western Europe it increased by 115,000 tons. This good trend over 2020 to 2021, though
lower in previous years, signifies the resilience of the organic sector, which encountered key
challenges, including product shortages due to supply chain challenges during the COVID-19
pandemic.

We can also observe the trends driving this forth, using examples across consumers,
producers, and retailers in 3 countries.
For instance, in Russia over 2020 to 2021 the retail presence for organic packaged food grew
as some retailer started allocating dedicated shelf space to organic packaged food, like dairy
products, to better attract consumers' attention.

In Germany, demand for fresh organic dairy products, including milk, yogurt, butter, and
cheese increased. Mainly because among Germans, organic is associated with higher quality
and local provenance. Also, some consumers perceive animal well-being to be better in
organic food production compared to mainstream production.

Finally, in Spain with people cooking more at home, new organic meal kits emerged to help
with this task. These organic meal kits consist of organic ingredients for recipes formulated
by nutritionists based on the different goals related to general health, weight management,
athletic performance, or appearance, while also considering different tastes and preferences
as well as food allergies. Some meal kit providers even created personalized plans for their
consumers.

The key takeaway here is that the organic sector is poised to witness a boost. Regardless
of the persistent challenges as consumer, producer and retailer trends and actions support
increased demand for and visibility of organic products. So, organic certification is a key
step to take now, more than ever.

We will now move to the next section on "Converting to Organic", where we examine
conversion to organic agriculture.

1.4 Converting to Organic

In this section on converting to organic agriculture, we will examine the driving factors or
considerations for converting from conventional farming to organic farming. Best practices
involved in doing so, the conversion timeline, phases of conversion and ideal components of
the conversion plan.
Conversion to organic agriculture is driven by various factors with a transitional phase often
required. In between the practice of conventional agriculture and switching to organic
agriculture.
The reasons why farmers convert from conventional agriculture to organic agriculture can
be:
 1. For environmental, ethical, and quality reasons. When farmers want to ensure that
their production and operations do not negatively impact the environment and/or
their workers.
2. For financial motives. Given the higher prices of niche organic products compared to
conventional products.
3. Policy-related reasons. Relate, for example, to countries imposing bans of the use of
synthetic fertilizers in some agricultural areas due to the need to conserve the
environmental health of these areas.
4. Personal reasons related to the farmer's health. And to the need to avoid undue
exposure to harmful substances and chemicals often found in synthetic pesticides,
herbicides, and fertilizers.
5. Finally, extensive influence of other converting farmers refers to a situation whereby
conventional farmers are encouraged to switch to organic farming, as a majority of
their colleagues in the agricultural area or region have converted. And are enjoying
higher demand and prices for their organic products versus conventional products.

The key takeaway here is that conversion to organic agriculture is driven by various factors
or aimed at providing better results from production activities.

We will now be discussing the best practices to implement in order to achieve the best
results during the conversion period.

While converting to organic farming there are best practices that farmers should adhere to.
These include:
1. Land requirements. Land must be free from prohibited substances for at least 3
years. Also, the land must have clearly defined boundaries and buffer zones to avoid
cross-contamination of chemicals from a non-organic land portion to the organic land
portion.
2. Soil fertility and nutrient management. By incorporating organic cultivation practices,
soil conditions, including soil structure and fertility are improved. Soil erosion can
also be minimized by planting cover crops to act as a barrier for mitigants. Also, in
any form of soil fertility, animal waste can be obtained at source, from beef, feedlots
of cattle and poultry farms.
3. Seed and planting stock usage. It is advisable to use non-GMO organic seeds or
seedlings to preserve all natural characteristics of organic products.
4. Pest and disease management. Implementing good integrated pest management
practices is crucial to implement the chances of success. These include planting pest
resistant stock or seeds.

The key takeaway here is that conversion to organic agriculture requires certain best
practices that are essential during the implementation stages. Without these best
practices, farmers will not be able to achieve the best results from organic farming.

We will now briefly examine the timeline for conversion to organic farming according to key
standards.
One thing is clear, if organic production is a new method of farming for a farmer or, if the
plan is to plant new crops, it will be wise to test out the organic farming method onto the
crop on a small portion of the intended land before taking off at a large-scale conversion.
This is because for farmers generally running both, conventional and organic systems, is
tough. In the end, it is only the farmer that can decide how fast to convert as the farmer is
the one who has the whole picture of the agronomic, economic, or social conditions of the
farm.
However, basic IFOAM standards vary from one month for annual crops to 18 months for
perennial crops. While EU standards require 24 and 36 months respectively for annual and
perennial crops.

The key takeaway here is that in order to decide on the suitability of land for organic
farming activities, the intended crop and farming method should be tested on a small
portion of the land before going large scale.

Next, we will see how conversion to organic farming requires detailed planning in phases
tailored to the farm's situation.

Conversion consists of different phases, including:

1. The knowledge gathering phase. This involves understanding organic agriculture, its
aims and practices, getting to know the available certification bodies to choose from
under their coverage as well as obtaining the list of standards and requirements.
2. The goal description phase. This entails deciding on the area to be used, crops to
plant and the crop rotation cycle.
3. The preparation phase. This enforces assessing compliance of the farm, facilities and
operations or farming practices and procedures. A conversion plan, which we will be
discussing shortly, is also being developed here.
4. The execution phase, which entails submitting the conversion plan to the chosen
certification body. Then undergoing the conversion phase and finally getting audited
or inspected.

The key message from this slide is that for you to meet all requirements for your detailed
conversion plan, it is important to undergo the important phases.

With this, we come to the end of this podcast section on organic certification overview, the
impact of COVID-19 on the organic market and converting to organic. Please listen to other
related podcasts in this organic series on obtaining EU organic certification, EU organic
regulations and organic certification in practice. They are also available on this platform. This
podcast was prepared by Euromonitor International, a global leader in market research.

Please feel free to contact the GIZ with your feedback, questions, or comments as well as for
download requests. Contact details of the GIZ are shown here.