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TRADE IN ORGANIC AND SUSTAINABLE AGRICULTURAL PRODUCTS
1. INTRODUCTION TO ORGANIC AND SUSTAINABLE AGRICULTURE
There is a steady rise in the production of organic and sustainable agriculture in the past few
decades due to awareness and demand from the consumer for more natural food products to be
grown without the use of chemical inputs such as pesticides and fertilizers. With the global sales
for organic food and beverage reaching over 20$ billion in 2020, international trade in organic
and sustainable agriculture products has become a significant market. The US is ranked first in
the importation of organic food, import value is more than 5$ billion every year to feed the
population whose demand for organic food cannot be met locally. The European Union ranks
next in importing nearly billion products related to organic foods in response to the increasing
demand for organic foods. As a result of this increased demand, developing countries are
earmarking more lands toward organic production for the essential export crops. Many
developed nations like the US depend on sources such as Argentina and China for organic
soybeans while tropic regions of Mexico and Africa are gradually developing into major
producers of popular organic crops such as coffee, cacao, and bananas. Thus, in order to
encourage this cross-border sale and guarantee its authenticity for consumers, many governments
are establishing standards for organics and certifying organic farms to ensure that those who are
buying organically produced products will get what they are paying for. The International
Federation of Organic Agriculture Movements (IFOAM) is another important actor for
standardization for the global organic sector. As the global demand for organic and sustainable
foods as well as other agricultural produce continues to grow at rapid pace, the next five years
are predicted to register a near-doubling effect on the international exports, this gives economic
benefits to farmers in both the developed and the developing world who are willing to undergo
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the change to organic farming, it also means that consumers all over the world can still enjoy the
benefits of organic food in their health and the health of the environment.
1.1. Definitions and principles
Organic and sustainable agriculture has its foundations in a number of fundamental principles
that seek to feed the world and nourish its population in a manner that is sustainable in terms of
the earth’s carrying capacity. It’s based on the idea of sustainable health of soil, plants, animals,
individuals and the earth as one system. To this end, organic production and processing excludes
synthetic inputs, hormones, antibiotics, genetically modified organisms and ionizing radiation
but fosters the use of natural processes and ecological system, biological diversification and
building up of soil organic matter through techniques such as crop rotation, integration of
livestock and use of compost and natural pest control agents. Sustainability moves out to
embrace longer-term viability and equitable use of resources.
Organic certification serves to ensure that the producers of organic foods stick to the
recommended standards in terms of inputs that are acceptable in the farm and the methods that
are acceptable in the production of the food. In organic operation, third parties such as the
government certify then inspect at least once a year to ensure compliance is observed. The
definitions may differ from country to country but most definition are those that have been set by
IFOAM which gives a format that is followed by the local governments. For instance, US
national standard restricts the use of sewage sludge, genetically modified organisms, ionizing
radiation and most synthetic inputs and enforces regular on-site inspections, documentation and
proper handling to prevent contact with non-organic products.
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IFOAM stresses four principles underpinning organic claims: Physical health – the action of
maintaining and even improving the fertility of the soil, biological and ecological balances, and
producing healthy food with high energy values. Biophysical health – using techniques such as
companioning, crop rotation, and integration of livestock and excluding chemical inputs. Social
justice – ensuring justice at the field level up to the consumer level. Restorative economy – the
process of exercising caution in decision-making with regard to sustainable agricultural
processes. These principles of organic oversight systems are universal. The adherence to these
practices results in producers attaining and sustaining organic accreditation which opens up trade
possibilities through consumer appreciation which results to preference of the organic logo
signifying authentic endorsement to the use of sustainable production practices and inputs in the
entire supply chain.
1.2. Historical development
Trade in products from Organic and sustainable agriculture has followed the development of the
systems used in agriculture. Traditional farming practices also embraced sustainable farming
practices. The latter half of 20th century and early part of 21st century saw the industrialization
of agriculture with more yields and synthetic inputs being the aim which led to negative effects
on the environment such as soil erosion and water pollution. The pioneers of this movement can
be traced back to the early 1940s which saw the publication of books such as Sir Albert
Howard’s An Agricultural Testament. Organic farming started gaining momentum in the 1960s
and 1970s as a result of increasing environmental consciousness and other effects of pesticide on
humans.
Consumer demand remained high but slow and thus the low establishment of specialty outlets
for distribution. Organic food distribution channels were initially developed through farmers’
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markets and food cooperatives assisted in providing organic food to regional producers and
buyers as such, organic products occupied a very small market share until national standards
were established in the 1990s and 2000s where they introduced a degree of national regulation.
Certification standards and labeling became unified and opened up new opportunities for
development while eliminating exclusive focus on direct sales. Changes in the policies
concerning the usage of the term “organic” on commercial products, it may be stated that such
alterations helped to enhance the confidence of the consumers and contributed to the
development of the interregional trade. Better transportation networks and storage methods also
enabled products to penetrate even fathom domestic and global markets. Supermarket giants
further opened up convenience retailing through stocking certified ones on shelves.
During the maturation period of the sector, there were indications of consolidation and vertical
integration of supply chains in the agribusiness sector. Small enterprises were bought by large
distributors, processors and marketers due to introduction of efficiency gains through acquiring
the necessary capacity to meet growing demand. While small-scale producers always go on
thinking of new strains for specific markets, giant transnational food corporations market
processed organic food internationally. Multinational liberalization of the rules made it easier to
export and import between the world’s large trading partners.
1.3. Global market overview
Global consumption of organic and sustainable farming produced agricultural produce has
rapidly increased over the last two decades due to increased awareness on the benefits of organic
produce on health and environment. The global sales of certified organic food and drinks were
worth 5 billion in 2018 and this has doubled the worth of the same in 2008. The largest market
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for organic products is the United States where retail sales of the products was recorded to be 9
billion in 2018 while that of the European Union and China were also significant.
Beyond certified organic, the market of sustainable agriculture is growing at a very fast pace due
to increased awareness of the consequences of climate change and the subsequent increase in
consciousness among consumers and retailers. Sustainable agriculture is a style of farming that
sustains the natural resources base, is profitable, and ensures a fair standard of living for
everyone involved. The sale of fresh produce grown under sustainable methods, which can
include both organically certified foods and sustainably produced goods, is estimated to hit 0
billion in the USA alone by the year 2021. Interest is still growing in food, fiber, and floral crops
that are grown from regenerative practices that enhance soil health such as cover crops, no-till
practices, and crop rotation.
From a trade angle, organic food and sustainable food farming is fair trade and has become more
of a standard issue in many developed countries. Europe and North America have always been
on the production and consumption frontier. However, contribution is increasing in domestic
markets of middle-income nations in Asia, Africa and Latin America and also in increments in
certified exports abroad. Fruits like coffee, coconut oil, cocoa and spices are being shipped at
high growth rates from the tropics to other parts of the world. While the multinationals are going
further in their ethical and environmental responsibilities, they are also globalizing sustainable
sourcing and all this has potential for semi-industrialized producers in the emerging world in the
agrifood supplies chain. Trade policy barriers present a major challenge; however, if
implemented, analysts are expecting the two-fold growth of the markets for organic and
sustainable foods within a decade.
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1.4. Environmental and social impacts
Growing consumer consciousness about the benefits of consuming organic and sustainably
produced foods has led to an opening of trade in these products internationally. This holds the
possibility of both environmental and social ramifications in countries that export organic and
sustainable agricultural products. On the environmental side, increase of organic farming
practices that do not use synthetically produced pesticides and fertilizers may help to improve the
condition of soil and water, as well as the biological diversity of the territories related to the
production in the exporting countries. Literature sources reveal that conventional systems on the
use of crop rotations, cover crops and integrated livestock farming have higher levels of
potentiality for soil carbon from climate change impacts than the conventional systems. This
minimizes pollution of water catchments by pesticides and chemical fertilizers, and also helps to
minimize water pollution and even eutrophication of water bodies downstream. On a regional
level, practices aimed at maintaining the natural environment and biological diversity are
fostered on organic farms due to mandatory preservation of natural ecosystems area. To the
society, growth in the exportation of organics may create employment and higher incomes to
farmers in the developing nations. As the UN Food and Agriculture Organization points out,
organic agriculture reduces reliance on input and technology and may entail more labor per
hectare contributing to increased employment for jobs like weeding and pest control. This
employment seems to benefit the small family-owned farms than the large-scale commercial
farmers. Higher prices accorded for certified organic products for export also translate to
potential higher profits. There are also the chances for the exporters to get involved in the fair-
trade certification programs that offer certain minimum prices and also give community
development funds to the small holder farmer co-operatives. Exporting at a massive scale
however, does present certain environmental and social issues nonetheless. This could lead to
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depletion of soil nutrient even under organic practices if not complimented by integrated soil
replenishment practices on all the farms to support increased volumes. Larger areas of
production also have direct effects on habitat lands and indirect or displacement effects that
reduce the organic production area, which is negative for the environment and its biodiversity.
On the social front higher organic price premiums could be averse to the domestic food supply in
exporting countries because supply shifts to cheaper but organic food. Yet, to counterbalance this
impact, more diligent and consistent efforts in carving out a portion of the augmented organic
export income to support domestic food adequacy endeavors could be beneficial.
1.5. Comparison with conventional agriculture
Cultivation of crops through natural means and without the necessity of using chemicals is
organic farming and it is quite different from conventional farming. This is particularly so in
terms of the methods used in growing the crops and the substances used in fertilizing and pest
and weed control as well as the absence of genetically modified foods which are common in
conventional farming. Organic farms maintain biologically active and healthy soils through the
addition of compost, cover crops, green crop and manure. These practices are useful in water
conservation and nutrients in the field. Intensive farming methods, conventional farms in
particular, commonly experience such adverse effects as accelerated soil erosion, nutrients
leaching, and water runoff charged with chemical residue. Organic farming practices like crop
interchanges, intercropping and agroforestry is used to increase crop diversities and improve on
the soil productivity instead of growing large tracts of fields with a single crop as is the practice
in conventional farming. The exclusion of synthetic chemicals to the organic systems can
minimize detrimental effects to advantageous insects, soil microorganisms and wildlife; on the
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other hand, conventional pesticide and herbicide application have negative effects such as
toxicity, contamination, and annihilation of habitats.
As for the yields, with regard to the experience in the improvement of the methods of
management of the organic farming, it has become possible to increase productivity and apply
the BMR: the yields of the organic crops are similar to those of the crops grown conventionally
for many crops. Still, for specific produce items that are typically affected by pests and disease,
total ban on certain synthetic pesticides in organic systems has the effect of slightly lower yield
at the moment. Some hard-to-breed organics might catch up with yield frontiers as breeding and
cultivation practices advance further. Following global demand for organics is increasing at a
faster rate than supply, price differentials for certified organic foods are high and enable organic
to generate a per area revenue that is equal to or more than conventional commodity crops. Thus,
organic farming can increase farm incomes and livelihoods when prices are higher than
conventional products but these prices may be threatened with decline in case supply growth
outstrips demand.
Since organics has become more of a mass market, creating a standard, having legal frameworks
and labeling norms that organizations can easily follow is important for fair competition and
consumer protection. One major challenge on organics trading is the difference in definition and
certification standard across the countries a situation that hampers the trading
processes. Therefore, the mutual cooperation of governments through international organizations
to facilitate the harmonization of organic standards as well as the conformity assessment systems
fosters freer trade flow to ensure adequate supply-demand balance across regions. Likewise, in
relation to sustainable standards and indicators for crops and livestock, international cooperation
can facilitate the trade in certified agri-food products that meet the sustainable and socially
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responsible standards. Turning constant expectations regarding such matters as pesticide
residues, the effects on biodiversity or the treatment of employees into standardized measures
enables sustainable verification to be a believable product claim internationally. It therefore
means that through global trade consumers are able to consume diversified diets that comprise of
organic and sustainable foods that are grown to typical standards.
2. CERTIFICATION AND REGULATORY FRAMEWORKS
Such certification and regulation standards have to be put in place to enhance export and
marketing of organic and sustainable agricultural produce. With the increasing consumer
awareness for products that are sustainable and produced in an ethical way, regulations and
compliance standards assist in guaranteeing that the claims made about a product are genuine
and are not fake green-washing products. The assurance of third-party certification processes,
where auditors visit sites and products are tested, lends more credibility to organic labels.
Governments equally set legal frameworks on ecological production practices, permitted inputs,
soil health, protections of animal welfare among other things.
Satisfying these official certification and regulatory requirements enables a producer to market
products globally as organic with approval from other countries’ governments. EU, United States
Department of Agriculture, Japanese Ministry of Agriculture, Forestry and Fisheries among
other national regulating agencies adhere to definitions and standard that are in concordance with
those of the IFAM environmental farm management. Compliance supports the understanding
that agricultural methods are sustainable, respect biodiversity, water and energy sources, as well
as the conservation of the same.
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With regard to fair trade aspects, oversight frameworks also gradually contemplate labor
relations and general population health. Future audits may apprehend working conditions, living
wages, and other aspects of the production process. This is to support the moral principles of
sustainable agriculture, where both the immediate food producers and the general environment
should be benefited. There are those that have included the environmental management systems’
certification and the certification of fair labor practices within the same set of standards.
The trends of the sustainable agriculture movement indicate that regulatory regimes are unlikely
to stagnate but will instead mature and grow larger. They may further focus on ‘Impact’ as in
carbon footprints, no/less processing of whole nutrient dense food and less chemical use than
petroleum-based fertilizers. Sustainable commitment to these frameworks while coming with
certain complexities, enables producers to make credible promises that their agricultural goods
are capable of regenerating the ecosystem, empowering the peoples and are sustainable
economically in the long run. Through proper supervision and standardization, trading of
certified sustainable products can increase so as to serve the increase demand from conscientious
consumers as well as promote agricultural sustainability.
2.1. Organic certification processes
Any farm and business involved in the production of organic foods must adhere to the organic
standards and must undergo evaluation by an organic certifying agency. The certification process
starts with the producer or handler drafting an organic system plan that outlines methods,
materials and practices proposed for use in establishing compliance to particular organic
requirements. This includes the specifications for where seeds will be purchased from, the type
of soil to be used, crop rotation times, where animals will live, and pest and weed management,
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feed and ingredients, how crops will be harvested, stored, processed, packed, and shipped. The
certifier examines the plan to check on procedures that have been implemented to follow the
compliant processes before organizing an on-site evaluation of the farm or facility. For example,
during the inspection the certifying agent may visit fields, crop storage, processing areas,
livestock accommodation and various papers such as purchase orders for organic inputs, sales
records etc. to ensure that policies set in the organic system plan are being complied with across
the board. Soil samples, water samples, plant samples, input or product samples may be collected
for chemical testing to verify compliance with prohibited pesticide residues or genetically
modified materials. In the case of a successful inspection, the organic certification agency issues
an organic certification that determines the crops or products that have been certified. A physical
assessment is done every year and if new records are developed, then the certification process
needs to be repeated. Labeling a product as organic means that the farming and production
practices followed are in compliance with the laid down organic requirements starting from the
seed to the final stage of sale. The certifying bodies place seals on the packaging so that the
consumers can easily identify that a particular product is certified organic. Stringent monitoring
from farm to the consumer end guarantees the organic quality flowing through the supply system
so that consumers are provided with genuine organic products that are grown without the use of
artificial fertilizers, banned drugs, hormones or genetically modified materials.
2.2. Sustainability standards and labels
Sustainability standards and the corresponding labels operate in a much wider environment of
certification and legal requirements for trade in organic and sustainable perishable commodities.
They assist in determining some of the acceptable practices and processes that are
environmentally as well as socially responsible by acting as pointers and reference points on
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what farmers/ producers need to do and show in order to adhere to the laid down
environmentally enhanced standards. Key sustainability codes in agriculture include non-
mandatory systems like Rainforest Alliance, FAIRSHARE, GLOBALG. A. P. and organic
certifications. These standards define the goals and measures of water use efficiency, soil quality,
wildlife, environmental quality, farm labor relations and other aspects. The performance of the
strong criteria enables the producers to attach particular labels and seals to their commodities to
help convey the sustainability aspects to the buyers as well as importers. This can offer some
market advantages and ensure premium price levels, therefore, the growth of multiple
sustainability labels has brought up post hoc questions of consumer confusion, accessibility,
costs of compliance, and harmonization. For instance, organizational labeling predominantly
depends on regulation and government agencies especially in large markets, but other
sustainability initiatives are primarily voluntary and are mainly regulated through standardization
agencies. This makes it difficult to harmonize principles, criteria, and policy alignment, first and
foremost, it can be financially and technically very costly for smallholder producers from
developing countries to prove their conformity with international standards through auditing and
certification. Hence sustainability standards and labels have the overall objective of creating
differentiation and value, but they face issues such as accessibility that affect those they want to
help. The dialogue continues to focus on alterations in various directions for the attainment of a
balance of equivalence, benchmarking, and other strategies for simplification within the
spectrum of the array of labels. The accumulation of a series of standards and seals indicates the
growing involvement in the process of making agriculture more sustainable, but also further
requires the endorsement from the legislation and institutions to add more credibility and
effectiveness to the process. Altogether, current and potential sustainability labels indicate that
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consumer and market attention is increasing, however, therefore, continued efforts are necessary
to enhance the quality, simplicity and standardization of sustainability labels to yield fair and
environmental positive impacts for global agricultural value chains.
2.3. International regulations and agreements
The following are some of the key international regulations and acquires that constitute an
integral part of the certification and regulation of trade in organic and sustainable agricultural
products: Among these, the most significant is the IFOAM Norms that are the simplest and basic
international standard for organic production and processing. The IFOAM Norms were
developed in 2014 and details the expectations on each link in the supply chain, from farm
practices to processing, handling, identification and marketing of certified organic products.
They form the basis of the equivalence judgments and recognition of other organic guarantee
systems beyond borders.
In addition to the IFOAM Norms, the Codex Alimentarius guidelines on organically produced
foods offer another coherent global legal requirement, which includes guidelines on labeling of
organic foods, production and agricultural methods, inputs, inspection and conformity
assessment. Thus, the Codex guidelines have legal status in the sense that governments have to
monitor them in national legal systems and to follow them in other regulations and norms to
support trade according to the World Trade Organization requirements. According to the
provisions of Codex, governments can dispute other countries’ organic regulations if they are
construed to be stricter.
There are also a number of other global accords that can be applied to sustainable agriculture
from an environment-people interface and/or a production trade lens and not solely on traded
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goods. Some of the standards include the one referred to as Sustainable Agriculture Network
standards, which is used across all the farming operations in tropical areas in order to ensure that
there is sustainable use of the land, fisheries and forests, as well as ensuring that there is
employment of labor in accordance with the standard. For such reasons, these types of standards
are progressively being applied on exported goods as consumer demand for products that are
accredited sustainable rises in North American and European countries. Likewise, other
sustainability certifications such as Rainforest Alliance are also gradually increasing their
adoption as indicators of sustainability and assurance of environmental management across
multiple geographies along the farming supply chain. While currently there are only fragmented
private and non-profit standards of sustainable verification that could be applied to exported
goods, the sector as a whole remains a part of the constantly growing field of international
regulation. These diverse regulations and conventions contribute towards opening up the markets
and ensuring that agricultural goods that are marketed as being organic, environmentally-friendly
and socially-responsible gain market acceptance.
2.4. Compliance and verification methods
It cannot be disputed that any framework for certification and regulation of organic and
sustainably produced agricultural products requires a set of compliance and verification tools to
enforce standards. They enable certifying bodies and regulatory agencies to conduct
comprehensive assessments regarding compliance with production, handling, and trading
standards at various levels of the chain. Fundamentally, core compliance aspects entail the first
on-site inspection to ascertain conformity to organic plans and sustainability techniques,
continuous compliance and reporting with record keeping by the farm operations, constant
submission of residue testing results, and on-sight certification and spot-checks at any time
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throughout the period of certification. Co-ordinate frameworks require each link along the value
chain to be assessed with independent third party or government inspectors, annually inspections
or audits. Audits look for all aspects of the production and handling systems and follow products
through from farms through to ultimate sale to ensured complete lack of contact with any
conventional supply chain. Inspections consist of review of input documentation and records
including production records, records of harvest yields, records of post-harvest handling and
packaging, records on any other documentation as well as physical checks that may be by mere
observation and sampling.
The test results, the inspection outcomes and corrective actions provided by the operations are
accumulated in certification files for evaluation by certifying authorities. Certifications at the
primary level are issued only if all subsequent verifications meet the set standards and
guidelines. Yearly compliance for subsequent certification renewal entails submission to this
entire verification process. Where noncompliance issues are detected through complaints or
investigations, appropriate corrective actions are administered including suspension or
decertification until full compliance is achieved and satisfactorily, certified. Compliance and
verification are critical in ensuring that mandate standard implementation is achieved besides the
need to sustain high market value and premium for quality production from the farm to consumer
end. Adhered to and implemented compliance programs foster culture of supply chain
relationships as well as sustain the credibility of sustainability efforts within agricultural business
while at the same time respecting the economic rationality of agricultural businesses. To achieve
sustainable performance, the verification process is followed by feedback from the certifiers, the
implementation of appropriate corrective measures, and then the process of verification is
repeated.
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2.5. Challenges in maintaining certifications
The process of securing certifications for the organic and sustainability of the agricultural
production may not be a very big challenge, although, the process of constantly having to adhere
to these certification standards presents a whole new set of challenges. One of the challenges that
has emerged is that the standards and regulations in place grows firmer and relatively
complicated year by year. For example, the organic producers may face working under the new
allowable input restrictions or more severe audits. The aforementioned changes may also be
costly and hard to implement for smallholders since they lack the necessary technical support
and cheap ways of compliance. Another area important for renewal of certifications is data
management and record keeping for input, output and process data which are burdensome for
producers in developing countries who may not be trained in these aspects. These include, loss of
certificates arising from factors such as lack of proper documentation, traceability or detection of
prohibited items which results in loss of premium prices and markets. This illustrates why there
is a need to train farmers on how to conduct their farming businesses as professional ones.
Stability of environment influences continuity of compliance since the fluctuations in climate
and pest/disease threats may force producers to use unapproved chemicals or other practices in
order to protect the yield. This forced deviation from the natural development plans poses a
danger to certification if the farmer does not have a backup strategy or a risk cover for any
shock. Similarly, sustaining and encouraging environmentally friendly practices may also need
significant commitments like improving the soil health or creating habitats for beneficial insects,
even if they may not have tangible positive effects immediately. To agree with this assertion, it is
therefore necessary to commit to these preventative measures as an economic risk in which
bridging finance, savings, and other stability measures during transition periods should be
available to the farmers. While certification leads to the entry into premium markets, sustaining
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the certification can be associated with extremely high capability challenges for producers in
terms of cost accommodation, rising standards, data accumulation, environmental scanning, and
developing a resilience war chest to carry on through the volatility. If not properly managed, the
burden could generally result into producer frustration and thus give up on other environmentally
friendly practices.
3. SUPPLY CHAIN MANAGEMENT FOR ORGANIC PRODUCTS
The competition as well as the consumer demands require proper supply chain management to
ensure the delivery of quality organic and sustainable agricultural products. Pest management,
recycling and reuse, crop rotation, weeding, and mechanical weed control being some of the
organic farming practices present specific challenges in supply chains than conventional
agriculture. Marketing and hauling and storing of organic products have to be done in a very
special way that the products do not get in contact with non-organic materials or other non-
organically grown agricultural produce. Proper structure measures on segregation should be
enforced right from the farming stage to the last stage of delivering to the supermarkets. Key
challenges relating to organics access include insufficient supply volumes due to farm size
limitations and an inherent disadvantage of organic farming, which is s seasonal as it eschews
chemical enhancements of growth cycles. These changes in volumes and extra handling affects
procurement, inventory, and operation of logistics in the supply chain. To tackle these problems,
there are emerging advanced IT solutions including the full transparency of the whole supply
chain process, applying the blockchain technology to cover all steps from farms to consumers’
table. Precision agriculture is a concept that utilizes the internet of things sensor data analysis to
predict yields and include growers in supply chain plans. Big data also helps in demand planning
and develops predictive models to assess what may occur in case of certain adjustments in the
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capacity. Technologies that are emerging along with the other approaches to sourcing like the
contracts with certified organic farmers can help to manage these risks. Further development of
the principles of eco-friendly consumption will ensure the growth of the organic market,
recognizing deserving market participants and those who operate in the organic segment in good
faith. It will be crucial to embrace the best contemporary technologies and invest in the
consistently long-term organic grower relationships to deliver unlaminated organic products that
can stand out and appeal to a progressively picky consumer base.
3.1. Sourcing and procurement strategies
The ability to source and procure organic inputs is therefore an important consideration in the
supply chain of organic producers and the food industry. In the case of organic production, there
are severe restrictions on the permissible inputs, such that the selection of appropriate seeds,
fertilizers, pest controls, and other requisites can be a complicated affair that calls for the
development of good supplier connections and procurement modalities. Thus, as the organic
sector evolves, approved inputs can be available but still present certain difficulties. There is
need for strategic alliances with certified organic input suppliers; Companies need to lock in
supply sourcing to achieve volume certainty; Companies need to consider imported organic
inputs especially where the domestic sources are unable to meet the requirements of the industry.
On the farming side, best practices entail sourcing seed from input suppliers, including seed
companies, that come from genetically pure, chemical-free seeds suited for organic farming.
Hence, soil amendment and fertilizer suppliers can mix organic inputs such as compost, blood
meal, chilean nitrate and other permitted ingredients to match crop nutrient requirement.
Beneficial insect producers offer pivotal biocontrol solutions to replace synthetically
manufactured chemical substances. Such investments help guarantee operational farms that the
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inputs they need can be sourced organically and are certified to meet the requirements of organic
farming.
Some issues that arise for organic food companies include buying raw materials that have been
grown organically is a challenge that has to be well coordinated with producers in order to check
on the legitimacy of the yields as well as the fact that once organic food is produced, it has to be
preserved in a way that prevents it from becoming contaminated by inorganic materials. Supplier
accreditation involves checking documents on organic certification, farm and site assessments,
and periodic checks for pesticide residues or genetically modified organisms in the
ingredients. The uncertainty of suppliers in procuring and pricing organic ingredients requires
long-term contracts for adequate volume procurement. The import procurement is also a possible
solution to expand the pool of opportunities to source compliant organic ingredients, which often
comes at a higher price. To have organic integrity one has to have stringent criteria for procuring
organic ingredients and quality assurance from farm to fork.
3.2. Transportation and logistics
The movement and distribution of the organic products involve transport and logistics which are
an important factor in the supply chain system. Given the fact that most organic products have
shorter shelf lives compared to their inorganic counterparts, distribution systems should provide
methods of ensuring the foods achieve their maximum shelf life. This is because many organic
fruits, vegetables, and animal products are sensitive to environmental factors and have short shelf
lives that demand adequate temperature and atmospheric control during transport and storage.
Prolonged periods without refrigeration are also not appropriate thus cold chain management is
crucial. Transit distance and times should be managed proactively to reduce the occurrence in the
planning of transportation. Grouping small loads into combined large shipments or full truckload
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or container shipment is likely to give optimal results. Applications for route optimization and
GPS Track and Trace also help in shipment tracking and in improving routes, scheduling, and
delivery performance. The physical structure of logistics and the information required to support
the delivery of the organic products must be integrated from the farm, packing house, processor
distributor and the retailer. Automation systems allow the tracking of inventory and can also
implement “first-in, first-out” policies to minimize spoilage. There are different packaging
techniques like modified atmosphere, smart moisture and gas release film technologies that can
be used to increase the shelf life of organic products being produced. Growing international
demand and trade of organic products are some issues that entail challenges such as
transportation, clearance of customs, and compliance with phytosanitary measures require
harmonized systems in importing and exporting. Some countries having facilities exclusively for
handling the organic produce to ensure that it does not get contaminated at the ports. Organic
traceability systems and blockchain are a way forward in the scalability of supply chain
transparency to respond to authenticity and origin claims valued by consumers. Organic food
supply chain implies the receipt of organic products with maximum safety and quality from the
point of production to the consumer that requires specific logistics services to meet the
nutritional and sensory characteristics. With increased health concerns and environmental
conservation, an effective transportation and logistical strategies will help the organic sector to
meet the growing consumer demand.
3.3. Traceability and transparency
Supply chain management for the certified organic product requires reliability and openness of
the supply chain. Therefore, with the growing consumer preference for organics, it is important
to prevent the dilution of the organic label through the tracking of products back to their source.
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A fully accountable and traceable supply chain enables the consumers to have faith in the
product labeled organic by ensuring that organic production methods were followed.
A strong traceability system enables suppliers to put systems in place that would show the flow
of organic inputs and products through every level in the supply chain right from the farmers,
processors, and distributors. Some of the records that may be kept to establish this traceability
trail may encompass records of inputs used in the farm, records of production and harvesting,
batch numbers, records in relation to storage and transportation conditions among others.
Blockchain technology, QR codes or IoT sensors ensure that it becomes easier to track and
record supply chain events or conditions in a manner that is secured and cannot be altered. They
can also identify the potential sources of contamination or fraud independently and in a timely
manner.
For trade in organics, same as with food safety, importers and regulatory agencies also apply
traceability in cross-border supply chain. Organic certification, customs clearance and also any
investigation regarding food safety related issues can be easily carried out when the complete
traceability of the imported organic products is ensured. By proving a clear chain of supply from
the buyer to grower level and beyond, the exporters of organic produce can sustain the trust of
their buyers while adhering to the standard organic requirements existing in target markets. The
integrity being referred to is that, any break in the traceability trail compromises the authenticity
of the organic label.
Traceability and transparency are the main support pillars of the trade of organic products
between buyers, sellers, and the final consumer domestically and globally. Overall, it ensures
organic product integrity, increases consumer trust in organic claims and facilitate expansion in
the sustainable agricultural markets.
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3.4. Quality control and preservation
Quality assurance and preservation are some of the key considerations that have been considered
as part of supply chain management for organics that need to be traded globally. Process controls
and strict supervision throughout the supply chain within global organic certification bodies
remain compulsory in order to safeguard the authenticity of the organic status throughout the
production and distribution channels. Another thing that has become a must is the supply chain
transparency and the ability to trace the products back to the origin farms. In this case, fruits,
vegetables, and grains are examples of perishable organic products that must be subjected to cool
temperature and appropriate climate conditions to maintain quality and nutrients before the
products reach the overseas markets. Such risks have to be reduced by means of cleaning and
sanitation, pest control, and cross-contact with nonorganic foods. There is also a great concern
with packaging: this includes containers that do not leach chemicals into food, organic status of a
product, the origin of the food, and how it should be handled.
In the least, supply chain managers work closely with certified organic farmers and processors in
producing crops and handling them with due regards to the organic requirements of the export
markets. Privacy of inputs and outputs, soil health, water resource availability, crop rotation to
enhance crop’s natural defense mechanisms against pests, no use of synthetic inputs and GMO
seeds and feeds are some of the key principles of compliance, it involves inspecting storage
facilities, transport vehicles, and loading docks to ensure cleanliness before the organic goods are
transported through the chain. Such measures as orientating personnel to adhere to various
protocols as well as internal audits for compliance enhance quality culture within the nodes.
Final check of the finished products to ensure that they are free from any chemical or microbial
contamination indicates an area of failure which needs correction. Enhanced collaboration with
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stakeholders and accountability with a focus on maintaining the integrity of the organic label
leads to enhanced export success. Third party agencies also carry out periodical assessments of
the system, vulnerability checks and traceability to ensure compliance and for certification.
Sustaining strict quality assurance and integrity of the organics ensure that the products appeal
for high price tag in the overseas market while at the same time satisfying the consumers’
expectations. It maintains both the supplier and trade partner credibility, as well as incrementally
enlarges the top-tier international organic market.
3.5. Market access and distribution channels
Market access and efficient distribution systems are some of the key factors that the organic
farmers have to address when getting their products to market. Organic foods were originally
exclusively associated with narrow market sectors in the form of small shops with specialized
product offerings. Yet, as this industry has expanded exponentially in the last twenty years, the
outlets through which organic foods are distributed and sold have changed significantly. Mass
merchandisers such as Wal-Mart and Kroger have even allocated sections of their store to that of
organic brands. It also means that organic foods get to reach a much wider population than it was
previously possible in the past. However, mere positioning of goods on the shelves can
sometimes yield no results. This indicates that organic producers need to be proactive in the
management of the RTM by communicating the value proposition of the organic product to the
retailers in a bid to gain better shelf positioning and promotional strategies.
Depending on the size of the organic producer, the mode to the market may vary in terms of
efficiency. CSA farms may involve few producers selling food directly to consumers or through
associations with chefs at local restaurants and in organized farmers markets. But for large-
scaled organic operations, for example, ones targeting regional or national clients such as
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retailers, building relationships with major grocery buyers and food distributors is strategic.
These distribution intermediaries act as filters by choosing which of the products will be taken to
the stores. As soon as a contract with a retail chain is signed, the organic producers have to make
sure that they are able to meet the required quantities of produce with the right quality at the right
time. This is because failure to consistently deliver can lead to the dilution of carefully built
distribution advantages. Other sustainable promotional activities with grocery partners such as
sampling, couponing, and multiple pack offers also assist in creating top-line sales growth for
organic products, the capacity and potential to supply major retail channels without hitches
provides organic brands the breadth needed to grow sustainably.
4. CONSUMER BEHAVIOR AND MARKETING
Consumers today continue to make efforts to seek products that are organic and produced using
sustainable farming practices. A market analysis shows that newer generations of customer are
willing to buy food and other products of agriculture industry only if it has been produced
through ethical means, environmentally friendly and with an eye on the health factor. This
change of paradigm has produced new business and farming opportunities for those that are able
to deliver clear and effective messages that can transmit the organic and sustainable character of
their products.
Consumers are becoming increasingly conscientious in their buying habits, and corporations are
responding by including marketing messages and labels such as ‘organic,’ ‘fair trade,’ ‘rainforest
alliance certified’ and ‘cruelty-free. Product information descriptions are helpful in providing
customers with detailed information that will help them make the right decisions that they
consider appropriate due to their ethical values. Companies are also using storytelling marketing
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across the multimedia to establish how they are embracing sustainable agriculture to create value
that consumers appreciate through corporate social responsibility.
Consumers have become better informed of the sources and the chains through which the
products they consume are produced and brought to the market, and so, brands must substantiate
their ethics and sustainability, initiatives. Through the use of technology modern consumers have
been able to educate themselves on, and verify, where and how their foods is produced. The
consumer trust and loyalty will most definitely be affected when there’s even a hint of
‘greenwashing’. Thus, for the brands that are eager to reap handsome profits from this promising
client base, they have to invest in the process in the same true manner as organic, regenerative,
equitable agriculture implies. A combination of changing consumer trends, technological
advancement in the exposure of information, and culture-conscious values in marketing have
contributed to the increased growth rate and trade in ethical agriculture.
4.1. Trends in organic and sustainable product consumption
Consumers have become more concerned with the quality of the produce that is being produced
through organic and sustainable farming methods. Studies reveal that as the younger generation
is growing more selective and conscious about the food they buy, they think more about the
source of the food and the effects of the food they buy on issues like sustainability of the
environment and fairness to labor, this rising consciousness has fueled growth in the organic
foods market which has been growing at double digit percentages every year for more than a
decade. There are multiple factors for this demand increase, but the primary ones can be
attributed to enhanced consumer understanding of the benefits of organic food for themselves
and the environment, more concern regarding climate change, pollution, soil and water depletion,
and other sustainability issues tied to traditional large-scale manufacturing farming, moreover,
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the acts of communication by both the small and big organic producers and organizations have
helped in popularizing organic and sustainable products with special emphasis on their social and
ecological features.
Consumer segments that are relevant for positively driving sustainable agriculture produce
include young people in urban areas especially Millennials and Gen Zs as well as young parents
who are always concerned with the kind of food their children consume. These demographics
indicate consumers are more likely and ready to pay premium price for the organic certification
labels, fair trade and ethical sourcing labels. Some of the ways their purchasing decisions can be
influenced include social media, the word-of-mouth recommendation from peers and ‘activist’
campaigns about problems with the conventional food system. To sustain the sales and market
share penetration within these segments, brands are looking into the new product formulation
which include traceability, transparency, upcycled ingredients and plant- based sources and
digital marketing strategies. These trends also enhance the use of IoT, AI and big data analytics
for accurate consumer profiling and personalization. Awareness in consuming agriculture
products as a form of cuisine is gradually shifting from being a mere niche market to becoming
the new norm or even the new black as sustainability concerns become more pronounced socio-
culturally. If businesses do not work on the unethical and unsustainable supply chain then they
are likely to lose a major market share in the next ten years due to this shift in perspectives,
priorities and affiliate brands that uphold ethic and sustainability.
4.2. Price premiums and willingness to pay
Current study reveals that most consumers have good attitude towards organic products because
of the health, environmental and ethical reasons associated with them, but they don’t necessarily
lead to buying behavior. A study done on consumers’ perception of green products revealed that
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the market appeals to a niche of consumers who heavily prioritize sustainability. The proportion
of consumers who are willing to pay high price for products which have environmental-friendly
features is relatively high. For all other consumers and for those segments who are motivated by
functional quality/value for money, the purchase intent drops sharply at higher prices even if
there are claims of sustainability.
There is need to strike a proper marketing strategy and set rational but, at the same time,
lucrative prices for organic products. While positioning the products at higher price point than
the mass market conventional counterparts and at the same time emphasizing on the
differentiated value propositions, the revenues and brand associated with the green attributes are
likely to be pulled by strong green buyers. Price premiums beyond what is reasonable may have
the unintended consequence of exerting demand from consumers who are more sensitive to price
changes. Promotion appeals including quality, health benefits, improved taste, social prestige and
ethical production have been useful in raising the willingness to pay of some. In contrast, cost-
promoting communications and shifting the default choice from premium-priced organic to
increase the base of organic buyers can occur. The growth in accessibility of media through
various retail outlets including supermarkets and bulk stores together with effective promotions
has boosted the discovery of these products. Increasing the degree of normalcy and converting
‘organic’ into a household staple through the development of the retail channel, competitive
pricing strategies and educational marketing will remain crucial levers to push for higher organic
product uptake in the future. The quest to get right products and prices that will harvest value
from green consumers while at the same time transposing trials across the broader population
remains a continuous struggle in the direction of sustainable growth for the organics market.
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4.3. Marketing strategies for organic products
Organic products are among the fast-growing markets today due to rising concerns over healthy
and natural living as well as environmental conservation. Organic products’ marketing is a
different concept from the marketing of the traditional goods. One of the essential components
here is to create consumer trust and eliminate organic’s connotations as being either too
expensive or of poor quality, the appeals should be directed towards the individual health and
environmental concerns, for instance the avoidance of chemicals and for encouraging people to
patronize organic foods for the better support of sustainable agriculture. Other branding
techniques which can be effective include branding that convinces the buyer of how the company
obtains products from local and sustainable farmers. The placement of organics, which implies
that they are the premium products not a category that requires the consumer to seek can bring
new customers. Minimally processed food, organic, nutrition claims, and farm-to-table
advertising make a POS in-store image preferable to conventional alternatives. Organic products
may be marketed as a social cause rather than a luxury because consumers from the millennial
and Gen Z generation are more inclined towards a healthy lifestyle. Parent bloggers, those
concerned with the environment and those interested in healthy living are also a good target for
influencer marketing. These strategies can explain to consumers that if they have to pay more a
little bit to buy organic than conventional commodities, the benefits are worth it for everything
from fruits and vegetables to processed foods, cloth, and cosmetic products. It is about
associating an image of emotion with the product and influencing the gullible shopper that they
are doing the right thing for the society. This means moving beyond such facts as ‘uses less
chemicals’ to ‘low Chemical’ stories that stir passion for health and the environment among
consumers. It is only those companies that show how the choice of organic products conforms to
the consumer’s perception of the world and its environment such as saving the earth or providing
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good food for families, that are most effective in shifting the organic market into the mainstream
one for all other categories. Communication should be done in the same tenor across the different
platforms, with major emphasis on the key values of sustainable sourcing and production,
nutritional value, as well as food quality and safety that has been achieved through sustainable
production. Organic food certification is an advantage that forms a credible reputation as the
market expands to meet the consumers’ need.
4.4. Education and awareness campaigns
Awareness creation and sensitization which is often carried out through the use of information
and education materials and activities is crucial in shaping the consumers’ behavior and
marketing of organic and sustainable agriculture products. Since the people get informed on the
various health and environmental impacts of using organic farming then they are willing to
purchase the organically produced products at higher prices. Several food producers and
marketers of organic food products have availed themselves and projected targeted marketing
and promotional campaigns to the consumers. By popularizing knowledge on adverse effects of
synthetic pesticides and fertilizers for human and soil health has formed a good reason for
organic. The growing awareness of carbon emissions and the climate change impacts have
resulted in consumers positively focused on the reduced carbon footprint of organic agriculture.
The campaigns on education and awareness have also demystified myths about low returns and
nutritional values of organically grown produce. One of the areas has been to ensure that famous
personalities to endorse organic products to companies, schools, parental groups to show the
benefits of taking organic diets on the health of children. A significant number of promotions are
targeted to create a perception of the consumer that organic products are tastier, of better quality,
and safer. Availability has also become easier due to a seemingly exponential growth of the
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organic sections in most conventional stores and continuously opening number of specialty
stores. Since the target audiences are urban customers who are increasingly aware of the health
and environment impacts of their consumption patterns, strategic and compelling online and
social media promotions increase brand awareness and ultimately control the choice of their
large-ticket customers. Manufacturers inform consumers at the retail point through notices, tags
and pamphlets of higher requirements practiced in the industry and the traceability feature that is
used to explain the premium pricing. More consumers are gradually persuaded to move from a
normal diet to organic or at least use organic in part due to such educative and informative
campaigns. Their marketing appeals to parent’s emotional needs for ensuring that they feed their
children with healthy meals. Some of these diseases include diabetes, obesity, high cholesterol
and high blood pressure, and these marketing campaigns cash in on consumer’s aspirations to
live a healthy and disease-free life.
4.5. Market segmentation and targeting
Market segmentation and targeting are important parts of consumer behavior and marketing with
special emphasis on organic and sustainable agricultural products. Consumer can be split into
various segments using different parameters for segmentation such as demographic,
psychographic and behavioral. Democratic segmentation may sort customers according to age,
income, area, education and other factors. For organics, potential target groups may be the higher
income groups that reside in cities and suburban families with children. Lifestyle segmentation
categorizes buyers by the way they live their lives in terms of their persona, interests and
opinions. Organic products are usually pursued by those individuals who consider health,
sustainability and manufacturing quality essential factors. This type of segmentation considers
factors such as the usage rates of the product, the usage rate of the benefits and the customer
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loyalty. Thus, light or first-time buyers differ from heavy users and the former cannot be targeted
in the same way as the latter who can be recognized by their intensive purchase of organics.
After segmenting, marketers choose and prioritize on the identified market segments. The major
reason is that organic food marketers have been inclined towards the high-end market due to the
price overtones giving organics a ‘premium’ status. They also aim at satisfying segments of
consumers who are in search of safe food, fresh and nutrient density. Organic foods as a category
attracts parents that are shopping for babies and young children which is a good market for any
organic marketer to target. In addition to the demographic variables, psychographics assists in
defining segments that appeal to the concept of organics’ belief system. The research done in the
last few years demonstrates that lifestyles targeted towards health and sustainability segment
remains on high growth path. Proclaimed values of being environmentally friendly, locally
sourced, animal friendly and fair-trade practices are some of the ways the marketers are able to
appeal to the values substituting consumers within the organic and sustainability appeal.
Marketing mix, that is constituted by product development and launch, pricing and positioning
and distribution strategies targeting clear segmentation means that organic marketing strategies
are aligned to the target’s needs and goals. Segment research which is a continuous process
enables the marketer to respond to new trends in consumer perception and in changes in the
economic factors that affect budgets and characteristics of what is considered a ‘buy’.
5. INTERNATIONAL TRADE AND ECONOMIC IMPLICATIONS
There are literally numerous economic impacts that are associated with the international trade in
organic and sustainable agriculture produce. With increasing consciousness over health
conscious foods that are also less hazardous to the environment by consumers all over the world,
many more countries are exporting these products. Other countries that have a favorable climate
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can gain competitiveness in the production of organically grown foods. If these exporters pay fair
wages, do not pollute the environment and allow workers’ rights such trade leads to economic
gains combined with improved environment and workers’ welfare. Nonetheless, the effects
associated with the spread of intensive monoculture organic farming on the ecological health of
farming environment and the general bio diversity can be compromised if not controlled
appropriately.
It also provides consumers with greater latitude to access a more varied diet of organically
produced foods, this extends consumer options and the diversity of food consumption. Indeed,
for the emerging economies with increasing middle class population such as the china and India,
the increased ability to pay means better standards and therefore the willingness to pay for high
quality imported foods that are perceived to be safer. Specifically, since domestic food safety
concerns are still present in these countries, consumers are attracted to the certified organic foods
even though they tend to be more expensive. The same apply to developed countries as they
import more to meet the thirst of organic goods that are not manufactured locally.
As the global organic export market expands, supply chain employment opportunities in farming,
processing, and distribution are generated in supplier nations. The employment and trade revenue
increases thus add socioeconomic development. Just like any organic production that targets
export market the application of ecological principles of production also increases sustainability
in developing countries. Some governments encourage it in order to eliminate the drawbacks
associated with conventional agriculture to the environment. If the expansion goes on the right
path then trade of organic products across the world can pave way towards a greener and more
inclusive economy. Besides lifting the farmers and exporters, the sustainable best practices do
not lead to the loss of biological diversity from monoculture operations or pollute the
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environment with hazardous chemical fertilizers and pesticides. Thus, there is apparently a net
economic gain, without any severe negative effects on the environment.
5.1. Trade policies affecting organic agriculture
Several trade policies regarding the organic agriculture industry do exist and are implemented at
the international level as well as at the national level. With increased consumer consciousness
and the desire for natural and organically produced foodstuff, international trade has also gained
momentum in this sector. However, issues such as variation in organic standards and certification
hitches gave a negative perception due to barriers across different countries. Also, since most
organic products are more expensive than their non-organic counterparts due to the high cost of
production, organic farmers need a consistent market for their produce in other countries for their
businesses to be financially viable. Therefore, the effects of various trade policies are interactive
and affect organic farmers and the entire organic agriculture sector. For example, trade
liberalization policies that enhance free movement of goods and lower barriers to imported
products increase access to organic foods in the importing country; and help export-led organic
farmers to maintain lower costs. Trade liberalization through economic partnership agreements
between countries or regions in a bid to reduce trade barriers ensures that each partner has
enhanced access to the other’s market and enhance benefits in trades ranging from organic
products. But other official measures that influence trade competitiveness and flows, including
regulatory instruments put in place by national governments, domestic support, quotas, export
subsidies are also seen to have a bearing on the less competitive organic sectors in some
countries. There is also the problem of equivalency whereby, certification bodies and
governments disagree on the organic standards in the trading partner countries in the case of
organic agriculture, it then gives rise to the need to streamline the standards to minimize trade
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barriers. Moreover, it is also very important to note that most of the trade in organic products is
still limited to the developed countries due to the fact that they are in a better position to ensure
proper accreditation for such products. Yet growing nations suffer more obstacles to export their
organic products despite possessing naturally favorable resources. Trade in organically grown
produce is further limited by policies that regulate issues of food safety and plant health
protection. Global policy harmonization is need among the major trading partners of organic
products in order to provide the needed framework for easy trade and minimize risk associated
with the growth of international organic agriculture sector as the sector evolves.
5.2. Fair trade principles and practices
The principles of fair trade are aimed at offering a fair price for the products they produce to
improve the developmental status of the third world producers. Some of the key fair-trade
standards are: paying a fair price for products, ensuring local sustainability, contractual
transparency, safe working conditions and labor rights, and democratic organization that allows
farmers to participate in running fair trade organizations. Reasonable prices seek to make fair
returns on invested capital, which includes cost of inputs, fair wages to workers, fair distribution
of profits and impacts on the environment. Fair trade minimum prices are intended to protect
farmers against the oscillations in the market. In order to support the concept of sustainability for
the local communities, the fair trade has to make investment into the projects that will help the
locals such as schools, health care or the environment. They exclude some toxic substances and
genetically modified organisms that are considered crucial to the sustainability. Those condition
SC transparency requirements enable the consumers to track back to the producers and ensure
that the conditions were fairly offered. All agricultural labor has rights shielded by the adherence
to fundamental ILO conventions on child labor, forced labor, discrimination, and freedom of
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association. Conditions for operation of democratic organisations provide farmers with an
opportunity to participate in determination of fairness of trade standards and premiums.
For producers and traders to be able to label their commodities such as coffee, cocoa, bananas as
fair trade, they have to undergo certification, and regular audits to ensure they have complied
with these social, economic and environmental tests. The disadvantages involve increased costs
of sourcing and marketing services, products from, and to small scale farmers, however,
economic impacts will include income security of small producers with fair trade minimum price
and premiums acting as buffers against fluctuating market prices. Researchers have concluded
that, fair trade farmers have better standards of living, enhanced food welfare, education for
children and equality between women and men. But it has remained relatively small, and this has
prevented wider effects from being observed. The proportion of fairly traded agricultural
products remains low at only 0. 5 %. Such changes entail addressing consumers’ confusion as to
the different meanings and labels associated with fair trade. Reliable understanding of FT
objectives and impact could potentially grow the market for sustainable products. If scaled up
markedly with sound monitoring and evaluation, fair trade could change the structure of
extended commodity systems for the better by promoting ethical, environment friendly
procedures with developmental potentiality for the farming communities.
5.3. Economic impact on developing countries
Export of organic and sustainable agricultural products and crops can go a long way in
ameliorating the economic status of the developing countries. Due to increased demand of
quality healthy and environmentally friendly foods, the expanding and developing nations having
favorable conditions in growing different horticultural produce stand to benefit from export
opportunities. When done sustainably, the increase in the size of the area under organic farming
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can provide employment to rural inhabitants and boost farmers’ earnings. For instance, products
such as organic coffee, cacao, nuts, and tropical fruits are examples of crops that developing
countries are already exporting to meet increasing demand in North America, Europe and other
international markets. This shows that once farmers switch to organic production methods, they
can charge a premium price for their produce compared to the conventionally grown ones. To
realize these opportunities, developing country governments can subsidize various forms of
assistance include supporting farmer’s move to organic certification, construction of irrigation
and storage facilities, promotion of credit facilities, opening domestic organic markets and trade
liberalization. Praise for success needs to set basic parameters as well as maintain accurate
accountability in order to avoid deception and contamination of the environment due to intensive
farming. Should the economic dividends be spent prudently, developing countries are in a
position to establish prosperous Agricultural sectors that enhance food security, eradicate poverty
among producers whose livelihoods depend on the production of crops and livestock; and
promote sustainable resource use so as to benefit future generations. But there are the risks, too,
if the market price fluctuations lead to the decline in prices or smaller farmers do not have the
right to participate. It is necessary to implement policies and programs containing technical
support for various kinds of producers in developing countries excluding only the large-scale
producers oriented on exporting their production so economic benefits from this process will also
be distributed between marginalized groups. International trade in organic products provides
opportunities for developing country economies to pursue sustained growth in an
environmentally-friendly manner but the equitable management of this trade is a continuous task
that demands attention to policy actions both at the national-level and collaboration at the
international level among trading partners.
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5.4. Market barriers and trade agreements
Expansion of such trade has been hampered by barriers such as tariffs, quotas, and
regulations. But since the mid of 1990s to the present time, nations have entered different new
global, regional and bilateral trade agreements to successively reduce these barriers. Trade
liberalization means that various barriers to trade are eliminated, and this opens up opportunities
to achieve scale economies and diversification, which makes sense in terms of welfare.
Liberalization of trade has some associated threats based on a shift in trends in volatile
commodities and high import penetration affecting the local agriculture value chains, however,
critics have expressed worries over the environmental impacts, and other social and economic
effects associated with liberalization in agricultural trade. Therefore, while engaging in trade
policies in this realm, a more complex strategy is called for in the creation of the relevant trade
deals.
With regard to trade in organic products the most significant barriers have been tariffs and non-
tariff measures that have reduced market access and increased costs of production for organic
goods. As the topic involves more cooperation and international standard setting, there are
increasing demands on better coordinated rules and mutual recognition of equivalence relating to
organic certification, labelling and conformity assessment. International trade treaties such as
USMCA already contain specific regulations designed to promote the sale of certified organic
agricultural products within its countries’ borders, this scenario also leaves room for several
plurilateral and multilateral agreements at the WTO level to gradually eliminate the obstacles
that negatively affect the organic products market access in international trade. However, it is
important to integrate the right measures that will avoid degeneration to green protectionism and
also protect the authenticity of the organic standards.
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Well-designed agreements in the field of trade can actively contribute towards the establishment
and development of markets, search for efficiency, fair competition, and create the necessary
incentives for effective farming practices in the long term. But still, they are to take into
consideration commercialization, environmentalism, and development goals. It is imperative not
to come up with standard measures in formulating the agreements, but a contextual, open and
inclusive style is desirable especially for developing nations needing special and differential
treatment in line with the capability and interest of the country.
5.5. Future trends and opportunities in global organic trade
Global prospects for organic trade are set to increase as consumer pull drives consumption,
globally converting land to organic practices, and as the world increasingly focuses on ecological
approaches to economic growth. Organic food and beverages have been becoming more popular
in the past twenty years especially in North America and Europe. The world is gradually shifting
towards organics and thus, as purchasing power of consumers rises in these developing
countries, the demand for such quality products should see a huge boost. China saw an annual
growth rate of more than 20 percent in the organic market, 2012-2017, but its share constituted
merely 1 percent of total food sales, indicating immense opportunities. Apart from food products,
other products that have their origin in agriculture such as the organically grown cotton and other
products that are agriculturally produced and are not in the food category will expand in the
global markets.
As governments seek to develop policies to address adverse impacts of climate change on the
productivity of arable land, more opportunities for producers to adopt wider systems of organic
production to meet increasing demand will be created. Due to the quality of the produce, farmers
who change land from conventionally grown to certified organic production can charge a
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premium price. At the same time, the competitiveness of the countries that cultivate specific
images of high-quality organic products to the market will increase. There are specific
approaches that can be taken to support domestic organic sectors, these include setting up clear
standards for production, subsidizing of organic production and providing trade promotion
policies for organic products. This will also help producers to realize more value since final
products will be being exported instead of raw commodities. These opportunities, however, are
only realizable through public and private investment on organic value chains across extension
services, transport infrastructure development, marketing, and integration of smallholder farmers
who are relatively operating in the informal economy. If countries cultivate natural segments
from scratch, the countries create the organic segment of global organic markets and achieve the
SDG goals in the sphere of economic development, food safety, and environmental preservation.
