Organic Markets in the European Union
In 2012, regulatory authorities in the European Union and the United States standardized the validity of organic product certification between both jurisdictions. This normalization facilitated and increased the amount of organic trade across the Atlantic Ocean. This article explores the status of organic markets in Europe.
Organic Markets in the European Union
Today, the organic market within the EU is worth approximately US$30 billion in annual revenues, particularly within Germany and France. Furthermore, agricultural markets in Europe boast a greater variety of organic products than North American markets and have done so for a long amount of time. In the specific case of the Czech Republic, today this country boasts well over 4.200 organic farms and cultivates organic crops throughout more than 500.000 hectares of land. The Czech Republic is a small central European country with a total territory of 78.800 square kilometers, which is slightly smaller than South Carolina. A member of the EU, the Czech Republic has a population of more than 10 million citizens and a gross domestic product (GDP) above US$300 billion. The Czech economy is divided into 3% agriculture, 37% manufacturing, and 60% services.
The main agricultural goods produced by the Czech Republic include wheat, potatoes, sugar beets, hops, vegetables, fruit, beef, pigs, and poultry. Furthermore, there are well over 500 producers of certified organic foods, representing a national organic market worth more than US$80 million. However, the Czech domestic market for organic goods still has substantial growth potential. In the Czech Republic, the average citizen spends less than US$10 a year on organic goods while the average for EU citizens is closer to US$50 annually. In terms of production, the output of organic wheat within the Czech Republic has gone from 9.000 metric tons in 2001 to 66.000 metric tons in 2015.
Currently, domestic consumption is the greatest barrier for growth within the Czech organics market due to the high prices of organic goods. Particularly, given the fact that more than half of all organic products commercialized in the Czech Republic are imported. The food and agricultural goods imported into Czech markets come mainly from fellow EU member states, mainly Germany who represents the country’s principal trading partner. Amongst the most purchased organic goods within the Czech market, there are dairy products totaling US$14.3 million during 2015 and baby food representing US$9.7 million in 2015. Similarly, the sales of organic rice, pasta, and noodles totaled US$8.1 million during 2015.
Interestingly, alongside the US and the EU, India, Uganda, the Philippines, Mexico, and Tanzania feature on the list of largest suppliers of organic goods to the international markets. Meanwhile, within the US market, the largest retail supplier of organic goods are Whole Foods grocery stores. Even though reaching an agreement seems highly unlikely during the coming years, given the current political winds, the implementation of a free trade agreement (FTA) between the US and the EU would give a great boast to commercial exchange within the transatlantic organic sector.