Global Organic Farming Market – Insights
Organic farming is an agricultural system that uses biological fertilizers derived from plant and animal wastes. Organic farming enhances agro-ecosystem health, which includes soil biological activity, biodiversity, and biological cycle. It excludes the use of chemical or synthetic pesticides, fertilizers, and growth regulators.
Favorable growth of organic agricultural practices all over the world coupled with regional government initiatives to promote organic farming is boosting growth of the global organic farming market. According to Research Institute of Organic Agriculture (FiBL) report, in 2014, over 44.4 million hectares of land is occupied by organic agricultural activities. In 2015, the regions with the largest areas of organic agricultural land are Oceania (22.8 million hectares, which is almost 45 percent of the world’s organic agricultural land) and Europe (12.7 million hectares, 25 percent). The countries with the most organic agricultural land include Australia (22.7 million hectares), Argentina (3.1 million hectares), and the United States (2 million hectares).
North America held a significant market share in the global organic farming market in 2017, owing to increasing demand for organic food in the region. According to U.S. Department of Agriculture (USDA) - National Agricultural Statistics Service (NASS), in 2016, the farms in the U.S. produced and sold US$ 7.6 billion in organic commodities that are certified. Also, the Certified Organic Survey 2016, shows that sales of organic farm were increased up to 23% in 2016, compared to the previous year in U.S.
The global organic farming market accounted for 50.9 million hectares of organic agricultural farmland in 2015 and is expected to expand at a growth rate of 8.4% by 2026 during the forecast period (2018-2026).
Asia Pacific was the fastest growing region and held the highest market share in 2017, owing to increasing government initiative in promoting organic farming by providing subsidies on organic fertilizers. For instance, in 2013, the government of India promoted production of organic fruits, vegetables, and crops through various schemes such as Horticulture Mission for North East and Himalayan States (HMNEH), National Horticulture Mission (NHM), Rashtriya Krishi Vikas Yojana (RKVY), and others. Under NHM, the government provides incentive to the cultivators of organic products.
Figure 1. Global Organic Farming Market Share, By Region, 2017
Source: Coherent Market Insights, 2017-18
Europe is expected to show a significant market growth and accounted for 25% share of the global organic farming market in 2017, owing to stringent rules and regulations on chemical or conventional fertilizers and GMO products in this region. For instance, in April 2018, the European Union announced to ban the widely used insecticides (neonicotinoids) to protect honeybees and other insects vital for food production from all fields. These can be only used in closed greenhouses. Furthermore, in 2010, the government banned the supply of ammonium nitrate fertilizers containing more than 16% of nitrogen. These factors are positively impacting growth of the organic farming market.
Figure 2. Global Organic Farming Market Share, By Method, 2017
Source: Coherent Market Insights, 2017-18
Changing dietary patterns towards organic food products are pushing demand for organic fertilizers in organic farming. According to reports published by the U.S. Food and Drug Administration, 6 in 10 U.S. citizens believe that organic foods are better for their health. Also, according to the U.S Department of Agriculture, 4% of total food sales in the U.S. in 2016, were from organic products. The organic retail sales in Europe stood at US$ 30.85 billion in 2014, as estimated by the International Federation of Organic Agriculture Movements.
Major players operating in the global organic farming market include Picks Organic Farm, Organic Farmers Co., The Indian Organic Farmers Producer Company Limited (IOFPCL), Bayer AG, Camson Bio Technologies Limited, and ZUWA Organic Farms Pvt Ltd among others.
Organic farming is a production system, which avoids or exclude the use of synthetic inputs such as fertilizers, pesticides, feed additives, and hormones and maximizes using animal manures, crop rotation, crop residues, and off farm organic waste. Organic farming maintains and manages soil fertility while minimizing wastage and pollution.
Organic farming offers high nutritional value for food is expected to drive growth of the global organic farming market. Foods from organic farming are rich in nutrient content such as enzymes, vitamins, minerals and other micronutrients. Furthermore, rising consumer awareness about the health benefits of organic products is expected to propel growth of the market during forecast period.
However, high production cost of organic farming is expected to hamper growth of the market during forecast period. Organic farming requires large number of labor or manpower to maintain the crop productivity, which in turn increases crop production cost.
North America held significant market share in the global organic farming market in 2017, owing to increasing consumer demand for organic food and rising organically produced goods in the region. According to United States Department of Agriculture (USDA), the organic sales account for over 4% of total U.S. food sales. The U.S. spends around US$ 1 billion every year on imports of organic food. Furthermore, rising demand for organic food is surpassing domestic supplies and leading to depend on imports from other regions. For instance, according to the United States Department of Agriculture (USDA), in 2014 imports for organic corn in Canada was valued at US$ 16.9 million which was increased by US$ 19.0 million in 2015.
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