Foreign suppliers satisfy Germany's organic craving

BERLIN -- Germany has one of the largest organic markets in the world -- so why is its economy hardly profitting?

BERLIN -- "Everything is regional," bellows Udo, a butcher, from behind the meat counter at the organic grocery store Bio Company in Berlin's low-income Moabit district.

"Even the sausages … well, except the Italian ones, of course," he adds in a poignant local accent as his eyes rest thoughtfully on the organic meat products in front of him.

"You really notice the difference in quality: I think it's better that you eat better meat two times a week than the standard stuff every day."

Udo isn't the only one who thinks so: Germans have long been conscious of the significance of where their food products come from, as well as how they are produced. Despite being pricier than traditional groceries, organic food products especially -- ones meeting E.U. organic guidelines -- have endured in Germany as both a status symbol and a sign of conscious consumerism -- a combination that has proved extremely beneficial for the growth of organic demand.

Accordingly, German organic consumption is on the rise. Revenue was up six percent in 2012, with a 30-percent increase over six years ago, and a 300-percent increase over ten years ago. Germany's organic industry cracked the seven-billion Euro mark for the first time last year.

But German farmers are hardly taking a piece of that massive pie. According to a study by Friedrich-Wilhelm University in Bonn cited by Der Spiegel, the use of land for organic farming has doubled since 2002, but the growth in demand for organic products has been even faster -- and production has failed to keep up.

Without domestic product available, retailers have turned to foreign suppliers for organic produce that could easily be grown at home. The study noted 28 percent of all organic potatoes come from Austria, Israel or even Egypt, while 48 percent of organic carrots in Germany come from Holland, Israel or Italy. Some 25 percent of organic eggs come from Holland and Italy. The trend raises questions about the added cost, carbon footprint and overall sustainability of Germany's organic market.

"I wouldn't call it a dangerous situation for the industry," Acting Director of the German Association for Ecological Food Production (BÖLW) Peter Röhrig told SmartPlanet. "But it's not good."

He said the most worrisome problem is the credibility of German retailers in a market where consumers demand a highly sustainable product -- and right now, they are getting products which are not "necessarily environmentally friendly."

"We need more organic farms first and foremost because it is better for the land and the environment -- and that's better for the industry," Röhrig said.

The university study identifies government policies as being primarily responsible for farmers' reluctance to switch to organic cultivation. It cites "politically influenced" price increases, such as subsidies that favor biogas industries producing ethanol, for instance, as a barrier in getting farmers to abandon conventionally cultivated crops.

The BÖLW has submitted recommendations for changes to current E.U. agriculture policies, including an outline of the association's view of the current global challenges and the industry's key needs. It cites appropriate market regulation, the distribution of subsidies based on the performance of industries, as well as the importance of sustainability as a primary benchmark for agriculture policy decision-making in the E.U.

Additional problems include a shortage of E.U. financial support for the industry following the renegotiation of the Union's financial framework. Organic agriculture received 15 to 20 percent less funding than it needed last year, according to the Friedrich-Wilhelm University study -- a tab it says individual countries will need to pick up in order to meet previously outlined organic goals.

But as the Süddeutsche Zeitung (SZ) notes, the industry itself is quite content with its current condition: Germany is the world's number-two organic market after the U.S., before number-three France. In addition, there is still time and space in the industry to have conversations about quality versus quantity -- which is just what happens at meetings.

But organic produce still only accounts for 3.9 percent of all the produce sold in the country -- up from 3.7 percent the previous year. What's more, only half of the organic industry's profits can be attributed to sales quantity: The rest, noted the SZ, was the result of price increases from low supply and high demand.

Lucky then, that many producers are already prepared to move with the tide: By switching to niche products like prune and mango ketchup, flavored coffee and cookies so whole-grained they're seedy, wrote the SZ -- organic producers are learning how to capture the hearts and minds of those with the pocketbooks to enable an organic movement in the first place.

PHOTO: Flickr / marfis75

This post was originally published on