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Organics - the road ahead

What was once the domain of only the most ardent consumer, organics produce has quickly become a staple food source for the mainstream shopper.

The Australian organics industry is valued at $300m and is expanding at 15% annually according to the Commonwealth Department of Agriculture, Fisheries and Forestry. The burgeoning export market contributes approximately $50m annually to this figure from countries such as Japan, Europe, the United Kingdom and North America, who are net importers of up to 70% of their organic produce.

Despite steady growth in production and increasing export demand, significant investment in the organic sector has been constrained by lack of certainty and security in the certification process for producers and consumers.

Organic certification

Organic produce certification in Australia is complex and lacks uniformity. There are several independent certification bodies in Australia including the National Association for Sustainable Agriculture Australia (NASAA), Australian Certified Organic (ACO) (the certification arm of the Biological Farmers Association (BFA)), the Demeter Bio-organic Research Institute, Organic Growers of Australia (OGA), Tasmanian Organic-Dynamic Producers (TOP), Organic Food Chain (OFC) and Safe Food Queensland (SFQ).

The ACO system certifies up to 60% of all Australian organic operations, and is representative of the general process. The ACO differentiate organic producers from 'value adders', including processors, wholesalers, retailers, transporters and importers/exporters.

Value adders can qualify for certification within three months by demonstrating compliance with required standards tailored to their specific activities. These standards deal with issues like protection from contamination and ability to trace the origin of produce.

Producers undergo a more involved, 2-stage process. 'Pre-certification' requires the producer to spend 12 months ensuring their operations comply with standards set by the BFA, then pass an audit. 'Conversion' requires continued compliance to be verified by annual audits for three years before full certification is given.

Obtaining certification is a costly process. Fees are imposed on applications, audits and certifications, and substantial alterations to the operations of producers may be required to meet certification requirements.

Proposals for uniform certification

A uniform system of certification has received unanimous industry support, however the means of achieving it are contentious. The key area of dispute is the choice of organization to house the 'Organic Standard', with two main options.

Food Standards Australia New Zealand (FSANZ), as advocated by the Organic Certifiers of Australia (OCA), represents six of the certification bodies. Advantages in favour of the FSANZ model are that the standard would remain the property of the industry, allowing greater flexibility if and when amendments are required and the cost-effectiveness of the model.

The second option, advocated by NASAA is to engage Standards Australia, the nation’s peak non-government standards development body. Advantages of this model include the incorporation of compulsory reporting obligations, which would provide the industry and consumers with greater transparency in composition and regulation of the standard.

The legalities

For many producers, the value attached to certification does not sustain the considerable cost. This may change if regulators, including the ACCC, were afforded certainty through a fixed standard. Certainty would enable more effective policing under the Trade Practices Act (TPA), specifically the misleading and deceptive conduct provisions, and give the term 'organic' a consumer value. A similar process has occurred recently under FSANZ in relation to Australian Made produce.

The road ahead

The competing OCA and NASAA proposals both incorporate transparency, cost efficiency and industry involvement, and underscore the importance of uniform national certification to provide certainty for both producer and consumer. Despite the current industry growth, such a standard is essential for the continued success of organic produce.

For more information

Contact
Arthur Braiotta
Solicitor, Minter Ellison Lawyers
p +61 8 8233 5448
e arthur.braiotta@minterellison.com

Food Talk, Summer 2007 (Issue 24)