Organic Business Guide/Organic production and fair trade

Organic production and Fair Trade

In the following chapter you will find a summary of what you need to know about organic farming and Fair Trade, and what you can expect from entering this type of business. It also provides you with an overview of the different standards and certification options for organic farming, Fair Trade and related sustainability initiatives.

What is organic production?

The most simple understanding of organic farming is "No chemical pesticides + No chemical fertilisers + Certification = Premium Price". While this may be a useful formula to begin with, organic farming is really much more than this. Where farmers do nothing about soil fertility or pest problems you do not have a sustainable business. You may start with an ‘organic by default’ situation but pretty quickly you need to move into an active organic farming approach. At this point you are then looking at a sustainable agricultural production system that builds on ecological processes without using chemical inputs or genetically modified organisms, in order to produce safe and high-quality food. IFOAM, the International Federation of Organic Agriculture Movements, defines organic agriculture as follows : "Organic agriculture is a production system that sustains the health of soils, ecosystems and people. It relies on ecological processes, biodiversity and cycles adapted to local conditions, rather than the use of inputs with adverse effects. Organic agriculture combines tradition, innovation and science to benefit the shared environment and promote fair relationships and a good quality of life for all involved." What the design of organic production systems means in practice, and what challenges need to be addressed, is described in detail in chapter 5.

Standards and their enforcement

Since the 1990s, organic production and trade has evolved into a whole industry of its own. In order to protect producers and consumers from fraudulent claims, the need arose to regulate the use of the organic label. In a participatory ongoing process, the international organic movement has defined organic agriculture in a set of principles and standards . These form the basis for many regulations at international (Codex Alimentarius), national (e.g. the US NOP, the Japanese JAS or the Indian NOS) and regional level (EU-Regulation), as well as for private labels (Soil Association, Naturland, BIO SUISSE etc.). There are organic standards for plant production, animal husbandry but also for wild collected products. Organic standards not only address primary agricultural production, but also include rules for processing and labelling. There are also rules for keeping organic products separate from conventional ones, to avoid contamination or mixing. All these rules and regulations are just the minimum requirements. It does no harm to go beyond the minimum; a lot of buyers and certainly the consumers will appreciate that!

Inspection and certification by an independent third-party ensure that products labelled organic really fulfil the requirements of the standard. For businesses that want to sell their products as organic in international markets, certification as per the respective standard is a must. In a situation where the product of a large number of smallholders is marketed, group certification systems based on an Internal Control System (ICS) are used (see chapter 8.1). Participatory guarantee systems (PGS) have evolved as an alternative to formal certification in situations where producers sell directly to consumers, in local markets . While in most markets there are national logos that are free to use, the use of a specific certification body allows the use of their private logo as well (e.g. Soil Association in the UK or Naturland in Germany). This can have certain advantages when marketing the produce.