Organic comes to a standstill in Germany after years of growth

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In the first half of 2022, Germany, the largest organic market in Europe, experienced a real stagnation. Zero growth compared to 2021.

The causes seem quite clear and related to a general situation. Moreover, this situation is compounded by a possible change of international suppliers, large players who are positioning themselves with authority in the world of organic food production.

Germany has also been hit by the inflation, by the rising energy costs and by the political insecurity caused by the Russian-Ukrainian conflict, which is pushing the families to be more cautious with their expenses.

According to the study ‘The World of Organic Agriculture’, conducted by the Swiss Research Institute FIBL in collaboration with IFOAM Organics International, and presented at the last edition of Biofach, Australia is breaking into the world market with 35.7 million hectares, although it is located on the other side of the world compared to the European market.

If we look closer, countries like Argentina have grown 4.5 million of organic cultivated hectares and had a 21% growth in production between 2019 and 2020. Similarly, Uruguay has grown 2.7 million organic hectares, with a 28% growth in production in 2020 from the previous year. India also bursted into the market with 1.6 million new certified producers after the pandemic. In the African continent, there is significant growth potential for the industry. Ethiopia has 220 thousand producers, while Tanzania has reached 150 thousand; organic farming is also growing in Namibia and Zambia.

A heterogeneous but ever-growing group of countries with low-cost producers compared to European producers, is entering the EU market and in particular the German market – which had a turnover of 15 billion euros in 2020 – trying to meet the domestic demand for cheap organic products. The challenge is to combine the quality level of organic supply required by the German market – with all the required guarantees and regulations – with the needs of its consumers who have less purchasing power. If the balance were to be found, European organic production would be in turmoil. 

According to Hans-Christopher Behr, manager of AMI (German Research Institute for Organic Farming), the organic sector in Germany had still recorded extraordinary growth in 2020 (+15% over 2019), and even in 2021, although it had started to slow down, it had maintained a positive sign (+5.8%).

This is why the absence of growth in the first half of 2022 not only raises debates but is bound to open up new scenarios. (m.l.)

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