Issue 6: Planning for growth and industry development
Peak bodies often play key roles in promoting growth and industry development, other than through lobbying governments. At present, industry development and promotion of Australian organics is fragmented, yet the industry has still grown. A key issue is determining what role a new peak body could play in promoting growth and further industry development.
Australia’s organic industry is growing strongly, but it still only constitutes a minor part of Australia's total agricultural production ($64 billion ABARES). In 1995, domestic sales of organics were estimated at $100 million; and by 1999, $250 million (Alexandra and May 2004). The latest Australian Organic Market Report indicates that Australia’s organic industry could exceed $2 billion in value of sales by 2018. Along with strong growth, the Australian Organic Market Report identifies that:
- the number of certified organic operations in Australia grew by 5% in 2016
- tonnage of organic products exported from Australia grew by 17% across a range of commodity and product types
- organics is a dynamic in the health and wellness packaged food market
The report identified that, in 2016, Australia’s organic industry consisted of 2,075 certified organic producers, 1,163 certified processors and 513 certified handlers.Australia has 53% of the world’s organic farmland by area, due to large areas of pastoral lands. The total value of Australian organic market in 2015 is estimated at over AU$1.7 billion (includes post farm gate value add) with the domestic Australian consumer market estimated at about AU$1.4 billion exports estimated at over AU$300 million.
Supporting this growth trajectory, or facilitating its acceleration, could be part of the mandate of a new peak body. Sometimes a communication hub linking actors along value chains is valuable. Sometimes active promotion within sectors and markets is needed to overcome constraints to growth. Sometimes there are issues with scale, investment, regulations and specific marketing that a peak body can help overcome.
“The market research company Organic Monitor estimates the global market for organic food in 2014 to have reached 80 billion US Dollars (more than 60 billion Euros). The United States is the leading market with 27.1 billion Euros, followed by Germany (7.9 billion Euros), France (4.8 billion Euros), and China (3.7 billion Euros). In 2014, the Swedish organic market experienced an unprecedented growth, increasing by more than 40 percent—a remarkable rate for an already well-established market. The highest per capita spending was in Switzerland (221 Euros) and Luxembourg (164 Euros).”—Research Institute of Organic Agriculture (FiBL)
- What kind of future growth is possible in Australia?
- If the industry has been able to grow without a peak body facilitating that growth, there needs to be careful consideration of how a peak body could enhance industry growth. How could a new peak body be effective in promoting growth and industry development?
- Can you provide examples, analysis and case studies describing specific examples of where a national peak body coordinating a campaign focused on industry growth (problem solving or opportunity seizing) could enhance the industry’s growth prospects?