Organic Agriculture in a Market Economy F9
Hamm, Ulrich1; Michelsen, Johannes2
1) Fachbereich Agrarwirtschaft und Landespflege, Fachhochschule Neubrandenburg, D-17009 Neubrandenburg; 2) Cooperative and Agricultural Research, South Jutland University Centre , DK-6700 Esbjerg
|In developed market economies the interest in organic farming has increased since the early 1970s. A few farmers were attracted by the less polluting production methods and small groups of consumers became more oriented towards organically grown food to improve their own health or to diminish environmental problems caused by agriculture. Marketing of organic products was mainly organized within tight networks of farmers, manufacturers, specialized retailers and consumers. In the 1980s the demand for organic products rose considerably among ordinary consumers. The closed marketing circuits, however, only supplied parts of the ordinary food market. Also in the 1980s European politicians found organic agriculture a suitable instrument to reduce food surplus production and limit agri-environmental problems. Consequently, some governments began to support farmer's conversion to organic agriculture in the mid-1980s. In 1989 a breakthrough for the production of organic food was reached in large parts of Europe after the EU had decided to subsidize conversion within an extensification scheme. However, the existing (semi-)closed marketing circuits for organic grown food were unable to manage the increasing quantities of organic products because many consumers only accepted to buy organic food in ordinary food outlets. The breakthrough for organic agriculture thus happened in production only, not in marketing. Market potentials appeared unexploited either because the expansion of production did not correspond to the major growth of demand or because marketing channels directed at connecting farmers and ordinary consumers never became developed. These mechanisms and ways to escape them are illuminated by comparing very different marketing experiences in Germany and Denmark. The comparison forms the background for pointing out main elements to be included in proper marketing concepts for organically grown products.