Organic sector growth expected to surge in Australia

Posted by Daniel Palmer on 14th January 2010

A leading representative group for Australia’s organic food and farming industry, says that the recent strong growth predictions for the organic industry reflect data and trends identified in ongoing market research commissioned by the industry.

In survey findings released last week by independent global industry researcher IBISWorld, organic farming was tipped to be a front-runner in the areas of revenue and employment in Australia. In its report on the “top 10” growth industries, IBISWorld states that organic farming revenue is poised for a growth spurt, to increase 14.8% in 2010, raising the value to $430 million. This places organic farming in the top two growth industries in Australia for the coming year.

“While on average organic goods remain more expensive than non-organic produce, higher disposable incomes, coupled with increasing awareness of environmental sustainability and an increase in the range of organic produce available, will see continued growth in this industry,” IBISWorld General Manager (Australia), Mr Robert Bryant, said. “Growth will mainly be driven by increases in production, and an increase in consumer demand.

“Not only does Organic Farming offer higher returns for farmers, but recent studies suggest it is more resilient and adaptable to changing conditions wrought by climate change – encouraging some farmers to switch from conventional to organic farming.”

Holly Vyner, General Manager of the Biological Farmers of Australia, welcomed the report, noting that it supported industry-commisioned studies.

“We have been watching steady growth in organics for some time now,” she said. “BFA commissioned research in 2008 reported retail sales overshooting the half billion mark (AU $0.6 billion) and an 80% growth in farm gate sales over four years despite widespread drought.

“This year will see the publication of the 2010 Australian Organic Market Report, independently researched by University of New England on behalf of BFA, building upon 2008 data. This next report will be an important yardstick for measuring organic industry growth over the past two years, and will provide industry members and potential new entrants with an essential guide to trends and opportunities in various sectors within the organic industry.”

Ms Vyner added that organic farmers are, on average, younger than non-organic farmers, which augurs well for future organic farming growth.

The rise of organic production has an impact beyond the farm gate, according to BFA Director and Standards Convenor Dr Andrew Monk, who reported that mainstream retail interest was steadily rising.

“In the marketplace, supply chain capacity is increasing to cope with the expanded demand for and supply of organics,” he remarked. “The growing number of larger retailers that are now seeking out and stocking increased ranges of organic produce, should assist to grow consumer demand as organic becomes more available and consumers become better educated on the value of organics. In tandem with this has been the growth in popularity of organic farmers market stalls and smaller, local retail.”