Natural growth: Organic farmers are benefitting from rising demand for their produce

Demand for a return to simpler, healthier and less chemically dependent food has led to the creation of a niche market in the agricultural sector: organic farming. Peru has become one of the world’s leading exporters of organic food, bringing in hundreds of millions of dollars in export revenue each year from more than 40,000 certified organic producers.

SURGE IN DEMAND: Led by a growing demand for organic banana and coffee during the first half of 2011, the country’s organic exports were reported to be up 50% over the same period in 2010, according to Peru’s Commission for the Promotion of Exports and Tourism (Comisión de Promoción del Perú para la Exportación y el Turismo, PromPerú). PromPerú also announced it expects organic food exports to reach $322m in 2012, more than twice the revenue brought in during 2008.

While Peru already maintains several important free-trade agreements with large trading partners such as the US and China, it is expected to push through an additional seven in 2012, including a vital deal with the EU. Thus far organic exports have found their way mainly to North America and Europe; however, many experts believe the future lies to the west in largely populated nations such as China and Japan.

In some respects the growth of organic farming is partially the consequence of limited access to finance in the agriculture sector. Certainly for small Peruvian farmers without the financial means or access to expensive fertilisers, becoming certified organic is one option for increasing returns on yields and adding value. Although potentially less expensive to produce, recent demand for organic certification, especially in developed markets like the US and the EU, provides a different sort of obstacle for small farmers: bureaucracy.

As the organic movement is still relatively young, federal organic certification did not even exist until the 1990s in most countries. Today, agricultural exports ( particularly those labelled organic) shipped to markets like the US and Europe are placed under intense scrutiny. However, such is the quality of Peruvian organic produce that the EU is likely to add Peru to its “preferred list” of developing world organic food suppliers in 2012, according to the National Agricultural Health Service. The EU is Peru’s largest importer of organic foods, purchasing 64% of organic exports, followed by North America (31%), Asia (3%) and South America (3%).

SUCCESS STORIES: Peru is the world’s leading producer of organic coffee, as well as a major producer of organic banana and cacao. Coffee accounts for the majority of Peru’s organic exports at roughly two-thirds, followed by banana (20%) and cacao (7%). The exports of organic coffee were estimated by the Peruvian Exporters’ Association to have increased 35% in 2011. Cacao, grown in selva jungle areas at the base of the Andes, has also become an important export earner. Peru is now the world’s second-largest exporter of organic cacao. In addition, organic banana exports to the EU are also expected to increase 30% in 2012, according to the Association of Organic Banana Producers for Chira Valley, one of Peru’s main exporters. Another of the country’s exporters of organic bananas, the Association of Small Organic Banana Producers of Central Piurana (La Central Piurana de Asociaciones de Pequeños Productores de Banano Orgánico, CEPIBO) has experienced impressive growth in its export business over the past three years. In November of 2011 Donald Lecarnaque, the president of the association, reported that container shipments of organic bananas from CEPIBO had reached 843 in 2011, seven times the 120 containers shipped from the region in 2008.

Peru’s varied geography and climate provide the country with an overabundance of options when it comes to cultivating crops. Importantly, organic farming provides small farmers who lack the finance or means to purchase fertiliser with another opportunity to maximise revenue. Having firmly established its presence in Europe and the US, Peru is now looking towards Asia for growth. With a few key FTAs in place and several more in consideration, the future certainly looks very bright for the organic farming industry.