Expansion of organic agriculture in Southeast Europe offers new opportunities

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Expansion of organic agriculture in Southeast Europe offers new opportunities

Riddle: Name the country on the Black Sea that is among Europe’s top three for acreage of certified organic pasture.

By Juliet Zavon
The answer is Romania, a country that is starting to make its mark on Europe’s map of organic agriculture and food production. However, how this came about sets Romania apart. For conventional farmers in most countries the transition period required for organic certification is a major hurdle whose high cost is a huge step with financial risks, but it is not quite the same in Romania. The certification process in Romania is as demanding as it is elsewhere, but an unintended effect of Romania’s turbulent recent history has been something of a benefit in easing the transition to organic agriculture. If, as the saying goes, every dark cloud has a silver lining, this is a positive side to the painful economic collapse that followed a half century of communist rule.

Jump-start Romania’s organic production
When Romania’s despotic communist regime was toppled nearly 20 years ago, the economy quickly spiraled downward, taking the state-run farms and food industry with it. Without the glue of state control, production fell rapidly. Since there was little cash flow or credit available to finance the purchase of inputs for conventional farming, what remained of Romania’s agriculture simply did without. Although less by design than necessity, numerous farms in effect went through many of the steps required in the transition period for organic certification. By the time the economy was beginning to recover and opportunities for organic businesses emerged, it was clear that this could help jump-start Romania’s organic agriculture and food production.

LaDorna, a Romanian milk processor, is an example of a company that has been able to make good use of this jump-start. The abundance of certified organic pasture in Romania is a cornerstone supporting expansion of their organic dairy products that include Telemea, a sheep-milk cheese that is a regional specialty in the lands along the lower Danube near the Black Sea.

250,000 acres in organic production
Romania has much to offer organic food companies. Starting from a very low base, farmland in organic production has grown rapidly, more than tripling in the last five years. It is estimated that in 2005 more than 250,000 acres were in organic production, with pasture accounting for more than half of this. The large acreage of organic pasture supports a growing number of dairy cows, sheep, and goats. Output of organic dairy products is expanding and cheeses such as LaDorna’s Telemea have found export markets in Western Europe. Organic honey, too, is well appreciated and is Romania’s leading organic export. Cereals, oilseeds, fruits, vegetables, herbs and medicinal plants are also part of Romania’s expanding organics business. German, Swiss, Dutch, and Italian companies increasingly find Romania to be a good source of organic agricultural products.

Romania’s climate, fertile soils, abundant agricultural resources, low-cost labor, and local traditions endow the organics sector with significant growth potential, but it will take further investment to develop it fully. Although honey and cheese are important processed products, most of Romania’s organic output is raw agriculture products. There are opportunities to expand production of organic processed ingredients and retail food products.

Domestic market will grow rapidly
Domestic demand for organic food is growing, but small due to the low income level of a large part of the population and a lack of consumer awareness. However, a number of factors suggest that the domestic market will grow rapidly over the next five years. Demand for organic food is strongest in urban areas and will grow as the rural population continues to move to the cities where better employment opportunities offer great upward mobility. As the economy continues to grow and standards of living rise, demand for organic products is expected to follow trends similar to the growth patterns experienced in markets in Western Europe. Membership in the European Union (EU), scheduled for January 1, 2007, is expected to accelerate these developments.

Both EU and Romanian government policies have supported the expansion of organic farming as the country prepares for EU membership. For example, EU funds helped finance the construction of LaDorna’s new cheese plant, which was built to EU food safety standards. The organic sector also benefits indirectly from EU government investment in Romania’s infrastructure such as roads.

Beginning in 2007 EU membership will strengthen the developments underway. Since trade within the EU is duty free, integration into this consumer market of 450 million people is expected to encourage growth in Romania’s organics sector by facilitating trade. EU membership will also improve access to financing for Romania’s farmers, which remains a problem despite the progress in economic recovery. This is very important in giving growers the ability to develop production. On the regulatory side, EU membership will end the use of genetically modified (GM) soybean seed in Romania. Currently about 80% of Romania’s 325,000 acres of soy is genetically modified. In addition, Romania’s organic farming will benefit overall from the same EU programs that support organic agriculture in other member countries.