Organic Food

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History

Organic agriculture began with biodynamic farming in the 1930s in Norway, but didn’t experience substantial growth until the 1970s and 1980s when growing interest in environmental issues began. In response to rising certification demands in Norway in the mid-1980s, the private organic certification body Debio, began to take up certification activities. Until today, Debio certifies all organic products on the Norwegian market. The number of organic farms has been on the rise ever since. Debio certifies according to governmental order on organic farming, processing, import and marketing of organic agricultural products, which corresponds to the EU regulation 2092/91.

Production base

In 2009, 56,713 hectares were under organic agricultural management; this constitutes 5.6 percent of Norway’s agricultural area (Røsnes 2010). Compared with 2008, this is an increase of five percent; compared with 2000, this is nearly a trebling of organic land. About 80 percent of organic land was fully converted. There were 2,702 organic farms in 2008 (Eurostat 2010).
Norway’s cold climate determines agricultural production, limiting products such as vegetables (Norfelt 2008). Eighty percent of agricultural land is used for arable crops, however, the largest part is used for green fodder (34,000 hectares), followed by cereals (9,000 hectares). Vegetables and potatoes are grown on 700 hectares. Eighteen percent of agricultural land is grassland
and the remainder is used for permanent crops – mainly apples, followed by berries and plums (Eurostat 2010). There has been an increase in organic production of most commodities from 2008 to 2009. Only grain production decreased, reflecting adverse weather conditions in 2009 (Norwegian Ministry of Agriculture and Food 2009).

Important for developing organic livestock farming is organic grain production. Important grains include barley, oats and wheat. A known bottleneck in development is lack of cereals for feed.

The number of organic laying hens in 2009 doubled since 2007. A similar positive development was seen with sheep and lamb, showing an increase in 2009 of over 20 percent since 2007 and dairy cows showing an increase of over 4 percent. In contrast, the number of slaughter pigs decreased by nearly 25 percent in 2009, but this was due to a disease breakout at the main producer (Røsnes 2010).

Government support

Norway is currently lagging behind most European countries in terms of availability of organic products. In response, the Norwegian government voted in 2005 for organic farming production goals that increase the production and consumption of organic food to 15 percent by 2015; in the meantime, the government voted again in October 2009, extending the date to 15 percent by
2020 (Norwegian Agricultural Authority website). While the basis for this production goal is a balanced development in various sectors, covering organic livestock and a diverse selection of organic foods, both Norwegian and imported foods are included in the goals for consumption (Norwegian Ministry of Agriculture and Food, Norwegian Action Plan).

The first direct payments for organic farming in Norway were established in 1990. Since then, organic agriculture has become an increasingly important part of agricultural policy. The Norwegian Agriculture and Food Production Board developed its first action plan for the development of organic agriculture in 1995, with the current action plan being the fourth consecutive action plan in progress.

The market

The retail sales value for organic food was estimated to be worth approximately 114 million euros in 2009, constituting a share of the food market of around 1.2 percent (Røsnes 2010). The average per-capita-consumption was estimated to be 27.7 euros (FiBL and AMI 2010).

The main limiting factor for organic market expansion in Norway is expected to be a shortage of many organic products in the coming years (Norfelt 2008). The import of organic foods will, however, significantly complement the Norwegian production and ensure access to foods that are not produced in Norway (Norwegian Ministry of Agriculture and Food 2009b).

Logo of Debio

For a long time, Norway’s main marketing channels were direct marketing, organic food shops and health food shops. Vegetable box schemes started in 1990s. Since the specialised organic retail market is not very developed in Norway, the organic market expanded largely by going through conventional sales channels, with 90 percent of organic products being sold in conventional supermarkets (Norfelt 2008). Given the exposure such large retailers imply, growth prospects for the organic market are seen as good (Norfelt 2008).

While processing, import and trading companies showed strong growth in 2007 and 2008, 2009 stagnated, with the number of companies staying constant at 803 (Ökomarkt service, issue 29/2010).

Norwegian consumers do not demand organic products as much as their fellow Europeans. Nonetheless, health and nutrition are becoming top priorities among Norwegian consumers and demand is growing at a rapid pace for environmentally-friendly, healthy, organic products (Agriculture and Agri-Food Canada 2009). There is also a high awareness among consumers about the organic certification label «Ø», distributed by Debio (Norwegian Ministry of Agriculture and Food 2009). Nielsen data indicates that «health» is currently Norwegian consumers' biggest concern. Norwegian consumers are also increasingly seen as willing to spend more money on healthy and ethical products. Norwegians spend 10 to 15 percent of their income on food and are willing to pay more for convenient, ethical and healthy products (Agriculture and Agri-Food Canada 2009). According to a Nielsen survey, 25 percent of Norwegian consumers say they would pay more for organic products and many consumers were uncertain of their opinion on organic products (Agriculture and Agri-Food Canada 2009).

In Norway, consumption of fruits and vegetables in general is increasing (growth in 2007 was 6 percent) with 1.4 billion euros (11 billion Norwegian Kroner) being consumed annually. The largest growth is seen in convenience products such as pre-packaged products (e.g., tomatoes, lettuce, carrots, onions, grapes and potatoes). The largest vegetable consumption in Norway in terms of volume is tomatoes and the largest amount of fruit imported is bananas (Agriculture and Agri-Food Canada 2009). Of the organic fruits and vegetables eaten, it is estimated that 50 percent is imported. However, this number is highly debated as it is impossible to give exact figures because distributors are not able to give detailed reports on the product’s origin (Norfelt 2008). What is known, however, is that there is especially strong growth with certain fruits and vegetables where consumers easily perceive the difference between organic and conventional. These are productions that are largely market driven (Norwegian Ministry of Agriculture and Food 2009b). In 2009, shares were highest for baby food (12.9 percent) followed by eggs (4.8 percent), vegetables (2.1 percent), coffee and tea (2.1 percent), milk and dairy products (1.7 percent), bread and cereal based products (1.4 percent) and fruit (0.9 percent) (Røsnes 2010). According to Røsnes, the greatest sales in organics in 2009 was seen in dairy products, vegetables, cereal based products, eggs, then fruit and meat.

Norway’s main trading partners are UK, Netherlands, Germany, Sweden, US, France and Denmark (Economy Watch 2009a). Included in Norway’s important export industries are fishing and food processing, whereby the percentage of organic is negligible, but global demand is growing and supply is therefore expected to follow (Economy Watch 2009b).

Imports and market requirements

Currently, Norway imports approximately half the food they eat (Norwegian Ministry of Agriculture and Food 2009a). According to the Nielsen Conference on key trends in Norway’s retail grocery market, environmentally-friendly, organic, fair trade and healthy products are a growing segment of the Norwegian retail grocery market. These trends may offer opportunities for organic exporters wishing to penetrate the Norwegian market (Agriculture and Agri-Food Canada 2009).

Certain organic products consumed are with certainty of Norwegian origin, such as eggs (100 percent) and most dairy and meat products (90 percent). With other products, such as baby food, it is known that 100 percent is imported. Grain import numbers are based on distribution chain figures (based on grain trader orders), but even here, the share of imports greatly varies from year to year based on Norwegian climate conditions. In 2009, because of bad growing conditions in Norway due to cold weather and too much rain, imports were around two-thirds.

Norway has a custom tariff-based import protection for agricultural products from the World Customs Organisation (WCO). Import protection is for products that can easily be produced in Norway, such as eggs, milk, grains, meat, potatoes and some fruits and vegetables. With a few exceptions, such as allowances for reduced tariffs on certain processed organic vegetables, juices and baby foods, Norwegian organic products have the same tariff protection as conventional products, therefore the same customs tariffs are charged. This, along with problems of miscoding regarding country of origin, makes it difficult to estimate the total amount of organic products being imported into Norway (Røsnes 2010).