Never mind the Great Wall it has been a Good year
Organically Yours
Ong Kung Wai
Feb 2013
Sector Development in Asia 2012
The Chinese revised organic rules, implemented in March, was the BIG topic in the region in 2012. Operators keen to participate in the biggest emerging market of the region are sorely challenged. The already strict Chinese rules are now even stricter. Dark clouds of national organic regulations and import requirements adding on technical barriers to intra-regional trade continue to cast shadows over development of the sector. Lesser known is progress of the Global Organic Market Access (GOMA) project (a three party collaboration between UNCTAD, FAO and IFOAM) in Asia. The GOMA initiative may result in a first ever regional mutual recognition arrangement in the near future. If so, it would be like the monsoon that seasonally washes over the region providing fresh growth.
Country reports note that 2012 has been a good year for sector development. Domestic markets based on participatory guarantee systems are growing. Three new additions to the fourteen existing national associations in the region were formed, i.e. in Nepal, Laos PDR and Vietnam. The Malaysian and Thai national associations concluded negotiations to be the first national agents for the IFOAM Global Organic Mark in their respective markets. Resurgence in regional collaboration boosted by the IFOAM Organic World Congress held in Nov. 2011 in Korea precipitated the reconstitution of Organic Asia, as an IFOAM Internal Body.
Of special note is the announcement of the Bhutanese Prime Minister at Rio + 20 to be a 100% organic nation. Small it is and without market influence, Bhutan nested on the rugged global rooftop of the Himalayas may yet be a leading light in its full hearted adoption of organic agriculture as integral to its national gross happiness agenda.
China’s new rules
At the NutraCon Organic seminar held in Hong Kong (August, 2012), participation was far larger than at previous years. All were keen to get clarification about the Chinese new rules. Most left despondent on learning about the new rules. Operators in and out of China now face more requirements, including inspection each growing season and sampling of all crops. Imported organic products must be certified to the Chinese organic regulations and use the Chinese national organic logo or cover up any organic claims on the original packing of the imported product.
Importers in China have been selling imported organic products in original packaging without declaring them as organic in Chinese. Authorities have now clearly stated that selling products with foreign ‘organic’ claims/marks without the Chinese national organic logo is a violation. It is also sending signals that enforcement will get stricter for importers.
Some refer to the new rules as the Organic Great Wall. Whilst some smaller operators have reportedly left the organic system due to the difficulty and cost of compliance to the new rules, most established operators are continuing. China’s domestic market interest remains strong. Sector growth may be constrained but not cowed.
A critical concern is that detection of any trace level of prohibited substances is prohibited under the new rules. That is what Chinese consumers reportedly expect of organic products in light of food safety mishaps in recent times. The no tolerance policy changes China’s organic premise from a non-use of prohibited materials to a non-contamination and residue free production and assurance paradigm. This varies from the principles of organic agriculture which the rest of the world currently apply. The EU and US rules influenced development of organic rules elsewhere due to the size of their respective markets. Will China’s rules change the game rule book? Can equivalence between different tolerance organic regimes be established?
GOMA’s initiative in Asia and ASEAN Economic Community
Whilst the Chinese new rules threw up additional challenges, the GOMA project initiative in Asia offered some solutions. Following on GOMA’s publication of the Common Objectives and Requirements for Organic Standards (COROS) in 2011 to facilitate equivalence assessment, the Asia initiative completed the Asia Regional Organic Standard (AROS) in February 2012 as a regional benchmark for equivalence as well as adoption by countries, who have not yet set their own national organic standards. It then assisted self-assessments of participating countries’ production and certification norms against the GOMA tools, i.e. COROS, AROS and IROCB (International Requirements for Organic certification Bodies). It also established a Task Force to explore multi party mutual recognition models in line with the ASEAN Framework Agreement for Mutual Recognition Arrangements.
A single market and production base is one of the four pillars of the ASEAN Economic Community (AEC) Blueprint to be implemented by end 2015. Currently, 5 out of 10 member states have established national organic standards and conformity assessment systems. 2 have established labeling and import regulations. More are expected to follow. Implementation of organic import regulations within the region will contradict the AEC Blueprint if not dealt with. Whilst technical infrastructure is not ready in all member states, establishing an ASEAN Sectoral Mutual Recognition Arrangement (MRA) for Organic Products will prevent technical barriers to trade between countries who have or intend to establish national labeling and import regulations as well as provide guidance for others in developing their respective technical infrastructure.
A proposal to the ASEAN Agriculture Task Force for Harmonization to adopt AROS during its April 2012 meeting was put off for further consultation to be conducted by a Special Working Group. The next ASEAN Task Force meeting scheduled for April 2013 in Brunei will review results of the Special Working Group for decision. Parallel to the ASEAN process, the Greater Mekong Sub-region, supported by the Asian Development Bank, took a position to support adoption of AROS in ASEAN at its July 2012 meeting.
At the GOMA meeting in September 2012, Bangkok, held in collaboration with the ASEAN Secretariat, ASEAN member country delegates from Cambodia; Indonesia; Lao PDR; Malaysia; Philippines; Thailand and Vietnam acknowledged that AROS and the proposed GOMA Asia mutual recognition model can facilitate ASEAN to establish an Organic Sector MRA in a relatively short time, as well as provide a blueprint for the completion of other ASEAN harmonization programs such as ASEAN GAP. The ASEAN Secretariat expressed support for follow up recommendations.
Lets hope for the best in the coming ASEAN Task Force meeting scheduled for April 2013 in Brunei.
Note: Ms Selina Gan, OAM Board member represented OAM in the GOMA Asia Working Group.
