The organic industry is currently having the most significant discussion regarding regulation since the National Standard was established 20 years ago. Australian Organic Limited CEO Niki Ford explains.
Australia’s certified organic sector contributes more than $2billion to the national economy each year and continues to grow at a rapid rate as consumers make conscious choices to improve their health and wellbeing, while considering the long-term sustainability of the planet.
This dynamic sector produces fresh fruit and vegetables, animal products, honey, pantry items, wine, beverages, cosmetics, skin care and pet food among other things, and spans supply chains from production, through to manufacturing and retail outlets.
The reach organic has across food and lifestyle segments both domestically and overseas is expanding, yet the current lack of a unified, legal ‘organic’ definition in Australia, and weak requirements surrounding the labelling of a product as ‘organic’, causes confusion and mistrust for shoppers and undermines confidence.
In addition, without a mandatory domestic standard, Australian exporters face incredible red tape and economic burden because they must meet secondary organic standards requirements for each country they wish to trade in, adding further operational costs each year.
Strong start, stagnant present
Australian Organic Limited (AOL), the peak body for the organic sector, is focused on working with the Australian Government to deliver a fit for purpose regulatory process that is consistent with export requirements.
The organic industry is currently in the process of the most significant discussion regarding regulation since the National Standard for Organic and Bio-Dynamic Produce (the National Standard) was introduced in 1992 enforcing mandatory obligations for Australian organic or bio-dynamic products intended for export.
The Australian Government released a second edition of the National Standard in 1998, and since its inception, the National Standard has provided the organic industry with a framework that sets out comprehensive obligations around production, processing, supply chains, labelling and imports before a product can be certified as organic.
In Australia, there are six recognised approved certification bodies who can confirm organic operators comply with the National Standard to achieve organic certification, with the operation undergoing rigorous audits each year to maintain their certification.
While the National Standard was, and still is, a world leading document requiring products claiming to be organic to be certified before they can be exported, its biggest shortfall was that it wasn’t made mandatory for the domestic sales of organic goods.
This means there are currently no mandatory standard requirements or regulations that operators need to adhere to – across production, processing, supply chains and even labelling – in order to sell products within Australia that are claiming to be organic.
However, more than 3000 operators within Australia voluntarily adhere to the framework set out in the National Standard for their domestic sales, recognising that organic certification adds credibility to their product and helps to build trust with consumers.
As the demand for organic products has continued to grow, it has become apparent there are three main issues for Australian organic operators fuelled by the lack of domestic regulation:
1. Consumer confidence
In the absence of a domestic mandatory standard for use of the term ‘organic’ there is no requirement for an operator to be certified to sell organic products in Australia. This means non-certified operators can make organic claims on packaging and marketing without achieving certification.
Last year, the Australian Organic Market Report uncovered 31 per cent of shoppers who had purchased an organic product during the previous year believed they had been misled by organic claims on the product packaging.
Domestic regulation will ensure all organic claims on product labelling are authentic and will provide consumers with greater confidence when choosing to buy organic.
2. Operator credibility
Achieving organic certification requires a significant commitment from operators both commercially and systematically.
Due to the absence of domestic regulation non-certified operators claiming to be organic may use chemicals or practises that are not allowed under organic standards however they still sell their product for a premium price. This undermines the credibility of operators who are doing the right thing, and who then spend more time on education and awareness instead of building their markets.
3. Market access
Through the National Standard, Australia has government-to-government (equivalence) arrangements with various countries, including the European Union, Japan and Taiwan, however without a mandatory domestic standard, key trading partners such as the United States, Canada and Korea will not recognise Australia’s current domestic framework via equivalency arrangements as the domestic market requirements are not consistent with those for export markets.
Without these arrangements, producers are forced to enter arrangements with different certifiers and pay separate fees to meet specific regulations in each country they export to.
A mandatory domestic standard will deliver much-needed efficiency and certainty to organic producers, helping them to better compete in export markets.
Looking forward
While there are many options for domestic regulation, AOL’s recommendation is to legislate the National Standard domestically as the best way forward given it is already widely used and understood by many of Australia’s organic operators. Additionally, our current trade framework is founded on the Australian Government owned standard.
Implementing the National Standard at the domestic level will solve the three big issues facing the organic industry – consumer confidence, operator credibility and market access.
Path to regulation
Since February 2019, AOL has been working with the Australian Government, relevant departments and agencies, as well as industry stakeholders to advocate for domestic regulation of the organic industry.
The first major step towards domestic regulation was achieved in December 2020, with the establishment of the Organic Industry Advisory Group (OIAG), consisting of producers and organic industry stakeholders. The OIAG met regularly in the first six months of 2021, with a significant majority identifying legislation as the preferred option for domestic regulation.
Since that time, a formal consultative process involving the OIAG, as well as industry and consumers, has taken place. This has included public consultation via business and consumer surveys and roundtable meetings with organic and boarder industry stakeholders.
In February 2022, a regulation impact statement process was announced, allowing stakeholders the opportunity to have their say on the regulation options put forward.
A report collating the responses to the consultative process is being finalised by the federal Department of Agriculture, Water and Environment, however as the federal election has now been called, all government departments are in caretaker mode, and the outcomes are not expected to be released until later this year.
The steps taken so far are positive for Australia’s organic industry, and also for the many consumers who are actively seeking a lifestyle supported by genuine and authentic organic products.
On behalf of its members, AOL looks forward to the recommendations and the successful implementation of domestic regulation for the organic industry.
In the absence of a mandatory domestic standard, AOL strongly encourages consumers to check the product label for organic certification. The ‘Bud’ certification logo is the most trusted organic logo in Australia and is recognised by 62 per cent of shoppers and can be found on more than 32,000 products across supermarkets, bottle shops and local farmers markets.
More information about domestic regulation of the organic industry is available at austorganic.com/industry/domestic-regulation.
