Equivalency agreements boost organic exports, says OTA

By Whitney Forman-Cook

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WASHINGTON, Dec. 16, 2015 - U.S. exports of organic products grew nearly 60 percent between 2011 and 2014 as a result of trade equivalency agreements, according to a report released Wednesday by the Organic Trade Association.

However, the group said, exports would be growing more if American organic farmers were growing more supply.

OTA's study - authored by Edward Jaenicke, an associate professor of agricultural economics at Penn State University - tracked the harmonized system trade (HS) codes USDA attaches to exports bound for Canada, the European Union, Japan and Taiwan - all partners who entered into organic equivalency agreements with the U.S. in 2009.

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Organic equivalency agreements allow organic products certified in the U.S. to be labeled and sold as organic in other, partnering countries without additional inspections.

The report found that these agreements collectively increased U.S. export of organic products by 58 percent between 2011 and 2014, over what exports would have been without any agreement in place, with the largest increases in U.S. exports bound for Canadian and Japanese markets. In 2014 alone, OTA says American organic growers sold more than $550 million worth of coded products in 2014.

The U.S. also imported as much as 200 percent more organic products as a result of the equivalency agreements between 2013 and 2014, over what exports would have been without any agreement in place, the study said.

“This report is the first of its kind, and it yields some key findings to help guide the organic and non-organic farm community, public policy makers, and all organic stakeholders in making future industry investment decisions,” Laura Batcha, OTA's executive director and CEO, told reporters Wednesday.

One of these key findings, Batcha said, was the limited number of existing HS codes - there are currently 34 export codes and 40 import codes for organic products. Monique Marez, OTA's associate director for international trade, said the existing export codes account for about 10 percent of all U.S. produced organic products. Batcha said that figure might be higher among organic foods.

With more HS codes - particularly more codes for processed organic products - the organic sector would be better able to track which products are being exported and which are being imported, Batcha argued.

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Another key finding of the report, according to OTA, is that the U.S. organic farming sector is not growing enough supply to meet the demand for organic goods outside the country or domestically.

For instance, according to an OTA report released in April, the U.S. imports more than $330 million worth of organic coffee annually, and also imports soybeans, olive oil, bananas and wine to lesser extents.

U.S.-grown apples, lettuce, grapes, spinach and strawberries top the export list, and according to OTA, could be exported at even higher rates if domestic production increased.

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