An analysis of organic market information in the EU-15. Lessons for the Irish organic sector.

Summary

Organic farming is seen as a solution for responding to environmental, food safety and animal welfare concerns making it significant to policy makers. With current policy targets focused on increasing supply (i.e. area share), there is the expectation that supply will automatically be met with increased market share (i.e. demand). There is no understanding of the relationship between the area share and market share variables and whether area share targets will translate into increased market share, or vice versa, yet this is important for farmers in Ireland who face uncertainty in the market. Data from three consecutive years is analysed to test the relationship between the variables and generate lessons for the Irish organic sector from high market share countries.
The results indicate that a significant positive linear relationship exists between area share and market share. This provides useful information for target setting and provides strong evidence that market share targeting is warranted. Additionally the covariance analysis confirms that ‘market share’ and ‘country’ significantly influence the variation in area share. This provides the basis for a more comprehensive review and country comparison between high market share countries (Denmark and Germany) and low market share country (Ireland) as national country factors strongly impact area share and in turn market share growth.
The author concludes that interventions focused on increasing either area share or market share will have a positive impact on the other, and interventions targeting both are warranted. The factors of ‘country’ and ‘market share’ explain a high proportion of variance in area share, and therefore country factors such as national policy, government support, national branding, market structures and socio-economic factors have a substantial role to play in influencing the area share-market share relationship. The outcome of the research is a number of recommendations for Ireland around stronger national policy, balanced policy targets and organic brand development supported through government intervention.