international trade with organic products

7/29/2019 international trade with organic products

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ACADEMY OF ECONOMIC STUDIES FROM MOLDOVA

FACULTY INTERNATIONAL ECONOMIC RELATIONS

CATEDRA RELAII ECONOMICE INTERNAIONALE

Arina MAFTEI

PROMOVAREA COMERULUI EXTERIOR ALREPUBLICII MOLDOVA PRIN PRISMA

INVESTIIILOR STRINE DIRECTE

IER Project

World Economy and IER specialty

Author:

student gr. EMREI 106,

full time educationArina MAFTEI

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Scientific Leader:Conf.univ.dr. Dorina HARCENCO

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Chiinu - 2012


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CONTENT

Introduction 3

I CONCEPT, OPPORTUNITIES AND CONSTRAINTS OF

ORGANIC AGRICULURE................................................................5

1.1 Concept of Organic Agriculture Opportunities and Constraints ....5

1.2 Activities and Functions of FAO in Organic Agriculture11

II EVOLUTION OF INTERNATIONAL TRADE WITH ORGANIC

PRODUCTS IN THE WORLD........14

2.1 International Trade with organic productsin the world..14

2.2 Trade with organic products in European Union.....15

2.3 Development of Organic Agriculture in Republic of Moldova.23

Conclusion.28

Bibliography.30

Annex..


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INTRODUCTION

According to the Food and Agriculture Organization FAO (Food and Agriculture Organization), and WHO

World Health Organization 'Alimentarius Code "organic farming is an integrated management system of

the production process, which helps to support and strengthen resilience agro ecosystems, including

biodiversity, biological cycles and soil biological activity. Organic farming emphasizes the use of

management practices appropriate instead of introducing new products that are made out the farm and taking

into consideration the fact that particularities of each region requires systems well adapted to this region.

This can be accomplished by using the agronomic, biological and mechanical methods instead of using

synthetic materials for certain operations in the system. Therefore organic farming must respect the strict

rules established by the laws. The trademark guarantees the highest quality and origin of products and that

is why farming is closely linked to respect strict rules of production established by certain legislative rules

and it must be checked and certified . The goal is to ensure customer compliance with established production

rules. Organic farming is a production method that takes into account traditional knowledge of farmers and

scientific integrates of all agricultural disciplines, addressing social concerns as the environment, quality

products are provided to consumers even in poorer countries. The main objective of organic farming is to

protect the biosphere and Earth's natural resources, excluding the use of chemical fertilizers, synthetic

pesticides and herbicides, prevention methods play a key role in the fight against pests, diseases and weeds.

It should also be taken into account biological techniques used and local conditions, adapted to the socio-

economic realities and traditional methods, optimum utilization of resources in agro ecosystems, is an

essential factor for achieving optimum results for long term. Principles underpinning organic farming are

universal, but the techniques used are adapted to the climatic conditions, resources and local

traditions.Organic farming is a method that requires observation and reflection capacity. It uses a high

potential of workforce, requiring new jobs and keep the peasants in the fields, important in a period

unemployment, on the one hand and the rural exodus to urban areas, on the other hand.

Minimum requirements for achieving sustainable development:

First, fair-balanced distribution of resources and increased quality production side as attributes of a new

conception of resizing growth. Second, improvement, refocusing or changing technologies, putting them

under the control and monitoring risks.Third, forms of governance, decentralization, increased participation

in decisions concerning ecology and the environment. Forth, providing a potential developed in terms of

financial, economic, human, technological. Environment and natural resources must be recognized as

the foundation of all human activities and protecting them should be a prerequisite for its

development. The concept of sustainable development is based on rights, obligations and justice,

assuming: the need to maintain environmental integrity. This means to be promoted economic


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efficiency and the maintaining of fairness.Sustainable development of agricultural ecosystems and

the ability to produce food of the highest quality can be considered the most important contribution

of agriculture to ensure the future of mankind. Such causes and diversify agricultural economic

activities as raw materials and processed primarily occur in rural areas, developing infrastructure

and increasing economic potential of villages. So, sustainable agriculture must be productive,

profitable, ecological, to conserve resources and balanced social and human.


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I CONCEPT, OPPORTUNITIES AND CONSTRAINTS OF

ORGANIC AGRICULURE

1.1 Concept of Organic Agriculture. Opportunities and constraints

Organic sign indicates consumer that the product was manufactured using some specific production

methods. In other words, organic is more a process than product index. Thus, an apple that was

grown using organic production methods accepted can be like an apple that was grown using the

classical method of growth. A number of countries and a variety of private certification

organizations have given definition of organic agriculture. In the past differences between these

definitions were very high but consistent requirements led to an international seller obvious

uniformity. International Federation for the Promotion of Organic Agriculture (IFOAM), an NGO

promoting organic farming has made a number of tutorials, which are widely used in organic

production and processing. Recently, the European Food trade mark discussed "Project Scoping

Report for the Production, Processing, Labelling and Marketing of organic products." Unique

definition of organic farming adoption by the Codex Committee Power is expected to be made at the

next meeting in June, 1999. According to the definition proposed by Codex, "organic agriculture is a

production management system which promotes and enhances agro-ecosystem health, biodiversity,

biological cycles and soil biological activity. It emphasizes the use of management practices face ofoff-farm inputs, taking into account that regional conditions require locally adapted systems. To

fulfill any specific function within the system by using, where possible, agronomic methods,

biological and mechanical, using synthetic materials. "Organic agriculture is one way to tackle

sustainable agriculture and many of the techniques used in them (international gathering of the

harvest, crop rotation, double digging, integration with livestock cereals) are practiced in different

farming systems. Specificity makes organic agriculture to be unique consists of: (1) almost all

synthetic inputs are prohibited, (2) crop rotations "soil building" is mandated. The basic rules of

organic production are that natural investments are accepted and synthetics are prohibited. But there

are exceptions in both cases. A natural inputs determined by the various certification programs that

are harmful to human health or the environment are prohibited (eg. Arsenic), as well as a set of

synthetic inputs, which were determined to be essential and consistent with farming philosophy

organic are allowed (eg. insect pheromones). All certification programs establish a list of allowed


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synthetic and natural prohibited investments, this list is constantly negotiated with Codex. Many

certification programs Additional measures required to protect the environment. Despite the fact that

many farmers in developing countries do not use synthetic inputs, they are not classified as organic.

The main objectives of organic farming:-To achieve high-quality agricultural products nutritious and effective conditions;

- Develop and strengthen the living systems during production cycles;

- Maintain and improve long-term soil fertility;

- Avoid all forms of pollution that may result from agricultural practices;

- Allow farmers a fair remuneration for their job satisfaction and a safe and healthy working

environment

-To promote and diversify the biological cycles in agricultural systems, following micro-organisms,

soil flora and fauna, cultures and growth of animals:

-To maintain and improve long-term soil fertility;

-Use as much as possible the natural resources and recycled locally;

-To develop agricultural systems as self-sufficient, regarding organic materials and nutrients;

-To ensure all animals living conditions as little contrary to fundamental aspects of the behavior

river;

-To maintain the genetic diversity of agricultural systems, their environment, plants and wildlife

including protection;

-To consider the impact on the environment and cultural techniques of social relations. The main

opportunities and constraints are:

a)Markets

Demand for organic products has created new export opportunities for developing world. While

some consumers express a preference for organic products local demand for a wide range of

products during the whole year makes it impossible for any country to source only organic food

inside it. As a result, many developing countries have begun to export organic products successfully

(eg. Tropical fruits in Europe, herbs from Zimbabwe to South Africa, six African nations export

cotton in the European Community). Usually organic exports is achieved impressive premiums at a

price 20% higher than identical products produced inorganic. Ultimate profitability of organic

production vary, but studies in this area indicate a high potential of this method of long production.


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Returns from organic agriculture can potentially contribute to local food security by increasing

family incomes.

However, a lucrative market penetration is not so easy. Farmers are denied market penetration

organic products in developed countries over a period of two to three years after the introduction

and use of organic management, this time is necessary for filtering chemical residues. According

Project Codex guidelines, the products produced on land under organic management for a period

exceeding one year but less than 2-3 years may be sold as "transitional organic" but for such

products there is still little markets. In most cases farmers and vendors who wish to sell their

products in developed countries must hire an organic certification organization to annually inspect

and confirm that these businesses adhere to organic standards set by the partners. The cost for this

service can be expensive, varying depending on farm size, production volume and efficiency

certification organization (eg. IFOAM certification costs from 2 to 5% of sales volume). Few

developing countries have domestic certification organizations, and even when sufficient resources

to pay for certification farmers have enough information to find inspectors accredited.

While most traders in developing countries focuses on export markets in developed countries,

domestic market opportunities for organic products and eco-products can be explored. For example,

in China, there is a growing demand for "green food" which, according to local standards, are

produced without pesticides and fertilizers with biological methods. Chinese farmers produce

organic food for export (eg: tea in Holland, soybeans in Japan).

Because of the difficulty of obtaining adequate information, farmers do not know where to focus

their attention: towards the local market or export. There is no systematic research markets organic

products. In particular, they have been conducted market projects in developing countries, no

systematic assessment of export markets. At the same time was not taken into account people's

willingness to pay Additional margins, the impact of regional attitudes and tastes and incidence of

fraud on the market.

b) Farm productivity

Farmers harvest losses are likely to perceive the transition to organic production. There is a period

between removal of synthetic chemicals and normalizing sufficient biological activity (eg increased

number insects, nitrogen fixation by legumes) that is typical fertility problem. Degree of yield loss

varies and depends on factors such as the biological attributes of the farm, farmer expertise, and the

use of synthetic inputs to transition to organic production. In areas where soil fertility is low and


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biological processes have been severely damaged, it may take years to restore the ecosystem where

organic production is possible. In these cases other methods can be implemented judicious use of

synthetic chemicals. Another strategy for crossing the transition period is the partial conversion of

farms to organic production so that the entire operation is not at risk.

Most studies point out that organic farming requires more labor input than conventional farms. This

shows the truth especially in regions with low ecological potential. However, when labor is not a

constraint organic agriculture can benefit the unemployed in rural communities. More than that,

used in organic farming crop diversification may distribute labor demand more evenly and stabilize

employment as a result of people. Land rent also shows a critical point in the adoption of organic

agriculture. It is unlikely that farmers required lessees to invest labor and suffer difficult transition

period without having strong guarantees on access land in later years, when the results of organic

farming will be his maximum.

Crop rotations should be planned in terms of both economic as well as technical - their use should

be determined for all types of crops and animals. As in any system of farming, diversification of

production and income generating opportunities may increase as in the case of fruit, provide a

substantial amount of minerals and vitamins to the diet familiar. It also reduces the risk of failure to

wide range of cultures. It is possible that organic farms where the crop volume is smaller than farms

with a high degree of synthetic inputs, final economic income to be due to a higher degree of market

margins high and low production costs.

Methods generated by organic farmers after their research specific production strategies can be of

great benefit to farmers inorganic interested in diversifying its management options. However,

organic producers face a number of uncertainties. Lack of information is an obstacle to organic

conversion (eg. Research in the field shows that 63% of farmers in the Sahara and 73% of North

America's organic farmers, consider lack of information as the greatest barrier for adoption of

organic management). Extension personnel rarely receive adequate training in the field of organic

methods, and this often discourages farmers from organic management. The more so, institutional

support in developing countries is rare. In most developing countries there are professional

institutions that would assist farmers during the process of production, post-production and

marketing. While there are many research outcome in the field, that can be immediately applied by

farmers, many other things are necessary. In 1990, FAO sponsored a conference where the need for


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research in organic agriculture have been identified (eg. Economy farm nitrogen cycle etc.).

Grudgingly many of them were discussed.

c) Environmental impact and sustainability

Explicit goal of organic agriculture is deeply sustainability. Yet negative impacts may occur, organic

agriculture is not an exclusive method for sustainable agriculture. Methods of protection and

conservation of soil and water used in sustainable agriculture, the combat erosion, salinization and

other forms of degradation are evident existing organic agriculture. Use crop rotation and other

methods improves soil microstructure and encourages the growth of microorganisms. Mixed

cropping ensure continuous soil cover, so the earth is exposed to the erosive rain, wind and sun.

Terracing to conserve soil moisture and is used in appropriate, particular attention is paid to the

actual irrigated areas on farm water management specified. Properly managed organic farming

reduces or eliminates water pollution and helps conserve water and soil on the farm (although

improper use of manure can seriously pollute water).

A small number of countries compel farmers to use organic techniques as a solution to water

pollution (eg Germany, France).

Farmers rely on natural pest control (eg biological control, plant pest control character) rather than

synthetic pesticides that are misused, kill beneficial organisms (such as: pest, bees, rhymes), pollute

water and soils. Reduce the use of toxic synthetic pesticides, after researching the World Health

Organization (WHO) poisoning 3 million. people annually, will help improve the health of farm.

Farmers organic products tend to use the maximum grain residues (straw, beans and other edible

parts) or directly as compost or indirectly as animal Dung. Elimination of synthetic nitrogen

fertilizers, greatly reduces the risk of nitrogen contamination of water. Crop rotation is a widely used

method to maintain fertility and control pests and diseases, which is used on farms of all sizes, both

in developed as well as in developing ones. Forage legumes are well known to raise soil fertility and

crops that are grown on vast territories in Asia sub-tropical and semi-arid regions with a dual

purpose animal feeding and enrichment of soil nitrogen. Cereals can also provide a reasonable crop

without nitrogenous fertilizer. Leguminous crops in rotations through biological fixation of

atmospheric nitrogen, can be used and other nitrogen fixing plants like Azolla.

Biological nitrogen fixation is a powerful technique, but it requires some addition of minerals to the

soil, especially phosphorus. Most certification programs prohibit the use of mineral fertilizers

necessary to supplement the manure produced on the farm. Can be used and organic manure off the


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farm such as: limestone phosphorus, calcium dioxide, natural manure, lime etc. While most

certification programs prohibit the use of wastewater and sludge residues, they are still used in some

places. It was found that the sludge may contain many elements contaminants including heavy

metals that have a cumulative effect and damage to the soil, while residues contain human

pathogens and should be carefully composted before use.

Crop rotation helps to use crop diversification, increase their productivity and conservation of plant

genetic resources. Integrating livestock adds income through organic meat, eggs and dairy products,

as well as using draft animal power. Fruit integrated into the system provide food, income and wood

fuel. In various organic agricultural systems may also be found integrated agro-aquatic. Economic

objectives are not the only motivation of organic farmers, their intent is often to optimize land,

animals, and plant interactions, preserve natural nutrient and energy, enhance biodiversity, all of

which contribute to the overall objective of sustainable agriculture to preserve natural resources and

ecosystems for future generations.

If we analyze from the political point of view we have to take in consideration the following aspects:

a) Public and private partnership

The environmental and economic benefits that organic agriculture has attracted the attention of a

large number of countries, and yet very few of them have enacted policies to assist the organic

sector. Most assistance has been applied in the private sector, especially by NGOs. The private

sector infrastructure has been recognized not only countries, but also encouraged.

Farmers and consumers in almost all countries rely on a system of self-organizing production units

and independent certifiers who, over the years have provided a certification effective economic

mechanism. The importance of independent certifiers that can be revealed by IFOAM coordinates

650 individual and institutional members in over 100 countries, 75% of the developing countries.

Yet certificate on the network require an extension, as has already been mentioned, many

developing countries suffer from lack of certification organizations.

Organic programs and projects Codex directory, specify "list permitted investments" for organic

produce and ingredients allowed. Countries, following consultation with civil social organizations

may propose individual lists Codex, which negotiations will determine the final list of international

acceptability. Framing in international trade requires much higher production volume of a particular

organic farms. NGOs assist farmers in establishing organizations for collecting, processing and


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marketing organic products. Governments can facilitate the formation NGO organizations that

coordinates and controls compliance techniques used in production and post-production.

b) Technical Support

Northern developed countries invest enormous sums in organic agriculture research, but

contribution in this area is minimal compared to the total agricultural research (less than 0.01% in

the U.S.). Practices initiated by FAO IPM and Farmers Schools showed that farmers, owners or

lessees, on small or large, can perform scientific research, whether they are technical assistance and

are provided with the correct orientation. Countries can also initiate market research. For example

U.S., examines market organic products in over 20 countries, specifying export opportunities.

Codex Project Scoping and most national and private organic standards prohibit the use in organic

production organisms built using genetic engineering (GE) and especially transgenic crops. While

biotechnology applications are prohibited in organic production, scientific research and possible

future negotiations that could result in technologies accepted by consumers.

c) Direct assistance

Interest in environmental protection and preservation of family farms, small size led to huge

subsidies from European developed countries. Serve as an incentive subsidies (eg in the UK during

the conversion period is 450 pounds subsidies for hectare subsidies in the European Community

helped 15% of Irish farmers, organic food to exercise to increase dairy operations ). Interested

communities should be informed about organizational characteristics, aspects of purchasing and

selling finished products.

Consumer confidence is essential if sensing products are made with high margins. Because organic

products can not be differentiated from conventional products, consumers depend entirely on

sincerity certifiers. To maintain organic standards is necessary rough punishment of all fraudulent

activities, as well as measuring the impact of fraud on the market for organic products.

1.2 Activities and Functions of FAO in Organic Agriculture

FAO has undertaken a set of specific organic farming activities, most of which are in the development stage.

In the FAO library are recorded 49 FAO reports about organic agriculture. FAO Regional Office gatherings

in Europe assist researchers in the field of organic farming sponsored conference in 1990 and recently

Biological Farming Round table of experts in the field of Organic Agriculture Research Methodology

coordinated network systems of European cooperative research in Agriculture (ESCORNA) in 1997


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. Asia and Pacific Regional Office coordinated the Asian Network of Bio-fertilizers and organic

fertilizers, which publishes more than 10 years in the annual ballot organic recycling in the region.

Division of Earth and Water Development has developed software that facilitates collecting

information about using organic fertilizers. Codex Committee on Food Labelling now develop draft

Guidelines for the Production, Processing, Marketing and Labelling of organic products.

Perspectives and guidelines for treating fruits, vegetables, organic species in developing countries

are developed by agro-industrial and Post Production Services Management.

In 1997 was established a network of internal e-mail to facilitate information exchange and

evaluation in the field of organic agriculture, as well as developing understanding between FAO

staff. Organic farming has been placed as one of the focal points of the Service of Natural Resources

and the Environment. After obtaining formal status as part of the FAO in 1997, FAO and IFOAM

meeting conducted in all technical departments in March 1998.

Additional efforts will be required to provide the information requirements in organic agriculture and techno-

financial assistance. FAO can effectively collaborate and build partnerships with existing institutions

(associations / national programs, IFOAM and other NGOs, national and international research centers in

agriculture) in certain regions, assuming the existence of adequate resources. Proposed main functions

are:

a)Providing a forum

As part of FAO Regular Programme could provide a forum for member countries to establish

standards for organic production, labeling and other market problems. Some of these would continue

to happen in the Codex Committee on Food Labelling , but FAO could gather groups of experts to

investigate problems in the crop rotation, etc. pathogenic problems. Advice of these groups can help

Codex Committee in developing international mechanisms of development of organic farming

activities. FAO Codex Regional Committees are the following local estimate of the organic

standards and list of investments that would take into account domestic production needs, as well as

international market demand.[4.1]

b) Policy Analysis and Information Support

Basic knowledge is required for a full understanding of the magnitude and potential organic sector.

FAO could get information about organic production and manufacturing in different countries using

annual questionnaires. FAO could also develop standards and classification of information collected

appropriated. FAO could serve as a clearing office market research by gathering information and


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issue reports on research in the field. Could be maintained a list of centers and hired experts in

marketing rebuke could be promoted an information network in developing countries. Data

collection would require specialized financing. For good functioning information network should be

developed together with the extra-budgetary funding control. For example, resources can be used

technical cooperation programs. Once the data is collected and analyzed, FAO could provide

guidance on the development of local production priorities in line with market demand organic.

c) Facilitating research and extension information exchange

Organic farming includes some interesting questions for research to improve management and

sustainable production systems. FAO could facilitate communication international research centers

such questions, so Consultative Group on International Agricultural Research (CGIAR) and the

National Agricultural Research (NARS). Level of collaboration in research could be raised by

establishing networks of information exchange. FAO could develop relevant questionnaires

extension programs and communication component. While some of these programs are included in

TAC and CGIAR Secretariat functions NARS, others will require extra resources.[4.2]

d) Technical Assistance

Collaborated pilot activities with national programs, FAO could assist organic integration, IPNS,

and EPI with necessary information. Among the most effective methods of assistance we can call

"Farmers Field School" method used in towns where organic production activity could be profitable.

FAO could promote the development of local certification organizations in developing countries,

which would eliminate the costly practice of hiring foreign experts to certify organic operations. All

these pilot activities will require identifying and mobilizing extrabudgetary resources.


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II EVOLUTION OF INTRNATIONAL TRADE WITH ORGANIC

PRODUCTS IN THE WORLD

2.1. International Trade with organic products

Organic farming has been transformed from a series of scientific experiments in the 1950s in an

industry of 55 billion today, in the context of response that governments have given one of the most

important existential challenges: ensuring food security and ensuring sustainable production , trade

and consumption of food. Successful transformation of organic farming in a real industry can be

attributed to these concerns: consumers are willing to pay more for a growing mode that promotes

healthy agro-ecological systems and avoids the use of protective chemicals.

Policy makers seeing economic and social value of a production system that generates

environmental benefits, such as agro-bio-diversity and carbon assimilation, avoid the need for

workers to handle pesticides or impose environmental costs on taxpayers (eg cleaning polluted

waters). Organic farming has a role in achieving development goals with less developed countries

exporting product prices in addition to developed countries.

IFOAM (International Federation of Organic Agriculture Movement) and FIBL (Research Institute

of Organic Agriculture) presented in the Biofach 2011, the latest figures regarding organic farming

worldwide.[4.3]

More than 37 million hectares of agricultural land was farmed organically in 2010. Countries with

the largest ecological agricultural areas are Australia, Argentina and the USA. Organic agricultural

land area increased in 2009 by two million hectares, an increase of 6% last year. Increasing largest

ecological agricultural area was achieved at European level: 12% increase, representing nearly one

million hectares. In 2009, nearly 2/3 of global ecological land was pasture / grassland (23 million

hectares). Arable land constituted 15% of the organic agriculture (5.5 million ha), 13% more than in2008. Most of this category of land is cultivated with cereals, including rice (2.5 million ha). 6%

permanent crops are organic farmland (2.4 million hectares). The most important crops were grown

coffee (0.54 million hectares), olive (0.49 million ha), nuts (0.2 million ha) and grapes (0.19 million

ha)


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Much of organic farming areas worldwide is in Oceania (33%), followed by Europe (25%) and

Latin America (23%). The highest percentage of organic farming in the Falkland Islands is the U.S.

(35.7%), followed by Lichtenstein (26.9%) and Austria (18.5%). There are currently 1.8 million

organic producers in the world, the majority being in developing countries.

Global market for organic products was estimated in 2009 to 40 billion euros (55 billion dollars) by

market research company Organic Monitor, 5% more than last year. Most organic products are sold

in Europe and North America. Europe has spent more than $ 18 billion for green products, Germany

fully recorded sales of 5.8 billion, followed by France ( 3 billion) and the UK (2.1 billion euros).

Danish and Swiss Consumers spend the most on organic products: more than 130 per year per

capita.[4.4]

Studies show that organic farming is a sector development in Africa, especially in countries in the

southern part of the continent. An important factor in the development of organic agriculture in

Africa is the demand for organic products in industrialized countries. More than 200,000 hectares

are currently cultivated in this system. Based on the estimates presented global sales in 23 European

countries, USA, Canada, Japan and Oceania were approximately 23-25 billion dollars in 2003 and

29-31 billion in 2005.

2.2 Trade with organic products in European Union

Simply, organic farming is an agricultural system designed to provide you, the consumer, fresh,tasty and authentic at the same time respects the natural life cycle of the systems.

Therefore, whenever you buy a green apple from the local supermarket, or choose your favorite

restaurant's menu, a wine made from organic grapes, you can be sure that they were produced

according to strict rules, which respects the environment and animals.[4.5]

Rules:

In the EU, these rules are laid down in Regulation (EEC) no. 2092/91 on the production of

agricultural products and indications referring thereto on agricultural products and foodstuffs.

A detailed review of this legislation has resulted in two proposals from the European Commission in

December 2005, for a number of simplified and improved rules on import of organic products on the

one hand and organic production and labeling on the other. These two proposals were adopted by

the Council of Europe. The first of these, namely import Rules of Council Regulation (EC) no.

1991/2006 of 21 December 2006 amending Regulation (EEC) no. 2092/91 on the production of


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agricultural products and indications referring thereto on agricultural products and foodstuffs

entered into force in January 2007.[1.1]

The other regulation, namely the new Council Regulation (EC no. 834/2007) in June 2007 on

organic production and labeling of organic products defines organic production logo and labeling

system was adopted by the Council of the European Union on 28 June 2007 and expected to enter

into force on 1 January 2009 [1.2]

Logo and Labeling:

Current EU regulations on organic production set the administration of crops and livestock and how

the processing of food and feed, because they can be labeled as organic. Compliance with EU

regulations on organic products is also mandatory for EU products will carry logo farming. It is also

mandatory to mention on the label and the code of the inspection body that inspects and certifies

operators agriculture and organic products.

This labeling scheme aims to make sure you and other consumers in the Member States of the

European Union, the organic nature of the products they buy. EU logo is designed to enhance the

recognition of organic products among consumers and act like national logos that you can see the

products in your country. Currently, it is imperative that products comply with EU Regulation on

organic production logo of the European bear, but this will become mandatory when the new

Regulation will enter into force.

Facts and Figures:

Statistics show that many EU consumers, like you, looking for products bearing such labels and

organic logo when buying vegetables or they choose a dish at a restaurant or cafeteria.

Studies estimate that the market for organic products grows by 10-15% a year.

The European market for organic products is approx. 20 billion per year

18.5% of the agricultural area of Austria is grown organically, which makes it EU countries with the

highest percentage of agricultural land for organic production in the country. The following places

ranks Sweden, a country where 12.6% of the total agricultural area is cultivated organically, Estonia

- 10.5% and the Czech Republic - 9.4%. Agricultural area devoted to organic farming across Europe

has increased tenfold since 1994, when totaled 1% of arable land by 2009, it totaled 9.3%

Year by year Total organic area is still increasing in the EU and Norway.


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The total organic area inEU-27 (i.e. the fully converted area and area under conversion) continues

to show an upward trend. The increase in area between 2007 and 2008 was 7.4 %, as compared with

5.9 % between 2006 and 2007.

Table 1

Total organic area 2008(ha) and % changes 2007-2008

From 2007 to 2008, Belgium, Bulgaria, Greece, Spain, Hungary, Slovakia and the United Kingdom

recorded growth of over 10 %. Although Italy led the European Union in the organic farming sector

in recent years, the area under organic crops in Italy actually fell by 12.9 %. During the same period,

the organic area in Spain increased by 33.3 % [4.8]
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Glossary:EU-27http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Glossary:EU-27http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Glossary:EU-27http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Glossary:EU-27


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Figure 2

Share of EU -27 organic area 2008(%)

The size of the organic area differs considerably from one Member State to another. In terms of the

total organic area of each Member State as a share out of the total organic area in EU-27, 4 countries

together accounted for around 50 % in 2008: the United Kingdom (9.4 %), Germany (11.7 %), Italy

(12.9 %) and Spain (17.0 %).[3.1]


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Figure 3

Share of organic producers by country in EU total 2008(%)

In 2009the market for organic products in Germany was 5.8 billion. Number of organic producers

Rise by 9.5 % between 2007 and 2008. In 2008, there were a total of 196 200 organic producers in

the EU-27. Germany, Greece, Spain and Austria each accounted for over 10 % of the EU-27 total,

with Italy out in front on 22.6 %. In 12 countries the share was less than 1 % .[4.7]


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Table 4

Number of organic producers 2008,% changes 2007-2008

Between 2007 and 2008 the number of organic producers in the EU-27 rose by 9.5 %. The highest

rate of increase, 40.2 %, was in the Czech Republic. In 6 countries (Denmark, Italy, Lithuania,

Romania, Finland and the United Kingdom) falls were registered, ranging from -0.9% in Lithuania

to as much as -13.4 % in Romania.[4.6]

The data, published by the Austrian newspaper Wiener Zeitung, based on a special report of the

Court of Auditors on the check control systems, production and distribution of organic and

biological and Agerpres quoted, shows that in the year 2009, first place in the ranking of the largest

collections made from the sale of food and drinks came in Germany - with 5.8 billion, followed by

France - to 3.04 billion EUR, United Kingdom - 2, 07 billion EUR, Italy - 1, 5 billion, Spain - EUR

0.91 billion and Austria - to 0.87 billion EUR.


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And in 2010 Germany is the second largest market for organic products in the world with a value of

6 billion. Studies also show that the rate of consumption of organic products increased in 2010 to

two billion U.S. dollars, with $ 340 million in France and $ 300 million in Germany.

Commission data shows that the market for organic products has grown rapidly in the EU, recording

annual growth rates of over 10% in the last 20 years. European market for organic food amounts to a

value of around 20 billion annually, representing an estimated market share of 1.5% of the food

market as a whole.

Romania: 300,000 ha organically grown in 2011, 10,000 organic operators and a market of 80

million EUR.Surface organic cultivation increased from 260,000 ha in 2010 to about 300,000 ha in

2011, but compared to 9 million ha of agricultural land area is still insignificant. [2.1]And the

number of organic operators grew in 2011 to 2008-2010, reaching 10,000. Most of these are but

small areas and a small number of animals. Romanian market of organic products totaling presently

about 80 million, while exports of these products are estimated to be worth 200 million in 2011,

twice more than in 2010, according to estimates Agriculture Operators Association eco - Bio

Romania.[2.3]

Romania export and import raw material processed organic products in Germany, Austria and

Belgium: As in previous years, most exported cereals, honey, berries and very few processed

products such as cheese, wine and bread products. European countries are the main export markets

for organic products in Romania, Germany, Austria and Belgium are among the countries importing

raw materials obtained massive local ecological system, but also the leading supplier of processed

organic products on the Romanian market.[2.2]

Regarding the consumption of organic products is estimated by Bio Romania about 80 million, half

of this amount from Romanian products, or honey, wine and bread, and half of the imports made

especially for large retailers.

The Partnership between European Union and U.S.A.

EU and U.S. sign a historic partnership in trade in organic products European Union and the UnitedStates announced on February 15, 2012 that as of June 1 2012, certified organic products in the EU

or U.S. can be sold as organic products either of these two regions. This partnership between the two

largest producers of organic world will build a solid construction that will promote organic farming

contributing to the development of this sector, to create jobs and business creation globally.


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In total, the U.S. organic products and EU together worth about 40 billion euros, a figure that

increases from year to year. Formal letters establishing partnerships were signed on 15 February

2012 in Germany, Nuremberg, The Dacian Ciolos, European Commissioner for Agriculture and

Rural Development, Kathleen Merrigan, deputy secretary the Ministry of Agriculture and U.S.

Ambassador Isi Siddiqui, chief agricultural negotiator in the U.S. trade representative. Signing

Ceremony World Fair held products BioFach organic, the largest event of its kind in the world.

"... The agreement has a dual value added. On the one hand, farmers and food producers green will

have access easier, with less bureaucracy and fewer costs to U.S. markets and EU, which will

strengthen the competitiveness of the sector. In addition, increases transparency standards for

organic products and the level of consumer confidence, and their ability to recognize organic food

and products, "said European Commissioner for Agriculture and Rural Development, Dacian

Ciolo.[4.9]

Before concluding this agreement, growers and companies wanting to market produced by both

sides of the Atlantic had to obtain certificates of conformity given two different standards, which

meant doubling fees, controls and moves bureaucratic. This agreement eliminates barriers,

especially for small and medium sized organic products. All products which qualify partnership can

be marketed and labeled as food, meat, cereals and wine certified organic. [5.0]

Although there are slight differences between the rules in the U.S. and EU in the field of organic

farming both individually decided that their programs are virtually equivalent, except prohibition on

the use of antibiotics. U.S. Department of Agriculture regulations (USDA) organic farming ban the

use of antibiotics, unless it is trying to control invasive bacterial infections (bacterial fire) affecting

orchard apples and pears. EU regulations on organic farming only allow the use of antibiotics to

treat infected animals. Under this partnership, not be used antibiotics for any reason, which must be

verified by the certification agency. In addition, all products are traded under the partnership be

transported to an export certificate for organic products. This document must indicate the place of

production, to identify the organization that certified organic product, verify that were not used

prohibited substances and methods, to ascertain whether the terms of the partnership were and

ensure the traceability of products traded.[4.7]

Both sides are committed to ensuring that all organic products that will be subject fulfill the terms of

trade partnership and that they maintain full ecological properties on the route from farm to point of

sale. DG Agriculture and Rural Development Commission and the national program for organic


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products (National Organic Program) of the U.S. Department of Agriculture - which oversees all

products U.S. green - will assume important roles surveillance.

2.3 Development of Organic Agriculture in Republic of Moldova

Agriculture is one of the largest sectors and has a big contribution to the economy Republic of

Moldova. In 2010, agriculture produced 12% of the country's GDP and employed 28% of

workforce. Importance of agriculture for Moldova's economy is validated by preponderance of

exports with agri-food products at 45-50% of total exports. This high rate is supported by the food

processing industry export-oriented agriculture, which produces most exports of agricultural

products and add about 7-8% to GDP.

Organic farming is a dynamic sector and potential. The attention of the targeted subsidized policies

in 2008-2010, the sector has seen green areas increased to over 22 000 ha in 2011. In terms of

budgetary austerity, years 2011-2012 and declared intentions for 2013 brought gradually dilution

relative subsidy measures. Perception business environment in this area is negative. Are expected

moderation in the pace of land conversion and even withdrawal of land from ecological cycle.

However, in view of increasing pessimistic scenarios green surfaces up to a weight of 3% of the

available agricultural land in 2026, exports could exceed 60 million eco Euro, compared to 15

million in 2011. They would only export crop production.[5.2]

Although representing only a fraction of the national conventional agriculture, organic farming has

potential for development. In 2011, only 3% of national exports of agricultural and food industryproducts are exports of organic food and agriculture (5% of the exports of cereals, vegetables and

fruits). However, during 2003-2011, organic surfaces increased from 80 ha to 22 102 ha (x270

times). The most common arguments for potential sector are higher selling price (including export),

restore the balance between anthropic and natural environment, development of related industries

(eco-tourism), higher capitalization of the land, the materialization income decreased emissions

growth management corporate culture Agribusiness etc.

There are a number of general and specific factors that may contribute to promoting the organic

sector a real engine of growth in agriculture in Moldova. General factors can be attributed to overall

agricultural development: increasing investment, development and civilization internal market

outlets, improve the quality of management and management culture in agriculture, improve rural

infrastructure: roads, irrigation systems, etc.. Specific factors can have an immediate impact on

cross-national agriculture: land conversion stimulation, application of subsidies, targeted


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development of domestic demand for organic products, brand promotion export country. Specific

factors can be deduced, mostly from the development of this sector globally.

Subsidies have also a significant impact on the development of organic agriculture. Most of all, they

were designed to support the introduction of agricultural land conversion process. However, farming

subsidies represent only a fraction of the total volume of subsidies to agriculture (0.7% in 2010).

In 2007 was stimulated ecological agricultural production by allocating EUR 2 million MDL. In the

period 2007-2008, support was given to partially offset the costs incurred during the conversion of

conventional agricultural production to organic production, and since 2009 it has added marketing

boost organic production. [5.2]

But the local market is underdeveloped because ofbarriers related to marketplace and promotion of

national export of organic products is anemic or nonexistent. It can be seen proper marketing for

organic products even internally. Producers on their own and their association with the purpose of

solving the problems of the sector and promote local and foreign market production is reduced.

Development of complex marketing strategies by each manufacturer is a difficult, expensive and

hard to argue.[5.1]

Organic farming has expanded rapidly in Moldova in recent years. Organic crops dominate this

sector. During 2003-2011, certified organic cultivated areas increased from 80 ha to 22 102 ha (x270

times). As the analysis shows the annual compound growth period (102%), cultivated areas have

doubled on average every year. The role of subsidies can hardly be disputed dynamics of this

process, though, can not be proven sufficient stability in their promotion. In 2011, certified organic

surfaces constituted 0.9% of all land area in Moldova

Figure 1

Statistical surface cultivated with organic products


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Structurally, most green areas were cultivated with cereals, vineyards and protein crops. Small area

of grassland illustrates underdevelopment organic livestock farming sector, which is based on

intensive grazing on green pastures.

Figure 2

The dynamics of manufactures of organic products

Over 170 producers were trained in organic farming in 2011 (7% of the total number of companies

in agriculture). Number of farmers increased by a compound annual rate of 41% during 2003-2011.

According to forecasts, the number will exceed 260 by 2015.[5.1]

Moldovan agricultural exports is mainly oriented towards traditional markets of CIS, emerging

markets, unstable now. Exports to these countries requires large risks. Reduction export of

agricultural products are influenced by a number of factors including the reduced competitiveness of

local agricultural production on the domestic and external market due to poor quality and safety,

such markets. Consumers ever-increasing demands of today, especially on EU markets and other

countries around the world, not only require guarantees that the products they buy are quality, but

more and more requests additional confirmation of the quality and safety of the products they

consume. They prefer organic products / clean green GM and demand for such products is

increasing.


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For example SGS company in Moldova is member of SGS International Group (Societe Generale de

Surveillance) registered and certified over 15 million hectares of agricultural land, which produces

nuts, grapes, wine, vegetable oil and ethereal, fruits and vegetables, grains, berries, honey green etc.

Certification is made in accordance with European regulation for Organic Production.

(EC) 834/2007, with the aim certification of agricultural production, crop production, livestock

production, aquaculture animal production, beekeeping production, wild crop. The majority

ecological products are exported and they are also requested on the local market.[1.3]

On 11.02.2011 was adopted theLaw on ecological food production that requires mandatory labeling

of organic products and organic agricultural production in line with EU rules.[1.4]

The Low describes the methods and principles of organic farming in crop and animal production,

describes possible methods of treatment and tillage, fertilizer and organic materials permitted

maintenance conditions of the animals, etc.. By law, national brand Organic Agriculture

Republic of Moldova is applied only on products that meet ecological standards.

National mark will indicate where they were agricultural raw materials from which it is

manufactured. If the raw material is grown abroad will be applied Organic brand non - Moldova.

Organic brand / non - Moldova will be applied if the part of the raw material was raised in the

country, and the other part - outside. Organic brand - the EU will be used if the raw materials are

cultivated in the EU.[4.8]

Right to use national brand Organic Agriculture- Republic of Moldova on products, labels and

packaging of agricultural products will get companies that produce, process, import, export and / or

made organic food products registered in the Ministry of Agriculture and Food Industry. Regulation

of import and export of organic products will be developed by the competent authorities and

approved by the government. Organic food product imported from third countries may be placed on

the Moldovan market for the fulfillment of certain conditions.[5.2]

The law provides for the development of organic agriculture in Moldova will be promoted to

farmers subsidy fund created annually in the state budget structure. As was reported earlier,

generally organic food products in Moldova produce about 100 companies that will receive the

appropriate national brand. Ministry of Agriculture has already 65 companies who want to receive

it. Companies that will produce organic food products will receive state aid in obtaining

international certificates of compliance and security that would facilitate exports and domestic

achievement priority


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Thus Republic of Moldova is situated in a geographical area with extremely favorable climatic

conditions and very fertile soils, the combination of which represents a huge opportunity for the

agricultural sector of national economy and allows a rich harvest high quality without the need of

intensive application of various chemicals and inorganic fertilizers or non-synthetic chemicals. It is

however necessary to comply with the requirements of international standards and national

production


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Conclusion

Converting traditional agriculture to organic farming is a complex operation involving high risk and

serious problems, both technical and economic. It was discussed that organic farming is more costlythan the conventional one, mainly because the labor input is higher and yields are lower. Inevitably,

organic farming needs more internal inputs, as well as labor. Developing and less developed

countries have some advantages that they have rather low external input use and often an unused

and underused labor. This movement in the those countries can make a considerable contribution

to developing efforts with high export capacity, if they could successfully cope with some important

obstacles related to production knowhow, organization and marketing. A gradualist approach is

advised to lower the amount of offfarms inputs. On the other hand, a strict certification procedure is

enforced. It reveals a dilemma in promoting organic farming. The only solution for farmers is tobe

able to receive a premium price for organic products in a rather stable market structure. At the

beginning, this could be realized by support policies as in the EU. It is well known that in the Union,

there are some national support schemes such as conversion grants or aids as well as Union wide

structural instruments and regulations. Due to the lack of the domestic market, this could be

achieved only through vertical coordination between producers and export oriented marketing or

processing firms through contract farming. Development of organic farming both in the developed

and developing countries will be dependent on the evolution of market structure and performance.

Sound adoption and dissemination efforts are needed to help existing non organic farmers convert at

least some of their production to organic methods, or to assist those who want to begin organic

farming as well as the existing organic producers. Availability of related organization and proper

supporting policies are very important for the development of organic agricultural movement.

Organizing under a farmer owned organization is very important for the small scaled farms. For

example, a well organized farming association can offer advisory services not only for the purpose

of inspection and the authorities use of the associations brand name, but also for marketing benefits.For instance, most of the German organic farming association standards are stricter than the

standards, which are included in the EU Regulation (Buley et al., 1997). The entire food chain from

the field through processing and trade to the market is subject to inspection where the importing of

the organic products is concerned.


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From the above figures, we can see the development of organic farming in the world. Although

Organic Agriculture is not dominating the continent yet. But in European Union seems to be a real

interest in this form of agriculture. For example, Germany has set an ambitious goal: to achieve a

20% share of organic farming in total cultivated areas and Austria has already a share of 10%

currently. For Moldovan citizens could be a huge opportunity to establish a more ecological

agriculture, little by little, to replace subsistence agriculture, prevalent at this time in the country.

Strategically quality objective of the sector organic positioning in national agricultural center as a

pivotal period in the development of rural areas.

Moldova has great opportunities for promoting and developing the ecological agriculture due to an

agricultural area of 2.25 million hectares and unpolluted soils.

To develop the organic sector in Moldova are necessary following measures:

1. Increasing the role of non-governmental organizations (NGOs) in this sector by

programs to develop trade with organic products;

2. Increasing the number of exporters actively involved in programs of ecological agricultural trade

development in disadvantaged areas;

3. Supporting commercial operation in organic farming to be more often encountered in the market;

4. Association of small producers of organic farming for cooperation in marketing organic products;

5. Increasing the number of projects for direct foreign investment

6. Increasing investment in export-related activities in rural areas

7. Increasing the volume of organic production

8. Increased investment in activities related to organic products exported from less developed rural

areas.

9. Increasing the number of new companies involved in exporting primary products and processed

organic farming

Thus Republic of Moldova is a country with a huge potential in organic production, because the

grounds are not chemicalized so much, therefore organic agriculture can be practiced successfully.


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Bibliography

I Laws and regulations:

1.1.Rules of Council Regulation (EC) no. 1991/2006 of 21 December 2006 (EEC) no. 2092/91 onthe production of agricultural products and indications referring thereto on agricultural

products and foodstuffs.

1.2.Council Regulation (EC no. 834/2007) in June 2007 on organic production and labeling of

organic products.

1.3.(EC) 834/2007, with the aim certification of agricultural production, crop production, livestock

production, aquaculture animal production, beekeeping production, wild crop.

1.4.Law on ecologyical food production that requires mandatory labeling of organic products and

organic agricultural production in line with EU rules adopted on 11.02.2011.

II Books:

2.1. Letitia Zahiu. Agricultura Uniunii Europene sub impactul politicii agricole commune.

Bucuresti: Editura Ceres 2006. P.26

2.2. Charles Walters, C.J. Fenzau. Eco-Farm.p.57

2.3. I. Toncea, Ghid practiced agricultura ecologica.Cluj-Napoca: Editura AcademicPres

2002.p.30

III Articles:

3.1.Area under organic farming increased by 7.4% between 2007 and 2008 in the EU-27- Statistics in

focus 10/2010

IV Websites:

4.1.www.madr.ro

4.2.www.miepo.md

4.3.www.eafacere.ro

4.4.www.ecomagazin.ro

4.5.www.agro-bucuresti.ro

4.6.http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statistics
http://ec.europa.eu/eurostat/product?code=KS-SF-10-010&language=enhttp://ec.europa.eu/eurostat/product?code=KS-SF-10-010&language=enhttp://ec.europa.eu/eurostat/product?code=KS-SF-10-010&language=enhttp://www.madr.ro/http://www.madr.ro/http://www.madr.ro/http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statisticshttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statisticshttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statisticshttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statisticshttp://www.madr.ro/http://ec.europa.eu/eurostat/product?code=KS-SF-10-010&language=en


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4.7http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statistics_%E2

%80%94_setting_higher_standards

4.8.www.ecologie.md

4.9.www.adevarul.ro

5.0.www.ec-europa.eu

5.1.www.statistica.md

5.2 http://data.worldbank.org
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statistics_%E2%80%94_setting_higher_standardshttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statistics_%E2%80%94_setting_higher_standardshttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statistics_%E2%80%94_setting_higher_standardshttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statistics_%E2%80%94_setting_higher_standardshttp://www.ec-europa.eu/http://www.ec-europa.eu/http://www.ec-europa.eu/http://www.statistica.md/http://www.statistica.md/http://www.statistica.md/http://www.statistica.md/http://www.ec-europa.eu/http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statistics_%E2%80%94_setting_higher_standardshttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Organic_farming_statistics_%E2%80%94_setting_higher_standards

Documents

international trade with organic products