August 3, 2005

French organic wheat sector hit by sluggish demand

By Sybille de La Hamaide

PARIS (Reuters) - France's organic wheat harvest, which
makes up less than one percent of the country's total wheat
crop, will be plentiful this year but the sector is threatened
by stagnant demand, producers said on Wednesday.

"First cuttings show the 2005 organic soft wheat crop will
be satisfactory in volume and quality," Intercereales said in a

The umbrella group of grain producers and consumers did not
give a precise estimate for the crop but the president of its
organic division, Salvador Ferret, said the total would be
above the average of 60,000 tonnes a year.

Organic agriculture has taken off over the past decade in
Europe after food and farming crises over mad cow disease,
dioxin, foot-and-mouth and swine fever, and amid continued
concerns over genetically modified crops (GMOs).

But interest in France lags behind that in other European
countries. And organic wheat, used to make baguettes, biscuits
and sliced bread, is now under threat in the country due to a
drop in prices that started several seasons ago, Ferret said.

"Between 1997 and 2002, there was a real craze for organic
products, which led to a huge demand to the point where
production could not keep up," he said.

"We worked hard and organic grain production increased
strongly. But at the same time demand has stagnated as public
interest and consumption remained stable. So we are now in a
situation of over-production," he added.

French organic wheat prices are close to the level where it
would be more profitable for producers to go back to growing
conventional wheat, putting the whole sector at risk.

"The real worry is to see farmers...go back to conventional
farming," Ferret said.

To reverse the drop in prices, organic producers have tried
to boost demand and attract industrial bread and biscuit makers
by increasing grain quality.

"Organic wheat was first aimed at traditional bread makers.
But we've raised the quality so that it meets industrial
requirements," Ferret said. "All we have to do now is to
convince them, as well as consumers, to use more of it."

France said earlier this year it wanted to boost its
organic sector, which recorded a two percent drop in cultivated
area and a three percent fall in the number of farms last year.

Under a 20-year blueprint for agriculture, France plans to
grant a tax rebate to farmers who earned 40 percent of their
income from organic farming.