REPORT: Organic products face new challenges as market moves online

The Growing demand for “clean and green” food is having an immediate effect in both the real and virtual worlds, but there is still doubt as to whether people are grasping the essence of being fully organic, with sustainable agriculture and fair trade. 

This doubt was aired at a recent Food Security Assembly forum spearheaded by BioThai – Thailand’s top campaigner for food security and biodiversity – and its 30-plus allies in networks dedicated to sustainable and alternative agriculture. 

The concept of organic products arose more than 20 years ago as a symbol in the fight against a so-called green revolution by farming communities. Markets were created as platforms to offer these goods as alternatives.

With lifestyles now shifting, the demand for clean food is growing and conventional markets, modern trade outlets and even the new online-retail option created by Jack Ma are adding green goods to their line-up of products. 

However, food-security advocates and economists believe the growing call for clean, green food can present challenges. 

Independent researcher Premkamol Phukaew, who presented her findings at the forum, said more fresh markets in Bangkok and neighbouring provinces were selling organic products, and some traders were opting for technology such as QR codes to boost sales. 

But hygiene remains an issue because these markets are not well regulated. In her study using data from the Bangkok Food Sanitation Office, Premkamol found that only 350 of the 1,120 markets in the city were regulated. In the rest there are no official checks on standards or hygiene. 

“The state is only controlling 30 per cent of the markets, so the question is whether the authorities will ever notice this and take action to improve the standards,” Premkamol said. 

BioThai network Thai-Pan recently conducted random checks on vegetables sold at such markets and found that more than half the samples were contaminated by chemicals, she said. 

Sellers’ understanding and the attitude of market owners, she said, play a key role in lifting standards in markets where state measures are obviously absent. 

The markets have managed to survive despite the shift in retail trends because they play a major role in connecting buyers with producers. 

A study by Oxfam Thailand found that modern trade outlets, such as large supermarkets and hypermarts, have also started carrying organic products in response to demand, said Theerawit Chainarongsophon, who works in private-sector engagement at Oxfam. 

He pointed out that the market value of the modern-trade sector stood at Bt2.3 trillion last year, despite there being few outlets. BioThai noted that such outlets hold a 50-per-cent share in the food market, while convenience stores command a share of up to 75 per cent among ready-to-eat products. 

However, these outlets do not quite pay heed to fair trade. A study by Oxfam International found that at least 30 per cent of their earnings go to the operators and barely 14 per cent to farmers. 

“This is an unfair and unbalanced distribution of the benefits,” Theerawit said. 

Oxfam Thailand found similar data when studying the distribution of income in Thailand’s shrimp industry. It discovered that up to 30 per cent of earnings went to modern-trade operators, while producers were given so little that they suffered food insecurity themselves. 

Theerawit said fair trade and food security were clearly the challenges faced by producers when they engage with modern trade, which has played more role in a food chain and bcome in more direct contact with producers.

Then there’s the new retail toy created by Ma, which is posing fresh challenges since modern technology moves high volumes of goods across borders at cheaper costs, but leaves farmers empty-handed. 

“There is a big change in relationships in the food chain. Monopolies and manipulation of production and distribution are posing new concerns,” said Kingkorn Narintarakul Na Ayutthaya, BioThai’s deputy director.

Virtual or application-based e-markets are also changing the way food is bought and produced. In South Korea, for instance, photos of food items are posted on public trains and buses and people can order these items using their phones. This trend appears to be coming to Thailand as well. 

Kingkorn said the trend is growing in the Asia region mainly because so many people live in cramped cities. “This type of trade could even kill fresh markets,” she said. 

Food-security advocates and economists say that, although markets and modern outlets have decided to put clean food on their shelves, they still ignore the mainstay of organic food – sustainable agriculture and fair trade – which is leaving farmers at the source of the food chain hungry. 

They blame the trend on consumers’ drive to be healthier. In their hunger for clean food, few people think about the producers who are critical to the food chain and its sustainability. 

Independent economist Sarinee Achavanuntakul, founder of Sal Forest – a company that promotes sustainable business growth – said her research shows there are different terms used to define organic products and “health food”, and the market values of these two categories are vastly different. 

For instance, she said, organic products generated around Bt1 billion last year, while health food earned Bt170 billion – a clear reflection on consumption trends and perception. 

She said the biggest challenge for clean products and markets was maintaining their value at competitive levels. 

While some green markets serve their local communities, the operators should think more about their unique value and how they can contribute to new trends and changing lifestyles. 

“Maybe it’s not about green or alternative markets, but more about marketing, about how we can lift our producers and connect them in the correct way with consumers. This will help us focus and reposition the organic-food chain in line with new market trends,” Sarinee said.