Voluntary Report - public distribution

**Date:** 12/30/2003

**GAIN Report Number:** EZ3019

EZ3019

**Czech Republic**

**Organic Products**

**Market Brief**

**2003**

**Approved by:**

![](media/image1.wmf)Sarah Hanson

U.S. Embassy

**Prepared by:**

Petra Choteborska

**Report Highlights:**

The market potential for U.S. organic products is strong as the Czech
organic market is growing 25 to 30% a year. However, Czechs still base
most purchases on price. This price sensitivity may change after EU
accession in May 2004 when purchasing power is expected to increase.
U.S. products with good potential include lentils, vegetables, nuts,
products from organic soybeans, and snack food ingredients (e.g.
cranberries).

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Vienna \[AU1\]

\[EZ\]

## Organic Production and Distribution 

In 2003 there were over 800 certified organic farms in the Czech
Republic. Approximately 240,000 ha (5.5% of total agricultural land) are
farmed organically. A 15 to 20% increase in organic acreage is predicted
for the next five years. 90% of the organic land forms sustainable grass
areas, 8% arable land, 0.5% vineyards and orchards, and 1.5% other type.

Czech goals for organic agriculture are focused on increasing area to 8%
of total agricultural land by 2006 and 10% by 2010, higher subsidies for
production on arable land, increased quality of processing, and
marketing and export support. Between 2004 and 2006 organic agriculture
should receive \$37 mil (1 bill CZK), out of which 80% would be from the
EU budget and 20% from Czech budget.

Currently there are 92 registered organic producers and 164
distributors. Last year over 1,100 products were registered as organic,
another 300 items were imported. The fastest growing products include
grains, vegetables, milk and eggs.

Around 60% of organic products are sold in supermarkets and hypermarkets
that have special sections for bio-products and over 35% is sold in
special stores for nutrition products. Consumers buying these products
usually have a higher education and higher income.

The major player on the organic market is a company called "Country
Life" which carrys over 400 bio-products. Country Life is the biggest
importer of organic products, has two stores in Prague, a restaurant,
and a farm for its own production.

Organic products have to labeled "Bio-product" according to Act 242/2000
on ecological (organic) agriculture. Use of this label is controlled by
independent organization Control of ecological agriculture (KEZ), which
lists certified producers. Distributors and traders sell organic
products with the label "Bio-product". Some companies use their own
private labels, e.g. "Pro-bio", "Country Life" etc.

PRO-BIO is a national non-governmental organization associating
ecological farmers, processors and traders as well as consumers, schools
and providers of other services, who focus on ecological agriculture and
the use of its products. PRO-BIO has 500 members, of which 400 are
agricultural enterprises cultivating 115,000 hectares of farmland.
PRO-BIO is a member of the international organization IFOAM and a
partner of \"Bioland\", the German association of ecological farmers.

## Policy

As off January 2001, Act 242/2000 regulates organic production,
labeling, requirements for import and export, and the control system.

The organic agriculture boom is the result of increased government
subsidies in recent years. Between 1993 and 1997 there were no subsidies
for organic agriculture, the Ministry of Agriculture focused on
different priorities. Between 1998 and 2002 subsidies for organic
agriculture as regulated by government Directive 505/2001 rose from
\$1.8 mil (48 mil CZK) to \$8 mil (210 mil CZK). Subsidies are paid
based on area; most support goes to vegetable production.

The Ministry is preparing two documents related to organic farming.
After the EU accession in May 2004, the Czech Republic will be able to
draw money from the EU for organic production according to Horizontal
Plan for Rural Development (HPRD) prepared by the Ministry of
Agriculture in line with Council Regulation 1257/99. The full text of
this document is available in Czech on the Ministry webpage:
[www.mze.cz](http://www.mze.cz/)

The second document prepared by the Ministry is an Action Plan for
Organic Agriculture in the Czech Republic. This document is the result
of an EU agricultural ministers council meeting in June 2001, and it
deals with processing, marketing, promotion, information for consumers,
and research. The plan is prepared by many organizations including
professional associations and agricultural universities.

## Import Regulations

In February 2000 an equivalency agreement between the Czech Republic and
the EU was established. According to Commission Regulation 2589/2001,
Czech Republic appeared on the list of third countries allowed to export
to the EU. All Czech organic products are treated equally in the EU
according to Council Regulation 2092/91.

Commission Regulation 1788/2001 from September 2001 set conditions for
import certificates from third countries based on Article 11 of Council
Regulation 2092/91 on organic products.

## 

## Trade

### Import

According to Act 242/2000 on organic agriculture, there are two basic
conditions for certification of an imported product as organic. The
first requires documentation of origin from a control organization in a
country on the list of equivalent treatment. The second requires only
registered producers, importers and distributors of organic products to
request certification of imported products as organic.

Among imported organic products are fruits, vegetables, beverages,
snacks, fruit jams, vegetable spreads, fats and oils, coffee, and meat
products.

### Export

In 2002 over 420 export licenses were issued and 3,600 MT were exported,
out of which 60% went to Germany, 28% to Austria, 6% to Holland and the
rest to other European countries.

Exported commodities include corn, peas, rye, carrots, spelt wheat,
herbs and spices, dried apples, apples, pears, flax, pumpkins, onion,
mustard, spelt coffee, pasta, spelt flour, oats, etc.

## U.S. Market Perspectives

Until the United States and EU establish an equivalency agreement for
organics, only U.S. farmers with IFOAM certificate are allowed to export
to the Czech Republic. U.S. products with a good potential on the Czech
market include lentils, vegetables, nuts, products from organic
soybeans, ingredient for snack foods (e.g. cranberries). Price of these
products, however, may still be too high for the Czech market.

## Contact Information

### Control of Ecological (Organic) Farming - KEZ

Ms. Iva Dvorska

Head of Certification Department

Podebradova 909

537 01 Chrudim

Czech Republic

Tel: +420 469 622 249

Fax: +420 469 622 249

E-mail: <iva.dvorska@kez.cz> <kez@kez.cz>

URL: [www.kez.cz](http://www.kez.cz/)

### Country Life

Mr. Ales Dolecek

Deputy Director

U 5. baterie 26

162 00 Praha 6

Czech Republic

Tel: +420-220-980-057

Fax: +420-220-981-057

E-mail: <dolecek@countrylife.cz>

URL: [www.countrylife.cz](http://www.countrylife.cz/)

### Pro-Bio -- Association of Organic Producers

Ms. Marketa Doubravska

Public Relations Manager

Nemocniční 53, P.O. BOX 116

787 01 Šumperk

Czech Republic\
Tel: +420 --583-216-609

Fax: +420 --583-214-586

E-mail: <marketa.doubravska@pro-bio.cz>

URL: <http://www.pro-bio.cz/english/english.htm>

## [Ministry of Agriculture]{.underline}

Mr. Ivan Landa

Head of Organic Production Section

Tesnov 17

117 05 Praha 1

Czech Republic

Tel: +420-221-812-819

Fax: +420-221-812-818

E-mail: <landa@mze.cz>

URL: [www.mze.cz](http://www.mze.cz/)

## [U.S. Embassy]{.underline}

Ms. Petra Choteborska

Agricultural Specialist

Trziste 15

118 01 Praha 1

Czech Republic

Tel: +420-257-531-170

Fax: +420-257-531-173

E-mail: <petra.choteborska@usda.gov>

URL: <http://www.usembassy.at/en/usda>

(Exchange rate: December 2003: 1\$ = 26.5 CZK)