The Risk Management of Organic Products along the Value Chain

Looking at the dynamics of the worldwide organic market value registered upward trends in the last years. Just as an example, the USA organic market surpasses $ 31 billion in 2011, growing by 9.5% since 2010 [1]. While the organic market in Europe reached € 21.5 billion in 2011, increasing 9% compared to 2010 [2]

Looking in more detail at what fuels the growth, we can see that in the EU-27 there are 9.6 million ha organically cultivated in 2011, out of which 86% of which in EU-15 [3]. This implies a growth rate of 500.000 ha/year on average [3].

Most experts agree that the organic market is expected to continue to grow in the following period!

Risk assessment for organic producers

In an ever growing organic market, in an ever growing number of international transactions, the issue of the relevance of the risk assessment of organic producers has become truly important for any intermediary on the market.

For any trader in the organic market, the trust and reputation are essential, especially in the organic trade.

The article is focused on an online trading platform of organic raw materials. From the perspective of this online trading platform which aims to facilitate commerce, the assessment of the risk of farmers / producers is a vital business strategy.

Source: Munteanu A.R. (2014) 

So the main research question is “How to design a framework to assess risk before a transaction takes place?”

References 

[1] Oganic Trade Association’s (OTA’s) 2012 Organic Industry Survey, quoted at http://www.organicnewsroom.com/2012/04/us_consumerdriven_organic_mark.html [accessed April 2014]

[2] Schaack, D., Lernoud, J., Padel, S., & Willer, H. (2013). The Organic Market in Europe 2011-Nine Percent Increase Compared with 2010. The World of Organic Agriculture-Statistics and Emerging Trends 2013, 224-229.

[3] European Commission (2013). Facts and figures on organic agriculture in the European Union. DG Agriculture and Rural Development, Unit Economic Analysis of EU Agriculture 

[4] Munteanu, A.R., 2014. The Risk Management of Organic Products along the Value Chain, Proceedings of The International Conference on Production Research - ICPR - QIEM 2014, 1-5 July, Cluj-Napoca