tropical and subtropical products such as coffee, tea, cocoa, spices, sugar cane and tropical fruits transition more easily to organic since they are generally low external input systems. The higher labor requirements of organic farming provide a comparative advantage to developing countries with relatively low labor costs (de Haen, 1999).

There are significant constraints for developing countries to the profitable production, processing and marketing of organic products for export.

Organic markets require high quality produce and the added costs and complexities of certification. This is a constraint for developing countries where market access may be difficult due to limited and unreliable infrastructure and a lack of skilled labor. Evidence suggests that the current price premium for organic produce will decline in the long term as supply rises to meet demand and as larger corporate producers and retailers enter the market. A lower price premium may make organic agriculture uneconomical for many small-scale producers in developing countries with poor rural infrastructure and services (de Haen, 1999). However, these constraints provide an opportunity for industrialized countries to assist developing countries to expand valueadding skills and infrastructure.

Organic demand is increasingly driven by big retailers with brands that dictate standards.

Large and vertically coordinated supermarket chains now account for a major share of the retail markets for fresh and processed organic foods. Supermarket sales of organic produce range from 40% in Germany, 49% in USA, to 80% in Argentina and the UK, and 85% in Denmark. Most large food companies have acquired organic brands and small firms, initiated partnerships with organic companies, or have their own organic lines. Mergers and acquisitions of organic brands and companies affect production, processing, certification and distribution pathways, e.g., in California, 2% of organic growers represent 50% of organic sales. The world's largest organic food distributor has sales of US$3.5 billion. Increasing domination of the organic market by big companies may control market access, and lead to price regulation that reduces returns to farmers. This trend could potentially undermine one of the central principles of organic agriculture: providing a better return to farmers to support the costs of sustainable production. Industry concentration is leading to pressure to erode organic standards (El-Hage Scialabba, 2005). There may however be other benefits to some producers such as ease and scale of marketing and more standardized production.

The localization of marketing has some benefits for smallscale organic producers.

Some initiatives (organic farmers markets, box home delivery and community supported agriculture) have successfully empowered small-scale farmers and promoted localized food systems by supporting community-based, short food supply chains in domestic markets Generally these initiatives are small in scale but seen in total and as a global trend in industrialized and developing countries their impact is significant. One example of larger scale success is a farm in Denmark that delivered 22, 000 organic boxes per week (annual sales of Euros 20 million) in 2005. Other innovations to promote the localization of organic production are the facilitation of dialogue between different government Ministries (e.g., agriculture, trade, environment, rural development, education, health, tourism) and civil society operators (e.g., farmer associations, inspectors, accreditors, traders, retailers, consumers) and location-specific research and knowledge sharing through Organic Farmers-Field-Schools to promote location-specific research and knowledge sharing (El-Hage Scialabba, 2005).

3.2.2.2 Managing agricultural land for ecosystem services and public goods

Agroecosystems are increasingly recognized as potential providers of ecosystem services, yet typically cultivated land has lower biodiversity than natural ecosystems, and is frequently associated with reduced ecosystem services (Cassman et al., 2005), consequently necessitating tradeoffs between production and ecosystem services.

3.2.2.2.1 Water quality and quantity

The available global freshwater resource has been estimated at 200000 km3 (Gleick, 1993; Shiklomanov, 1999), of which over 90% is groundwater (Boswinkel, 2000). Population growth has reduced annual per capita water availability from 12,900 m3 in 1970 to less than 7,800 m3 in 2000 (CA, 2007). With water a scarce resource, the role of agriculture in wise water resource management is increasing in importance (CA, 2007). Currently, 7,200 km3 of water are used in crop production annually and this is predicted to double by 2050 (IWMI, 2006). There are two major trends in water management-government intervention on large scale projects (Molden et al., 2007b), and private and community investments in small scale projects (e.g., 26 million private small scale irrigation pumps owners in India). Large dams, reservoirs and irrigation systems are typically built by government agencies, which often continued to operate them for economic development (including agriculture, urbanization, power generation), without adequate consideration of farmer needs.

Present trends in irrigation water management within public and private sector have significant positive and negative effects on environment.

Rainfall contributes about 110,000 km3 of water per year worldwide, 40% enters rivers and groundwater (43,500 km3) (Molden et al., 2007a). The rapid increase of irrigation in the last 50 years (Figure 3.1c) has led to dramatic moditropical