On the one hand, organic farming is definitely policy-driven. It exists, first of all, because of food safety legislation, which places a limit on the amount of pesticide residues that can be present in food. Organic farming exists, secondly, because of environmental regulations, which specify that certain chemical fertilisers and pesticides should not be dumped in the soil or the groundwater.
On the other hand, organic farming is also definitely consumer-led. Many people prefer organic food, even though it is often considerably more expensive than conventionally produced food. Even among those consumers who aren't willing to pay substantially more for organic produce, there is often nevertheless a preference for organic food when the price is comparable.