Indian Organic farming Market Opportunities and Challenges

Report By SURINDER PAL SINGH MBA GLOBAL BUSINESS & SUSTAINABILITY ALTIS.

S.NO 1 2 3 4 5 6 7 7.1 7.2 7.3 8 8.1 8.2 9 9.1 9.2 10 11 12 13 13.1 13.2 13.3 13.4 13.5 14 15

Topics Executive Summary Introduction Demographic of India Objective of study What is organic farming why to go organic Indian domestic Market Indian organic products Reasons for unsold stock of organic products Potential customers for organic products in domestic market Non-Governmental organizations Types of farmers in organic farming Program for small farmers Certification Certification bodies in India Cost of inspection and certification Frame condition of the organic market in India & Recommendation Awareness about organic products Non-consumer of organic products Demand for Indian Organic products in the domestic & Export markets Domestic market Export Market Supply The International Market Proposed Objectives Government support to the sector Integrity and sustainability at the centre of organic development Growing market 16 The focus on India & sustainability Key indicators 2012 17 Conclusion 18 References

Page No 2 3 3 4 4 4 5 5 7 7 8 8 8 9 9 9 9 10 11 11 11 11 12 13 14 14 14 14 15 16 17 17,18

1- EXECUTIVE SUMMARY The relatively high success of organic farming in some countries are due to the high awareness of the health problems caused by the consumption of contaminated food products, the ill effects of environment degradation, appropriate supports by the government and organizations like the European Union and International Federation of Organic Agriculture Movements (IFOAM). The financial support for organic farming extended by various national and provincial governments in these countries is very substantial to push up the spread of organic methods. Strong marketing networks linking the farms, processing and distribution and the organization of production under the NGOs with stringent certification programmes were other facts, which contributed to the growth of organic farming. The growth rate of market values of organic products is about 20 per cent per annum in some of these countries. The conventional farming had helped India not only to produce enough food for own consumption but also generated surpluses for exports. However, the increasing population and income will lead to further increases in demand for food and also for raw materials for industry. The modern system of farming, it is increasingly felt, is becoming unsustainable as evidenced by declining crop productivities, damage to environment, chemical contaminations, etc. The necessity of having an alternative agriculture method which can function in a friendly eco-system while sustaining and increasing the crop productivity is realized now. Organic farming is recognized as the best known alternative to the conventional agriculture. The progress of organic agriculture in India is very slow. We are able to convert only 41,000 ha of area so far, which is a mere 0.03 percent of the cultivated area. These figures should be compared to 2,58,500 ha (11.30 per cent) of Austria, 1,02,999 ha (9.70 per cent) of Switzerland, 1,83,000 ha (7.94 per cent) of Italy, 6,32,165 ha (3.70 per cent) of Germany and 9,50,000 ha (0.23 per cent) of USA. The production of organic farms came to about 14,000 tonnes in India during 2002 and 85 per cent of it was exported. Domestic consumption is marginal and is concentrated in the metropolitan cities in the country. NGOs are spearheading the organic movement in India as in other countries. The major weaknesses of organic agriculture in the country are absence of linkages between the farmers and markets and absence of financial support from the governments. India has the potential to become a major organic producing country given the international demand for our farm products, different agro-climatic regions for the cultivation of a number of crops, the size of the domestic market and above all the long tradition of environment friendly farming and living. Experts have identified the areas suitable for the introduction of organic farming. However, an appropriate policy framework is yet to be laid down by the government. The only progress made in this direction appears to be the implementation of National Standards for Organic Production (NSOP) in 2000 and the founding of a National Institute of Organic Farming. A few agencies with the assistance of international bodies have entered the field of inspection and certification. An appropriate national agriculture policy, giving a prominent place to organic farming addressing the issues related to its coverage, financial support during the conversion period, creation of linkages among the farmers, processors, traders and consumers, inspection and certification of organic products and increasing the public awareness of the benefits of organic agriculture along with the ill effects of the conventional system, should be designed. This must be followed by concrete action on

the ground if we do not want to miss the far reaching changes all over the world heralded by the organic farming movement. 2- INTRODUCTION Organic agriculture offers trade opportunities for farmers in the developing and developed countries. This market of organic products is expected to grow globally in the coming years and high rates over the medium term (from10-15 to 25-30 %) are expected. The organic market expansion makes it possible for farmers to reap the benefits of a trade with relatively high price premiums. However, this market is not very well known to most farmers, especially those living in the developing countries. The absence of sufficient technical and market information and financial support also means that few farmers will risk changing their method of production. In developing countries it is therefore essential for major key player (e.g NGOs, farmer organizations, traders, exporters etc.) that promote organic farming to have up-to-date information on the available opportunities (market requirements) and trends of the organic market. One example is India, a country with a huge number of small farmers who still use traditional methods and do farming with few agricultural inputs. NGOs that promote organic farming and other organizations support farmers in these aspects. An organic movement is now emerging in India on different levels (producer groups, trainers and advisors, certification bodies and processors and traders). So dissemination of information about the opportunities and challenges for Indian organic products on the domestic and international market is of fundamental concern in order to allow continued development of the organic agriculture movement in this country. 3-Demographics of India The demographics of India are inclusive of the second most populous country in the world, with over 1.21 billion people (2011 census), more than a sixth of the world's population. Already containing 17.5% of the world's population. India is projected to be the world's most populous country by 2025, surpassing China, its population reaching 1.6 billion by 2050. Its population growth rate is 1.41%, ranking 102nd in the world in 2010. Population growth rate 1.548% (2009) Agriculture GDP : 18.1%, industry: 26.3%, services: 55.6% (2011 est.) Life Expectancy: 63 years Languages: Hindi, English and 16 other official languages. Literacy rate: 59.5 % of the population over the age of 15 can read and write. Work force: 416 million ---63 percent agriculture--- 22 percent industry and commerce --- 11 percent Services and government --- 4 percent transport and communications. Labor cost per Hour: $0.77 (2003 estimate)This represents a 37.5% increase from $0.56 per hour in 1999. Agricultural Land Currently, according to the FiBL & IFOAM survey, India ranks 7th in terms of total land under organic cultivation. The cultivated land under certification is around 2.8 million hectares ( 2007-08). This includes 1 million hectares under cultivation and the rest is under forest area (wild collection).

4- Objectives of study i. To analyze the potential for organic products in the Indian domestic market; ii. To identify the necessary steps to develop the domestic market; iii. To assess demand and requirements in the international market and identify measures to improve the quality of the Indian organic products in line with international market requirements; iv. To formulate strategies for both the domestic and international markets with a special focus on market access for small and medium-sized farmers and enterprises. 5- What is organic Farming? Organic foodstuff is produced with a commitment to respect biological and ecological processes. Organic agriculture is based on a holistic viewpoint that perceives nature as more than just the separate, individual elements into which it may be split. The principles of organic farming are found in ecology, a science concerned with the interrelationship of living organisms and their environments. The concept of organic farming also covers economic and social aspects of agricultural production, local as well as global. The aim of organic farming is to support and strengthen biological processes without recourse to synthetic fertilizers and pesticides and the genetic modification of organisms. Hence, this method takes a mainly preventive approach to controlling weeds, pests and diseases. In order to ensure that organic products are indeed produced according to organic farming principles, they, or rather the whole production and handling process from the farmer to the consumer must be certified organic. By certification, a third party (an accredited body) gives written assurance that a product labeled as organic is produced according to recognized standards for organic farming. Certification is a necessary condition for international trade in organic products. When entering a market, suppliers should ensure that their products are certified as meeting the standards applicable in that particular market. Producers who supply several different markets should be aware that organic standards may differ somewhat from market to market, although they are generally based on the same principles.

6- Why to go Organic ? Organic agricultural practices are based on a maximum harmonious relationship with nature aiming at the non-destruction of the environment. The developed nations of the world are concerned about the spreading contamination of poisonous chemicals in food, feed, fodder and fibre. Naturally, organic farming system is looked upon as one of the means to remedy these maladies there. The ultimate objective is to produce poison- free food for Indian consumers and to achieve this maintaining the living fertility of Indian soils. As time went by, extensive dependence on chemical farming has shown its darker side. The land is losing its fertility and is demanding larger quantities of fertilizers to be used. Pests are becoming immune, requiring the farmers to use stronger and costlier pesticides. Due to increased cost of farming, farmers are falling into the trap of money lenders, who are exploiting them no end, and

forcing many to commit suicide. An overuse of chemicals has made land acidic and hard, which means it needs even more water to produce, which is costly," Organic is best benefit. Taste is different. Size of grain is bigger. First, there's a 10% to 20% premium to be earned by selling organic products abroad and in India's increasingly affluent cities, a move towards healthy living and growing concern over toxic foods and adulteration plaguing the food market. Second, the cost of pesticides and fertilizers has shot up and the loans farmers need to buy expensive, modified seed varieties are pushing many into a spiral of debt. Organic farming slashes cultivation and input costs by up to 70% due to the use of cheaper, natural products like manure instead of chemicals and fertilizers. Third, farmers are suffering from the damaging effects of India's green revolution, which ushered in the rampant use of pesticides and fertilisers from the 1960s to ensure bumper yields and curb famine and food shortages. Over the decades, the chemicals have taken a toll on the land and yields are plunging. "Western, modern farming has spoiled agriculture in the country. An overuse of chemicals has made land acidic and hard, which means it needs even more water to produce, which is costly," says Narendra Singh of Organic India "Chemicals have killed the biggest civilisation in agriculture earthworms, which produce the best soil for growth 7- INDIAN DOMESTIC MARKET Organic agriculture in India & Significance of organic agriculture for Indian farmers In the Indian context, organic farming can be significant in two distinct ways: 1. To increase the efficiency and sustainability of production: Organic farming can help to reduce production costs (especially where labor is cheap compared to input costs) and to increase or stabilize yields on marginal soils. This is especially relevant for smallholders in marginal areas where Green Revolution agriculture has lead to a depletion of soil fertility and to high debts because of increase in input costs. 2. To increase product value: In areas where farmers have access to established organic markets within the country or abroad, products can achieve a higher price compared to the conventional market. Especially in the trend of decreasing prices for agricultural products, this can be an important way to stabilize or even increase incomes. Extent of organic production The Indian Government has recognized the export potential of organic agriculture and is in the process of strengthening the sector by putting a legal framework in place. This includes creating national organic standards and the possibility of accrediting in-country inspection and certification bodies. 7.1 Indian organic products

Considering that Indian agriculture as a whole accounts for about 180 million hectares, the total land under certified organic production is a negligible are of just 0.0015%. Major products being produced organically in India are given in Table 1. Table 1: Major products produced in India by organic farming

Type Commodity Spices Pulses Fruits Vegetables Oil seeds Others

Products Tea, coffee, rice, wheat Cardamom, black peeper, white peeper, ginger, turmeric, vanilla, mustard, tamarind, clove, cinnamon, nutmeg, mace, chili Red gram, black gram Mango, banana, pineapple, passion fruit, sugarcane, orange, cashew nut, walnut Okra, brinjal, garlic, onion, tomato, potato Sesame, castor, sunflower Cotton, herbal extracts Source: (org-marg)

Products for which Indian production has a comparative advantage India being a country with different agro-climatic zones, each state produces its own specialty products, Based on soil and climate, India is divided into 21 agro-ecological zones. Products for which production in India has a comparative advantage are given inTable2. Table 2: Products for which Indian production has a comparative advantage Season States Major Locations Throughout the year Assam, West Bengal, Darjeeling, Uttranchal Guwahati, Dehradun Throughout the year Kerala, Tamil Nadu, Cochin, Coimbatore, Karnataka Idduki, Coorg Throughout the year Kerala, Tamil Nadu, Coimbatore,Coorg, Karnataka Wayanadu,Peeremade Kharif & Rabi * Punjab, Haryana, Assam, Amritsar, jalandhar, Maharashtra, Tamil Nadu Darrang, Ratnagiri, Kanchipuram, Thrivallur Kharif & Rabi Punjab, Haryana, Uttar Pradesh Ambala, Patiala, Bhatinda, Faridkot Throughout the year All India Various locations Throughout the year All India Various locations Khafif Maharashtra, Gujrat, Akola, Amravati, Madhya Pradesh Amreli, Kheda, Indore

Product Tea

Spices Coffee Rice

Wheat Vegetables Fruits Cotton

*Kharif and Rabi are two growing seasons in India. Kharif is essentially from May to September and Rabi is from November to March. Source: (org-marg) Besides the broad range of products and the seasonal advantages mentioned above, Indian has other comparative advantages for organic production: 1. India is throng in high quality production of certain corps like tea, some spices, rice specialties, ayurvedic herbs etc. 2. India has a rich heritage of agricultural traditions that are suitable for designing organic production systems. Sophisticated crop rotation or mixed cropping patterns, for example the famous agro-forestry systems of the Western Ghats, facilitate the management of pests,

3.

4.

5.

6.

diseases and nutrient recycling. Botanical preparations, some of which originate from the ancient Veda scripts, provide a rich source for locally adapted pest and disease management techniques. The widespread cultivation of legume crops facilitates the supply of biologically fixed nitrogen. In several regions of India agriculture is not very intensive as regards the use of agrochemicals. Especially in mountain areas and tribal areas, use of agrochemicals is rather low, which facilitates conversion to organic production. On these marginal soils, organic production techniques have proved to achieve comparable or in some cases (especially in the humid tropics) even higher yields than conventional farming. Compared to input costs, labor is relatively cheap in India, thus favoring the conversion to less input-dependent, but more labor-Intensive production systems, provided they achieve sufficient yields. The NGO sector in India is very strong and has established close linkages to large numbers of marginal farmers. Many NGOs are engaged in promotion of organic farming and provide training, extension services information and marketing services to farming communities. The Indian government has realized the potential significance of organic agriculture for the country and has recently started to support organic agriculture on a large scale and on various levels. A national regulatory framework (standards, accreditation regulations) has already been passed in 2000. There are various schemes and events to support and facilitate exports of organic products (e.g. the large conference Indian Organic Products- Global Markets held in Delhi in December 2002, mainly sponsored by the Indian Government). The Ministry of Agriculture announced that various forms of support for organic producers, processors and traders were to be included within the latest five-year plan. Reasons for unsold stock of organic products

7.2

Price and lack of marketing of the product are the major reasons cited for the unsold stock of organic products in the national market. In the export market, import traders mentioned the following reasons: Lack of information on availability and certification; Price expectations too high in relation to quality; Low consistency of quality and contamination; Reliability of exporters; Slow shipment, restrictions on importing Indian organic products. However, the Agricultural and Processed Food Products Export Development Authority (APEDA) and other institutions are carrying out the following measures to improve the trade image of India; Training programs for producers and certification agencies; Improving the quality of research and development; Setting up a research institution aimed at improving different aspects of organic production; Promoting Indian organic products at international fairs(e.g Bio-Fach) and promotional programs in the media (e.g. video films); Application for accreditation under different countries national organic regulations. 7.3 Potential customers for organic products in the domestic market

In order to assess the profile of potential customers in domestic market, traders, exporters and producers were asked to indicate the type of customers who were interested in buying organic products. They were presented with a selection of 3 customer types: Upper class, Upper-middle class and lower-middle class. 90% of the respondents believed upper class consumers to be interested in buying organic products. In contrast, only 10% and 0% of them indicated that upper-middle class and lower-middle class consumers respectively might be interested in buying organic products. However, from survey by agriculture ministry it is know that at least in some areas in India health conscious middle class families do buy organic food. The main products that Indian consumers would be interested in buying are presented as below chart. Vegetables and fruits are the major organic products desired by the Indian customers. Chart: Organic products desired by Indian customers

Chart 1
Vegetables Fruits Spices Rice Pulses Tea Wheat Baby Food Herbal extracts Edible oil 0 20 40
% Respondents

60

80

Source (org-marg) 8-Non-governmental organizations (NGOs) NGOs play a very important role in promoting organic farming in India. Survey findings by NGOs are summarized in the ensuing section: 8.1 Types of farmers involved in organic farming

Since NGOs are closely associated with the farmers, involvement of farmers in terms of (large, small) as well as producer organizations could be assessed. The findings showed that large and small farmers are involved in organic farming (base: 30 respondents) Among small farmers, only 42% are engaged in 100% organic farming. The reason of the low participation of small farmers in 100% organic production is the lack of awareness of the organic market potential.

According to the interviewed NGOs, growth in the domestic market for organic products would be driven by: Health consciousness; Awareness about organic products; Marketing techniques adopted; Availability throughout the year.

8.2

Program for small farmers

NGOs are the most active promoters of organic agriculture in India. Promotion of organic production by the NGOs involves various steps, as listed below: Organizing the farmers; Educating them on the benefits or organic farming vs. conventional farming; Providing training to farmers in terms of: o Maintaining proper documentation for certification o Training in production practices as per certification requirements. Providing technical assistance; Organic seeds and inputs; funding in rare cases; Organizing the export of the products through exporters. 9-Certification Certifying agencies play an important role for producers in facilitating access to organic markets, especially on the export level. To regulate the export of certified organic products, the Director General of Foreign Trade, Government of India has issued a public notice according to which no certified organic products may be exported unless they are certified by an inspection and certifying agency duly accredited by one of the accreditation agencies designated will be made compulsory in 2003. Hence, to understand the role of certifying agencies in India, various issues relation to certification were discussed with the target respondents. In India, there are at present, six accreditation agencies approved by the central governments Ministry of Commerce (MoC). They are the Agricultural and Processed Food Products Export Development Authority (APEDA), Coffee Board, Spices Board, Tea Board, Coconut development Board and Cocoa & Cashew nut Board. 9.1 Certification bodies in India

The following certification bodies were fully accredited under the Indian National Program for Organic Production (in alphabetical order): ECOCERT International (based in France and Germany, branch office in Aurangabad); IMO India Pvt. Ltd. Institute for Market ecology (based in Switzerland, office in Bangalore); INDOCERT (based in India, office in Aluva, Kerala) LACON GmbH ( based in Germany, office in Aluva, Kerala); SGS India Pvt. Ltd (based in Switzerland, offices in Delhi and other cities);

 SKAL International (based in the Netherlands, branch office in Mumbai). Several other Indian initiatives have applied for accreditation but had not been accredited by that time. Increasing competition can be expected in the Indian certification market in the near future. 9.2 Cost of inspection and certification

Most certifiers are charging inspection and certification fees based on the number of persons-days involved, plus fees for the issue of certificates. Sometimes, different fees are applied for small farmers, large farmers, and processors or traders. An example of the fee structure of a certification body operating in India is given below: Cost of inspection and certification Category Small farmers and cooperatives Estate manufacturers and exporters Large and medium-sized processors Details Travel and inspection Report preparation Certification Travel and inspection Report preparation Certification Travel and inspection Report preparation Certification Fees (Rs) 12000/day 5000 flat fee 5000/certificate 19200/day 5000 flat fee 5000/certificate 16800/day 5000 flat fee 5000/certificate

Over the past few years, many international certifiers opened branch offices in India, operated by Indian staff. Thus, the costs for certification came down considerably. At the same time, local certification bodies started to emerge, partially with the aim of further reducing certification costs. It can be assumed that certification costs will soon reach the lowest possible level while still ensuring quality requirements for inspection and certification work.

10-Frame conditions of the organic market in India & Recommendations In India organic production has yet to be developed. In order to understand the frame conditions for organic farming for the various categories viz. Government authorities, certification organizations, NGOs traders, processing industry and producers, various problems and suggestions were discussed and are summarized below: Frame conditions of the organic market in India & Recommendations Category Present problems What needs to be changed? Strategies Government -So far low involvement/interest -Plans for organic farming authorities -No subsidies provided to organic -Provide subsidies to organic producers producers -Reduce documentation -Lots of paper work (e.g. duty) -Education and training -No initiatives to educate farmers -Awareness creation among Indian

Certification organizations NGOs

-Delay on policy implementation -Target only export market -No marketing support -Lack of financial support -High cost of certification & bureaucratic -No standardization in terms of regulations -Lack of funds -Not completely linked up with certification agencies -Lack of proper infrastructure -Unorganized -Low level of awareness -Low domestic market -Low price realization -Lack of proper marketing network -Lack of organic raw materials -No standardization in terms of processes -No dependable supply of organic products -Availability of upgraded processing technologies -Not organized -some do not provide any benefits to farmers associated -Over expectations -Lack of organic raw materials -Lack of effort to target domestic market -Lack of modern technology

consumers (market promotion) -Provide adequate supporting Infrastructure -Reduce cost of certification -Link up with NGOs -Standardization of regulations -Availability of funds -Improved infrastructure -Organized operation

Tradersdomestic

-Create awareness(promotion) -Increase retail chain of organic products -Support for marketing initiatives -Improve availability of organic raw materials -Process standardization -Improve market information -availability of latest processing technologies -Organized network -Organizations should provide proper margins for farmers -Realistic information -Organized supply -support through modern technology

Process industry

Organization of organic producers

Source- (self by search engine) 11-Awareness about organic products Awareness about the presence of organic products is quite low. Only 25% of the consumers were aware of the organic products. The consumers were aware of the following organic products: rice wheat, tea, coffee, pulses, fruits and vegetables. Of the 25 % of respondents demonstrating awareness (12.5 consumers), 36 % actually used organic products. The major reason for use of organic products was attributed to health consciousness. Environmental reasons or concerns for the well being of the farmers were not stated and are likely to be of minor relevance to Indian consumers in general. The respondents who buy organic products do so with a purchase frequency of at least once a month. The purchase ration of organic to conventional products is 1:10. The organic products currently being consumed are rice, wheat flour, pulses, vegetable and fruits.

12-Non-consumers of organic products Lack of awareness is the main reason for non-consumption of organic products. Following appropriate education, prima facie, all the non-consumers indicated any interest in consuming organic products, mainly due to increased health consciousness.

13-Demand for Indian organic products in the domestic and export markets

13.1

Domestic Market

The domestic market for organic products is as yet not as developed as the export market. The products available in the domestic market in organic quality are rice, wheat, tea, coffee, pulses, fruits and vegetables. Wholesalers/traders and supermarkets play major roles in the distribution of organic products. Distribution of organic products takes place as follows:

Chart 2 Source: (Self) As most organic production originates from small farmers, wholesalers/traders account for a 60% share in the distribution of organic products. Large organized producers distribute their products through supermarkets as well as through self-owned stalls. Considering the profile of existing consumers of organic products, supermarkets and restaurants are the major marketing channels for organic products. Major markets for organic products lie in metropolitan cities-Mumbai, Delhi, Kolkata, Chennai, Bangalore and Hyderabad to name a few.

13.2

Export Market

India organic producers and exporters are well aware of the demand for organic products in developed countries. Products available for the export market are rice, wheat, tea, spices, coffee, pulses, fruits & vegetables, cashew nuts, cotton, oil seeds and medicinal herbs. The channels adopted for the export of organic products, expect for tea, are mainly trough export companies. Organic tea is produced by major well organized tea estates which are exporting tea directly. In the case of other organic products, predominantly small farmers are involved in producing organic products. Hence, these products are exported through exporters. Organic products are mainly exported to the following countries (in order of priority) Europe: Netherlands, United Kingdom, Germany, Belgium, Sweden, Switzerland, France, Italy, Spain; Americas: USA, Canada; Middle East: Saudi Arabia, UAE; Australia; Africa: South Africa

13.3

Supply Players Arya Tea Co.Ltd, Kolkata; Bombay Bumah Trading corporation, Coimbatore; Chamong Tea Pvt. Ltd.,Kolkata; Hindustan Lever Ltd.,Nilgiri; Tea Promoters India.Kolkata. Arogya Organic coffee Cultivators, Chikmanglur Bombay; Bumah Trading Corporation, Coimbatore;Peeremade Development Society, Idduki Poabs; Organic Products Pvt. Ltd., Pallakad Yellikodge, Estate, Chikmanglur. Accelerated Freeze Drying Co.Ltd. Cochin; Cochin Spices Ltd. Cochin; Peeremade Development Society, Idduki; Unicom Natural Products Ltd., Hyderabad. Indian Organic Food, Delhi; Ion Exchange Enviro Organic Agriculture farms, sirsa; Picric Season Throughout the year Markets Domestic: Mumbai, Bangalore, Delhi, & Hyderabad Export: Autsralia, Germany, Japan, Netherlands, UK, USA.

Products Tea

Coffee

Monsoon Domestic: Bangalore, (June to Chennai,Hyderabad, Mumbai, and September) Delhi Export: Australia, Germany, Japan, Netherlands, Sweden, UK, USA.

Spices

Throughout the year

Rice

Domestic: Bangalore, Chennai,Hyderabad, Mumbai, and Delhi Export: Germany, Japan, Netherlands, South Africa, Singapore, UK, USA, France. Kharif: Domestic: Bangalore, April to Chennai,Hyderabad, Mumbai, and September, Delhi

Wheat

Pulses

Ltd, Sonepat; Sunstar Overseas Rabi Ltd; Bahalgarh. November to February Giraff International, Hissar; Kharif: grewals Organic Agriculture April to Farms, Sirsa; L T Overseas Ltd. September, Bahalgarh; Sunstar Overseas Rabi Ltd., Bahalgarh. November to February Grewals Organic Agriculture March to Farms, Sirsa; Ion Eschange May Enviro Farms, Pune; Pratibha Syntex Ltd., Idore Kharif: April September

Export: Japan, USA, Singapore, UAE,Canada, Germany. Domestic: Bangalore, Hyderabad, Mumbai, and Delhi Export: Australia, Germany, Japan, Netherlands, UK, USA.

Oilseeds

Enfield Agrobase Pvt Ltd., Chennai; Grewals Organic Agriculture Farms, Sirsa, Ion Exchange Enviro Farms; Pune Fruits& Grewals Organic Agriculture Vegetables Farms, Sirsa; Mahesh Agri Exim Pvt. Ltd.., Surat; Ion Exchange Enviro Farms, Pune; IQF Foods Ltd., Bangalore; Namadhris fresh, Bangalore; Picric Ltd., Sonepat Cashew nut Narayan Ganesh Prabhu Zantye & Co. Goa; Trading Organic Association, Goa Others: Pratibha Systex Ltd., Indore; Cotton Maikall bio Re Pvt. medicinal Ltd.,Mhow;Rohini Herbal, herbs & Chennai; Khadinge Plants and extracts, aloe Herbs Pvt. Ltd. vera, sapota

Domestic: Bangalore, Chennai,Hyderabad, Mumbai, and Delhi Export: Germany, Japan, Singapore, UAE, Saudi Arabia. Domestic: Negligible to Export: European Countries

Throughout the Year

Domestic: Bangalore, Chennai,Hyderabad, Mumbai, and Delhi Export: Australia, France, Germany, Netherlands, Sweden, UK, USA, Italy, Switzerland.

March June

to Domestic: Nil Export: European Countries. Domestic: Bangalore, Chennai,Hyderabad, Mumbai, and Delhi Export: Australia, Germany, Belgium, Netherlands, Switzerland, japan, Italy, UK, USA.

Throughout the year

Source :(self)

13.4

THE INTERNATIONAL MARKET

Obstacles for selling Indian organic products in the selected export markets and possible solutions. In order to find out why traders do not import Indian organic products into the selected markets, they are asked to answer the following question: 1. What are the major obstacles to the import of Indian organic products? 2. Which measures or solutions do you propose to overcome these obstacles?

Aspects Price Quality

Obstacle Price expectations are too high in relation to quality. Low consistency of quality: contamination

Availability

Reliability of exporters

Logistics

Slow shipment, restrictions for importing Indian organic products.

Certification

Lack of national certification and accreditation

Export authorities Information

Administration

Customer Service

Time consuming and complicated paper work. Lack of information on More promotion activities on availability and certification the part of traders, farmers and governmental institutions(e.g. international fairs). Establish an internet portal to enable easy access to information on Indian organic products. Inconvenient modus of Indian traders must show more payment: the governmental flexibility in modus of banks system is too slow. payment. The banks system must reach higher standards. Poor customer service from Increase service quality; in the Indian traders after sales. particular, client follow up

Solutions The export traders from India should have realistic prices. The quality must be consistent. For this reason higher quality standards must be enforced to develop and maintain a good reputation. Post-harvest practices should be improved. More promotion from Indian traders and governmental institution. Better understanding of the demands of buyer (small quantities). Suppliers must show financial stability. The logistics must be better coordinated from the place of dispatch for shipment. Duty ports must reduce the time taken to complete the customs process. Enhance the infrastructure available to guarantee qualify upon arrival. Local certification bodies accredited by national and international organizations would enhance the acceptance of organic products from India. Develop a fast track for export.

systems must be implemented. Traders must accomplish what they promise. Source (org-marg) According to the Indian Competence Centre for Organic Agriculture, the global market for organically produced foods is $26 billion and is estimated to increase to $102 billion by 2020.

13.5

Proposed Objectives The broad objectives of organic farming in India can be the following in the light of the discussions on the adverse effects of the conventional farming system the country practiced for about 30-40 years and the potential benefits of the organic methods; 1. Sustainable agriculture-By introduction of agricultural innovations such as natural resources 2. Increasing agriculture production By increasing awareness among small farmers by educating benefits of organic farming. 3. Food self-sufficiency- More production and more self-sufficiency for farmers. 4. Environmental protection-Improvement in soil quality by not burning the raw fields etc 5. Conservation of natural resources- Natural resources should be conserved such as coal, minerals etc. in order to sustain for the better future 6. Rural Development- More steps taken by state government for organic production for rural development. Research and Training A National Institute for Organic Farming has been established to spearhead research in organic agriculture. The government of India constituted task force had also recommended the initiation of the postgraduate level courses in organic farming. The Morarka Foundation and Maharana Pratap University of Agriculture and Technology (MPUAT), Rajasthan have collaborated in the design and implementation of such a programme.

14-Government Support to this sector The increasing demand for organic food products in the developed countries and the extensive support by the Indian government coupled with its focus on agric-exports are the drivers for the Indian organic food industry. Organic food products in India are priced about 20-30% higher than non-organic food products. This is a very high premium for most of the Indian population where the per capita income is merely USD 800. Though the salaries in India are increasing rapidly, the domestic market is not sufficient to consume the entire organic food produced in the country. As a result, exports of organic food are the prime aim of organic farmers as well as the government.

The Indian government is committed towards encouraging organic food production. It allocated Rs. 100 crore or USD 22.2 million during the Tenth Five Year Plan for promoting sustainable agriculture in India. Nine states have drafted organic farming polices. Out of these, four states Viz; Uttarakhand, Nagaland, Sikkim and Mizoram have declared their intention to go 100 percent organic. Sikkim has already converted nearly 40 % of its total cultivated area under organic and has set target to convert entire state to organic by 2015. Other states have also defined schemes to promote organic farming. Recently Bihar has sanctioned a scheme worth Rs. 256 crores for the promotion of organic farming for the period 2010-11 to 2014-15. This scheme is 100% state plan and entire funds shall be borne by state Government. The scheme funded by the central government will be in addition to this scheme. APEADA (Agricultural and Processed Food Export development Authority) coordinates the export of organic food (and other food products) in India. The National Programme for Organic Production in India was initiated by the Ministry of Commerce. The programme provides standard for the organic food industry in the country. Since these standards have been developed taking into consideration international organic production standards such as CODEX and IFOAM, India organic food products are being accepted in the US and European markets. The Government of India has implemented the National Programme for Organic Production (NPOP). The national programme involves the accreditation programme for certification bodies, norms for organic production, promotion of organic farming etc. The NPOP standards for production and accreditation system have been recognized by European Commission and Switzerland as equivalent to their country standards. Similarly, USDA has recognized NPOP conformity assessment procedures of accreditation as equivalent to that of US. With these recognitions, Indian organic products duly certified by the accredited certification bodies of India are accepted by the importing countries.

15-Integrity and sustainability at the centre of organic development Growing markets, stable area The market for organic products continues to grow. In 2010, the global organic market increased to 59 billion US$. The sector grew considerably in the USA and many European countries. 37 million hectares of agricultural area stable in comparison to the previous year was certified organically. There is continued need for action to utilize the potentials of organic agriculture to the service of sustainable planet. Once again, IFOAM and FiBL present the newsst statistics of the organic movement at BioFach through the publication The World of Organic Agriculture 2012. Ten key indicators characterize the global organic development as end 2010. 37 million hectares of agricultural land and 43 million hectares of non agricultural land( primarily wild collection) are organically managed in 160 countries (in 2000, 86 countries). These figures remained basically stable ( 0.05 million hectares of agricultural land and +2 million hectares wild collection). Australia and Argentina continue to have the highest percentage of organically managed land (12 million million and 4.2 million hectares, respectively). Finland, Brazil, Cameroon and Zambia are the countries with the most area under wild collection.

The number of producers dropped to 1.6 million in comparison to the previous year. Compared however to two years back, there is some growth (in early 2009 -1.4 million, in 2010-1.8 million producers). The countries with the highest number of producers continue to be India, Uganda, Mexico and Ethiopia Pleasingly; the markets have continued to grow. Overall, according to the organic Monitor, organic products worth 59 billion US$ were bought (+5 billion US$).Impressive are the consumption growth rates in the USA (+2 billion billion US$), France (+0.34 billion ) and Germany (+0,2 billion ). The annual per capita consumption is highest in small Central and Northern European countries (Switzerland, 153 , Denmark, 142 , Luxembourg, 127 , Austria, 118 ). The first figures available for 2011 show further growth. Germany has the second biggest organic market worldwide (6 billion ) and has the highest numbers of IFOAM and thus a leading role in the sector. The figures indicate a consolidation of the production areas and a continuous and stable growth in the markets. The organic production that gets sold in the big markets continues to be small in relation to the areas. The potentials of the organic farmers are yet to be exhausted and there are no shortfalls to the supply. A further expansion of the organically managed are- certified and non-certified- is however desirable. This would strengthen the ecological, economic and social structures in the rural areas in the fight against poverty. Innovations economic and social frameworks knowledge management and dynamic organic sector are the keys to credible and successful development. Equivalence, not equality of the guidelines, helps mutual recognition IFOAM Food and Agriculture Organization (FAO) and the United Nations Conference on Trade and Development (UNCTAD) have been working for 10 years on eliminating trade barriers, which have their origins in the diverse demands placed by the different countries and stakeholders on the certification regimes. This diminishes the pressure on producers costs of production. Meanwhile there are already some bilateral agreements recognizing organic certifications on the basis of equivalence. These unfortunately are more the exceptions than the rule. The GOMA conference today brings the different decision makers from the governments and the private sector together. IFOAM puts forth a simple model- the Family of Standards- that is now also recognized also by BioFach to show how countries can rely on one harmonized, international reference.

16-The focus on India and sustainability IFOAM warmly welcomes the BioFach 2012 Country of the year, India. With its numerous small organic farmers, its diversity and its dedication at all institutional levels, India can be a model for the organic movements worldwide. Organic Agriculture is not perfect, and must further advance and develop consistently. The goal is a sustainable world. In this connection, IFOAM and other leading stakeholders will announce the global Sustainable Organic Agriculture Action Network (SOAAN). This will give impetus to the further advancement of content on organic agriculture and help positioning it as integral and

uncompromisingly sustainable.
Key Indicators, 2012

Organic Agriculture 2012: Key Indicators and Leading Countries

Indicator World ountries
2010: 160 countries

Leading c

Countries with data on certified organic agricul ture Organic agricultural land

2010: 37 million hectares (2 009: 37.1 million hectares; 1999: 11 million hectares) 2010: 0.9 %

Australia (12 mio. hectares, 2009) Argentina (4.2 mio. hectares) US (1.9 mio. hectares, 2008) Falkland Islands (Malvinas) (35.9 %) Liechtenstein (27.3 %) Austria (19.7 %) France: +168,000 hectares (+24 %) Poland: +155,000 hectares (+42 %) Spain: +126,000 hectares (+9%)

Share of total agricultural land Growth of organic agricultural land

2010: - 50,000 hectares = 0.1% (2009: +1.9 mio. hectares = +5%; 2008: +2.9 mio. hectares = +9%)

Further, non-agricultural organic areas ( mainly wild collection) Producers

2010: 43 million hectares ( 2009: 41 million hectares; 2008: 31.9 million hectares)

Finland (7.8 million hectares), Bra zil (6.2 million hectares; 2007) Ca meroon (6 million hectares)

1.6 million producers (2009: 1.8 million producers; 2008: 1.4 million producers) 44.5 billion euros or 59.1 billion US dollars (2009: 54.1 billion US dollars 1999: 15.2 billion US dollars) Source: Organic Monitor 2010: 6.5 euros or 8.6 US dollars

India (400,551), Uganda (188,625), Mexico (128,826) US (20.2 billion euros or 26.7 billion USD), Germa ny (6 billion euros or 8.4 billion US dollars), France (3.4 billion euros or 4.7 billion US dollars)

Organic market size

Per capita consumption

Switzerland (153 euros, 213 USD) Denmark (142 euros, 198 USD) Lu xemburg 127 euros (177 USD)

Number of countries with organic regulations 2010 Organic certifiers 2010

84 countries (2009: 74 countries)

2011: 549 certifiers (2 010: 532; 2009: 489)

Japan, USA, South Korea

Source: FiBL and IFOAM; For total global market: Organic Monitor; for number of certifiers: The Organic Standard/ Grolink

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17-Conclusions The ill effects of the conventional farming system are felt in India in terms of the un sustainability of agricultural production, environmental degradation, health and sanitation problems, etc. Organic agriculture is gaining momentum as an alternative method to the modern system. Many countries have been able to convert 2-10 percent of their cultivated areas into organic farming. The demand for organic products is growing fast (at the rate of 20 percent per annum in the major developed countries). It appears that India is lagging far behind in the adoption of organic farming. So far, the only achievement seems to be the laying down of the National Standards for Organic Production (NSOP) and the approval of 4 accreditation agencies (all government bodies) whose expertise is limited to a few corps. The following are some of the issues, which require attention at the government policy marking levels if we want to lay the spadework of the spread of organic agriculture in the country. 1 substantial financial support by government (Central, state and lower level bodies) is absolutely necessary to promote organic farming. A major factor behind the progress made by the major organic countries has been the very liberal subsides provided by the governments. In India, organic Farmers do not receive the benefits of government subsidies as they are targeted at the conventional cultivation. Given the low risk bearing capacity, the need to make the organic farming an attractive proposition at least during the initial period, the likely prospect of loss of productivity for some time, and the non-existence of marketing channels for organic produces the financial support must be adequate. The suggestion to begin the introduction of organic farming in the north-east region and in the dry farming areas of India is a well thought out proposition. However, it should be remembered that these regions are inhabited by the poorest and least advent aged groups whose dependence on agriculture for a livelihood is total. A programme for organic agriculture in these areas must be fully supported by the full compensation both in cash and kind to the farmers in the event of the loss of production they would suffer till it reaches the levels of the days prior to the adoption of organic farming. A fair, quick and efficient delivery system for such assistance, perhaps by keeping the government bureaucracy at a distance should also be in place before hand. 2 Market development for the organic products it a crucial factor to promote domestic sales. Supplies do not match the demand for organic products in the country and the absence of proper links between the two has been pointed out for the target growth of organic farming in the country. An important role of the government in this direction is giving various supports to the producer and consumer associations to market the products. 3 the producer organizations must be encouraged to get accredited for inspection and certification in accordance with the NSOP. They can also have own standards and even symbols. This may also reduce the costs of certification besides the simplification of the process. A vigorous campaign to highlight the benefits of organic farming against the conventional system is essential to increase the awareness of the farmers and consumers. Identification of crops for cultivation on the organic farms is important. The examples soyabean in Madhya Pradesh and cotton in the rain fed areas could be kept in view in the process.

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18-References:Data collection for Government support to sector - http://www.nabard.org NAAS National Academy of Agricultural Sciences , India -- mix data http://www.ecoworld.com Page 4 why to go organic ?-- http://www.guardian.co.uk , http://www.organicfacts.net Point-14 Government support to this sector http://indiacurrentaffairs.org/organic-farming-in-india/-d Report by Salvador V.Garibay and Katke Joyti Research Institute of Organic Agriculture (FIBL) and ACNielsen ORG-MARG Other Important websites used for collection of data- www.org-marg.com , www.ofai.org www.organicworld.net , www.ifoam.org , www.fibl.org , www.navdanya.org BIBLIOGRAPHY Altieri, Miguel. Agroecology: The Science of Sustainable Agriculture. Boulder, Colo.: Westview, 1995. Balfour, Evelyn. The Living Soil. London: Faber and Faber, 1943. Barton, Gregory. "Sir Albert Howard and the Forestry Roots of the Organic Farming Movement." Agricultural History, 75, no 2 (2001): 168187. Carson, Rachel. Silent Spring. New York: Houghton Mifflin, 1962. Codex Alimentarius Commission and the FAO/WHO Food Standards Programme. Codex Alimentarius:Organically Produced Foods. Rome: FAO/WHO, 2001. Department for Environment, Food, and Rural Affairs (DEFRA). 2000 Statistics on the Organic Sector. London, 2001. EarthPledge Foundation. Sustainable Cuisine White Papers. New York: 1999. FIBL (Research Institute of Organic Agriculture). Organic Farming in Europe. Provisional Statistics 2001. Available at Organic-Europe, www.organic-europe.net/europe_eu/statistics.asp. Funes, Fernando, Luis Garcia, and Martin Bourque, eds. Sustainable Agriculture and Resistance: Transforming Food Production in Cuba. Oakland, Calif.: Food First, 2002. Gates, Jane Potter. "Tracing the Evolution of Organic/Sustainable Agriculture: A Selected and Annotated Bibliography." Bibliographies and Literature of Agriculture 72. Beltsville, Md.: Agricultural Research Service, U.S. Department of Agriculture, 1988. Greene, Catherine. U.S. Organic Agriculture. Washington, D.C.: USDA, 2001. Greene, Catherine. "U.S. Organic Farming Emerges in the 1990s: Adoption of Certified Systems."Agricultural Information Bulletin 770. Washington, D.C.: USDA, 2001. Greene, Catherine, Carolyn Dimitri, and Nessa Richman. "Organic Marketing Features Fresh Foods and Direct Exchange." Food Review 24, no. 1 (2001): 3137. Hess, John, and Karen Hess. The Taste of America. New York: Penguin, 1977. House of Commons Select Committee on Agriculture. Organic Farming : Second Report. London: Parliament, The Stationery Office, 2001. Howard, Albert. An Agricultural Testament. Oxford: Oxford University Press, 1943. Leopold, Aldo. A Sand County Almanac and Sketches Here and There, New York: Oxford University Press, 1949. Page | 22

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MacRae, Rod. A History of Sustainable Agriculture, Ecological Agricultural Projects. Quebec: McGill University, 1990. National Research Council. Alternative Agriculture. Washington, D.C.: National Academy Press, 1989. Northbourne, Walter. Look to the Land. London: Dent, 1940. Rodale, Jerome. Pay Dirt: Farming and Gardening with Composts. New York: Devin-Adair, 1945. USDA. Soils and Men. The Yearbook of Agriculture. Washington, D.C.: USGPO, 1938. USDA. Technology on the Farm: A Special Report by an Interbureau Committee and Bureau of Agricultural Economics of the U.S. Department of Agriculture. Washington, D.C.: 1940. Yussefi, Minou, and Helga Willer. Organic Agriculture Worldwide 2002. Biofach in collaboration with International Federation of Organic Agriculture Movements (IFOAM), SOEL, Foundation for Ecology and Agriculture, Germany. Daphne L. Derven http://www.vedicbooks.net/organic-farming-c-130.html This is the link for books for organic farming.

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