CHAPTER I

INTRODUCTION
Sustainable development has caught the imagination and action all over the world for more than a decade. Sustainable agriculture is necessary to attain the goal of sustainable development. According to the Food and Agriculture Organization (FAO), sustainable agriculture is the successful management of resources for agriculture to satisfy changing human needs while maintaining or enhancing the quality of environment and conserving natural resources. All definitions of sustainable agriculture lay great emphasis on maintaining an agriculture growth rate, which can meet the demand for food of all living things without draining the basic resources (Source: NABARD 2005). Organic farming is one of the several approaches found to meet the objectives of sustainable agriculture. Many techniques used in organic farming like inter-cropping, mulching and integration of crops and livestock are not alien to various agriculture systems including the traditional agriculture practiced in old countries like India. However, organic farming is based on various laws and certification programmes, which prohibit the use of almost all synthetic inputs, and health of the soil is recognised as the central theme of the method (Source: NABARD 2005). Adverse effects of modern agricultural practices not only on the farm but also on the health of all living things and thus on the environment have been well documented all over the world. Application of technology, particularly in terms of the use of chemical fertilizers and pesticides all around us has persuaded people to think aloud. Their negative effects on the environment are manifested through soil erosion, water shortages, salination, soil contamination, genetic erosion, etc. Organic farming is one of the widely used methods, which are thought of as the best alternative to avoid the ill effects of chemical farming. There are several definitions of organic farming and the one given by the US Department of Agriculture (USDA) is considered the most coherent and stringent. It is defined as a system that is designed and maintained to produce agricultural products by the use of methods and substances that maintain the integrity of organic agricultural products until they reach the consumer. This is accomplished by using substances, to fulfill any specific fluctuation within the

system so as to maintain long term soil biological activity, ensure effective peak management, recycle wastes to return nutrients to the land, provide attentive care for farm animals and handle the agricultural products without the use of extraneous synthetic additives or processing in accordance with the act and the regulations in this part. Organic Agriculture in the World The last few years have seen rapid growth in organic agriculture. Currently, it is practiced in 120 countries, across the world. According to the latest survey, more than 32.2 million hectares of land area is organically managed. In addition 19.7 million hectares of certified forest and wild harvested plants together contributed to the total area of 52 million hectares under organic production. (Source: Nature Bio-Foods Ltd). Top 10 countries in organic production area is shown in table 1.1 Table 1.1 Top 10 Countries in Organic production area in 2007 World Ranking 1 2 3 4 5 6 7 8 9 10 Australia Argentina Brazil USA China Italy India Spain Uruguay Germany Country Area (m ha) 12.02 2.78 1.77 1.64 1.55 1.15 1.03 0.99 0.93 0.87

Source: Nature Bio-Foods Ltd

The leading countries are Australia (12.02 Million ha), Argentina (2.78 Million ha) and Brazil (1.77 Million ha). Asia has about 13 per cent of word's organic land, dominated by China and followed by India and Russia. (Source: Nature Bio-Foods Ltd) Organic agriculture, is witnessing a very promising annual growth rate and the growth potential in the developing countries is gaining momentum, Global Market for organic products was estimated as USD 27.8 Billion, in 2004. The value is estimated to

increase to USD 102 billion by 2010, (Source: Nature Bio-Foods Ltd). Although the production base of Organic Agriculture is spread across the world, the market drive for such products is concentrated in the western world. With US and Europe being the major markets and the other key markets being Brazil and Middle East, The markets for organic products will continue to develop throughout the world. The growing evidences of pesticide residues in food and beverages coupled with the outbreak of mad cow disease, dioxin-poisoned chicken and eggs etc., have led to enormous increase in demand for organic products. Rapid economic growth and changing lifestyle patterns coincided with development of organized retail chains further fuelled the growth of organic market worldwide. Organic Agriculture in India The Indian Agriculture is traditionally organic and farmers were following organic cultivation till the middle of the last century (1950). The Green Revolution was ushered in India during sixty and it has been the cornerstone of India's agricultural achievement, transforming the country from the stage of food deficiency to selfsufficiency. During the period, the production of food grains has increased four folds, from 50.82 mt in 1950-51 to 229.85 mt on 2008-09 (Source: PIB Database). But indiscriminate and excessive use of chemicals during this period has put forth a question mark on sustainability of agriculture in the long run calling attention for sustainable production which will address soil health, human health and environmental health and eco-friendly agriculture. Organic farming appears to be one of the options for sustainability. Starting of organic agriculture in India in 1900 by Sir Albert Howard, a British agronomist in North India, Development of Indore Method of aerobic compost (Howard, 1929), Bangalore method of anaerobic compost (Archarya,1934), NADEP Compost (ND Pandari Panda,Yeotmal, 1980) initiated organic agriculture in India.

The year 2000 is very important year for India from organic point of view. The four major happenings were made during the year 2000. These are:

 The Planning Commission constituted (2000) a steering group on agriculture who identified organic farming as National challenge and suggested it should be taken in the form of a project as major thrust area for 10th-plan. The group recommended organic farming in NE Region, rain fed areas and in the areas where the consumption of agro chemicals is low or negligible.
The National Agricultural Policy (2000) recommended promotion of traditional

knowledge of agriculture relating to organic farming and its scientific up gradation.

The Department of Agriculture and Co-operation (DAC), Ministry of Agriculture

constituted (2000) a Taskforce on organic farming under the chairmanship of Shri Kunwar Ji Bhai Yadav and this task force recommended promotion of organic farming. The Ministry of Commerce launched the National Organic Programme in April 2000 and Agricultural and Processed Food Products Export Development Authority (APEDA) is implementing the National Programme for Organic Production (NPOP). Under the NPOP, documents like National standards, accreditation criteria for accrediting inspection and certification agencies, Accreditation procedure, inspection and certification procedures have been prepared and approved by National Steering Committee (NSC). Nowadays organic farming and organic product is gaining popularity among Indian farmers. They are encouraged by Government of India by adopting schemes and policies to improve organic agriculture. Year by year there are tremendous changes in organic farming development in India. Changes in land area of organic farming development are shown in table 1.2 Table 1.2 Organic farming developments in India Year Area (ha)

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Source: Nature Bio-Foods Ltd

37,050 73,500 114,037 185,937 432,259 1,030,311

India has advantage of organic farming because it is endowed with various types of naturally available organic form of nutrients in different parts of the country and it will help for organic cultivation of crops substantially. There is diversity in climates 10010,000 mm rainfall, hill, desert, strong traditional farming system crop tree animal, innovative farmers, vast dry lands (60% agriculture land), least use of chemicals. In fact, the rain fed tribal, north east and hilly regions, of the country are practicing subsistent agriculture with negligible amount of chemicals use for a long period.

Traditional Organic Inputs Organic inputs had been in use from ancient period. Animal manures (farmyard manure, poultry, goat manure), plant based products (green manure, Greenleaf manure, oil cakes of groundnut and sunflower, neem, tulsi, marigold), compost and crop residues (sugarcane trash, cotton etc.,) were some of the traditional Organic inputs, which are the potential sources of nutrients. While animal dung had competitive uses as fuel, it was extensively used in the form of farmyard manure. Development of several compost production technologies like vermicomposting, phospho composting improved the quality of composts through enrichment with nutrients bearing minerals and other additives. These measures had the capacity to fulfill nutrient demand of crops adequately and promoted the activity of macro and micro flora in the soil. All these manures were bulky as well as concentrated in nature and supplied bio matter in large amounts. These traditional bio-inputs supply primary, secondary and micronutrients to plants, improve the physical conditions of soil like soil structure, aeration, water holding capacity and stimulates activities of different soil microorganisms

by supplying energy. Efficient and effective use of these inputs as soil conditioners would also provide one of the best means for maintaining and restoring soil productivity. Problems in Using Traditional Organic Inputs The major constraints in using these inputs were non availability of regulatory mechanisms and less response towards the usage of these inputs. Bulkiness of bio-inputs like farmyard manure and compost etc., involve high cost of transportation and difficulty in handling of these inputs in the field. Slow release of nutrients from traditional organic inputs does not match the nutritional demand of high yielding varieties. Varied nutrient content in organic inputs makes it difficult to farmers to calculate the actual amount of bio-inputs to be added in the soil. Farmyard manure, farm compost, town compost, night sludge and green manures supplied large quantities of organic matter but only small quantities of plant nutrients in comparison to the inorganic fertilizers and the decomposition rate was also slow (Saxena, 2005). Modern Organic Inputs Modern Organic inputs had been developed to overcome the problems of traditional organic inputs and had gained popularity in the market by satisfying the immediate needs for crop production. Biofertilizers, Biopesticides, Bioherbicides, Bio control agents, Organic fertilizers, Vermiwash, Spent wash, Bioactivators and Press mud are some of the existing modern bio-inputs. They create optimal conditions in soils for high yields and good quality produce. They improve plant growth and physiological activities of the plant by supplying all the nutrients. They improve the soil physical properties such as granulation and good tilt, giving good aeration, easy root penetration and improved water holding capacity and chemical properties such as supply and retention of soil nutrients by promoting favorable chemical reactions. The inputs are found to be eco-friendly, target specific and easily biodegradable leaving no harmful residues in soil. Even though the cost of the product is higher, it would effectively control pests, diseases and soil related problems.

The inputs are compatible with inorganic fertilizers and results in higher quality produces thereby reducing the cost of cultivation. The modern organic inputs can be applied in small quantities (in Kg/ha) unlike traditional inputs (ton/ha). They are available in handy packages and hence handling and transportation of these inputs are easier than bulky traditional organic inputs. These inputs are accessible to farmers as they are readily available in all the dealer shops and agricultural depots. However, lack of awareness and knowledge about usage were the major reasons for not using modern organic inputs like Organic fertilizers, bio pesticides, bio control agents etc. Markets for Organic Inputs It is very difficult to estimate the total size of organic inputs market in India because of its diversity in terms of products and also due to the nature of it being unorganized market. Green inputs into agriculture include bio-fertilizers, bio-pesticides, compost, Farm Yard Manure (FYM), green manure etc. As most of this inputs are either not traded and even if they are traded, it is only at informal levels available information regarding production capacity, demand and sales is at best sketchy estimation and hence inadequate. The limited number well-established firms that have their presence in this market today as a result it is predominately controlled by the small and local producers of bio-fertilizer, vermi compost and other input producers who are in large numbers. Relatively speaking there is more rigour in estimation of bio-fertilizer market in India, because of the presence of some large producers in production of bio-fertilizers and comparatively this is more organized than other organic inputs market. Based on the gross cropped area in India (190 million hectare) and recommended doses of biofertilizers, potential demand is estimated to be about 6,27,000 MT(Abhay Phadke, 2001) . This demand can further be segregated into different categories of bio-fertilizer, such as Rhizobium, Azotobactors, Azospirillium, BGA, and Phosphate Solubilizer etc. Increase in use of vermi-compost has been observed for kitchen gardens and for cultivation of high value cash crops but the information about actual quantity used is not available. Area under green manure is one indicator that is showing negative trends because the area under intensive cropping is increasing. Increase in irrigation facilities

are indirectly contributing towards reduction of area under green manure. Other green inputs for agriculture in India are used in very minimal quantity. Some of the popular biopesticides include neem based formulation and Bacillus thuringingiensis (Bt). Consumption of bio-pesticides in India has increased from 83 MT (Tech. Grade) during 1994-95 to 686 MT during 1999-2000 and in case of neem based pesticide formulation it has increased 40 MT to 71 MT during the same period in case of Bacillus thuringiensis (Bt) (Source: Thirty-Seventh Report Standing Committee On Petroleum & Chemicals, 2002). Organic Produce Market Trends & Potentials in India Demand for organic agricultural products is a stimulant for growth for input market. In other words if there is demand in market for organically produced farm products will encourage farmers to implement the organic farming practices and also to use organic inputs like Organic fertilizers, bio-fertilizers, bio-pesticides, vermi-compost, green manure and FYM. Some of the major organically produced agricultural crops in India include crops like plantation, spices, pulses, fruits, vegetables and oil seeds etc. Major products produced in India by Organic farming are given in annexure I. India is best known as an exporter of organic tea and also has great export potential for many other products. Other organic products for which India has a niche market are spices and fruits. Org-Margs survey also proves this fact as around 30% of respondents that includes producer, exporters and traders has responded that organic tea is produced in India and this is highest response for any single crop, next are spices, fruits, vegetables, rice and coffee (Garibay S V and Jyoti K, 2003). There is small response for cashew, oil seed, wheat and pulses. Among the fruit crops Bananas, Mangos and oranges are the most preferred organic products. Major organic products exported from India are given in annexure II. The burgeoning US and European green markets provides enormous scope for Indian exporters. Though the current market share for organic produced is estimated between one to two percent of total food products market, but the forecasting by experts show that this market is likely to grow at a higher pace. According to experts in medium

term around five percent of the market is expected to be organic market share (Minou Yussefi and Heldge Willer, 2003). Problem Focus Organic input is emerging as a sustainable alternative input in reviving Indian Agriculture especially in areas where the indiscriminate usage of chemical fertilizers and pesticides had resulted in loss in soil fertility and productivity with adverse effects on water quality, soil, plant and human health. T. Stanes, a company committed to the protection of the environment, has developed a range of Organic fertilizers like Apoorvam and Anandham that induce increments in crop growth as well as in yield. Apoorvam is Digested Organic Supplement, shortly called as DOrS. DOrS is a highly sophisticated organic supplement enriched with microbes and secondary nutrients. Anandham is made by mixture of neem, pungam and castor. It supplies both macro and micro nutrients to the crop plants and increases the soil fertility and quality of the soil. However the awareness and acceptance of Organic fertilizers require field level behavioral study of the farmers. The usage pattern of the Organic fertilizers may be influenced by various factors. Hence, an attempt has been made in the current study to examine the usage, buying behavior and to estimate the market potential for Apoorvam and Anandham in Cuddalore district. This study aims to help the company to develop new strategies and to take up various promotional activities to increase the sales of Apoorvam and Anandham. With this background, the present study was undertaken with the following specific objectives.

Objectives The overall objective of the study is to analyze the market potential for Organic fertilizers in the study area, The specific objectives of the present study are; i) To study the awareness, usage and buying behaviour of farmers with respect to different brands of Organic fertilizers.

ii) iii) iv)

to study the awareness, adoption and satisfaction level of farmers and dealers with respect to T.Stanes Organic fertilizers, to study the dealers perception about marketing of organic fertilizers and to assess the market potential for Organic fertilizers in Cuddalore district and, to suggest the promotional strategies for marketing of Organic fertilizers.

Scope of the study This study will throw more light on the various factors, which determine the Organic fertilizer usage. It aims to get a clear picture of the farmers who are the ultimate end user. It will also help the Organic fertilizer marketing firms to take up remedial measures to remove the impediments if any, so as to create a healthy market for Organic fertilizers. The findings of the study will also help the firm in planning their strategies for designing effective marketing programmes. Limitations of the study Considering the time and resource, the study is based on the primary data collected from the sample respondents by survey method. The study area was limited to Cuddalore district of Tamil Nadu. As none of the farmer maintained proper farm records, they had to furnish the information from their memory and hence the collected data were subjected to recall bias. However, every effort had been taken to minimize the recall bias by including questions that facilitated cross checking. The information collected from the dealers was based mostly on the records maintained by them. Since the study was limited to a particular area, the utility of the findings is also limited for general applications. Hence, the findings of the study may be considered appropriate to the similar situations prevailing in the study area and extra care should be taken while making generalizations. Organization of the thesis The thesis has been presented under the following chapters.

Chapter I

Introduction: Introduction, objectives scope and limitations of the study are presented.

Chapter II

Concepts and Review: The concepts used in the study and brief reviews of past studies are given. Design of the study: The research design and methodology followed and the analytical techniques used are discussed. Description of the study area: A general and agricultural characteristic features of the study area are described and information on case firm is also presented. Results and Discussion: The findings of the analysis are presented and discussed. Summary and Conclusion: A Summary of the results of the study is presented to draw inferences and make policy suggestions.

Chapter III

Chapter IV

Chapter V

Chapter VI