Commercial Organic Agriculture in the whirlpool of large and niche market

In World Food Summit (1996) as organized by FAO, the term “Food Security” was defined as “physical and economic access at all times, to sufficient, safe, and nutritious food to meet their dietary needs and food preferences for an active and healthy life”. Against this backdrop, organic agriculture is considered as a safe production holistic management system which is environment-friendly. During the last few decades, the world has experienced that indiscriminate exploitation of natural resources and injudicious application of chemical fertilizers and pesticides have been the major concerns of soil, health and environmental hazards. As consumers are becoming more conscious of food quality, health and environment, the demand of organic food from all countries of the world is gaining significant momentum.

EARLIER SCENARIO

In ancient times, our agriculture was entirely natural. The emergence of Chemical Farming was initiated in 1842 with the production of Single Super Phosphate. During the first world war (1913 – 17), industrial nitrogen fixation in the form of ammonia was discovered by Fritz Haber. The application of DDT as pesticide began during second world war (1938 – 42). InIndia, large scale application of these chemical inputs along with the use of high yielding varieties were made during the era of Green Revolution (1966 – 70). So, chemical farming is being continued only for last 175 years which have damaged our natural agricultural systems which was being practiced for 10000 years since the beginning of Neolithic period.

MODERN ORGANIC AGRICULTURE

Modern Organic Farming depends on commercial approaches likeStandards, Certification and Market creation. Standard is a principle of propriety,honesty, andintegrity or a level of excellence or quality. In fact, establishing standards is the prime step in building consumer confidence.  Both shoppers and consumers demand guarantees that “the organic products they buy are actually produced in compliance with both process and product standards”. At present, there are several standards (Codex,EU, NPOP and so many) which are reliable. 

1. GOMA Approach:

The GOMA (Global Organic Market Access) project as funded by the Norwegian Agency for Development and Cooperation (Norad) started in 2002 for creating the facilities of regional initiatives for harmonization and trade. Under this project, the Food and Agricultural Organization of the United Nations (FAO), International Federation of Organic Agriculture Movements (IFOAM) and United Nations Conference on Trade and Development (UNCTAD), in 2002 to 2012, together addressed different barriers to organic trade arising from the proliferation of Organic Standards and technical regulations. (GOMA Report Asia). Through the intervention of International Task Force (ITF), the GOMA project made a set of recommendations for harmonization, equivalence and other forms of cooperation to reduce barriers in organic trades. The International Requirements for Organic Certification Bodies (IROCB) helps different certification bodies, based on equivalence performance. This is a very good step for increasing organic trade in different countries including India. 

1. Status of Indian Standard on equivalence

Indian standard (NPOP) for production and accreditation system is being recognized by the European Commission. Besides, ‘USDA has recognized NPOP conformity assessment procedure of accreditation as equivalent to that of US.“This has made a paradigm shift in Indian Organic trade which is encouraging.

1. Growth of World Organic market

Market demand for organic products has expanded rapidly over the past two decades. It is interesting to note that worldwide sales of the organic product were US dollar 10 billion in 1997. The current world Organic market is USD 72 billion with 43 million of organic agricultural land. America is the largest organic market with significant growth of 11.5 %. Other important organic trade countries are Germany, France, China, Canada, UK, Italy etc. World’s growth of Organic agricultural land in 1999 was 25.7 % while in 2013, it was 43.1%. The driving force of the World Organic market are i) Strong market growth, ii) Growth in World exports of Organic products from the tropical origin, iii) Price premium and consumer behaviour, iv) Distribution channels. Supermarkets in the developed countries are a faster-growing distribution channel for organic products. Large multinational companies are also increasingly offering products including cosmetics, herbal products etc., even on online, that have their own quality protocols.  

1. Indian Organic Market

During the year of 2000, the organic farming status of India was at nascent state. About 42000 ha. and 76000 ha. of cultivated land was certified in 2003 – 04 and 2005 – 06 respectively. Apart from this, about 2.43 million forest land for the wild collection was also certified organic. In this period, the total quantity of organic products exported was 6792 metric tons. This time, the number of accredited third-party certification agencies were only 12. Thereafter, considerable progress has taken place in the Indian organic sector. Currently, organic farming in India is experiencing a real boom. Many farmers are turning to organic practices. Now, India has the largest number of organic producers (6,50,000). India ranks 10^th among the top ten countries in terms of cultivable land under organic certification, although major areas belong to forest and wild area of collection. 

Among the States, Madhya Pradesh is sharing maximum area under organic certification, followed by Himachal Pradesh and Rajasthan. At present, the number of accredited third party certification agencies are 28 only. During 2015 – 16, the organic food export realization was 298 million US dollars. 

1. Export Market

Organic Tea:

Considerable achievement has been made in organic tea sector. Total world production of organic tea was 9 million kg roughly in 2001 and India produced 3.15 million Kg of Organic Tea while China produced 4.5 million kg in the same year (Export Import, Bank Report 2003 Bank Report) But during last two decades, organic tea production in the world has increased significantly.Currently (2015), world organic tea production is 50 million Kg (approximately), where China contributes 70% (35 million Kg) and India shares 22% (11 million Kg). In India, organic tea contributed 2% of the total organic products exported in 2012 – 13 Bhattacharyya,2016). At present, the number of certified organic tea gardens in India is 77 (while in 2001, it was 50 only). In fact, only 1% of the total tea produced in India is organic tea and about 15000 – 16000 ha. area is under cultivation.

Organic Tea Production status in India and China

Organic Spice

The spectacular progress has been made in case of spice also. India produces a large amount of organic spice under default, most of it done by tribal groups through backyard farming, which remains unaccounted. In 2001 – 02, India produced 115 metric tons of organic spice on a certified, cultivated area of 658.4 ha (Export Import, Bank Report 2003 Bank Report). Currently (2011 – 12), the country exports around 1400 metric tons of organic spice, valued at 47 crores. USA, Germany, Netherlands are the major countries where Indian organic spices are exported.

Organic Coffee

As regards coffee, nearly 1.7 million bags of organic coffee were traded in 2009, a substantial increase of 335% since 2001. The current trade is more.

Domestic Organic Market

Domestic Organic Market in India is also potential. It has been reported that only 10% of the total organic production is exported; the rest is consumed (Gouri, 2012) domestically. The present domestic market is estimated at US dollar 543 million. A survey conducted by the International Competence Centre for Organic Agriculture (ICCOA) in 2005 indicated that there is already ready market with 1000 Crore for organic products in the country (Yadav and Tej Pratap, 2006).

As per FiBL- Yes Bank analysis, the lead organic companies in India are: Conscious Foods (Mumbai, Maharashtra), 24 Letter Mantra (Hyderabad, AP), Morarka ‘Down to Earth’ (Jaipur, Rajasthan), Organic India (Lucknow, UP), Fab India (Delhi), Navdanya (Delhi)etc.The total turnover of these companies is nearly 1000 crore. Recently Patanjali has emerged as one of the best organic market agency in India.

Constraints faced by Niche market

Out of 140 million ha.  net sowing area of the country, only cultivated area certified under organic farming has grown from 4.55 lakh ha in 2009 – 10 to 7.23 lakh ha in 2013 -14(NCOF, 2016). This is very negligible area as compared to the total cultivable area in the country. We have to keep in mind that about 90 percent of farmers belong to small and marginal categories. There are many areas in the country where organic agriculture is being practised by ‘de-fault’. But their efforts are being unaccounted. Still, they are the driving forces for organizing niche markets (small markets) in different parts of the country. Unfortunately, they do not get the access of major market chains either due to lack of awareness or they are afraid of agents/brokers who exploit them. In the absence of infrastructural facilities or capacity building, they organize local Jaivik markets sporadically in an isolated manner. Most of the farmers have no knowledge on standard, Certification or market development. Maybe, some of them have little understanding on the third-party certification process, but they are not financially equipped to bear the expenses of certification. Even consumers have no idea of quality protocols, but they purchase organic products on the assumption that these products are hygienic, tasty etc.

In West Bengal, on every Sunday, some villagers arrange organic markets in different parts (Ultadanga, Baguihati, Middleton Street etc.) either with or without local government assistance. But quality is still doubtful. Some farmers are selling GAP (Good Agricultural Practice) – based products in the name of organic. Therefore, the integrity of these niche markets is in question. These market organizers have no facilities of storage, warehousing, transportation etc. This is the high time to give the appropriate shape of these niche markets as system demands.

Government Intervention:

For the last years, the Government has changed its mindset and is encouraging Organic Farming in the country. Sikkim has been declared as the Organic State with the support of the local government. Apart from the routine role of APEDA (Ministry of Commerce) and NCOF (Ministry of Agriculture), the Government has further extending adequate support for promoting Organic Farming. Some of these areas under:

1. Notification of PGS Certification

Participatory Guarantee System (PGS) is a farmer-friendly approach for organic certification which is based on the active participation of stakeholders and is built on a foundation of trust. It represents an alternative approach to third party certification.In fact, the idea of implementing PGS certification for strengthening domestic market stemmed from FAO – India Project (2006) under Ministry of Agriculture. Afterwards, in March 2011, National Centre of Organic Farming under Ministry of Agriculture,Government of India launched a PGS – India quality assurance system along with development of holograms like PGS India Green and PGS – India Organic (Yadav,2013).Recently, the Government of India has launched the PGS – India website www.pgsindia-ncof.gov.in in July 2015 (Chandra, 2016). This website has been designed to facilitate farmers for online registration and approval of PGS – certification from Regional Councils under PGS – India Program. 

1. PKVY-Recent Central Sector Scheme

Recent Government intervention on Organic Farming is Parampara Krishi Vikash Yojana (PKVY) which has been launched in the year 2015 – 16 with an outlay of Rs 300 crore. The aim of the scheme is to motivate farmers to take up organic farming with the usage of local indigenous resources, adopting eco - friendly low-cost technology. It is expected that with the support of PKVY, niche markets in domestic organic sectors will get oxygen for their establishment. 

1. Mission Organic Value Chain Development for North Eastern region

Looking to the potential of expanding existing phase of Organic Farming in North Eastern Region of India, the Government has launched a Central Sector Scheme entitled “MissionOrganic Value Chain Development for North Eastern Region “with an outlay of Rs 400 Crore. The scheme aims at the development of Certified Organic Production in a value chain model. This will act as a facilitator for developing Niche Markets, especially in the North Eastern Organic Sectors. 

INVOLVEMENT OF NON-GOVERNMENT ORGANIZATIONS 

The trade fair plays a significant role in organic products trading. The International Competence Centre for Organic Agriculture (ICCOA) (Bangalore) has made a significant contribution by organizing “India Organic “trade fair for last 12 years in collaboration with different government and non – government partners. In this regard, the active participation of “Organic Farming Association of India “(OFAI) is also worth mentioning in strengthening different niche markets for the better trade in organic sectors. 

CONCLUSION 

According to “India Organic Food Market Forecast andOpportunities, 2017 “, Indian Organic food market is anticipated to grow at a significant CAGR of around 19% during 2012 – 2017. By 2020, The World organic market value will reach 100 billion US dollars.  We expect Niche markets will also develop their capacities in the coming days.

Dr. P Bhattacharyya
Ex Director, National Centre of Organic Farming,MOA,GOI &
Scientific Consultant, SCOPE Organic Informatics Kolkata
Email:[email protected]