Vous êtes sur la page 1sur 7

Mobile.

+91 9820532465
ganesh@dessenceconsulting.com
www.dessenceconsulting.com

Organic Farming Full Circle: Back to Nature

White Paper Series


on
Organic Farming

Team DEssence

ORGANIC FARMING - FULL CIRCLE: BACK TO THE NATURE

INTRODUCTION AND BACKGROUND


-

Increasingly land is getting infertile


Soil is becoming toxic
Ineffective pesticides is depleting the
organic matter of soil and resulting in
falling yields.
Growing Pest resistance and pest
resurgence

It has become clear after years of Green


Revolution that cultivation practices using
chemical pesticides is not sustainable. Organic
farming is increasingly being recognized as a
viable alternative to conventional farming.

WHAT IS ORGANIC FARMING?


Organic farming avoids or largely excludes
the use of synthetically produced fertilizers
pesticides; growth regulators and livestock
feed activities. It relies to the maximum extent
on crop rotation, crop residues, animal
manures, legumes, green manures, organic
wastes to maintain soil productivity, supply
plant nutrients and biological pest control.
Primary goal is to optimize the health and
productivity of interdependent communities of
soil life, plants, animals and people thereby
enhancing the ecological balance of the
natural systems

Recycling of biomass from crop residues as


a nutrient source
Realization of nutrient re-cycling
Intensive use of legumes to provide nitrogen
supply
Biological pest control and plant protection
by using natural predators
Optimum use of bio-fertilisers
Diversity of crop varieties and species
grown /Crop Rotation
Prohibition of genetic engineering
Least possible consumption of nonrenewable energy
Ban on synthetic, chemical fertilizers for
plant production, storage and ripening.
Careful attention for wildlife and natural
habitats.

MARKET SIZE
Current market size (Source: Closing Report
on BioFach 2004)

World - USD 25 billion


European Union - USD 7.5 billion
USA - USD 8 billion
Japan - USD 3 billion
Growing markets South East Asia.

World average growth rate 20-25%

Commands premium prices 15-50%


over conventional produce

Organic foods are minimally processed to


maintain the integrity of the food without
artificial ingredients.
NEED FOR ORGANIC FARMING
It is also known as biological farming,
regenerative farming and sustainable farming.

Characteristics and Basic principles of Organic


Farming

Protecting the long term fertility of soils by


maintaining organic matter levels and
encouraging soil biological activity

Indiscriminate
use
of
chemical
fertilizers since decades has resulted in
rapid decline of organic matter content
in soil.
Use pesticides has led to pest resurgence
and difficult to control weeds species
Resistance of chemicals has caused
concern over the safety of food and

sustainable production (resulting


chemicals entering the food chain)

in

Hence it becomes imperative to develop an


alternative viable strategy to conventional
farming.
REASONS TO GO ORGANIC

End customers include Natural food stores,


health food sections, direct farmer markets,
produce departments of Supermarkets.
Properly certified products command a price
premium of 15 to 50% over conventional
produce since they must meet strict
regulations which in turn makes the process
is often more labour and management
intensive.

Helps in keeping chemicals out of the


food chain as conventionally grown
produce has chemical residues on its skin
even after rinsing
Fresh organic produce tastes better and is
much more nutritious.
A viable alternative to genetically
engineered food. E.g. Non-organic farm
animals in UK are fed on genetically
modified soya.
Supports bio-diversity and follows
sustainable farming practices

Overview of World Markets for Organic Food Beverages

CONSUMER DEMAND KEY DRIVER

Increasing
becoming
more
health
conscious
Rising concern over methods adopted to
produce the food
Rising concern over chemical residues in
the food chain, genetically engineered GE
crops; and the scare created by the
outbreak of Foot and Mouth disease in
Europe

Organic product forms -Almost every type


of food product is available in the organic
form starting from fruits and vegetables,
Cereals and its derivatives, spices, processed
food ingredients, meat, dairy products, tea,
wine.
Sample trade flows into Europe are from Israel
(fresh produce), Brazil-Chile-Argentina (fresh
produce, soy, wheat), other European
countries (baby food, processed foods, cereals,
meat), Canada (wheat, soy, canola), MexicoCentral America (bananas, citrus, coffee,
cocoa), Sri Lanka-India (tea), and the United
States (processed foods of all types, wheat).

Markets

Retail sales
2003
(million
USD/Euro)

in %

in %

Germany

2,800 - 3,100

1.7 - 2.2

5-10%

20-50%

UK

1,550 - 1,750

1.5 - 2.0

10-15%

30-50 %

Price
Premium

Italy

1,250 - 1,400

1.0 - 1.5

5-15%

35-100 %

France

1,200 - 1,300

1.0 - 1.5

5-15%

25-35 %

Switzerland

725 - 775

3.2 - 3.7

5-15%

10-40%

Netherlands

425 - 475

1.0 - 1.5

5-10%

15-20 %

Sweden

350 - 400

1.5 - 2.0

10-15%

20-40 %

Denmark

325 - 375

2.2 - 2.7

0-5%

20-30 %

Austria

325 - 375

2.0 - 2.5

5-10%

25-30%

Belgium

200 - 250

1.0 - 1.5

5-10%

Ireland
Other
Europe

40 -50

< 0.5

10-20%

USA

750 - 850
10,000 11,000
11,000 13,000

2.0 - 2.5

10-15%

Canada

850 - 1,000

1.5 - 2.5

10-20%

Japan

350 - 450

< 0.5

10-20%

Oceania

75 - 100
23,000 25,000

< 0.5

Total Europe

THE GLOBAL MARKET OPPORTUNITY

Annual
Growth
2003 05

% of
total
food
sales Estimate

Total

10-30%
-

Source :USDA/ITC

ORGANIC FOOD PRODUCTS - ADVANTAGE


INDIA

No need of conversion to organic


agriculture as Organic farming been
practiced since centuries. Less than
world
average
consumption
of
pesticides and fertilizers.
Cattle fed on natural fodder

Biomass & Cowdung applied as natural


manure
Availability of wide geographical and
agro - climatic conditions enables us to
cultivate almost every crop in the world

Status of Organic cultivation in INDIA


India`s exports of Organic food items handled
by Agricultural and Processed food products
Exports Development Authority (APEDA) has
increased from Rs.2.6 million in 1998-99 to
Rs.28.2 million during 1999-2000.
Organic farming is expected to receive a major
boost following a series of initiatives taken by
the government

Regulatory framework has been put in


place to ensure proper certification and
export promotion
National
Programme
for
Organic
Promotion, NPOP was released in 2000
The nodal agency APEDA has accredited
certification agencies - ECOCERT, SKAL
and IMO for certifying organic farms
along with India Tea Board, Coffee Board
and Spices board, Coconut Development
Board, Directorate of Cashew and Cocoa
Development.
APEDA has set up four model farms
(aromatic rice, sugarcane, passion fruit
and pineapple). All of them have received
organic certification.
Indian National Organic Standards based
on IFOAM and EU Standards and
operating Manuals drawn up for selected
Agro Products
Indian Organic Logo developed for
certified organic products from India.
Proposal for assistance to set up Model
Organic Farms for selected Agri-Horti
Products in North Eastern part of the
country
Assisting in setting up of Organic Farm
for production of peanuts in Western India

Organic Rice - Organic rice, Sugarcane


grown in 3000-4000 hectares Certified organic
farms. Other certified organic farms are small
in size ranging from 100 to 150 ha. There are

organic farms certified by Ecotropic of UK.


The total area 2.8 ha. Production 19 MT.
Organic Wheat- Small farms measuring
total area of 2600 ha. Producing 645 MT of
organic wheat annually.
Organic
Coarse
Grains
Great
international Demand for organic maize and
millet
Organic Pulses- Organic farms. The total
area 302 ha. Production is 2935 MT.
Certification by Ecotropic.
Organic oilseeds -Organic soya produced.
The total area 444 ha. Certified by Ecotropic
UK.
Organic Fruits & Vegetables-NonCertified organic farms producing fruit and
vegetables exist all over the country.
Key factors to be considered

Personal conversion in terms of


attitude and approach before converting
to organic farming
Availability of Information as
organic farming is much more
information and management intensive
Transition period / Land tenure - it is
highly unlikely that tenant farmers
would invest the necessary labour and
sustain through the difficult transition
period usually of about three years as
the benefits of organic farming takes
some time to emerge.
Bio-fertilizers
/bio-pesticides
availability they are not become
popular in India due to lack of
marketing and distribution network.
Weak support from Retailers, as demand
is low, supply is erratic, farmers are
ignorant. Also chemical fertilizers are
much more aggressively marketed and
offer higher margins to retailers.
However firms like Terra Firma,
Banglore and Organic pesticides,
Belgaum are have entered the fray.
Certification Issues (discussed
greater detail at the end)

in

Entry barriers are limited but organic


certification is critical

Skal International Bangalore

Corporates
Costs Farmers and agri-businesses
seeking to sell their organic food to
developed countries have to hire an
Organic Certification agency for annual
inspection.

Distribution infrastructure for storage


and transportation that has to be consistent
with organic channels

Farm productivity Some loss in yields


do happen initially after discarding
synthetic inputs during the Transition
period. Sometimes it might take several
years to restore the ecosystem balance.

Marketing linkages - Biofach is the


worlds biggest organic food trade fair
organized in Nuremberg, Germany in
February every year. Major Indian players
that participated in 2002 were exhibition
were Coffee Board, Spices Board, Ion
Exchange Enviro Farms, Indian Organic
Food, Ecofarms India, Atik, Narmada
Agropharma, and Ananda Bag Tea Co.
Other fairs are also held - Japan,
December; United States, in the month of
May.

Bombay Burma Trading Corporation


BBTC Organic tea
Godfrey Philips India
ION Exchange Enviro Farms Ltd.
(IEEFL)
IEEFL is an agri-business subsidiary of
water treatment major Ion Exchange Ltd.It
is involved in large-scale bio-intensive
organic cultivation commercially Focuses on
a) farm operation; b) consultancy
operation (where Ion Exchange consultancy
division helps customers to develop farms
and market the produce, both organic and
conventional); and c) produce marketing,
an integrated structure linking contract
farming of organic produce to customers of
such products. Has 15 farms covering over
1,200 acres of certified farm land spread
over Maharashtra, Tamil Nadu and Goa
where crops such as mango, cashew,
chickoo , custard apple and litchi were
cultivated. Crops chosen are proven in the
country for their adoption, productivity and
market demand. Banana and pineapples are
also cultivated as intercrops and are
exported to Europe.

List of bodies involved in Organic Farming


Some Success Stories
Institutions

Members of International federation of


organic agricultural movement IFOAM,
India
Institute for Integrated Rural Development
IIRD, Aurangabad
Society
for
Organic
agriculture,
Secunderabad.

Certifying Agencies

IMO Bangalore
Indian Organic Certification
INDOCERT Cochin
SGS India Gurgaon

Agency

Basmati growers Haryana


Mango & Banana growers- Madhya Pradesh
Cotton growers- AP
Tea growers- Darjeeling
ORGANIC

CERTIFICATION

REQUIREMENTS

For most producers, Europe and the US are


the main target markets, hence their
products need to comply with the Regulation
(EEC) N 2092/91 on Organic Production
More difficult is the situation in Japan,
where the organic certification procedures
differ quite substantially and therefore
require special re-certification procedures.
In addition to this compulsory certification,

there are wide ranging private organic label


schemes all over the world. As most of them
are owned by organic farmer associations and
existed well before the regulations came into
force, consumers in some countries tend to
have higher confidence in these traditional
labels, so they can be of considerable
importance for marketing in certain regions.
Which private label will best support
marketing efforts highly depends on the target
markets and is best discussed with local
trading partners. However, it has to be
understood, that a number of these standards
exceed the EU-Regulation in certain aspects of
the production system. Although organic
standards, both official and private, are
generally based on the 'Basic Standards of
IFOAM, International Federation of
Organic Agriculture Movements' individual
deviations and differences have to be carefully
evaluated and taken into account.
Summarised briefly, the main requirements of
Regulation (EEC) N 2092/91 for producers of
agricultural crops are:

Soil fertility has to be maintained via crop


rotation, adapted cultivation techniques
and nutrient cycles.
Pest attacks must be minimised by means
of healthy soil, natural enemies and
adapted crop varieties. Only those farm
inputs (fertilizers, pesticides) that are
listed may be used in organic farming.
Only certified organic seeds should be
used.
All farm or processing activities must be
documented at every stage, to ensure full
traceability of product flow.
Conventional units must be clearly
separated from organic units and the same
product must not be produced in both
units. Conventional and organic products
must not be mixed at any stage.
Farms converting to organic farming
have to undergo 2 (annual crops) or 3
years (perennial crops) of transition
period. After the first 12 months, the
products can be marketed as 'organic
in conversion'.
Organic products need to be labelled as
'organic' or 'organic in conversion'

throughout the whole chain of harvest,


transport, storage, processing, export.
Specific requirements apply for
organic livestock and honey
production.
Every farm, processor or exporter
producing or handling organic produce
needs to be inspected and certified once
a year by an accredited certification
agency.

European Markets for Organic Food


Austria
Belgium
1300
490

260
140 1150

170

970

Germany
Italy
Netherland

10
270

France

Luxembourg
2990

Spain
Switzerland
U.K.

Source : Synergie Data 2000 figures


(in Euro millions)

No part of this publication may be reproduced or transmitted in any form or by any means,
electronic, digital or mechanical, including scanning, photocopying, recording or any
information storage and retrieval system relating to all or part of the text, photographs,
logotypes without first obtaining permission in writing from the publisher.
DEssence Consulting 2004

For further information, please contact

Off No. 2, Bldg No. 1 New Mhada Complex, Near PMGP Colony
Off Mahakali Caves Road, Andheri (East)
Mumbai, India- 400093
Tel 91-22-2834-7425, Fax 91-22-2822-8142
Email.- ganesh@dessenceconsulting.com Mob - +91 9820532465
www.dessenceconsulting.com