Consumer demand for organically produced food and fibre products, and society's interest for more sustainable development provide new opportunities for farmers and businesses around the world.
Since the mid-1990s, the market for organic foods has been expanding rapidly and retail sales will probably exceed the value of US$23 billion in 2003. In Asia, it is estimated that total retail sales will reach some US$450 million in 2003. While most of these sales presently take place in Japan, other countries have witnessed a rapid expansion of their organic market. These countries include China, India, the Republic of Korea and Singapore. Organic production has risen steadily across Asian countries in recent years, and the total area under organic management was estimated at 600 000 ha in 2003. The countries with the largest organic area are China, India and Indonesia. To date, China and Japan have established official organic certification bodies, and China, India, Malaysia, the Philippines and Thailand are developing organic legislation.
| International Market for Organic Food Products ($ Bln) | ||
| Country | Sales in 1997 | Potential in 2000 |
| USA | 4.2 | 8.0 |
| Germany | 1.8 | 2.5 |
| Japan | 1.2 | 2.5 |
| Italy | 0.75 | 1.1 |
| France | 0.72 | 1.25 |
| UK | 0.45 | 0.9 |
| Australia | NA | 0.17 |
| China | NA | 0.12 |
| NZ | NA | 0.58 |
| Taiwan | NA | 0.10 |
| Phillipines | NA | 0.09 |
| Other | 1.33 | 10.38 |
| Total | 10.45 | 19.727 |
| Hindu 30 Oct. 2001 quoting NISTADS 2000 | ||
However, the growth of sales has slowed from its high rates of the period 1996-2001. For some products, there is a risk if oversupply and prices are expected to decrease in the near future. While the deceleration of the sales' growth is a general trend, the market for organic fruit and vegetables has remained dynamic in many countries such as Australia, France, Italy, Japan and the United States.
One should bear in mind that the organic sector is still a niche in the total food sector. Market shares of organic foods in most developed countries are around two percent of total food sales. Somewhat higher figures are found in some West European countries (e.g. Austria, Denmark, Switzerland) with estimated organic shares close to 3 percent.
The share of organic sales in the fruit and vegetable sector is somewhat higher than the share of organic sales in total food sales. In most developed countries, organic shares in fresh fruit sales are estimated at about three to five percent, whereas for vegetable sales the organic shares are estimated at up to ten percent in the Switzerland and the United Kingdom. Organic fruit and vegetables offer some opportunities for developing countries. Domestic production of organic products in developed countries is expected to continue rising within the next few years (there is usually a time lag of three years between conversion and production of certified organic produce), but it is unlikely to meet demand for most products.
Rapidly growing consumer demands are also reported from countries like Argentina, Japan, Brazil, Poland and Australia. Especially encouraging is the fact that local markets for organic food are also getting increasingly established in so-called "developing" countries. Of growing importance in this context will be the close cooperation between organic agriculture and the fair trade movement.
With retail sales of organic food and beverages amounting to about $ 12 billion in 2003, the United States is the world's largest market for this product group. Industry sources expect recent years' strong growth (20 per cent or more annually) to continue over the short to medium term. In 2002, organic produce sales even grew by 33% (New Hope Natural Media). According to some surveys, retail sales of organic food might reach $ 20 billion in 2005, although other sources are less optimistic and think it will take longer to reach this level.
| Global Retail Sales of Organic Products | ||||
| Markets | Retail Sales in 2003 (est.)($ mn) | Expected annual growth % in med. Term | %of total food sales 2005 ($ mn) | Retail sales |
| Austria | 325-375 | 5-10 | 2.0-2.5 | |
| Belgium | 200-250 | 5-10 | 1.0-1.5 | |
| Denmark | 325-375 | 0-5 | 2.2-2.7 | |
| France | 1200-1300 | 15-20 | 1.0-1.5 | |
| Germany | 2800-3100 | 5-10 | 1.7-2,2 | |
| Sewden | 350-400 | 0-15 | 1.5-2.0 | |
| Switzerland | 725-755 | 5-15 | 3.2-3.7 | |
| UK | 1500-1750 | 10-15 | 1.5-2.0 | |
| Europe | 10000-11000 | |||
| US | 11000-13000 | 15-20 | 2.0-2.5 | |
| Canada | 850-1000 | 10-20 | 1.5-2.0 | |
| Japan | 350-450 | 0.5 | ||
| Oceanea | 75-100 | 0.5 | ||
| Total | 23000-25000 | 29000-31500 | ||
| Fin.Exp. 23 June 2003 quoting ind. Sources | ||||
According to USDA figures, total certified farmland increased from 935,000 acres in 1992 to 2,344,000 acres in 2001, corresponding to about 150%. The biggest increase took place in cropland, which reached about 1,305,000 acres in 2001, while pasture and rangeland amounted to about 1,040,000 acres. Vegetables were grown on 71,600 acres. Major crops were lettuce, tomatoes and carrots. Fruit was grown on 55,600 acres. Main crops included grapes, apples, citrus and tree nuts. However, a wide and varied range of fruit and vegetables are grown organically in the United States.
| Price comparison | ||
| Product | Organic (Price Rs./kg) | Conventional (Price Rs./kg) |
| Rice | 32 - 110 | 15 - 60 |
| Wheat | 35 - 40 | 15 - 25 |
| Coffee | 475 - 1000 | 350 - 500 |
| Tea | 450 - 1300 | 250 - 500 |
| Spices | 400 - 1500 | 250 - 800 |
| Pulses | 50 - 75 | 25 - 40 |
| Fruits | 80 - 100 | 20 - 100 |
| Source: Org-Marg, 2002 (Data collected from departmental stores) | ||
There is a National Project on Organic Farming with a Rs 99.6-crore outlay during the Tenth Plan. The government may christen organic farming 'Vedic Krishi' to give identity to Indian products. The nutrient efficiency and factor productivity is on the decline. The second-generation problems of the Green Revolution need to be corrected by adopting alternate technology in farming, a technology which should be "eco-friendly, farmer-friendly and low-cost" but also "preserve traditional bio-diversity and knowledge." (Times News Network, April 04, 2004 )
| Export sales product wise (2002). | |
| Product | Sales (Tons) |
| Oil Seeds | 100 |
| Herbal Products | 250 |
| Pulses | 300 |
| Cashew nut | 375 |
| Coffee | 550 |
| Spices | 700 |
| Wheat | 1150 |
| Cotton | 1200 |
| Fruits & Vegetables | 1800 |
| Tea | 3000 |
| Rice | 2500 |
| Total | 11,925 |
| Source: Org-Marg, 2002 (Field survey, and secondary sources) APEDA, Tea Board, Coffee Board, and Spices Board). | |
| Organic Earnings | ||
| Year | Qty.(in tonne) | Value(Rs.in crore) |
| 2000-01 | 37.6 | 1.25 |
| 2001-02 | 100.25 | 2.72 |
| 2002-03 | 108 | 2.33 |
| 2003-04(April-Dec.) | 193 | 4.8 |
| Source:Eco.times 29.3.04 | ||
Spices
EXPORT of organic spices is showing marginal increase with the addition of more items every year ever since the country started exporting with organic pepper in 1998-99. During the fiscal 2001-02, total exports of organic spices stood at 98.65 tonne valued at Rs 2.67 crore as against 37.60 tonnes worth Rs 1.26 crore the previous year . The current fiscal it was expected to go up further given the availability of more organic items in more quantity. The major exporter of organic spices was Peermade Development Society (PDS) in Kerala's Idukki district, which had exported 38.55 tonnes of organic white pepper valued at Rs 1.31 crore and 41.88 tonnes black pepper worth Rs 0.71 crore. The average unit values of the white pepper and the black were Rs 340.25 and Rs 169.95 respectively per kg.
The unit value of organic black pepper was more than double that of ordinary MG 1. Buyers of these products were Germany, Belgium, UK and Netherlands, while organic clove and thyme were exported to Switzerland. Clove fetched a unit value of Rs 673.53 per kg, while thyme Rs 124.78 per kg.
Besides pepper, clove and thyme, chilli powder, dry ginger, turmeric (dry), mustard seed, tamarind (dry), nutmeg and mace were exported in 2001-02. Details of these items for the last fiscal have yet to be worked out. Given the ever-growing shift towards chemical-free organic food items in western world the potential for export of Indian organic spices was high.
According to the trend in the European, US and Japanese markets, it is estimated that 10 per cent of the total demand of 5,70,000 tonnes for conventional spices could be shared by organic spices with in the next seven years. Therefore, India was placed at an advantageous position being a major exporter of spices to the global market. India exported around 2.5 lakh tonnes of conventional spices every year and 10 per cent of it would come to 25,000 tonnes. As against this, current exports were at around 100 tonnes. Processed foods can only be labelled as organic if 95 per cent of all ingredients originate from organic agriculture.
The remaining five per cent could be products, which are listed in a special annex of the European Union regulation. Spices and culinary herbs are not listed and must therefore always be of organic origin.
The Spices Board, had come out with package of practices for organic cultivation of ginger, turmeric, chillies, pepper and vanilla. The farmers would have to ensure the minimum requirements for organic agriculture, "which must be fulfilled for certification programmes with regard to conversion, bio-diversity, seeds and planting materials, conversion period, cropping pattern, fertilisation policy, soil and water conservation, labelling, food processing and handling, packaging". To ensure the quality of the organic products there are seven accredited inspection and certification agencies operating in the country.
They are the Association for Promotion of Organic Farming (APOF), SKAL International (India) and IMO Control Private Ltd all in Bangalore, Indian Organic Certification Agency (INDOCERT) at Aluva, Kerala, SGS India Pvt Ltd, Gurgaon, Haryana and Ecocert International and Lacon GMBH in Germany. (THE HINDU Sunday, Jun 22, 2003)
THE National Bank for Agriculture and Rural Development (Nabard) plans to promote organic cultivation of horticulture crops in the mango belt in the southern districts of Tamil Nadu, according to Nabard sources.
The project would be effected through Nabcons, the newly promoted consultancy wing of Nabard. The southern districts, particularly Theni and Dindigul, are major mango growing areas. The State Government has also announced plans to promote an agri export zone for mangoes in these districts. Organic cultivation of horticulture crops would complement the export effort and emerge as a major revenue earner with developed countries willing to pay a premium for organically grown products, sources said.
Nabard hopes to catalyse organic cultivation initially through enhancing awareness and identifying leading farmers who are willing to invest in such a project. It hopes to identify at least 100 farmers initially. Nabard has the expertise to offer escort services for such projects including providing technical know-how and facilitation of bank procedures, sources said.
The issues that need to be addressed are availability of viable stretches of cultivable land since economies of scale are important and for technical reasons. Organic cultivation will mean that there should be no contamination of chemical inputs such as fertilisers and pesticides; therefore surrounding areas should also be free from such contaminants. Ideally a large block of a few hundred acres would be needed since the purpose would be defeated if a small farmer adopts organic cultivation and another in the next plot continues to use chemicals.
An initial step has been taken with Nabard encouraging a major organic farm in Theni. It hopes to duplicate this effort on a similar scale. According to the organic farmer in Theni district, Mr A. Somasundaram, who has invested over Rs 3.5 crore in a 252 acre organic farm, the major issues are bank finance, the patience to await returns that could take a few years, market information, assessment of land areas with potential for organic cultivation, infrastructure and attention to details regarding lay out of the farm to enable mechanisation, inspection by buyers and sanitation facilities for farm workers. These issues will have to be tackled to encourage organic farming in the southern districts.
Cultivable wastelands where chemicals have not been used or have been minimal are ideally suited for organic farming. A mechanism that helps identify land for such projects, expediting funding arrangements and to source quality planting material would immensely benefit the farmers, he said.
For instance, it had taken him more than a year to identify land suitable for organic cultivation, it had taken him over three years to convince banks to fund the projects and several months to source ideal planting material from Ratnagiri, Maharashtra.
Certification of organic practices on the farm from authorised certifying agencies cost about Rs 46,000 per year for his farm. Having invested over Rs 1.80 crore from own funds and Rs 1.75 crore obtained as bank assistance, Mr Somasundaram expects to make his first harvest of mango in 2005, but the wait is worth it. Organically grown fruits command a hefty premium, but a detailed knowledge of the market preference is essential. He has opted for Alphonso cultivation because a ready market was available in Europe and it was an established product. Prices range about Rs 540 per kg in Germany. He has planted 7,500 mango trees out of a targeted 12,000 and 1,500 coconut trees out of a targeted 3,000. Post harvest facilities including cold storage will soon be set up.( THE HINDU Thursday, May 29, 2003)