Looking for organic growth

For Lalatendu Deo, a civil engineer turned organic farmer from Koraput district in southern Orissa, getting the right price for his organic coffee and pepper was an uphill task. With the market still dominated by middlemen, who regularly make a killing on the margins, Deo was in a quandary.

Deo, who uses only neem and other herbal extracts as pesticides for his 100-acre farm, says the market for organic farm products is growing in the country. But the lack of marketing opportunities has prevented farmers from getting the right price for them.

“A couple of years ago, I was approached by a trader from Rajasthan wanting to buy two tonnes (2,000 kg) of organic black pepper. I offered him the pepper at Rs 300 per kg, while he wanted to beat down the price to Rs 240. The reigning price in the US market is Rs 2,000 per kg. If I had sold it to him at Rs 240 per kg, the trader would have made a killing of Rs 40 lakh,” Deo said.

Deo, who has certification for organic food from the US Department of Agriculture, says organic farming is a difficult task as it requires more labour, while the yield is one-fifth of the conventional crop. Farmers have to toil more for fertiliser and pesticide application. It is for this reason alone that organic farm products command a premium in the market.

Deo says that given his education, he could also reach the same overseas market as the trader. However, reaching those buyers is taking time. “I will succeed in selling the produce eventually, but it is a huge task,” he added.

Many farmers in Tamil Nadu too are keen to undo the mistakes of the past by returning to the old way of chemical-free cultivation. Earlier, many of them had relied on hybrid seed varieties, synthetic fertilisers and chemical pesticides.

Raju Venkateswarra, owner of an organic three-acre farm in the Karur district, grows sugarcane, coconut and spinach. “All the chemicals that have been used in my village fields have eventually robbed the soil of its nutrients and biological life. While this has resulted in a poor yield, farmers have not realised the problem and have been heaping more chemicals and fertilisers on the top soil,'' he said.

Though Sarvesh Ghanotra returned to traditional, organic farming methods five years ago, at his sugarcane, banana, turmeric and yam farms near Nashik, Maharashtra, he prefers to use natural and self-made pest repellents, fertilisers and what he terms ‘growth promoters’. To keep the soil healthy, he practises crop rotation and uses green manure.

For many farmers such as Deo, Venkateswarra and Ghanotra, a brand identity for their organic farm produce and the right price, as well as building trust with consumers, is gaining ground.

Even as the Chhattisgarh government has launched an ‘organic farming mission’ in the districts of Bastar, Bilaspur and Ambikapur, where the government is keen to provide infrastructure, certification and knowledge to farmers who opt for organic farming, the Maharashtra Organic Farming Federation has also decided to group together to brand their produce.

The Federation is a farmers association which has five lakh individual farmers and 120 non-government organisations as members. President Vikram Bokey says that as the business of organic foods is still dominated by traders, the Federation is planning to develop its own brand of organic foods.

Grains, vegetables and cereals produced by the farmers would soon be marketed through an umbrella brand, Bokey says, adding that the brand has been registered under the name of Shashwat Organics. While the produce would be sourced directly from the farmers, it would be graded, packed and sold by the representatives of the federation.

Since the federation has representatives in each and every district of Maharashtra, it would be easy to keep the middlemen out, he added.

Tamil Nadu farmer Venkateswarra has managed to get some neighbouring farms to convert to organic farming, but not everyone is convinced. Increasingly crowded retail space in metros and bigger cities have got many organic brands to re-invent themselves.

However, branding the organic produce is not the only hurdle. As Raju notes, being organic is no longer good enough, as organic foods have become ‘commoditised' in the marketplace. While some bigger companies are positioning themselves as ethical brands, others are positioning their firms as a sustainable brand that supports the environment.

Yet others have adopted a brand extension strategy, expanding from organic farming to several dairy products. Certification is turning out to be the next big thing.

Bokey pointed out that the organic certification requirement by farmers is being met through Participatory Guarantee Systems (PGS), an alternative to the third party certification process especially adapted to the local markets.

The PGS is a globally applicable organic quality assurance system, which is similar to ISO 9000. However, it is implemented and controlled by committed organic farmers and producers through the active participation of consumers.

He said that the federation has managed to export organic products to countries in West Asia and New Zealand using the PGS certification.

Chief Executive Officer of Sankalp Farms Milind Manerikar, who manages a 170-acre organic farm near Pune, says that organic farm producers will find it difficult to market their produce unless it is in large volumes. Farmers will be forced to produce more, he said.

“Imagine a person going to the market for buying a basket full of organic vegetables. The person will literally have to scour around the whole place for filling the basket. Therefore, what is required is more standalone organic stores or separate sections for organic foods,” Manerikar says.

He says that as getting the organic certification for farm produce is also very expensive, the Maharashtra Government should subsidise the farmers for the certification process, under the organic farming policy. It would be helpful in market penetration, he added.