The Organic Foods Divide In India
The divide between farmers growing and selling organic produce in India and the major organic foods and beverages retailers is widening, to the detriment of organic farmers. This was evident at Biofach India 2013 held in Bengaluru
The recently-held Biofach India 2013 in Bengaluru—an annual meet and exhibition of organic producers and products—has confirmed three disturbing trends concerning Indian organic produce. These are:
■ That the urban market for organic products is growing at a rapid pace and a ‘junior’ food retail system (junior as compared with established large-scale food retail as a consumer goods sub-sector) devoted to these products is aggressively rounding up consumer interest and budgets.
■ That under central government programmes to encourage and promote cultivation based on organic principles (like the Rashtriya Jaivik Kheti Periyojana or National Project on Organic Farming) state governments have administrative and budget capacities (though small) to develop organic produce, but these efforts are evolving into parallel, local-specific knowledge and practice networks.
■ That the connection between the organic farming family in the rural district and the consumer is being exploited in a sophisticated manner by a growing roster of new companies whose profit margins do not lead to higher or necessarily more secure incomes for the cultivating household.
First, consider the market. All the major retailers of organic foods and beverages at Biofach India 2013 sell their products through stores in Ahmedabad, Aurangabad, Baroda, Bengaluru, Bhopal, Chennai, Delhi, Goa, Guntur, Hyderabad, Indore, Kakinada, Kolhapur, Kolkata, Mumbai, Mysore, Nashik, Pune, Punjab, Vijayawada and Vishakhapatnam. This is the established network that runs into some 160 urban stores (including supermarkets such as Auchan, Reliance, Tesco, Nature’s Basket, Food Bazaar and so on). Estimates of the monetary size of this market are unreliable and few, and the organic producers’ claims are based on flimsy and disorganised evidence—currently these range from several hundred crore rupees per year now to an amount that is expected to cross Rs 6,000 crore in 2015 (the US$ 1 billion market as envisaged by the International Competence Centre for Organic Agriculture \[ICCOA] which is a partner of the Biofach India exhibitions).
Next, the chasm between ‘certified’ and participatory guarantee. Organic producers all over the world have been developing methods to guarantee the organic integrity of their products. This is a response to the third-party certification system which is still dominant—as was visible during Biofach India 2013—as a means of ‘organic guarantee’ for world trade and retailers intent on the urban Indian market. While third-party certification bodies are described as ‘respected’ and ‘authoritative’, the fee for and administrative cost of such certification is prohibitive for small producers or even producer groups. On the contrary, the International Federation of Organic Agriculture Movements (IFOAM) has defined the participatory guarantee system (PGS) as “locally focused quality assurance systems” that “certify producers based on active participation of stakeholders and are built on a foundation of trust, social networks and knowledge exchange”. PGS in India (and elsewhere too) uses socially relevant methods, documentation is minimal and in the local language, and results in a farmer’s pledge that is honourably upheld and scrutinised by the cultivating community.
Finally, the real destiny of most organic foods grown in India, processed and packaged by Indian organic food traders (under third-party certification), and promoted abroad (particularly in Europe and North America), is as exports. According to the Agricultural and Processed Food Products Export Development Authority (APEDA), which is responsible for promoting food exports, India exported almost 70,000 tonnes of organic products, valued at around US$ 130 million (around Rs 715 crore) in 2010-11. This rose to 115,000 tonnes, worth over US$ 360 million (around Rs 2,090 crore) for 2011-12. An APEDA statement quoted in the business press attributed the financial assistance it has given the organic foods export sector (about Rs 210 crore) as being responsible for the growth. Furthermore, APEDA has forecast that exports of organic foods and beverages from India could double
At Biofach India 2013 (held between November 14 and 16, 2013), the pavilions of the major organic foods and beverages retailers—Phalada, Organic Tattva, 24 Mantra, Sanjeevani Organics, Amira Organic, Mother India Farms, Ecolife Organic and Morarka Organic—resembled those seen at a conventional food and agriculture industry exposition (routinely organised by major industry associations such as CII, FICCI and ASSOCHAM). Then there were the tables and small kiosks (at times no more than a couple of posters, a desk and two stools) of the state government-supported organic cultivation agencies. These were the ones that had brought cultivators to the fair, who were wandering the air-conditioned aisles astonished by the prices they read printed on the packets of the organic foods on display.
The calculations of the frontline organic foods and beverages retailers of market size and export value have little or no connection to the livelihood and income needs of the farming and cultivating households. This separation was evident in the manner of the two displays—the state-sponsored agencies with their baskets and trays of cereals and vegetables, and the colour-coordinated and fashionable designed stands of the frontline retailers with their Euro-standard packaging (multiple certifications well displayed) and suited attendants and representatives.
For the many small producer organisations and cooperatives that cultivate according to organic principles and have fully converted to chemical-free, high-input-free agriculture in which commercial seeds, genetically modified organisms and inorganic fertiliser is entirely absent, there is a need to assess critically their links directly to groups of consumers (whether urban or local, in what development agencies are now calling ‘short supply chains’). It is clear that the export-oriented retailers in India of organically grown foods and beverages are exploiting the state’s support for organic produce in order to serve an upper middle class urban market and to secure export channels in Western Europe and North America.
According to the (Research Institute of Organic Agriculture (FIBL), India has about 550,000 organic producers (2010 data), placing it at the top position amongst countries with the maximum number of organic producers (although this is an estimate based on data returns only from the ‘certified’ producers). In the same way, FIBL has estimated that India has 4.5 million hectares of ‘non-agricultural organic areas’ which is its classification for wild collection—Zambia with 5.9 million hectares and Finland with 7 million hectares
The global size of the organic produce market is estimated by Organic Monitor (an information services company that specialises in the international organic foods industry) to be US$ 62.9 billion (in 2010, only for organic foods and beverages and excluding cosmetics) with a world per capita consumption in monetary value of US$ 9.02 of organic products—this is the market the Indian organic retailers have taken well-supported strides into. Organic Monitor has estimated that the world market for organic produce (foods and beverages) has expanded by 170% between 2002 and 2011 (nine years) which is an average annual growth rate (monetary value) of just under 19%. This is the pace of growth in the Indian urban market too, which places it comfortably ahead of the already rapid 15% per year rate of growth of the conventional foods and beverages industry in India.
It is against this dual market reasoning that the popularity of IFOAM membership in India may be seen—amongst the 766 IFOAM affiliates (2013 January data) there are 46 from India which is placed second after Germany (96). And the proliferation of certification bodies may be noted—the total number of certification bodies is 576 (according to the Research Institute of Organic Agriculture, FIBL) which is up from 549 in 2011 with Asia for the first time having more organic certification bodies than Europe. FIBL had also reminded the organic movement that “organic agriculture has a significant role to play in addressing the pressing problems of food insecurity, poverty, and climate change”. But this reminder has been elbowed aside in India by the race to secure a position on retail organic shelves. (Infochange)
By Rahul Goswami