Transcript
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BUSINESS PLAN FOR SETTING UP AN ORGANIC

FARM

Submitted by:

Mohammad Ali

MBA(IB)-4th semester

A7002008002

Under guidance of:

Prof.Anil Dubey

Dupt.Director

ABS, Lucknow

(DISSERTATION REPORT IN PARTIAL FULFILLMENT OF THE AWARD OF FULL TIME

MASTERS IN BUSINESS ADMINISTRATION (INTERNATIONAL BUSINESS) 2008-10

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH, LUCKNOW

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STATEMENT BY THE STUDENT

I here by state that this project is submitted in partial fulfillment for the requirements

of MBA (IB) program of the AMITY UNIVERSITY, UTTAR PRADESH is an

original research work carried out by me under the guidance and supervision of Prof.

Anil Dubey, Dupt. Director, AMITY BUSINESS SCHOOL ,LUCKNOW and the

thesis or any part has not been previously submitted. previously

Date.______________

Signature Signature Signature

Mohammad Ali Prof.Anil Dubey Prof. R P Singh

Student Faculty Guide Director (ABS)

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CERTIFICATE BY FACULTY GUIDE

Certified that this report is prepared based on the dissertation topic BUSINESS PLAN

FOR SETTING UP AN ORGANIC FARM undertaken by Mohammad Ali Student

of MBA(IB) 4th semester, AMITY BUSINESS SCHOOL, LUCKNOW CAMPUS in

partial fulfillment of award of degree of Master Of Business Administration In

International Business from AMITY UNIVERSITY, UTTAR PRADESH.

DATE:

FACULTY GUIDE:

Prof.Anil Dubey

Dupt. Director

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ACKNOWLEDGEMENT

As a part of our course curriculum, I had to make a dissertation report on any topic to

get the right exposure to the practical aspects of business management. I got an

opportunity to work upon this topic, where I work on the project entitled BUSINESS

PLAN FOR SETTING UP AN ORGANIC FARM

Dedication, hard work and application are vital for achieving any goal but these are

also awarded by guidance / co-operation and proper assistance. A number of persons

have given their ideas and precious time to complete the report. I wish to express my

heartfelt gratitude to the following individuals who have played a crucial role during

my project. Without their active cooperation the preparation of this project could not

have been completed within the specified time limit.

The first person I would like to acknowledge is my project guide Prof.Anil Dubey

who, supported me throughout this project with utmost cooperation and patience. I am

very much thankful to him for sparing his precious time for me and for helping me in

doing this project.. He was a constant source of support during my research.

I would also like to thank Mrs. Charu Bisaria, coordinator for Dissertation for her

help. I give my sincere thanks to my partners Shantanu Sing and Rahul Shankar,

for giving me the opportunity and creating a nice work environment for me to

complete my Business Plan report within the stipulated period of time. I would like to

thank my parents for supporting me during my research.

Finally I thank Krishi Vigyan Kendra, Unnao, for their continued support in this

project. This is a small contribution towards the greater goal.

Above all, I would like to thank THE ALMIGHTY for always helping me.

MOHAMMAD ALI

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SYNOPSIS

The emerging global prospects for organic farm produce and the realisation of long-

lasting damages caused to soils by chemical fertilisers and pesticides have propelled

a shift to organic farming methods both in developed and developing countries.

World wide, about 130 countries produce certified organic products on a commercial

scale.

Reasons for the increase in organic food production are: market premiums of 2 to 2.5

times the conventional market price; an expansion in the consumer sector willing to

pay the higher prices demanded by organic food; an expansion of markets in the

developed world where Saskatchewan farm exports traditionally are targeted; and

lower input prices due to organic production.

This document is a proposed business plan, with a financial model, for setting up

and operating an organic grain farm in Uttar Pradesh

The success of Farm would depend largely on a few factors. Such factors would

include the successful organic certification for the year of production, maintaining the

industry average yields for organic crops and receiving the premium prices expected.

Failure of one or a combination of these factors would mean certain failure for the

business. An angle that was not addressed in this business plan would be to diversify

an existing traditional grain farm into organic production over a number of years.

This approach would seem more logical as the owner would have previous experience

in the farming industry. However, if the individual that is investing their equity is

confident that all the criteria can be met and continually achieved, Oraganic Farm

would be a successful endeavor when started up on its own.

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OBJECTIVE

The objective behind setting up an organic farm is to attract and invite more farmers

towards this form of farming. It is clear from current scientific researches and through

environmentalists that use of chemical pesticides have been one of the major cause

behind the deteriorating level of crop production, and let the farmers know that

organic farming will not only enhance there crop production but also help in

maintaining the land fertility as it uses the sustainable agricultural techniques.

Moreover, organic farming is also the need of the hour as it now very well known that

this kind of farming is environment friendly and can be a farmers input against the

fight against global warming. The sum up of objectives is as under:-

To increase crop productivity

To use sustainable crop production methods

To switch over to natural and environment friendly methods of crop

cultivation

The purpose of this study is to –

To find out the prospects of establishing an organic farm in Uttar Pradesh.

To find out the benefits of establishing an organic farm in Uttar Pradesh.

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CONTENTS

1. Students certificate

2. Certificate by Faculty Guide

3. Acknowledgement

4. Synopsis

5. Objective of the report

CHAPTER -1 9

1. Background 10

2. History 10

3. Significance of the study 14

4. Review of literature 15

5. Hypothesis 19

6. Problems and constrains 20

CHAPTER-2 26

1. Generation of idea 27

2. Promoter 27

3. Product

4. SWOT analysis 32

CHAPTER-3 34

1. Methodology 35

2. Sample size 35

3. Area 35

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CHAPTER-4: 36

1. Organic farming around the globe 37

2. Organic farming in India 40

3. Organic farming gaining momentum 41

4. Organic farming in rural India 42

5. Need for organic farming 44

6. Methods 48

7. Industry statistics 52

8. Growth 54

9. Economics 55

10. Critical analysis 56

11. Progress 60

12. Procedure 64

13. Prospects 65

CHAPTER-5 : 72

1. Presentation of Business Plan 73

2. General Information 74

3. Production details 75

4. Miscellaneous Fixed Assets 76

5. Preliminary Expenses 76

6. Working Capital 76

7. Marketing 77

8. Target clients, Marketing strategy, Manufacturing Process 77

9. Pollution Control, Energy Conservation 78

10. Production Schedule, sales revenues 79

11. Raw material, Utilities, salary, repairs 81

12. Selling Distribution, Administrative Exp., Interest 82

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CHAPTER-6 86

1. Conclusions 87

2. Recommendations

ANEXTURES AND BIBLOGRAPHY

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CHAPTER ONE

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BACKGROUND

Organic farming

Organic farming is the form of agriculture that relies on crop rotation, green

manure, compost, biological pest control, and mechanical cultivation to maintain soil

productivity and control pests, excluding or strictly limiting the use of

synthetic fertilizers and synthetic pesticides, plant growth regulators, livestock feed

additives, and genetically modified organisms. Since 1990, the market for organic

products has grown at a rapid pace, to reach $46 billion in 2007. This demand has

driven a similar increase in organically managed farmland. Approximately 32.2

million hectares worldwide are now farmed organically, representing approximately

0.8 percent of total world farmland. In addition, as of 2007 organic wild products are

harvested on approximately 30 million hectares.

Organic agricultural methods are internationally regulated and legally enforced by

many nations, based in large part on the standards set by the International Federation

of Organic Agriculture Movements (IFOAM), an international umbrella

organization for organic organizations established in 1972. IFOAM defines the

overarching goal of organic farming as follows:

"Organic agriculture is a production system that sustains the health of soils,

ecosystems and people. It relies on ecological processes, biodiversity and cycles

adapted to local conditions, rather than the use of inputs with adverse effects. Organic

agriculture combines tradition, innovation and science to benefit the shared

environment and promote fair relationships and a good quality of life for all

involved.."

History of organic farming

The history of organic farming dates back to the first half of the 20th century at a

time when there was a growing reliance on synthetic fertilizers. The organic

movement began in the 1930s and 1940s as a reaction to agriculture's growing

reliance on synthetic fertilizers. Artificial fertilizers had been created during the 18th

century, initially with superphosphates and then ammonia derived fertilizers mass-

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produced using the Haber-Bosch process developed during World War I. These early

fertilizers were cheap, powerful, and easy to transport in bulk. Similar advances

occurred in chemical pesticides in the 1940s, leading to the decade being referred to

as the 'pesticide era'.

Sir Albert Howard is widely considered to be the father of organic farming. Further

work was done by J.I. Rodale in the United States, Lady Eve Balfour in the United

Kingdom, and many others across the world.

As a percentage of total agricultural output, organic farming has remained tiny since

its beginning. As environmental awareness and concern increased amongst the

general population, the originally supply-driven movement became demand-driven.

Premium prices from consumers and in some cases government subsidies attracted

many farmers into converting. In the developing world, many farmers farm according

to traditional methods which are comparable to organic farming but are not certified.

In other cases, farmers in the developing world have converted for economic reasons .

As a proportion of total global agricultural output, organic output remains small, but it

has been growing rapidly in many countries, notably in Europe.

20th Century

Technological advances during World War II accelerated post-war innovation in all

aspects of agriculture, resulting in large advances in mechanization (including large-

scale irrigation), fertilization, and pesticides. In particular, two chemicals that had

been produced in quantity for warfare, were repurposed to peace-time agricultural

uses. Ammonium nitrate, used in munitions, became an abundantly cheap source of

nitrogen. And a range of new pesticides appeared: DDT, which had been used to

control disease-carrying insects around troops, became a general insecticide,

launching the era of widespread pesticide use.

At the same time, increasingly powerful and sophisticated farm machinery allowed a

single farmer to work over larger areas of land and fields grew bigger.

In 1944, an international campaign called the Green Revolution was launched in

Mexico with private funding from the US. It encouraged the development of hybrid

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plants, chemical controls, large-scale irrigation, and heavy mechanization in

agriculture around the world.

During the 1950s, sustainable agriculture was a topic of scientific interest, but

research tended to concentrate on developing the new chemical approaches. In the

US, J.I. Rodale began to popularize the term and methods of organic growing,

particularly to consumers through promotion of organic gardening.

In 1962, Rachel Carson, a prominent scientist and naturalist, published Silent Spring,

chronicling the effects of DDT and other pesticides on the environment . A bestseller

in many countries, including the US, and widely read around the world, Silent

Spring is widely considered as being a key factor in the US government's 1972

banning of DDT. The book and its author are often credited with launching the

worldwide environmental movement.

In the 1970s, global movements concerned with pollution and the environment

increased their focus on organic farming. As the distinction between organic and

conventional food became clearer, one goal of the organic movement was to

encourage consumption of locally grown food, which was promoted through slogans

like "Know Your Farmer, Know Your Food".

In 1972, the International Federation of Organic Agriculture Movements, widely

known as IFOAM, was founded in Versailles, France, and dedicated to the diffusion

and exchange of information on the principles and practices of organic agriculture of

all schools and across national and linguistic boundaries.

In 1975, Fukuoka released his first book, The One-Straw Revolution, with a strong

impact in certain areas of the agricultural world. His approach to small-scale grain

production emphasized a meticulous balance of the local farming ecosystem, and a

minimum of human interference and labor.

In the 1980s, around the world, various farming and consumer groups began seriously

pressuring for government regulation of organic production. This led to legislation

and certification standards being enacted through the 1990s and to date.

Since the early 1990s, the retail market for organic farming in developed economies

has been growing by about 20% annually due to increasing consumer demand.

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Concern for the quality and safety of food, and the potential for environmental

damage from conventional agriculture, are apparently responsible for this trend.

21st Century

Throughout the history, the focus of agricultural research, and the majority of

publicized scientific findings, has been on chemical, not organic farming. This

emphasis has continued to biotechnologies like genetic engineering. One recent

survey of the UK's leading government funding agency for bioscience research and

training indicated 26 GM crop projects, and only one related to organic agriculture.

This imbalance is largely driven by agribusiness in general, which, through research

funding and government lobbying, continues to have a predominating effect on

agriculture-related science and policy.

Agribusiness is also changing the rules of the organic market. The rise of organic

farming was driven by small, independent producers, and by consumers. In recent

years, explosive organic market growth has encouraged the participation of

agribusiness interests. As the volume and variety of "organic" products increases, the

viability of the small-scale organic farm is at risk, and the meaning of organic farming

as an agricultural method is ever more easily confused with the related but separate

areas of organic food and organic certification.

In Havana, Cuba, a unique situation has made organic food production a necessity.

Since the collapse of the Soviet Union in 1989 and its economic support, Cuba has

had to produce food in creative ways like instituting the world’s only state-supported

infrastructure to support urban food production. Called organopónicos, the city is able

to provide an ever increasing amount of its produce organically.

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Significance of the study

There are three categories of opinions about the relevance of organic farming for

India. The first one simply dismisses it as a fad or craze. The second category, which

includes many farmers and scientists, opines that there are merits in the organic

farming but we should proceed cautiously considering the national needs and

conditions in which Indian agriculture functions. They are fully aware of the

environmental problems created by the conventional farming. But many of them

believe that yields are lower in organic cultivation during the initial period and also

the cost of labour tends to increase therein. The third one is all for organic farming

and advocates its adoption wholeheartedly. They think that tomorrow's ecology is

more important than today's conventional farm benefits.

However, among many a major reservation, the profitability of organic farming vis a

vis conventional farming, is the crucial one from the point of view of the Indian

farmers, particularly the small and marginal.

Organic farming involves management of the agro-eco system as autonomous, based

on the capacity of the soil in the given local climatic conditions. In spite of the

ridicule poured out on organic farming by many, it has come to stay and is spreading

steadily but slowly all over the world. India has been very slow to adopt it but it has

made Inroads into our conventional farming system. One advantage we have here is

the fact that the farming techniques practiced in this country before the advent of the

green revolution were basically eco-friendly and they have not faded away from the

memories of the present elder generation of our farming community.

India's options in finding out an alternative method to the conventional farming are

limited. The World Trade Organization (WTO) deadline for banning exports of

vegetables and horticulture products based on inorganic farming will expire in 2005.

Sensing the importance, the Central and state governments have taken several

initiatives to popularise organic farming in the country.

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Review of Literature

Howard's (1940) Agricultural Testament draws attention to the destruction of soil and

deals with the consequences of it. It suggests methods to restore and maintain the soil

fertility. The study contains a detailed deposition of the famous Indore method of

maintaining soil health. The reasons and sources of the erosion of soil fertility and its

effect on living things are discussed. The criticism of the agriculture research and

examples of how it had to be carried out to protect soil and its productivity are

discussed in detail.

Bemwad Geier (1999) is of the opinion that there is no other farming method so

clearly regulated by standards and rules as organic agriculture. The organic

movement has decades of experience through practicing ecologically sound

agriculture and also in establishing inspection and certification schemes to give the

consumers the guarantee and confidence in actuality. Organic farming reduces

external inputs and it is based on a holistic approach to farming. He describes the

worldwide success stories of organic farming based on the performance of important

countries in the west. The magnitude of world trade in organic farming products is

also mentioned. To the question of whether the organic farming can feed the world,

he says that neither chemical nor organic farming systems can do it; but the farmers

can.

Save and Sanghavi (1991) are of the view that after their intensive experiments with

organic farming and narrating the results to the informed, it is time that the

governments and farmers are brought around. They firmly state that the economic

profitability of organic farming can be proved. Four crops of banana grown by the

natural way on the same farm by them are compared with those produced by the

conventional way. While the natural farm yielded 18 kg of banana in the first round,

the conventional one gave 25 kg. 30 kg was the yield at the second round on both the

farms. However, on the third round, the natural farm gave 25 kg, the conventional

one yielded only 20 kg. The results on the fourth round were stunning - the plants on

the conventional farm died out; but the natural ones gave 15 kg on an average. Thus,

the aggregate output was 88 kg on the natural farm and 75 kg on the conventional

one.

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While, the natural banana commanded a price of Rs 2.50 per kg, the conventional one

could fetch only Rs 1.75 per kg. This has been the major reason for the substantial net

profit (Rs 154) earned from the cultivation of natural banana (conventional banana

could get only a net profit of Rs 26.25). The expenses incurred were Rs 66 and Rs

105 for the natural and conventional bananas respectively. However, a stringent cost

and return analysis representing a larger sample size will be necessary to draw

meaningful conclusions. It should be born in mind that the output obtained from the

natural banana farm was also because of the accessibility to the inputs and expertise,

which the authors happened to possess. Farmers placed in less advantageous positions

may not derive such results. The price advantage to the natural organic farming

products will also taper off when the supply increases. The environmental costs and

returns have to be internalized and it is quite possible that the organic farming will

prove to be a far better alternative to the conventional one. However, these aspects

will have to be built into a scientific and tight economic reasoning, among others.

Kaushik (1997) analyses the issues and policy implications in the adoption of

sustainable agriculture. The concept of trades off has a forceful role to play in organic

farming both at the individual and national decision making levels. Public vis-a-vis

private benefits, current vis-a-vis future incomes, current consumption and future

growths, etc. are very pertinent issues to be determined. The author also lists a host of

other issues. While this study makes a contribution at the conceptual level, it has not

attempted to answer the practical questions in the minds of the farmers and other

sections of the people.

Sharma (2001) makes a case for organic farming as the most widely recognized

alternative farming system to the conventional one. The disadvantages of the latter

are described in detail. Other alternatives in the form of biological farming, natural

farming and perm culture are also described. The focus is on the organic farming,

which is considered as the best and thus is discussed extensively. The work is not

addressing the relevant issues in the adoption of organic farming on ground.

Veeresh (1999) opines that both high technology and sustainable environment cannot

go together. Organic farming is conceived as one of the alternatives to conventional

agriculture in order to sustain production without seriously harming the environment

and ecology. However, he says that in different countries organic farming is

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perceived differently. While in the advanced countries, its focus is on prevention of

chemical contamination, we, in countries like India are concerned of the low soil

productivity. Even the capacity to absorb fertilizers depends on the organic content of

the soil. The principles of organic farming are more scientific than those of the

conventional. India's productivity of many crops is the lowest in the world in spite of

the increase in the conventional input use. The decline in soil nutrients, particularly in

areas where the chemical inputs are increasingly being used in the absence of

adequate organic matter is cited as a reason for low productivity. Doubts about the

availability of massive sources of organic inputs also exist. He advocates an advance

to organic farming at a reasonable pace and recommends conversion of only 70 per

cent of the total cultivable area where unirrigated farming is in vogue. This 70 per

cent supplies. only 40 per cent of our food production. While this analysis has several

merits, it is more addressed to the policy makers and less to the farmers.

Sankaram Ayala (2001) is of the view that almost all benefits of high yielding

varieties based farming accrue mostly in the short term and in the long term they

cause adverse effects. There is an urgent need for a corrective action. The author rules

out organic farming based on the absolute exclusion of fertilizers and chemicals, not

only for the present, but also in the foreseeable future. There ought to be an

appropriate blend of conventional farming system and its alternatives. The average

yields under organic and conventional practices are almost the same and the declining

yield rate over time is slightly lower in organic farming. The author also quotes a US

aggregate economic model, which shows substantial decreased 5aelds on the

widespread adoption of organic farming. Decreased aggregate outputs, increased farm

income and increased consumer prices are other results the model gives. While the

details about this US analysis are not known, its relevance to India where we already

have the lowest yields of a number of crops under the conventional system appears to

be open.

Singh and others (2001), recording the experiments on rice-chick pea cropping

sequence using organic manure, found the yields substantially higher compared to

the control group. Similar results were obtained for rice, ginger, sunflower, soyabean

and sesame.

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Ahn Jongsung opines that organic agriculture is economically viable (Anon, 1998).

The author gives emphasis on marketing the organic products on the basis of

reputation and credibility. In Japan, the farmers sell the produces directly to the

consumers. The Kenyan farmers have seen that in organic farming, costs go down

and profits increase. A farmer from UP who allotted a portion of his land exclusively

for organic farming found that the yields of sugarcane, rice, wheat and vegetables

were lower than those under chemical farming. An Englishman, settled in Tamil

Nadu, who runs an organic farm in 70 acres planted with coffee, citrus, other fruits,

rice, pepper and vegetables says that he does not earn a profit and does not have

confidence in organic farming.

Somani and others (1992) have published a collection of 42 papers presented at a

National Seminar on Natural Farming. Korah Mathen recounts several problems in

evolving representative and rigorous yardsticks for comparison between modern and

alternative farming. Yields cannot be compared, because of monoculture nature of

chemical farming with those of multi crops raised under organic/natural farming.

Economic analysis is also problematic because one has to quantify the intangibles. He

advocated the resource use efficiency analysis. But the question of profitability of

different systems of farming seems difficult to be examined in the absence of an

economic analysis although the author does not rely upon it.

Save (1992) found that after three years of switching over to natural cultivation, the

soil was still recovering from the after effects of chemical farming. When the soil

regained its health, production increased and the use of inputs decreased. The farm,

which was yielding 200 to 250 coconuts per tree, gave 350 to 400 per annum.

Rahudkar and Phate (1992) narrate the experiences of organic farming in

Maharashtra. Individual farmers growing sugarcane and grapes, after using vermi

compost, saw the soil fertility increased, irrigation decreased by 45 per cent and

sugarcane quality improved. The authors say that net profits from both the sugarcane

and grape crops are high in organic farms.

The foregoing overview of the literature makes it clear that opinions about organic

farming are divided both among the farmers and experts. Disputes about the

profitability and yield increases in organic farming are acute, but there Is a consensus

on its eco-friendly nature and inherent ability to protect human health. There are

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strong views for and against organic farming (the latter, mainly on the grounds of

practicability of feeding a billion people, financial and economic viability, availability

of organic inputs and the know-how). Those who are totally against it are prepared to

ignore the ill effects of the conventional farming system. There are many who while

approving organic agriculture, want a mixture of both the systems or advocate a

careful approach by proceeding slowly towards the conversion of the conventional

farms into organic. The questions about the yield and financial viability are crucial

from the point of view of farmers; but they remain unanswered to a large extent. The

study of a geographical area in the country endowed with a large number of resources

for organic farming, but has not made any significant stride towards it, is also not

found in the literature overview.

Objectives of the dissertation

To understand the need for organic farming in India in the light of the

experiences of other countries.

To assess and evaluate the factors which may facilitate the adoption of organic

farming in the country.

To analyse the constraints, both political and social, and above all economic,

in the introduction of organic farming in India.

Hypothesis

About 65% of India's cropped area is not irrigated and it can be safely assumed that

high-input demanding crops are not grown on these lands. Fertiliser use on drylands is

always less anyway as chemical fertilisers require sufficient water to respond.

Pesticide use in these lands would also be less as the economics of these hardy or

"not-so profitable" crops will not permit expensive inputs. These areas are at least

"relatively organic" or perhaps even "organic by default". While neither of these terms

necessarily denotes a healthy farm or a recommended agriculture system, it would at

least imply a non-chemical farm that can be converted very easily to an organic one

providing excellent yields and without the necessity and effort of a lengthy conversion

period.

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Problems and Constraints

The most important constraint felt in the progress of organic farming is the inability

of the government policy making level to take a firm decision to promote organic

agriculture. Unless such a clear and unambiguous direction is available in terms of

both financial and technical supports, from the Centre to the Panchayath levels, mere

regulation making will amount to nothing. The following are found to be the major

problem areas for the growth of organic farming in the country:

Lack of Awareness

It is a fact that many farmers in the country have only vague ideas about organic

farming and its advantages as against the conventional farming methods. Use of bio-

fertilizers and bio pesticides requires awareness and willingness on the part of the

farming community. Knowledge about the availability and usefulness of

supplementary nutrients to enrich the soil is also vital to increase productivity.

Farmers lack knowledge of compost making using the modern techniques and also its

application. Proper training to the farmers will be necessary to make vermi-compost

on the modern lines. Attention on the application of composts/organic manure is also

lacking. The organic matter is spread during the months when the right moisture level

is absent on the soil. The whole manure turns into wastes in the process. The required

operation is of course labour intensive and costly, but it is necessary to obtain the

desired results.

Output Marketing Problems

It is found that before the beginning of the cultivation of organic crops, their

marketability and that too at a premium over the conventional produce has to be

assured. Inability to obtain a premium price, at least during the period required to

achieve the productivity levels of the conventional crop is a setback. It was found that

the farmers of organic wheat in Rajasthan got lower prices than those of the

conventional wheat. The cost of marketing of both types of products was also same

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and the buyers of wheat were not prepared to pay higher prices to the organic variety

(Rao, 2003).

Shortage of Bio-mass

Many experts and well informed farmers are not sure whether all the nutrients with

the required quantities can be made available by the organic materials. Even if this

problem can be surmounted, they are of the view that the available organic matter is

not simply enough to meet the requirements.

The crop residues useful to prepare vermi-compost are removed after harvest from

the farms and they are used as fodder and fuel. Even if some are left out on the farms

termites, etc destroy them. Experiments have shown that the crop residues ploughed

back into soil will increase productivity and a better alternative is conversion into

compost.

The small and marginal cultivators have difficulties in getting the organic manures

compared to the chemical fertilizers, which can be bought easily, of course if they

have the financial ability. But they have to either produce the organic manures by

utilizing the bio-mass they have or they have to be collected from the locality with a

minimum effort and cost. Increasing pressure of population and the disappearance of

the common lands including the wastes and government lands make the task difficult.

Inadequate Supporting Infrastructure

The state governments are yet to formulate policies and a credible mechanism to

implement them. There are only four agencies for accreditation and their expertise is

limited to fruits and vegetables, tea, coffee and spices. The certifying agencies are

inadequate, the recognized green markets are non-existent, the trade channels are yet

to be formed and the infrastructure facilities for verification leading to certification of

the farms are inadequate.

High Input Costs

The small and marginal farmers in India have been practicing a sort of organic

farming in the form of the traditional farming system. They use local or own farm

renewable resources and carry on the agricultural practices in an ecologically friendly

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environment. However, now the costs of the organic inputs are higher than those of

industrially produced chemical fertilizers and pesticides, including other inputs used

in the conventional farming system. The groundnut cake, neem seed cake, vermi-

compost, silt, cow dung, other manures, etc. applied as organic manure are

increasingly becoming costly making them unaffordable to the small cultivators.

Marketing Problems of Organic Inputs

Bio-fertilizers and bio-pesticides are yet to become popular in the country. There is a

lack of marketing and distribution network for them because the retailers are not

interested to deal in these products, as the demand is low. The erratic supplies and the

low level of awareness of the cultivators also add to the problem. Higher margins of

profit for chemical fertilizers and pesticides for retailing, heavy advertisement

campaigns by the manufacturers and dealers are other major problems affecting the

markets for organic inputs in India.

Absence of an Appropriate Agriculture Policy

Promotion of organic agriculture both for export and domestic consumption, the

requirements of food security for millions of the poor, national self-sufficiency in

food production, product and input supplies, etc. are vital issues which will have to be

dealt with in an appropriate agriculture policy of India. These are serious issues, the

solution to which is hard and consistent efforts along with a national consensus will

be essential to go forward. Formulation of an appropriate agriculture policy taking

care of these complexities is essential to promote organic agriculture in a big way.

Lack of Financial Support

The developing countries like India have to design a plethora of national and regional

standards in attune with those of the developed countries. The adoption and

maintenance of such a regulatory framework and its implementation will be costly.

The cost of certification, a major component of which is the periodical inspections

carried out by the certifying agencies, which have freedom to fix the timings, type

and number of such inspections appears to be burdensome for the small and marginal

farmers. Of course, the fees charged by the international agencies working in India

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before the NPOP were prohibitive and that was a reason for the weak response to

organic agriculture even among the large farms in the country. No financial support

as being provided in advanced countries like Germany is available in India. Supports

for the marketing of the organic products are not forthcoming neither from the State

nor from the Union governments. Also, the financial assistance extended to the

conventional farming methods are absent for the promotion of organic farming.

Low Yields

In many cases the farmers experience some loss in yields on discarding synthetic

inputs on conversion of their farming method from conventional to organic.

Restoration of full biological activity in terms of growth of beneficial insect

populations, nitrogen fixation from legumes, pest suppression and fertility problems

will take some time and the reduction in the yield rates is the result in the

interregnum. It may also be possible that it will take years to make organic

production possible on the farm.

Small and marginal farmers cannot take the risk of low yields for the initial 2-3 years

on the conversion to organic farming. There are no schemes to compensate them

during the gestation period. The price premiums on the organic products will not be

much of help, as they will disappear once significant quantities of organic farm

products are made available.

Inability to Meet the Export Demand

The demand for organic products is high in the advanced countries of the west like

USA, European Union and Japan. It is reported, that the US consumers are ready to

pay a premium price of 60 to 100 per cent for the organic products. The upper classes

in India are also following this trend as elsewhere. The market survey done by the

International Trade Centre (ITC) during 2000 indicates that the demand for organic

products is growing rapidly in many of the world markets while the supply is unable

to match it.

India is known in the world organic market as a tea supplier and there is a good

potential to export coffee, vegetables, sugar, herbs, spices and vanilla. In spite of the

several initiatives to produce and export organic produces from the country, the

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aggregate production for export came to only about 14000 tonnes. This also includes

the production of organic spices in about 1000 ha under certification. Some export

houses are also engaged in exporting of organic fruits, vegetables and coffee from

India. The country could export almost 85 per cent of the production indicating that

demand is not a constraint in the international markets for organic products.

Vested Interests

Hybrid seeds are designed to respond to fertilizers and chemicals. The seed, fertilizer

and pesticide industry, are also the importers of these inputs to the country having a

stake in the conventional farming. Their opposition to organic farming stems from

these interests.

Lack of Quality Standards for Biomanures

The need for fixing standards and quality parameters for bio-fertilizers and

biomanures has arisen with the increasing popularity of organic farming in the

country. There are a very large number of brands of organic manures, claiming the

high levels of natural nutrients and essential elements. But most farmers are not aware

of the pitfalls of using the commercially available biomanure products. While the

concept of organic farming itself lays great stress on the manures produced on the

farm and the farmers' household, many of the branded products available in the

market may not be organic. Elements of chemicals slipping into the manures through

faulty production methods could make the product not certifiable as organic. Even if

the farmers are using manure produced by different methods, proper parameters for

biomanure are yet to be finalized. Most farmers are still unaware of the difference

between biomanure and bio-fertilizer. While biomanure contains organic matter,

which improves the soil quality, bio-fertilizers are nutritional additives separated

from the organic material, which could be added to the soil, much like taking vitamin

pills. Bio-fertilizers do nothing to enhance soil quality while the loss of soil quality

has been the major problem faced by farmers these days.

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Improper Accounting Method

Understanding the real costs soil erosion, human health and the loss of welfare of

both humans and other living things, the computation of these costs are necessary to

evaluate the benefits of organic farming. These costs will have to be integrated to a

plan for the implementation of organic agriculture.

A recent study shows the inappropriateness of the cost and return accounting

methods adopted to find out the economics of the organic farming (Prakash, 2003).

An economic evaluation of the bad effects of inorganic agriculture and their

internalization through environmental taxes is proposed for a market based approach

to promote organic farming in India.

Political and Social Factors

Agriculture in India is subject to political interventions with the objectives of

dispensing favours for electoral benefits. Subsidies and other supports from both the

Central and state governments, government controlled prices of inputs like chemical

fertilizers, the public sector units' dominant role in the production of fertilizers,

government support/floor prices for many agricultural products, supply of inputs like

power and water either free of cost or at a subsidized rate, etc are the tools often used

to achieve political objectives. Any movement for the promotion of organic farming

in India will have to counter opposition from the sections who benefit from such

policies in the conventional farming system. The political system in a democracy like

India is likely to evade the formulation of policies, which affect the interests of the

voting blocks unless there are more powerful counter forces demanding changes.

In the absence of alternative employment opportunities and other considerations, the

organized workforce particularly in the public sector fertilizer, pesticide and seed

industries is also likely to oppose moves on the part of the government to promote

organic farming on a large scale.

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\

CHAPTER TWO

Company profile

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The generation of idea

The rapid urbanization in the country has resulted in the declining progress in the

agricultural sector due to which the current agricultural growth is at 4% where as the

industrial growth rate is at 12% .To minimize the gap between the two sectors we

need investment in the agricultural sector. Through this project we are planning to do

the following things, which will ultimately result in overall growth of the agricultural

sector along with the improvement in the lifestyle of the economically backward

sector of the society.

1. We will take the agricultural lands on lease or some other feasible alternative

by discussing with the owners of the land.

2. We will invest money to build a good agricultural infrastructure viz irrigation,

power, modern equipments etc.

3. We will exploit the local unemployed villagers, train them in organic

farming and make them engage in production process.

4. We will recruit people from various agricultural schools and colleges to

improve this project and train local peoples

5. The production from the agricultural lands will be sold in the local market by

opening various outlets.

6. The project gradually will become “Agricultural Park” which can be a source

of a income by attracting the tourist and this is possible as government is now

more concerned about the rural tourism in India.

THE PROMOTERS :

KRISHI VIGYAN KENDRA, Unnao.

Genesis of KVK

Taking the note of the developmental activities of PIRENS the Indian Council of

Agricultural Research, New Delhi granted its sanction for establishment of the

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Krishi Vigyan Kendra (the Farm Science Centre) in May 1992. However the actual

implementation of its programmes could be started during March, 1993 only.

Before launching its programmes and activities, a Benchmark survey of the

selected villages was done to make a socio-economic appraisal and to understand

the existing practices of the farmers. This enabled the KVK to identify the

technological gaps and critical needs and requirements of the farmers. This formed

the basis for framing operational modality like training, demonstration and on-

farm-trials by the KVK. Simultaneously the farm development work was also

started as an important requirement for the strengthening of training-cum-

demonstration infrastructure of the KVK.

Initially the off campus training were given emphasis due to unavailability of

infrastructure. However, since 1995, the on campus training has become a core

activity of the KVK. Comparatively the demonstrations under the LLPs and FLDs

took off on an earlier note during 1993-94.

Apart from conducting these demonstrations various innovative approaches were

undertaken for providing the environment friendly packages to meet the farmer’s

problem. An overwhelming response of the farmers to these eco-freindly practices

later paved the way for forming various farmers interest groups and self help

groups. The response to these groups organized under the domain of Krishi Vigyan

Mandal further motivated the KVK to establish the Innovative Farmers Club in the

year 1996. The club is an informal group of self experimenting farmers that

provides an opportunity for sharing their innovations and practices among

themselves. Further the KVK started the Innovative Farm Women's Club for

involvement of farm women in the dissemination of various technological

interventions at faster rate.

The KVK has excelled in bringing the modern technological packages at the

farmers doorstep with the help of various instructional units. The KVK today has

sufficient resources to impart training skills for not only the farmers but also the

rural youth. The training schedule typically incorporates the existing needs and

problems of the farmers for making a positive impact. The trainings are conducted

both at the on-campus and off-campus locations. It invariably emphasizes on

providing both the short term as well as long durational courses specifically to

impart practical orientation to these courses. The KVK has started the instructional

units for not only imparting the skills but also for providing the critical inputs as

per the demand and need of the farmers. Wherever the response of the farmers to

technologies under the Lab to Land Programmes and the on-farm-trials

demonstrated by the KVK was multifold the need to take the assistance from the

other funding agencies arose. The KVK took bold initiatives in convincing

different State and Central Govt. funding agencies to provide the financial support

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to undertake the innovative schemes and projects for further extending the

extension programmes outside the purview of the KVK selected villages.

In the current scenario the mandates of the KVKs are as follows

Mandate

Conducting “on-farm testing” for identifying technologies in terms of

location specific sustainable land use systems (Technology Assessment and

Refinement).

Organize training programmes to update the extension personnel with

emerging advances in agricultural research on regular basis (In-service

training).

Organize short and long-term vocational training courses in agriculture and

allied vocations for the farmers and rural youth with emphasis on “learning

by doing” for higher production on farms and generating self

employment (Vocational training).

Organize Front Line Demonstration on various crops to generate production

data and feedback information (Front Line Demonstration).

Other Activities

Formation of Farmers Commodity based Groups

Conducting Monthly Zonal Workshop with extension functionaries

Rendering need based farm advisory services

Implementing State and Central Governments sponsored agriculture related

development programmes

Developing location specific technologies

Conducting skill demonstrations

Dissemination of technologies through AIR, Doordharsan, Websites and

Newspapers

Precision Farming, National Horticulture Mission, ATMA, IAMWARM,

etc.

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TYPE OF PRODUCT/SERVICES

Type of the Project: Production of agricultural food items and rendering services to

the rural society

Product/Services description (Type, Quality & uses): The rapid urbanization in the

country has resulted in the declining progress in the agricultural sector due to which

the current agricultural growth is at 4% where as the industrial growth rate is at 12%

.To minimize the gap between the two sectors we need investment in the agricultural

sector. Through this project we are planning to do the following things, which will

ultimately result in overall growth of the agricultural sector along with the

improvement in the lifestyle of the economically backward sector of the society.

1. We will take the agricultural lands on lease or some other feasible alternative

by discussing with the owners of the land.

2. We will invest money to build a good agricultural infrastructure viz irrigation,

power, modern equipments, sustainable agricultural techniques, etc.

3. We will exploit the local unemployed villagers, train them in organic

agricultural techniques and make them engage in production process.

4. We will recruit people from various agricultural schools and colleges to

improve this project and train local peoples.

5. The production from the agricultural lands will be sold in the local market by

opening various outlets.

6. The project gradually will become “Agricultural Park” which can be a source

of a income by attracting the tourist and this is possible as government is now

more concerned about the rural tourism in India.

Major Consumers: All classes of Indian family

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SWOT-ANALYSIS OF INDIAN ORGANIC AGRICULTURE

(DOMESTIC AND EXPORT MARKET)

Organic farming is one such part of agriculture sector which is unexploited yet,

especially in the state of Uttar Pradesh. The projects strength, weaknesses,

opportunities and threats are discussed as below-

Strengths:

The export of Indian organic products is progressing. The Government support to

organic agriculture, awareness for healthy food harmful effects of pesticides and

presence of their residues. International and national certification bodies in India –

these four facts are the dominating strengths. The supply (quantity, not considering

the quality) is certainly not the bottle neck for further development of OA in India.

Weaknesses:

Major weaknesses are on the level of information/awareness: most farmers have only

small holdings and quality consciousness is low besides lack of marketing skills (e.g.

disjointed sector for the domestic market). Another weakness to be noted is that the

organic market is not onsumer demand -based, but supply driven. From this fact a lot

of threats can be derived. For the success of the organic market, powerful, well

organized and consumerbased farmer organizations are certainly very important.

Opportunities:

To quantify the potential of the organic products is not simple because the fast

development of the Indian society and economy. For further progress, more

information should be gathered on the market opportunities. Nevertheless, the need

assessment shows that on the level of the opportunities, a considerable potential for

the organic market exists, even though the size of the potential can not be quantified

exactly. There is a consensus within the Indian organic agriculture sector (private and

government) that an interface organisation is needed to provide information and

services. The founding of the Indian Competence Centre of Organic Agriculture is a

promising initiative for this and can serve as a platform for various activities related to

market development (as given in Business Plan of ICCOA).

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Threats:

Some of the major threats are really dangerous. The awareness about pesticide

residues is to be considered as strength. However, a bigger threat is that all kind of

products are offered under declarations like “without pesticides”, “eco-friendly” or

even “organic”. In this sense most threats are related to the problem of faithful

declaration, role of government, and clarification of the term “organic”. These threats

should be quickly overcome; otherwise the Indian organic market might fail before it

has even started off.

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CHAPTER THREE

Research methodology

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Methodology

The paper is based on secondary data. Information from literature on the historical

evolution of the organic farming and the progress it has made both in India and

abroad collected from the published sources like the websites of the European Union

countries. International Federation of Organic Farming Movements (IFOAM), books

and periodicals and news paper reports is liberally used for the preparation of the

paper.

This study used the analytical research design, as it was not intended to develop or

defend any particular hypothesis. In Analytical Research design, research is done on

the basis of already available facts or information to make a critical evaluation.

Sample Size:

I had done documentary observation to rearch up to the result so there is no need of

sample size.

AREA:

The area of my research is Uttar Pradesh (India).

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CHAPTER FOUR

Analysis of data

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Organic farming- a global picture

The following information is taken from the 2009 edition of the yearbook "The World

of Organic Agriculture", published by the International Federation of Organic

Movements IFOAM, the Research Institute of Organic Agriculture FiBL and the

International Trade Centre ITC.

According to the latest survey on organic agriculture, carried out by the Research

Institute of Organic Agriculture FiBL and the International Federation of Organic

Agriculture Movements IFOAM, organic agriculture is developing rapidly, and

statistical information is now available from 141 countries of the world. Its share of

agricultural land and farms continues to grow in many countries. The main results of

the global survey on certified organic farming show that 32.2 million hectares of

agricultural land are managed organically by more than 1.2 million producers,

including smallholders (2007). In addition to the agricultural land, there are 0.4

million hectares of certified organic aquaculture. Global demand for organic products

remains robust, with sales increasing by over five billion US Dollars a year. Organic

Monitor estimates international sales to have reached 46.1 billion US Dollars in 2007

(FIBL, IFOAM, ITC 2009).

Africa

In Africa, there are almost 900’000 hectares of certified organic agricultural land (end

2007). This constitutes about three percent of the world’s organic agricultural land.

The countries with the most organic land are Uganda (296'203), Tunisia (154'793

Hectares), and Ethiopia (140’308 hectares). The highest shares of organic land are in

Sao Tome and Prince (5 percent), Uganda (2.3 percent) and Tunisia (1.6 percent). The

majority of certified organic produce is destined for export markets, with the large

majority being exported to the European Union, which is Africa’s largest market for

agricultural produce. The African market for organic products is still small. Three

countries have an organic regulation and seven are in the process of drafting one. A

first African Organic Conference will be held in Kampala, Uganda, from May 19-22,

2009. (FIBL, IFOAM, ITC 2009).

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Asia

The total organic area in Asia is nearly 2.9 million hectares. This constitutes nine

percent of the world’s organic agricultural land. 230’000 producers were reported.

The leading countries are China (1.6 million hectares) and India (1 million hectares)

The total organic area in Asia is nearly 2.9 million hectares. This constitutes nine

percent of the world’s organic agricultural land. 230’000 producers were reported.

The leading countries are China (1.6 million hectares) and India (1 million hectares).

The highest shares of organic land of all agricultural land are in Timor Leste (seven

percent). Organic wild collection areas play a major role in India and China.

Production of final processed products is growing, although a majority of production

is still fresh produce and field crops with low value-added processing, such as dry or

processed raw ingredients. Aquaculture (shrimp and fish) on the other hand, is

emerging in China, Indonesia, Vietnam, Thailand, Malaysia and Myanmar. Textiles is

another important trend. Sector growth is now also driven by imports, and local

markets have taken off in many of the big cities in the South and Eastern part of

region besides Japan, South Korea, Taiwan and Singapore. Kuala Lumpur, Manila,

Bangkok, Beijing, Shanghai, Jakarta, Delhi, Bangalore and other cities are increasing

internal consumption of organic products. Nine organic regulations are in place. In

seven countries work on national standards and regulations is in progress.(FIBL,

IFOAM, ITC 2009).

Europe

As of the end of 2007, 7.8 million hectares in Europe were managed organically by

more than 200'000 farms. In the European Union, 7.2 million hectares were under

organic management, with more than 180’000 organic farms. 1.9 percent of the

European agricultural area and four percent of the agricultural area in the European

Union is organic. Twenty-four percent of the world's organic land is in Europe. The

countries with the largest organic area are Italy (1'150'253 hectares), Spain (988'323

hectares) and Germany (865'336 hectares). The highest percentages are in

Liechtenstein (29 percent), Austria (13 percent) and Switzerland (11 percent).

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Compared to 2006, organic land increased by more than 0.3 million hectares. Sales of

organic products were approximately 16 billion Euros in 2007. The largest market for

organic products in 2007 was Germany with a turnover of 5.3 billion Euros (2008: 5.8

billion Euros), followed by the UK (2.6 billion Euros), France and Italy (both 1.9

billion Euros). As a portion of the total market share, the highest levels have been

reached in Austria, Denmark and Switzerland, with around five percent for organic

products. The highest per capita spending is also in these countries. Support for

organic farming in the European Union and the neighboring countries includes grants

under rural development programs, legal protection and a European as well as

national action plans. One of the key instruments of the European Action Plan on

organic food and farming, an information campaign, was launched during 2008, with

the aim of increasing awareness of organic farming throughout the European Union.

Furthermore, most EU member states have national action plans. In order to boost

organic farming research, a technology platform joining the efforts of industry and

civil society in defining organic research priorities and defending them vis-à-vis the

policy-makers was launched in December 2008. The platform’s vision paper reveals

the potential of organic food production to mitigate some of the major global

problems from climate change and food security, to the whole range of socio-

economic challenges in the rural areas).(FIBL, IFOAM, ITC 2009).

North America

In North America, almost 2.2 million hectares are managed organically, representing

approximately a 0.6 percent share of the total agricultural area. Currently, the number

of farms is 12'064. The major part of the organic land is in the US (1.6 million

hectares in 2005). Seven percent of the world’s organic agricultural land is in North

America. Valued at more than 20 billion US Dollars in 2007 (Organic Monitor), the

North American market accounted for 45 percent of global revenues. Growing

consumer demand for healthy & nutritious foods and increasing distribution in

conventional grocery channels are the major drivers of market growth. The U.S.

organic industry grew 21 percent in sales in 2006, and was forecast to experience 18

percent sales growth each year on average from 2007 through 2010. Whether this rate

will actually be realized is uncertain due to the economic downturn and reduction in

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consumer spending in the last quarter of 2008. Likewise, a downturn is expected in

Canada, even though the market growth in Canada, paired with the introduction of the

new organic regulations, should provide a good outlook over the coming years. In the

United States, the National Organic Program has been in force since 2002. Canada

has had a strong organic standard since 1999; this had been, however, voluntary and

not supported by regulation. Canada’s Organic Product Regulation will be fully

implemented on June 30, 2009. Canadian labeling requirements will very similar to

those of the US and the EU. In 2008, the new Farm Bill was passed by the US

Congress. Increasing expenditures on organic agriculture and programs to

approximately 112 million US Dollars1 over the course of its five-year life, the 2008

Farm Bill provides a five-fold increase for the organic sector compared with federal

funding in the previous bill.(FIBL, IFOAM, ITC 2009).

Latin America and the Caribbean

In Latin America, 220’000 producers managed 6.4 million hectares of agricultural

land organically in 2007. This constitutes 20 percent of the world’s organic land. The

leading countries are Argentina (2'777'959 hectares), Brazil (1'765'793 hectares) and

Uruguay(930'965 hectares). The highest shares of organic agricultural land are in the

Dominican Republic and Uruguay with more than six percent and in Mexico and

Argentina with more than two percent. Most organic production in Latin America is

for export. Important crops are tropical fruits, grains and cereals, coffee and cocoa,

sugar and meats. Most organic food sales in the domestic markets of the countries

occurs in major cities, such as Buenos Aires and São Paulo.

Fifteen countries have legislation on organic farming, and four additional countries

are currently developing organic regulations. Costa Rica and Argentina have both

attained third country status according to the EU regulation on organic farming.

In recognition of the growing importance of the organic sector to Latin America’s

agricultural economy, governmental institutions have begun to take steps towards

increasing involvement; governments are beginning to play a central role in the

promotion of organic agriculture. The types of support in Latin American countries

range from organic agriculture promotion programs to market access support by

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export agencies. In a few countries, limited financial support is being given to pay

certification cost during the conversion period.

An important process underway in many Latin America countries is the establishment

of regulations and standards for the organic sector (FiBL, IFOAM, ITC 2009).

Oceania

This region includes Australia, New Zealand, and island states like Fiji, Papua New

Guinea, Tonga and Vanuatu. Altogether, there are 7'222 producers, managing almost

12.1 million hectares. This constitutes 2.6 percent of the agricultural land in the area

and 38 percent of the world’s organic land. Ninety-nine percent of the organically

managed land in the region is in Australia (12 million hectares, 97 percent extensive

grazing land), followed by New Zealand (65’000 hectares) and Vanuatu (8'996

hectares). The highest shares of all agricultural land are in Vanuatu (6.1 percent),

Samoa (5.5 percent) and the Solomon Islands (3.1 percent). Growth in the organic

industry in Australia, New Zealand and the Pacific Islands has been strongly

influenced by rapidly growing overseas demand; domestic markets are, however,

growing. In New Zealand, a key issue is lack of production to meet growing demand.

Australia has had national standards for organic and biodynamic products in place

since 1992, and like New Zealand, it is on the third country list of the European

Union. It is expected that the Australian Standard, based on the National Standard

employed since the early 1990s for the export market, will be adopted in 2009. In

New Zealand, a National Organic Standard was launched in 2003. There is little

government support to encourage organic agriculture in Australia. However, over the

recent past, governments have been supportive of the Australian Standards issue.

Furthermore, funding is made available to promote an understanding among

consumers. In New Zealand, through the establishment of the sector umbrella

organization Organics Aotearoa New Zealand and the Organic Advisory Programme

as well as other initiatives, there is political recognition of the benefits of organic

agriculture.

In the Pacific Islands work on a regional strategy and national plans to lay the

foundation of sustainable organic agriculture development in the region is in progress.

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The Regional Organic Task Force, a technical group representing all sectors and

countries involved in organics, was charged with developing the Pacific Standard and

will be responsible for implementing the Regional Action Plan. Pacific High Level

Organics Group consists of Pacific leaders who have shown a commitment to the

development of organic agriculture in the region and provide high level political

support and advocacy. The first Pacific Organic Standard was endorsed by Pacific

Leaders in September 2008. This provides a platform for further regional policy

development around organic agriculture. (FIBL, IFOAM, ITC 2009).

Organic farming in India

The official position

As per a Food and Agriculture Organisation (FAO) study of mid-2003, India had

1,426 certified organic farms producing approximately 14,000 tons of organic food /

produce annually. In 2005, as per Govt. of India figures, approximately 190,000 acres

(77,000 hectares) were under organic cultivation. The total production of organic food

in India as per the same reference was 120,000 tons annually, though this largely

included certified forest collections.

Another side to the story

There are a number of farms in India which have either never been chemically-

managed / cultivated or have converted back to organic farming because of their

farmers' beliefs or purely for reason of economics. These thousands of farmers

cultivating hundreds of thousands of acres of land are not classified as organic though

they are. Their produce either sells in the open market along with conventionally

grown produce at the same price or sells purely on goodwill and trust as organic

through select outlets and regular specialist bazaars. These farmers will never opt for

certification because of the costs involved as well as the extensive documentation that

is required by certifiers.

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Organic farming gains momentum in India

(As published in Business Standard: January 03, 2008)

Chennai/Bangalore: Four-fold rise targetted to take area beyond 2 million hectares by

2012. Organic agriculture movement is gaining in momentum in the country. The area

under organic cultivation is likely to cross the 2 million hectare mark by 2012,

according to National Centre for Organic Farming (NCOF), a body under the Union

Ministry of Agriculture. This means a growth of nearly 4 times from the present

528,000 hectares, which includes both certified and in-conversion lands. According to

Bangalore-based International Competence Centre for Organic Agriculture (ICCOA),

a government recognised not-for-profit organisation promoting organic farming,

organic farming is witnessing a growth of over 40 per cent year-on-year. While the

domestic market for organic products is estimated at Rs 560 crore last year, the

exports were in excess of Rs 250 crore. The Indian organic produce is mainly

exported to Japan, Netherlands, Italy, France, Switzerland, the UK and USA.

Said Manoj Kumar Menon, Executive Director, ICCOA, "The major reason for the

growth in organic farming is increased awareness among consumers in the country.

Till now organic food was mainly being exported. But over the last couple of years,

the domestic market has started growing. Many state governments have woken up to

the importance of organic farming and have announced several incentives for farmers

to go organic." The fact that organic movement has gained a wider acceptance was

evident at the recently-concluded 'India Organic 2007', a trade fair and seminar.

The third edition of India's first organic products trade fair, which was held for the

first time in Delhi (Bangalore hosted the event in 2005 and 2006) saw participation of

a record 184 companies and 25 state governments and 12 countries. The event

generated business enquiries worth Rs 150 crore, a growth of 80 per cent over 2006,

Menon said.

The fair, organised by NCOF, Agricultural and Processed Food Products Export

Development Authority (APEDA), Research Institute of Organic Agriculture (FiBL),

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Switzerland and ICCOA, witnessed 15,000 business visitors and key policy makers

from the Central ministries and state governments.

The buyer-seller meet was a huge success. Large number of participants showed

interest to have trade interactions with Indian organic producers. Out of 128 such

meets, 58 B2B meets were held with foreign buyers directly.

Workshop on organic cotton and marketing of organic products, organic food festival

and farmers meet were the other highlights of India Organic 2007.

Impressed with the progress made by the country in organic, the ministry of

agriculture, government of Sri Lanka has invited by ICCOA to prepare a strategy for

domestic market development in Sri Lanka, Menon said. The Sri Lanka government

has also asked ICCOA to help them organise a trade fair on the lines of India Organic

in Sri Lanka.

In India, the governments of Rajasthan, Maharashtra, Andhra Pradesh and Assam

have also invited ICCOA to organise the organic trade fair in their states.

Organic Farming in India (Rural Economy)

The role of Organic Farming in India Rural Economy can be leveraged to mitigate

the ever-increasing problem of food security in India. With rapid industrialization

of rural states of India, there has been a crunch for farmland. Further, with the

exponential population growth of India, the need for food sufficiency has become

the need of the hour. Furthermore, the overuse of plant growth inhibitor, pesticides

and fertilizers for faster growth of agricultural produce is detrimental to human

health and the environment as a whole. The proposition of Organic Farming in

India Rural Economy holds good, as an alternative to arrest this problem. The

introduction of the process of Organic Farming in India Rural Economy is a very

new concept. The huge furor over the overuse of harmful pesticides and fertilizers

to increase agricultural out put has in fact catalyzed the entry of Organic Farming

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in India Rural Economy. The process of organic farming involves using of

naturally occurring and decomposable matter for growth and disease resistance of

different crops. The concept of organic farming in India dates back to 10,000 years

and it finds its reference in many Indian historical books.

Agriculture was the main source of livelihood in India and the use of naturally

occurring matters for increased productivity, disease resistance and pest control

was always in use, since time in memorial. The use of oil cakes, cow dungs, neem

leaves, etc. is still practiced in India to ward of pests and used as preservatives.

The use of chemical fertilizer for increased productivity started from late 1850s. In

India, the first use of chemical fertilizer for increased agriculture productivity

started from 1906.

The Indian states involved in organic farming in India are as follows -

Gujarat

Kerala

Karnataka

Uttarachal

Sikkim

Rajasthan

Maharashtra

Tamil Nadu

Madhya Pradesh

Himachal Pradesh

The main organic agricultural products of India are as follows-

Bajra-mustard-wheat

Chilly

Cereals-cereals

Cereals-pulses

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Kholar

Maize

Ginger

Soybean

Large cardamom

Passion fruit

Dungarpur Pulses-cereals

Bajra

Mustard

Til

Wheat

Nagour Guar-cumin

Guar-wheat

Moong

Mustard

Ganganagar Cotton

Bhilwara Urd

Jaisalmer Bajra

Bharatpur Bajra and wheat

Jhunjhunu Pulses and wheat

Alwar Wheat and bajra

Banswara Maize

Cotton-grass

Jaipur Guar

NEED FOR ORGANIC FARMING IN INDIA

The need for organic farming in India arises from the unsustainability of agriculture

production and the damage caused to ecology through the conventional farming

practices.

The present system of agriculture which we call 'conventional' and practiced the

world over evolved in the western nations as a product of their socio-economic

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environment which promoted an over riding quest for accumulation of wealth. This

method of farming adopted by other countries is inherently self destructive and

unsustainable.

The modern farming is highly perfected by the Americans who dispossessed the

natives of their farms right from the early period of the new settlers in US (Wadia,

1996). The large farms appropriated by the immigrants required machines to do the

large scale cultural operations. These machines needed large amount of fossil fuels

besides forcing the farmers to raise the same crops again and again, in order to utilize

these machines to their optimum capacities. The result was the reduction of bio-

diversity and labour. The high cost of the machines necessitated high profits, which

in turn put pressure to raise productivity. Then, only those crops with high

productivity were cultivated which needed increased quantities of fertilizers and

pesticides. Increasing use of pesticides resulted in the damage to environment and

increased resistance of insects to them. Pesticides harmed useful organisms in the

soil.

The monoculture of high yielding seeds required external inputs of chemical

fertilizers. The fertilizers also destroy soil organisms. They damage the rhizobia that

fix nitrogen and other micro organisms that make phosphates available to plants

(Wadia, 1996). The long term effect was reduction of crop yields. The damaged soil

was easily eroded by wind and water. The eroding soil needed use of continuously

increasing quantities of fertilizers, much of which was washed/leached into surface

and underground water sources.

The theme of consumer welfare has become central in the economic activities in the

developed countries in the world. Sustainable agriculture based on technologies that

combine increased production with improved environmental protection has been

accepted as absolutely essential for the maximization of the consumer welfare. The

consumers are increasingly concerned about the quality of the products they consume

and food safety has become a crucial requirement. Safety, quality and hygienic

standards are increasingly being made strict. The mad cow disease and the question of

genetically modified food production are the recent instances, which made the

countries to tighten the laws. Mycotoxln contamination, unacceptable levels of

pesticide residues and environment degradation are the problems on which the

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attention is centred. Keeping the interests of the consumers, the European Union has

taken tough measures including criminal prosecution to ensure food safety. Another

area to increase the consumer welfare is promotion of the eco-friendly methods in

agriculture. No-till, or conservation agriculture, lower input approaches of integrated

pest or nutrient management and organic farming are some of them.

The Indian agriculture switched over to the conventional system of production on the

advent of the green revolution in the 1970s. The change was in the national interest

which suffered set backs because of the country's over dependence on the foreign

food sources. The national determination was so intense that all the attention was

focused on the increase in agriculture production.

The agriculture and allied sectors in India provide employment to 65 per cent of the

workers and accounts for 30 per cent of the national income. The growth of

population and the increase in income will lead to a rise in demand for foodgrains as

also for the agricultural raw materials for industry in the future. The area under

cultivation, obviously, cannot be increased and the present 140 million hectares will

have to meet the future increases in such demands. There is a strong reason for even a

decline in the cultivated area because of the urbanization and industrialization, which

in turn will exert much pressure on the existing, cropped area.

Science and technology have helped man to increase agricultural production from the

natural resources like land. But the realization that this has been achieved at the cost

of the nature and environment, which support the human life itself, is becoming clear.

It has been fully evident that the present pattern of economic development, which

ignores the ecology and environment, cannot sustain the achievement of man without

substantial erosion of the factors that support the life system of all living things on

the Earth. The evidence of the ill effects of development is well documented. As said

earlier, we in India have to be concerned much more than any other nation of the

world as agriculture is the source of livelihood of more than 6-7 million of our people

and it is the foundation of the economic development of the country.

There were times when people lived close to nature with access to flora and fauna in

healthier and cleaner surroundings. One has to look back at our present metropolitan

cities or other large towns before the past fifty years as recorded in

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history/memmories of the present elder generation to see the striking differences in

the surroundings in which the people lived there. Land, water and air, the most

fundamental resources supporting the human life, have degraded into such an extent

that they now constitute a threat to the livelihood of millions of people in the countiy.

Ecological and environmental effects have been highly publicised all over the world.

Many times, these analysis have taken the shape of doomsday forecasts. Powerful

interests in the developed western countries have also politicised these issues to take

advantage of the poor nations of the world. Efforts to impose trade restrictions on the

plea of environment protection are a direct result of these campaigns. But we have to

recognize that the abysmal level to which we have degraded our resources ,requires

immediate remedial measures without terming the demand for them as the ploys of

the rich nations to exploit the poor.

Another turn of the events has been the blame game for ecological problems stated at

the Earth Summit and other international conferences. The developed countries, it is

true, are to a great extent instrumental to degrade the environment. However, the

poorer countries of the world including India cannot delay or ignore the need for

remedial measures, which are to be effectively implemented. We cannot gloss over

the fact that we have also contributed to the degradation of ecology; look at the

droughts and floods, disappearance of forests, high noise level and air pollution in the

cities which are our own creations.

Organically cultivated soils are relatively better attuned to withstand water stress and

nutrient loss. Their potential to counter soil degradation is high and several

experiments in arid areas reveal that organic farming may help to combat

desertification (Alam and Wani, 2003). It is reported that about 70 hectares of desert

in Egypt could be converted into fertile soil supporting livestock through organic and

biodynamic practices. India, which has some areas of semi-arid and arid nature, can

benefit from the experiment.

The organic agriculture movement in India received inspiration and assistance from

IFOAM which has about 600 organizational members from 120 countries. All India

Federation of Organic Farming (AIFOF) is a member of IFOAM and consists of a

number of NGOs, farmers' organisations, promotional bodies and institutions.

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The national productivity of many of the cereal crops, millets, oilseeds, pulses and

horticultural crops continues to be one of the lowest in the world in spite of the green

revolution. The fertilizer and pesticide consumption has increased manifold; but this

trend has not been reflected in the crop productivity to that extent. The country's

farming sector has started showing indications of reversing the rising productivity as

against the increasing trend of input use.

The unsustainability of Indian agriculture is caused by the modern farming methods

which have badly affected/damaged production resources and the environment.

METHODS OF ORGANIC FARMING

"An organic farm, properly speaking, is not one that uses certain methods and

substances and avoids others; it is a farm whose structure is formed in imitation of the

structure of a natural system that has the integrity, the independence and the benign

dependence of an organism"

—Wendell Berry, "The Gift of Good Land"

Soil management

Plants need nitrogen, phosphorus, and potassium as well as micronutrients, but getting

enough nitrogen, and particularly synchronization so that plants get enough nitrogen

at the right time (when plants need it most), is likely the greatest challenge for organic

farmers. Crop rotation and green manure ("cover crops") help to provide nitrogen

through legumes (more precisely, theFabaceae family) which fix nitrogen from the

atmosphere through symbiosis with the bacteria rhizobia. Intercropping, which is

sometimes used for insect and disease control, can also increase soil nutrients, but the

competition between the legume and the crop can be problematic and wider spacing

between crop rows is required. Crop residues can be ploughed back into the soil, and

different plants leave different amounts of nitrogen, potentially aiding

synchronization. Organic farmers also use animal manure(which must be composted),

certain processed fertilizers such as seed meal and various mineral powders such

as rock phosphateand greensand, a naturally occurring form of potash which provides

potassium. Altogether these methods help to control erosion. In some cases pH may

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need to be amended. Natural pH amendments include lime and sulfur, but in the U.S.

some synthetically compounds such as iron sulfate, aluminum sulfate,magnesium

sulfate, and soluble boron products are allowed in organic farming.

Mixed farms with both livestock and crops can operate as ley farms, whereby the land

gathers fertility through growing nitrogen-fixing forage grasses such as white

clover or alfalfa and grows cash crops or cereals when fertility is established. Farms

without livestock ("stockless") may find it more difficult to maintain fertility, and

may rely more on external inputs such as imported manure as well as grain legumes

and green manures, although grain legumes may fix limited nitrogen because they are

harvested. Horticultural farms growing fruits and vegetables which operate in

protected conditions are often even more reliant upon external inputs.

Weed control

After nutrient supply, weed control is the second priority for farmers. Techniques for

controlling weeds have varying levels of effectiveness and include

handweeding, mulch, corn gluten meal, a natural preemergence herbicide, flame,

garlic and clove oil, borax, pelargonic acid, solarization (which involves spreading

clear plastic across the ground in hot weather for 4–6 weeks), vinegar, and various

other homemade remedies. One recent innovation in rice farming is to introduce

ducks and fish to wet paddy fields, which eat both weeds and insects.

Controlling other organisms

Organisms aside from weeds which cause problems include arthropods (e.g. insects,

mites) and nematodes. Fungi and bacteria can cause disease.

Insect pests are a common problem, and insecticides, both non-organic and organic,

are controversial due to their environmental and health effects. One way to manage

insects is to ignore them and focus on plant health, since plants can survive the loss of

about a third of leaf area before suffering severe growth consequences. To avoid using

insecticides, one can select naturally-resistant plants, put bags around the plants,

remove dying material such as leaves, fruit, and diseased plants, covering plants with

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a solid barrier ("row cover"), hosing, encouraging and releasing beneficial

organisms and beneficial insects, planting companion plants and polycultures, various

traps, sticky cards (which can also be used to assess insect prevalence), and season

extension. Biological pest control uses natural predators to control pests.

Recommended beneficial insects include minute pirate bugs, big-eyed bugs, and to a

lesser extentladybugs (which tend to fly away), all of which eat a wide range of

pests. Lacewings are also effective, but tend to fly away. Praying mantis tend to move

slower and eat less heavily.Parasitoid wasps tend to be effective for their selected

prey, but like all small insects can be less effective outdoors because the wind

controls their movement. Predatory mites are effective for controlling mites.

Several of pesticides approved for organic use have been called green pesticides such

as spinosad and neem. Generally, but not necessarily, organic pesticides are safer and

more environmentally friendly than synthetic pesticides. The main organic

insecticides used in the US are Bt (a bacterial toxin) and pyrethrum. Surveys have

found that fewer than 10% of organic farmers use these pesticides regularly; one

survey found that only 5.3% of vegetable growers in California use rotenone while

1.7% use pyrethrum (Lotter 2003:26). Rotenone used to be used by some organic

growers in the US, however since 2005 it has not been approved by National Organic

Program guidelines. Nicotine sulfate may also be used; although it breaks down

quickly, it is extremely toxic, nearly as toxic as aldicarb. Less toxic but still effective

organic insecticides include neem, spinosad, soaps, garlic, citrus

oil, capsaicin(repellent), Bacillus popillae, Beauvaria bassiana, and boric

acid. Pesticides should be rotated to minimize pest resistance.

The first disease control strategy involves keeping the area clean by removing

diseased and dying plants and ensure that the plants are healthy by maintaining water

and fertilization. Compost tea is sometimes promoted and can be effective, but there

is concern over whether these are ineffective or even harmful when not made

correctly. Polyculture and crop rotation reduce the ability of disease to spread.

Disease-resistant cultivars can be purchased. Organic fungicides include the bacteria

Bacillus subtilis, Bacillus pumilus, and Trichoderma harzianum which are mainly

effective for diseases affecting roots. Bordeaux mix contains copper, which can be

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used as an organic fungicide in various forms. Sulfur is effective against fungus as

well as some insects. Lime sulfur is also available, but can damage plants if not used

correctly. Potassium and sodium bicarbonate are also effective against fungus.

Standards

Standards regulate production methods and in some cases final output for organic

agriculture. Standards may be voluntary or legislated. As early as the 1970s organic

producers could be voluntarily certified by private associations. In the 1980s,

governments began to produce organic production guidelines. Beginning in the 1990s,

a trend toward legislation of standards began, most notably with the 1991 EU-Eco-

regulation developed for European Union, which set standards for 12 countries, and a

1993 UK program. The EU's program was followed by a Japan program in 2001, and

in 2002 the United States created the National Organic Program (NOP). As of 2007

over 60 countries have regulations on organic farming (IFOAM 2007:11). In 2005

IFOAM created the Principles of Organic Agriculture, an international guideline for

certification criteria. Typically the agencies do not certify individual farms, but rather

accredit certification groups.

Materials used in organic production and foods are tested independently by

the Organic Materials Review Institute.

Composting

Under USDA organic standards, manure must be subjected to proper thermophilic

composting and allowed to reach a sterilizing temperature. If raw animal manure is

used, 120 days must pass before the crop is harvested if the final product comes into

direct contact with the soil. For products which do not come into direct contact with

soil, 90 days must pass prior to harvest.

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Organic food

Organic food does not 'cost the earth' to grow. It should not also cost consumers 'the

earth' to eat. At the same time however, assuming that the ruling market prices for

conventionally-grown food are fair, it is only correct that an organic farmer should

receive at least a marginally higher price for his produce and his efforts, especially

when consumers are aware that organic food is better than chemically-grown food in

all respects, including taste, flavour and for their own health, besides that of the earth.

Industry Statistics and Projected Growth

Industry Statistics and Projected Growth

The organic industry continues to grow worldwide. Here are some statistics regarding

this burgeoning market.

Organic food sales are anticipated to increase an average of 18 percent each

year from 2007 to 2010.

Representing approximately 2.8 percent of overall food and beverage sales in

2006, this continues to be a fast growing sector, growing 20.9 percent in 2006.

Organic non-food sales grew 26 percent in 2006.

The sales of larger grocery natural food stores combined with smaller

independent natural food stores and chains accounts for 44 percent of organic

food and beverage sales. Mass merchandisers and club stores, food service,

internet/mail order and farmers’ markets represent 8 percent, 4 percent, 2.2

percent, and 2 percent of organic food sales, respectively.

Nearly 30.4 million hectares were managed organically by more than 700,000

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farms in 138 countries in 2006, according to The World of Organic

Agriculture: Statistics & Emerging Trends 2008 report released in February

2008 by the International Federation of Organic Agriculture Movements

(IFOAM), The Foundation Ecology & Agriculture (SÖL), and the Research

Institute of Organic Agriculture (FiBL). That figure represents 0.65 percent of

the total agricultural land of the countries covered by the survey.

As in previous years, Australia led with the most organic land (12.3 million

hectares), followed by China (2.3 million hectares) and Argentina (2.2 million

hectares). The United States was fourth, with 1.6 million hectares in 2005

(latest available statistics). The ten countries with the most organic land

represented a combined total of nearly 24 million hectares, more than three

quarters of the world’s organic land. Other countries in the top ten were Italy,

Uruguay, Spain, Brazil, Germany, and the United Kingdom. Based on

distribution by continent, Oceania led with 42 percent of organic area,

followed by Europe (24 percent), Latin America (16 percent), Asia (20

percent), North America (7 percent), and Africa (1 percent).

The proportion of organically managed land to conventionally managed is

highest in countries in Europe.

Global demand for organic products continues to grow, with sales increasing

by over $5 billion a year, according to The World of Organic Agriculture:

Statistics & Emerging Trends 2008. It cited Organic Monitor estimates that

international sales reached $38.6 billion dollars in 2006, double that in 2000.

The most important import markets for organic products continue to be the

European Union, the United States, and Japan.

New research from The Natural Marketing Institute (NMI) released in 2008

reveals that consumers are increasingly incorporating organic into their

lifestyles. Total household penetration across six product categories has risen

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from 57 percent in 2006 to 59 percent in 2007. The research also showed that

the number of core users has increased from 16 percent in 2006 to 18 percent

in2007

According to the National Restaurant Association’s 2007 Restaurant Industry

Forecast, chefs ranked organic food as third on a list of the top 20 items for

2007. Also, more than half of fine-dining operators who serve organic food

anticipated these items would represent a larger portion of sales in 2007. In

addition, casual- and family-dining operators expected organic items to

represent a larger proportion of their sales in 2007.

Growth

As of 2001, the estimated total market value of certified organic products was

estimated to be $20 billion. By 2002 this was $23 billion and by 2007 more than $46

billion according toOrganic Monitor (Willer/Kilcher 2009).

In recent years both Europe (2007: 7.8 million hectares/European Union: 7.2 million

hectares) and North America (2007: 2.2 million hectares) have experienced strong

growth in organic farmland. However, this growth has occurred under different

conditions. While the European Union has shifted agricultural subsidies to organic

farmers in recognition of its environmental benefits, the United States has taken a free

market approach. As a result, as of 2007 4 percent of the European Union's farmland

was organically managed compared to just 0.6 percent of United States farmland

(Willer/Kilcher 2009).

IFOAM's most recent edition of The World of Organic Agriculture: Statistics and

Emerging Trends 2009 lists the countries which had the most hectares in 2007. The

country with the most organic land is Australia with more than 12 million hectares,

followed by Argentina, Brasil and the US. In total 32.2 million hectares were under

organic management in 2007. For 1999 11 million hectares of organically managed

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land are reported (Willer/Kilcher 2009).

In recent years organic agriculture has grown tremendously. Considering this rapid

growth, it is within the nature of organic farming to keep it from becoming a large

scale industrial business as conventional farming has become (Duram 183). Duram,

Leslie. Good Growing. Santa Cruz: Bison Books, 2005.

Economics

The economics of organic farming, a subfield of agricultural economics, encompasses

the entire process and effects of organic farming in terms of human society,

including social costs,opportunity costs, unintended consequences, information

asymmetries, and economies of scale. Although the scope of economics is broad,

agricultural economics tends to focus on maximizing yields and efficiency at the farm

level. Mainstream economics takes an anthropocentric approach to the value of the

natural world: biodiversity, for example, is considered beneficial only to the extent

that it is valued by people and increases profits. Some governments such as the

European Union subsidize organic farming, in large part because these countries

believe in the external benefits of reduced water use, reduced water contamination by

pesticides and nutrients of organic farming, reduced soil erosion, reduced carbon

emissions, increased biodiversity, and assorted other benefits.

Organic farming is labor and knowledge-intensive whereas conventional farming is

capital-intensive, requiring more energy and manufactured inputs. Organic farmers in

California have cited marketing as their greatest obstacle.

Geographic producer distribution

The markets for organic products are strongest in North America and Europe, which

as of 2001 are estimated to have $6 and $8 billion respectively of the $20 billion

market. However, as of 2007 organic farmland is distributed across the

globe. Australasia has 39% of the total organic farmland with Australia's 11.8 million

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hectares, but 97 percent of this land is sprawling rangeland, which results in total sales

of approximately 5% of US sales. Europe has 23 percent of total organic farmland

(6.9 million hectares), followed by Latin America with 19 percent (5.8 million

hectares). Asia has 9.5 percent while North America has 7.2 percent. Africa has a

mere 3 percent. See also Organic farming by country.

Besides Australia, the countries with the most organic area are Argentina (3.1 million

hectares), China (2.3 million hectares), and the United States (1.6 million hectares).

Much of Argentina's organic farmland is pasture, like that of Australia (2007:42).

Italy, Spain, Germany, Brazil, Uruguay, and the UK follow the United States by the

amount of land managed organically.

CRITICAL ANALYSIS

Organic farming is less productive

Agronomically difficult crops as a challenge

One major criticism of organic agriculture is that productivity is lower compared to

intensive conventional agriculture. Under geoclimatic conditions that allow for a very

high yield, in the case of some crops the relative advantage of organic agriculture in

terms of energy consumption per land area compared to conventional production may

switch to the contrary when calculated on the basis of crop or livestock yield. This is

particularly true in the case of highly demanding crops such as potatoes, grapes fruits

and horticultural crops especially from greenhouse production (Nemecek et al. 2005,

Bos et al 2006, Comrack 2003). Pest, disease and weed management problems

relating to these crops have not yet been resolved satisfactorily. Consequently, the

yield for these crops is too low and the energy input, even though relatively low on a

land area basis, becomes relatively high when applied to a crop unit. With more

research into organic agriculture, however, progress may be expected in this field.

Better technology transfer could improve organic yields

The productivity of organic agriculture is often underestimated by many scientists and

policymakers. Organic agriculture represents a very productive food supply system

that relies on recycling strategies. Badgley et al. (2007) modelled the yields stated in

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293 on-farm and onstation publications and concluded that, compared to high-input

agriculture in developed countries, the average yields in organic crop and livestock

production are 92% of those in conventional agriculture.

Organic farming performs better under water constraints

Interestingly, yields from organic agriculture under conditions where water is limited

during the growing period, and under subsistence farming, are equal or significantly

higher than those from conventional agriculture. A comparison of 133 studies from

developing countries concluded that organic plant and livestock yields were 80%

higher than their conventional counterparts (for crops only the increase in yield was

by 74%) (Badgley et al., 2007). In temperate climate zones higher yields for maize

and soya were registered in organically managed fields in dry seasons (Hepperly et

al., 2005). The available data indicates that the technique inherent to organic farming

of investing in soil fertility by means of green manure, leguminous intercropping,

composting and recycling of livestock manure could contribute considerably to global

food productivity. Further improvements in manure storage and application

techniques are also required, however, in organic systems in order to reduce nitrous

oxide and methane emissions.

High dependency on nutrients derived from livestock

Some critics are concerned about the dependency of organic cropping upon nutrients

deriving from livestock. This criticism, however, underestimates manure as a valuable

and potentially useful resource. Moreover, this is not a relevant weakness since the

numbers of animals kept in agriculture depends mainly on consumer demand. In order

to reduce greenhouse gas emissions, efficient and direct recycling of manure and

slurry is the best option, since it avoids long-distance transport and consumption of

energy for

synthetic fertilizer production. The combination of crop and livestock production is

currently the most efficient way of bringing organic ‘waste’ from livestock production

back into the carbon stock of the soils and use it as a locally available resource for

crop fertilization and enhancing soil quality. When integrated into arable farming

systems, ruminants exploit leguminous crops and intercrops that are needed to

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produce nitrogen, provide soil cover and capture soluble nutrients, building up soil

fertility and soil structure. From the point of view of integrating ecology and

sustainable resource use, the combination of organic cropping with livestock

production is undoubtedly a strong point.

More funding is needed for research on organic farming

As 99 % of the world’s public and private research funds have focussed on optimizing

conventional and integrated food and farming systems during the last decades, major

progress and solutions can be expected as a result of agro-ecological and animal

welfare research activities.

Myths and fallacies about organic farming

There are a number of fallacies that surround organic farming, both in favour of and

against. Some of the more common ones are :

Yields in organic farming are lower than chemical farming

Not so. When properly followed, yields in organic farming are, in the long run, far

greater than those obtained by chemical farming. In horticulture crops, the effects are

even better. A look at agriculture in Punjab will tell the full story. The origin of the

"Green Revolution", Punjab's agricultural yields have remained the same for the past

many years while the quantity of agro-chemicals required to maintain these static

yields have steadily increased.

In the case of a chemical farm converting to organic however, there is often a loss in

yield and it takes a few years before yields increase and stabilise at a level often

higher than that achieved under a chemical regime. It is therefore recommended to

convert gradually over a period of three to four years if income from the farm is a key

issue.

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Organic farming is not economical

Again, not so. While certain practices such as composting and mulching do entail

greater costs on account of labour, the overall cost of cultivation is usually lower than

chemical farming. An important point to note here is that the farmer has to be self-

sufficient in his requirement for composts and pest control measures (easily done),

otherwise economics do get skewed. Farms and farmers who would like to make their

own inputs may read "Making your own organic farming inputs".

“You can't supply enough nutrients by using composts”

This is a common argument put to use by all detractors of organic farming, especially

academicians. If one calculates the percentages of nitrogen, potassium and

phosphorous in fertilisers and composts, the difference is indeed vast. Going by these

"scientific" calculations, one may find that in lieu of say 200 kgs. of mixed fertilisers,

one needs over 30 tons of composts, fairly impossible to supply two or three times a

year. In organic farming however, the concept of feeding the plant does not exist. The

attempt here is to feed the soil, keep it healthy and living and keep a PROCESS in

motion. Much of the work is done by the numerous soil organisms and

microorganisms that thrive in "living" soils. The various practices of organic farming

ensure that soil fertility is maintained and this symbiotic relationship is kept alive and

vibrant. The analogy we can think of is meeting your day's entire nutritional

requirements (calculated for you by a dietician) by swallowing a few tablets and

capsules. Your nutritional needs are met, but will you remain healthy?

The non-use of chemical fertilisers and pesticides is organic farming (or the use

of organic manures is organic farming)

The last important myth is that simply avoiding the use of chemical fertilisers and

pesticides is organic farming. That is not so. While organic farming is all about

maintaining soil health ("feeding the soil" rather than "feeding the plant"), it entails

producing the highest yields possible, in a sustainable, eco-friendly manner using a

number of techniques. Indeed, for any agriculture system to succeed, it must take a

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responsibility towards feeding the earth. Organic farming entails a lot of hard

work and even systems like Do-nothing (or Natural) farming - as propagated by

Fukuoka and used so effectively by Bhaskar Save at his Gujarat farm - entail

tremendous understanding of nature, natural agriculture, the local ecosystem and

require a little hard work even though the name may suggest otherwise! You

may learn about many techniques that can be used by an organic farmer in the section

on organic farming techniques.

External inputs, even if eco-friendly or bio-degradable are ecologically questionable

and commercially unsustainable for an organic farm. Work is hence required on-farm

to produce inputs such as composts and biopesticides. Farms and farmers who would

like to make their own inputs may read "Making your own organic farming inputs".

PROGRESS OF ORGANIC FARMING IN INDIA

The first conference of NGOs on organic farming in India was organized by the

Association for Propagation of Indigenous Genetic Resources (APIGR) in October

1984 at Wardha. Several other meetings on organic farming were held at different

places in the country towards the end of 1980s. Here, mention must be made of the

Bordi Conference in Maharashtra, the state which was the focal point for the organic

farming movement in India. The Rajasthan College of Agriculture with the support of

the state government organized a meeting on organic agriculture in 1992. The United

Planters' Association of South India (UPASl) organised two national level

conferences on organic farming in 1993 and 1995. ARISE (Agricultural Renewal in

India for a Sustainable Environment) is a major organization in the country engaged

in the promotion of organic farming. ARISE was founded in 1995 at a national

conference of organic farming held at Auroville. ARISE comprises of a supporting

network of regional groups aiming at sustainable environment by protecting bio-

diversity and promoting organic agricultural practices. The selection of Auroville for

the conference was apt as it housed the Arabindo Ashram and the pioneering work

under its auspices on building technology, alternative energy research, wasteland

development, afforestation and organic agriculture.

By 1980, three groups of Indians had taken to organic farming. The first one

consisted of urban educated technocrats for peripheral interest, which did not last

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64

long. Educated farmers consisted of the second group whose farming practices were

based on scientific knowledge. The third group practiced organic farming through

trial and error. The successful organic farmers in India are those who have access to

sufficient natural resources like, water and other organic inputs mostly on their own

farms. These farms produce crops like sugarcane, areca, cocoa, coconut, pepper and

spices. Many of them have shown that switch over to organic farming do not affect

yields and income and more importantly, knowledge/ expertise is available for

successful adoption of organic farming in the country.

The International Federation of Organic Agriculture Movements (IFOAM) estimates

that an area of about 41,000 hectares in India is under organic farming representing

about 0.17 per cent of the world organic acreage. It also reveals that the percentage of

organic area to the total cultivated area comes to only about 0.03 per cent and the

total number of farms comes to about 5,661. But, a comparison of our 41,000 ha to

Australia (10.5 million ha), Argentina (3.19 million ha], Italy (1.83 million ha), and

USA (0.95 million ha) clearly indicates that organic farming in India has to go very

far even to catch up with that of the leading nations of the world.

Non Governmental Organizations (NGOs) are spearheading organic farming in India.

A report in 2002 indicates that about 14,000 tonnes of organic products have been

raised in India. They include tea, coffee, rice, wheat, pulses, fruits, spices and

vegetables. India exports organic agricultural produces to European Union, USA,

Canada, Saudi Arabia, UAE, Japan, Singapore and Australia, among others.

The International Conference on "Indian Organic Products-Global Markets" at the

end of 2002 was the first to be held in India. IFOAM predicts that India and China

have great potential to be organic farm produce exporters in the future. An important

event in the history of the modern nascent organic farming in India was the unveiling

of the National Programme for Organic Production (NPOP) on 8"^ May, 2000 and

the subsequent Accreditation and Certification Programme on P' October, 2001. The

logo "India Organic" was released on 26'*' July 2002 to support the NPOP.

Progress

An important progress towards organic agriculture made by India is the increasing

awareness of the ill effects of the modern farming system, which the country adopted

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65

about 35 years ago. The threat poised by the conventional food products to the human

health and the damage done to the ecology are being viewed seriously. Efforts are

made to produce healthy foods and the demand. for them is increasing. The

importance of the marketing of the organic products is highlighted for the promotion

of organic agriculture. Several individuals and associations have taken to organic

farming and organic products are available in the large cities to a very limited extent.

Production and Exports

The aggregate production of organic agriculture came to about 14,000 tonnes during

2002 and the exports amounted to 11,925 tonnes. Details are given in Table 10:

Exports of Organic Products from India

2002.

Products Tonnes

Tea 3000

Rice 2500

Pulses and Vegetables 1800

Cotton 1200

Wheat 1150

Spices 700

Coffee 550

Cashew nut 375

Pulses 300

Herbal products 250

Oil seeds 100

Total 11925

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Indian organic products are mainly exported to Europe (Netherlands, United

Kingdom, Germany, Belgium, Sweden, Switzerland, France, Italy, Spain, etc.), USA,

Canada, Saudi Arabia, UAE, Japan, Singapore, Australia and South Africa.

Regulations

The most important step towards organic farming taken by the government was to

draw a regulatory framework. It is true that the initiatives by the government to

introduce organic farming by laying down regulations came belatedly as many

countries have already done this kind of basic work decades ago. The implementation

of NPOP is ensured by the formulation of the National Accreditation Policy and

Programme (NAPP). The regulations make it mandatory that all organic certification

bodies should be accredited by an Accreditation Agency. The international

certification agencies operating in India even prior to these regulations will also have

to get accreditation under the new dispensation.

The regulations lay down the institutional arrangements for implementing the

national programme for organic production. The NPOP is administered, monitored

and implemented for the benefit of farmers, processors, traders and consumers. It

envisages a three tiered organisation under the overall guidance of the Union

Government with the Department of Commerce, Ministry of Commerce and Industry

as the nodal agency. Policy making and declaration of the standards for organic

products, recognition of organic standards of other nations, efforts to get our

standards recognized by others and coordination with other arms of the government

for the successful management of the organic agriculture are the major functions

entrusted to the ministry.

The agencies accredited are the Agricultural and Processed Food Products Export

Development Authority (APEDA), Coffee Board, Tea Board and the Spices Board.

The regulations cover exports, imports and the domestic trade of the organic

products. But the government regulations are applicable to only the exports. So, an

organic farm product can be exported only if it is certified by a certification body

accredited for the purpose. The categories of products covered under accreditation are

organic crop production, organic animal production, organic processing operations,

wild products and forestry.

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A national level steering committee is functioning as the apex advisory body for

assisting the government to promote organic farming in the country. This body

consists of representative's form the Ministries of Agriculture, Food Processing

Industries, Forests and Environment, Science and Technology, Rural Development

and Commerce.

Organic production requires certification after periodic inspections in order to ensure

that all prescribed practices are followed. The inspection and certification are done by

the agencies accredited to the Accrediting Agencies dealing with the commodity.

Inspection and certification agencies can be government departments, NGOs, trade or

consumer or producer organisations. Such agencies should be registered bodies, with

managements in position, declaring the persons who shall be held responsible for any

miscarriage of certification and having proof of adequate field staff to undertake

periodic inspections. The continued accreditation of such bodies is dependent upon

their record of fidelity to the principles of organic production. They are authorised to

award certificates after due satisfaction that practices conformed to those enunciated

by the Accrediting Agency in relation to the item concerned. The charges levied by

the certifying agencies are fixed by the Accrediting Agencies.

PROCEDURE FOR STARTING

STANDARDS

At present, there are no regulations on organic products applicable worldwide.

Attempts have been made by FAO/WHO Codex Alimentarius Commission to

harmonies the laws and to establish an international procedure to develop the

equivalence of organic standards. Two international agencies – IFOAM and Codex

Alimentarius Commission – are the prime players in farming standards. In the EC,

regulation EEC 2092/91 determines the minimum requirements for organic farming in

all the member states. It contains standards for production, processing, imports,

inspection and certification, marketing and labeling of organic products.

In India, the National Program for Organic Production (NPOP) provides an institutional framework for

implementing standards for organic production system. This includes certification of organic farms,

products and processes as per National Standards of Organic Products (NSOP).

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ACCRIDITATION

As per the national accreditation policy under the National Program for Organic

Production (NPOP) being implemented by the Government of India through the

Ministry of Commerce, all the certifying agencies operating in the country have to

obtain accreditation from anyone for the four accrediting agencies appointed by the

Government of India, viz., Spices Board, Coffee Board, Tea Board and APEDA for

spices, coffee, tea and other agricultural crops.

CERTIFICATION

Certification tracks and controls the flow of products from primary production at farm

level to each stage of manufacturing right to the final product that reaches the

consumer. Broadly, the certification process consists of (a) inspection (control) to

verify that production and handling are carried out in accordance with standards

against which certification is to be done and (b) Certification to confirm that

production and handling conforms to standards. The documents to be maintained

include field map, field history sheet, activity register, input record, output record,

harvest record, storage record, sales record, pest control record, movement record,

equipments cleaning records and labeling records.

Research and Training

A National Institute for Organic Farming has been established to spearhead research

in organic agriculture. The government of India constituted task force had also

recommended the initiation of the postgraduate level courses in organic farming.

Projects and Initiatives

Several projects and initiatives to promote organic farming in the country have begun

at the behest of individuals and institutions. The following are only a few of such

efforts the details which could be available.

A project aided by the World Bank to empower the rural communities in the country

to grow organic products for exports had come up in 2002. The programme aims at

the improvement and promotion of organic production of spices, certification and

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export of black pepper, white pepper, ginger, turmeric, cardamom, clove, nutmeg and

herbals like rosemary, thyme, oregano and parsley. The implementation of the

progamme is done by the NGOs, and Idukki and Waynad districts of Kerala, Nilgiri

district of Tamil Nadu and Kandhamal district of Orissa are the areas selected for the

purpose. Imparting training to both the JNTGOs and the farmers on organic

production methods, basic standards required, documentation, inspection and

certification is a major objective of the programme. The assistance to NGOs includes

among others computer hardware and software especially for market promotion of

their produces.

PROSPECTS

It is quite natural that a change in the system of agriculture in a country of more than

a billion people should be a well thought out process, which requires utmost care and

caution. There may be several impediments on the way. An understanding of these

problems and prospects will go a long way in decision making.

Indian agriculture should be able not only to maintain but also must strive to increase

the production of foodgrains. It appears that given the availability of organic

infrastructure, minimum efforts for conversion due to the low use of chemical farming

methods and the limit of the public investment, organic farming can be progressively

introduced. The potential areas and crops, which fulfill the above constraints, could be

explored and brought under organic agriculture. The rainfed, tribal, north-east and

hilly regions of India where the traditional farming is more or less practiced could be

considered (Veeresh, 2003). Given below are details of fertilizer consumption in the

north-east and hilly regions of the country.

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Consumption of Fertilizer in India in 2001-02.

Sr. No. State/Region Quantity (kg/ha)

1 Manipur 105

2 Jammu and Kashmir 65

3 Himachal Pradesh 41

4 Assam 39

5 Tripura 30

6 Meghalaya 17

7 Mizoram 14

8 Sikkim 10

9 Arunachal Pradesh 3

10 Nagaland 2

11 Rainfed Areas 31

All India 90

Agriculture production in these areas is still almost on the traditional eco-friendly

lines and making the farmers aware of the methods of organic farming may not be

very difficult.

A strategy to prevent sudden and substantial yield losses is to convert to organic

production in phases to reduce the risks during the initial years. The question of the

vast requirement of organic matter to the country's farms in order to switch over to

organic agriculture is also answered. Chemical fertilizer is applied only in 30 per cent

of the cultivated area, which is irrigated, and the remaining land is under rainfed

agriculture with almost no fertilizer application. Also the rainfed area under

cultivation accounts for only 40 per cent of the foodgrain production of the country

(Veeresh, 2003). The introduction of organic farming in these areas will allay the

fears of a sudden sharp decline of food production which many fear may drive the

nation to food imports. Thus the demand for biomass for the production of organic

manures can also be controlled in a phased manner. Moreover, the simple

technologies with low input use have been developed for dry farming and they can be

transferred to the farms for organic cultivation. The resulting increases in productivity

and sustain-ability of production will increasingly contribute to the betterment of the

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economic condition of the dry land faming community, which is one of the poorest in

the country.

An estimate indicates that about 600 to 700 million tonnes of biomass is available to

be converted to manure. Such conversion increases the nutrient value from 0.3-04 to

1-2 per cent. Attempts can also be made to increase the supply of biomass by

allocating a portion of the cultivated area to grow tree manure crops. These plants can

be harvested to be used for making composts. Schemes can be devised to grow green

manure crops in the public lands on the lines of the social forestry programmes.

Several alternatives for supply of organic soil nutrients like vermi-composts and

biofertilizers exist. Technologies have been developed to produce large quantities of

these nutrients. Crop specific biofertilizers for cereals, millets, pulses and oil seeds

are also available. Vermi- composting and bio-fertilizer manufacturing can be

undertaken to increase the supply of organic manure to meet the demand.

The basic rules and regulations for accreditation and certification of organic products

are in place in India.

A Congenial socio-cultural environment prevails in India for the promotion of

organic agriculture. The farmers of India had been practicing eco-friendly agriculture

for centuries till the advent of the 'green revolution' which was based on the

conventional farming methods prevailed in the western countries. Still many small

and marginal farmers, because of many reasons, have not fully adopted the

conventional farming and they follow more or less the traditional environment

friendly system. They use local or own farm derived renewable resources and

manage self-regulated ecological and biological processes. This has become

necessary to cultivate the acceptable levels of crop, livestock and human nutrition

products and above all to protect both the crops and humans from pests and diseases

through the use of bio-chemicals and bio fertilizers. Such a situation is suitable for

making the farming community aware of the organic farming methods to make the

switch over less troublesome.

A country like India can enjoy a number of benefits from the adoption of organic

farming. The price premiums for the products, conservation of the natural resources

in terms of improved soil fertility and water quality, prevention of soil erosion,

preservation of natural and agro-biodiversity are major benefits. Economic and social

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benefits like generation of rural employment, lower urban migration, improved

household nutrition, local food security and reduced dependence on external inputs

will be large gains in the Indian conditions. The protection of environment and the

consequent increase in the quality of human life will be other contributions of organic

farming.

As said earlier, there is a good demand for organic products in the domestic market,

which is not matched by supplies. The linkages between the two do not exist which in

turn discourage production. The wholesalers/traders play a major role in the

distribution of organic produces as they originate from the small farms (Kumar and

Jain, 2003). Large farmers have access to supermarkets and own stalls for

distribution. Mumbai, Delhi, Kolkota, Chennai, Bangalore and Hyderbad are the

major domestic markets for organic products.

Prospects for organic farming in India can be gauged from the earlier mentioned

experiences of soyabean cultivation initiated in Madhya Pradesh. High premium

prices both in the national and international markets and the lack of supplies in the

latter reveal the opportunities for India. Similarly the case of organic cotton of India

is judged as having bright prospects.

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CHAPTER FIVE

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PRESENTATION OF THE BUSINESS PLAN

After the study and critical analysis of organic farming in India I have come to

conclude that it projects a vast scope of progress, welfare and development to the

farmers. However, one very important point to be noted is that it can be a very

troublesome and tedious task for any farmer to switch over from conventional farming

style to organic farming, as it takes at least 2 to 3 years for the soil exploited through

chemicals to adapt to the sustainable and organic methods. Moreover, the organic

produce, though it is very good in nutrients and for the health of a person, does not

finds a market and good price easily. Moreover, the rapid urbanization in the country

has resulted in the declining progress in the agricultural sector due to which the

current agricultural growth is at 4% where as the industrial growth rate is at 12% .To

minimize the gap between the two sectors we need investment in the agricultural

sector. These and various other problems can be tackled only through a pre-planed

process with the tendency to forecast the coming challenges. Through this project we

are planning to do the following things, which will ultimately result in overall growth

of the organic farming sector along with the improvement in the lifestyle of the

economically backward sector of the society.

1. We will take the agricultural lands on lease or some other feasible alternative

by discussing with the owners of the land.

2. We will invest money to build a good agricultural infrastructure viz irrigation,

power, modern equipments etc.

3. We will exploit the local unemployed villagers, train them in organic

farming and make them engage in production process.

4. We will recruit people from various agricultural schools and colleges to

improve this project and train local peoples

5. The production from the agricultural lands will be sold in the local market by

opening various outlets.

6. The project gradually will become “Agricultural Park” which can be a source

of a income by attracting the tourist and this is possible as government is now

more concerned about the rural tourism in India.

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GENRAL INFORMATION

Name of the Entrepreneur: Mohammad Ali, Shantanu Singh, Rahul Shankar

Proposed Project : Organic Farming

Major Produce/Services : Agricultural Food Products

Proposed Location : ______________________

Type of Organization : Product as well as Service Oriented

ENTREPRENEUR PROFILE

Name of the Entrepreneur: MOHAMMAD ALI

Educational Qualifications: MBA- International Business, B.Com

Work Experience (if any): 1 year of farm management at owned farm.

Name of the Entrepreneur: RAHUL SHANKAR

Educational Qualifications: MBA- International Business, B.Com

Work Experience (if any) : 4.5 years in Sales, Marketing & Business Development

Name of the Entrepreneur: SHANTANU SINGH

Educational Qualifications: MBA- International Business, B.A. (English Literature)

Work Experience (if any): 2yrs in K.V.K. as Asst. Manager & Marketing Designer

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PRODUCTION DETAILS

1.1 LAND AND BUILDING

Sr.no Particular Area Required Total Cost Remarks

1. Land 500000sq.ft 100000 The Land shall

be taken on

lease basis.

Total: 100000

1.2 MACHINERIES/EQUIPMENTS

Sr.No Description Nos. Required Rate(Rs) Total

Value(Rs.)

1.

2.

3.

4.

Tractor

Pipes

Water Pump

Computers/Laptop

10

200

5

5

100000

1000

5000

30000

1000000

200000

25000

150000

Total 1375000

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1.3 MISC. FIXED ASSETS

Sr.No Particulars Nos. Required Rate(Rs) Total

Value(Rs.)

1. Furnitures As required 5000 5000

Total: 5000

1.4 PRELIMINARY AND PRE-OPERATIVE EXPENSES

Sr.No Particulars Amount(Rs.) Remarks

1.

2.

3.

Interest During

Implementation

Establishment

Expenses

Start-up Expenses

70000

200000

250000

This may vary

during the time of

execution.

Total: 520000

1.5 WORKING CAPITAL

Sr.No Item Rs.

1.

2.

3.

4.

Raw-Material

Salary/Labor

Rent

Interest on Loan

300000

1344000

24000

70000

Total: 1738000

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2. MARKETING POTENTIAL

2.1 Present Demand and Supply of the Product Competition

Sale value per annum = Rs. 3600000

Production Capacity per Annum = 9000 units

2.2 Target Clients:

All classes of Indian Family

2.3 Marketing Strategy:

This type of production of food items is new to the state of PQR(Product Quality

Research). As we have no competitors competing with us at this level of production

there will be not much threat for marketing but at the same time we cannot ignore the

potential threats in the markets so we have to advertise the products to retain the

existing customer base.

3. MANUFACTURING PROCESS

3.1 Step-By-Step Description of the Manufacturing Process

1. Proper tilling of the entire land area.

2. Dividing the entire land area into smaller land areas of equal size.

3. Proper watering of the entire land area.

4. Proper spraying of seeds over the sub areas.

5. Spraying of organic composts and manures.

6. Day to day maintenance of the crops.

7. Control of pests and weeds through organic methods.

8. Harvest at proper time.

9. Process the produced crop.

10. Proper Storage and packaging of the crops.

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3.2 POLLUTION CONTROL:

The govt. accords utmost importance to control environmental pollution. The small

scale entrepreneurs should have an environmental friendly attitude and adopt

pollution control measures by process modification and technology substitution.

Organic farming plays a major role towards this process.

3.3 ENERGY CONSERVATION:

While the growing energy needs and shortage coupled with rising energy costs, a

greater thrusts in energy efficiency in every sector has been given by the govt. of

India since 1980’s. The following steps shall be taken for conservation of electrical

energy :

1. Adoption of energy conserving technologies, production aids and testing

facilities.

2. Efficient management of process, manufacturing machineries and for yielding

maximum energy conservation.

3. Periodical maintenance of motors etc.

4. Use of renewable energy sources like sun and wind energy.

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4. PRODUCTION SCHEDULE

4.1 No. of working days per Annum : 25 days/month*12=300 days/annum

4.2 No. of working shifts (8 hrs) per Day : 300*8=2400hrs

4.3 Installed Capacity (Annual) : 9000 units

4.4 Utilized Capacity (%) : Our project is under observation for 1

year

5.1 SALES REVENUE

Sr. No Item(s) Quantity Sold

Per Year

Rate Per

Unit(Rs)

Sales

Realization(Rs)

1.

2.

3.

4.

Paddy

Wheat

Vegetables

Cereals

3000

2000

1000

2000

300

400

1000

450

900000

800000

1000000

900000

Total: 3600000

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5.2 RAW MATERIALS

Sr.No Item(s) Quantity Rate(Rs) Total

Value(Rs)

1.

2.

3.

High Quality

Seeds

Organic

composts

Manures

100 units

300 units

100 units

500/unit

700/unit

200/unit

50000

210000

20000

Total: 280000

5.3 UTILITIES

Sr.No Particulars Annual

Expenditure(Rs.)

Remarks

1.

2.

Power/Electricity

Water

50000

1000

This depends on

the consumption.

Total: 51000

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5.4 SALARIES/WAGES

Sr.No Particulars No.s Wages/salaries

per Month(Rs.)

Annual

Expenses(Rs.)

1.

2.

3.

4.

5.

6.

7.

8.

Skilled

Semi-Skilled/

Unskilled

Manager/engineer

Supervisor

Electrician

Store-keeper

Peon/watch-man

Marketing

Executive

10

30

1

4

1

1

2

1

3000

2000

5000

2500

1000

1000

1000

2500

360000

720000

60000

120000

18000

12000

24000

30000

Total: 50 1344000

5.5 REPAIRS AND MAINTAINANCE

Sr.No Particulars Amount(Rs.)

1.

2.

Electrical equipments

Piping network

1000

5000

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5.6 SELLING AND DISTRIBUTION EXPENSES

Sr.No Particulars Amount(Rs.) Remarks

1.

2.

3.

Transportation and

consumables

Insurance

Consumable Stores

10000

4000

3000

These expenses has

been considered

under pre-operative

expenses

Total: 17000

5.7 ADMINISTRATIVE EXPENSES

Sr.No Particulars Amount(Rs.) Remarks

1.

2.

3.

4.

Stationery & Printing

Post/Telephone/Telegrams

Entertainment expenses

Misc.

2000

3000

5000

4000

These expenses

depend on the

requirements of

the customers.

Total: 14000

5.8 INTREST

Year Outstanding

Loan

Amount(Rs)

Interest(Rs) Installment

(Rs)

Balance(Rs)

I. 1000000 70000 Nil 100000

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5.9 DEPRECIATION

Sr.No Type of Asset Cost of Asset Expected Life Depreciation

1.

2.

Building

Machinery and

equipment

240000

1375000

1yrs

1yrs

2400

13750

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6. TOTAL COST OF THE PROJECT

Sr.No Particulars Total Value(Rs.)

1.

2.

3.

4.

Fixed capital

(Total of Item

no.2.1,2.2,2.3)

Working Capital

Margin(Total of Item

no.2.5)

Preliminary and Pre-

operative Expenses(Total

of item no 2.4)

Contingencies

1480000

1738000

520000

10000

Total 3748000

7. MEANS OF FINANCE

Sr.No Particulars Amount(Rs.) Remarks

1.

2.

3.

Own investment

Term Loan

Working Capital

Loan

1010000

1738000

1000000

The amount

required for the

entire project was

taken as loan and as

well as personal

investments.

Total: 3748000

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8. PROFITABILITY PROJECTIONS

Sr.No Particulars Amount(Rs.)

A.

B.

i)

ii)

iii)

iv)

v)

vi)

vii)

viii)

ix)

C.

D.

E.

Sale Realization

Cost of :

Raw Materials

Utilities

Salaries/wages

Repairs & Maintenance

Selling & Distribution

Administrative Expenses

Interest

Depreciation

Misc. expenses

Gross Profit/Loss(A-B)

Income-tax

Net Profit/loss

3600000

280000

51000

1344000

6000

17000

14000

70000

16150

5000

1796850

Nil

1796850

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CHAPTER SIX

CONCLUSION AND RECOMMENDATIONS

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Conclusions

The ill effects of the conventional farming system are felt in India in terms of the

unsustainablity of agricultural production, environmental degradation, health and

sanitation problems, etc. Organic agriculture is gaining momentum as an alternative

method to the modern system. Many countries have been able to convert 2-10 per

cent of their cultivated areas into organic farming. The demand for organic products

is growing fast (at the rate of 20 per cent per annum in the major developed

countries).

It appears that India is lagging far behind in the adoption of organic farming. So far,

the only achievement seems to be the laying down of the National Standards for

Organic Production (NSOP) and the approval of 4 accreditation agencies (all

government bodies) whose expertise is limited to a few crops. The following are

some of the issues, which require attention at the government policy making levels if

we want to lay the spadework for the spread of organic agriculture in the country.

Substantial financial support by governments (Central, state and lower level

bodies) is absolutely necessary to promote organic farming. A major factor

behind the progress made by the major organic countries has been the very

liberal subsidies provided by the governments. In India, organic farmers do

not receive the benefits of government subsidies as they are targeted at the

conventional cultivation. Given the low risk bearing capacity, the need to

make the organic farming an attractive proposition at least during the initial

period, the likely prospect of loss of productivity for some time, and the non-

existence of marketing channels for organic produces the financial support

must be adequate.

The suggestion to begin the introduction of organic farming in the north-east

region and in the dry farming areas of India is a well thought out proposition.

However, it should be remembered that these regions are inhabited by the

poorest and least advantaged groups whose dependence on agriculture for a

livelihood is total. A programme for organic agriculture in these areas must be

fully supported by the full compensation both in cash and kind to the farmers

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in the event of the loss of production they would suffer till it reaches the levels

of the days prior to the adoption of organic farming. A fair, quick and efficient

delivery system for such assistance, perhaps by keeping the government

bureaucracy at a distance should also be in place beforehand.

Market development for the organic products is a crucial factor to promote

domestic sales. Supplies do not match the demand for organic products in the

country and the absence of proper links between the two has been pointed out

for the tardy growth of organic farming in the country. An important role of

the government in this direction is giving various supports to the producer and

consumer associations to market the products.

The producer organizations must be encouraged to get accredited for

inspection and certification in accordance with the NSOP. They can also have

own standards and even symbols. This may also reduce the costs of

certification besides the simplification of the process.

A vigorous campaign to highlight the benefits of organic farming against the

conventional system is essential to increase the awareness of the farmers and

consumers.

Identification of crops for cultivation on the organic farms is important. The

examples of soyabean in Madhya Pradesh and cotton in the rainfed areas could

be kept in view in the process.

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90

ANNEXURE

BIBLIOGRAPHY:

Search engines:

www.google.com

www.yahoo.com

Websites:

www.wikipedia.com

www.india-exports.com

www.indianportal.com

exim.indiamart.com

www.indianindustry.com

Books:

Chirunilium P, International Marketing.

News paper:

The economic times (29-12-09)

Times of India (18-01-10)

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91

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