Organic farming guides the future
Leader, Climate Change and Sustainability Services (CCaSS), EY
Conventional agriculture is environmentally unsustainable. And, it is a misnomer that organic farming is economically unviable.
India holds a unique position among 172 countries practising organic agriculture: it has 6,50,000 organic producers, 699 processors, 669 exporters and 7,20,000 hectares under cultivation. But, with merely 0.4 per cent of total agricultural land under organic cultivation, the industry has a long journey ahead.
Last year, the Indian organic export and domestic market grew by 30 and 40 per cent respectively, and will sustain primarily due to an increasing number of affluent and health conscious consumers. As the industry continues to grow, it faces unique challenges. Due to relatively small volumes, the costs of organic food products are relatively high. The cost of cultivation increases as it takes more time and energy to produce than its chemical-intensive counterpart.
High demand and low supply has further created an inflationary pressure on organic food products. This supply-demand mismatch can be eased fundamentally by making organic production mainstream with location-specific hybrid production strategies. Specialised farmer training costs, higher processing and inventory holding costs, and increased packaging, logistics and distribution costs add to the price of end products. Nevertheless, investments in achieving operations excellence by companies will facilitate lowering the cost of organic food products.
The absence of organic food products across all segments in the market is a concern. Consumers find little value buying limited organic products at a premium when rest of the foodstuff they consume is non-organic. Prospects are immense on the supply side as currently organically cultivated crop areas represent only a small fraction of the total acreage of these crops. The good news is that the number of organic food categories has grown to more than 200, including tea, spices, flour, cereals, fruits, vegetables, milk, and honey. In order to sustain consumer trust, maintaining an accurate audit stream, and preventing cross-contamination with conventional goods would be crucial.
Many farmers are apprehensive about adopting organic farming due to the high production cost and the three-year transition period when farmers have to wait before getting their farms certified. This issue was addressed in the US by food manufacturers offering financial incentives to offset the waiting period. Ardent Mills pays farmers more remuneration for crops grown on land undergoing transition and helps them choose rotational crops they can sell to supplement their income. Kashi has created a logo, “Certified Transitional”, to label products made from farms that are undergoing the process of transition.
There has been a contentious debate on the sustainability of organic farming. Though there is lower yield, these farms are more profitable and environmentally friendly, provide several ecosystem services, numerous social benefits and deliver nutritious foods with relatively less pesticide residues compared to conventional farming. Organically managed soils release less carbon dioxide per hectare per year than conventionally managed soils. New studies indicate that using the best management practices in organic systems over a long period of time can produce equal yields, or even outdo those of conventional systems.
More awareness required
There is low awareness at the producer level on the difference between conventional farming and organic farming. At the consumer level there is confusion between natural and organic products and limited understanding of the health benefits of organic food products. In addition, consumers are faced with a plethora of decisions around brands — imported or domestic, product quality, authenticity of claims and certifications. It is critical for companies involved in the organic food business to increase awareness among consumers in non-metro cities. Progressively, people across all income groups should have access to organic food. This can be facilitated by different means such as establishing community-supported agricultural farms or with “grow your own food” programmes. Where penetration is low, smaller sized packs can help encourage trials.
It has been estimated that in the US, the adverse impact of conventional farming on the environment and health costs $5 billion to $16.9 billion a year. These costs are actually paid by the consumer in the form of medical bills and decreased quality of life due to pollution. Impact assessment of organic farming compared to conventional farming considering the sustainability framework can help to increase consumer awareness on the true cost of a product.
Many counterfeit organic products are available in the markets, which adversely impact the industry and consumer trust. Therefore, the Government has come up with stringent punishment for selling counterfeit organic produce. Organic farmers are unable to save their crops using traditional methods of pest control. The Government must rope in agricultural scientists and international research institutions to develop organic herbicides.
It will be a while before organic agricultural practices becomes mainstream. Many may argue that attempts made by the Government are inadequate and but positive results are showing up with time. Today, Sikkim is an organic state with 75,000 ha of land under organic cultivation based on an initiative that started in 2003. Meghalaya aims to convert 200,000 ha under organic farming by 2020.
The courage shown by farmers to convert from conventional to organic is laudable. Kerala has more than 100,000 farmers practising organic farming and 10 cooperatives promoting the sector. The Centre’s announcement for allocation of ₹1 billion for organic market development and ₹3 billion for the participatory guarantee scheme is commendable. Indian farmers are using inputs manufactured from energy-intensive processes and, in some cases, from imported sources resulting in a burden on the exchequer. They could follow organic practices and use available bio-wastes to transit towards a circular economy. Consumers should consume responsibly and stakeholders should prevent wastage along the supply chain. Meanwhile, organic agriculture in India will continue to grow and play a larger part in safely feeding 1.5 billion Indian mouths in 2030.
Organic agriculture is the best insurance policy that India can have for its population with better performance on productivity, environmental impact, economic viability and social well-being.
Focusing only on higher yields at the expense of other sustainability pillars (economics, environment and society) is not the food production system that India needs. What India needs is an integrated system that gives equal importance to all sustainability dimensions across the value chain and thus helps establish a healthy and well-fed society.