Organic Products from India

Potential for Trade of

Occasional Paper No. 174

Potential for Trade of Organic Products from India Occasional Paper No. 174
 EXPORT-IMPORT BANK OF INDIA

OCCASIONAL PAPER NO. 174

potential for trade of ORGANIC

products from india

EXIM Bank’s Occasional Paper Series is an attempt to disseminate the findings

of research studies carried out in the Bank. The results of research studies
can interest exporters, policy makers, industrialists, export promotion agencies
as well as researchers. However, views expressed do not necessarily reflect
those of the Bank. While reasonable care has been taken to ensure authenticity
of information and data, EXIM Bank accepts no responsibility for authenticity,
accuracy or completeness of such items.

© Export-Import Bank of India

November 2015

1
2
Contents

Page No.

List of Exhibits 5

List of Tables 9

List of Boxes 11

Executive Summary 13

1. Introduction 31

2. Global Land under Organic Cultivation 35

3. Leading International Organic Markets 41

4. Organic Standards and Regulations 87

5. Organic Farming in India 98

6. Organic Farming in North East India 125

7. Organic Products: Status of Industry and Trade from India 135

8. Organic Market: Challenges and Strategies 150

Annexure - 1 164

Annexure - 2 169

Project Team :
Mr. S Prahalathan, Chief General Manager, Research & Analysis Group
Ms. Sumana Sarkar, Assistant General Manager, Research & Analysis Group
Ms. Simaran Kaur, Manager, Research & Analysis Group

3
4
List of EXHIBITS

Exhibit No. Title Page No.

2.1 Global Organic Area (2007-2013) 35

2.2 Region –Wise Share of Organic Land in Global Organic 37
Agricultural Land (2013)
2.3 Major Countries with Largest Organic Agricultural Land (2013) 38
2.4 Countries with Highest Share of Organic Agricultural Land (2013) 39
2.5 Region-Wise Share of Organic Producers (2013) 40
3.1 US Organic Food Sales and Annual Growth (2006-2014E) 42
3.2 Organic Food Sales Trend in the United States 42
3.3 Sales of Organic Fruits and Vegetables in the United States 45
(US$ Billion)
3.4 Certified Organic Fruits and Vegetables Acreage in the 45
United States (2011)
3.5 Sales of Organic Milk in the United States (US$ Billion) 47
3.6 Certified Organic Milk Cows in the USA (thousands) 50
3.7 Sales of Organic Beverages in the USA (US$ Billion) 51
3.8 Imports of Organic Coffee in the United States (2013) 53
3.9 Imports of Organic Black and Green Tea in the United States (2013) 54
3.10 Organic Wine Imports in the United States (2013) 55
3.11 Organic Packaged/Prepared Food Sales in the United States 56
(US$ Billion)
3.12 Organic Veg Oil Imports by the United States (2013) 57
3.13 Organic Bread and Grain Sales in the United States (US$ Billion) 58
3.14 United States Certified Area Under Organic Grain Production in 58
Thousand Acres
3.15 Organic Agricultural Land in Europe 62
3.16 Top 10 Countries with Largest Organic Agricultural Land in 63
Europe, 2013

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 Exhibit No. Title Page No.

3.17 Top 10 Countries with the Highest Share of Organic Agricultural 64

Land in Europe (%), 2013
3.18 Organic Market in Europe and the European Union 64
3.19 Share of Organic Products in Total Retail Food Sales in Europe (2013) 66
3.20 Top 5 Organic Markets in Europe 67
3.21 Domestic Market for Organic Products in Germany 68
3.22 Organic Food Sales in Germany, 2013 69
3.23 Sales Channels for Organic Products in Germany, 2012 70
3.24 Organic Market in France 72
3.25 Sales of Organic Products in France, 2013 73
3.26 Organic Sales Channels in France, 2012 74
3.27 Organic Sales in the UK 76
3.28 Sales of Organic Products in the UK, 2013 77
3.29 Organic Sales Channels in the UK, 2013 78
3.30 Organic Sales in Switzerland (Euro billion) 79
3.31 Sales of Organic Products in Switzerland, 2013 79
3.32 Organic Agricultural land in Japan 82
3.33 Trend in Domestic Production of JAS Certified Organic Agricultural 83
Products
3.34 Share of Organic Agricultural Production in Total Agricultural 84
Production in Japan (percentage)
3.35 Import of JAS Certified Organic Agricultural Products, Certified 85
Outside of Japan (2011)
3.36 Trends in Production of JAS Certified Organic Agricultural Processed 86
Food Products in Japan
3.37 Import of JAS Certified Organic Agricultural Processed Products, 86
Certified Outside of Japan (2011)
4.1 Organic Certification Process in the United States 89
4.2 Inspection Certification System for Organic Products 95
4.3 Certification by Registered Japanese Certifying Body or Registered 96
Overseas Certifying Body
4.4 Procedure of Certification of Importers Certified by Registered 97
Japanese Certifying Bodies

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Exhibit No. Title Page No.

5.1 Cultivated, Wild and Total Area under Organic Certification in India 99
5.2 Production of Certified Organic Produce in India 99
5.3 Top 5 States in Acreage under Organic Production in India 100
5.4 Organic Area in Madhya Pradesh (million ha) 102
5.5 Biofertiliser Production in Madhya Pradesh (metric tonnes) 103
5.6 Area under Organic Cultivation in Himachal Pradesh (thousand ha) 103
5.7 Biofertiliser Production in Himachal Pradesh (metric tonnes) 104
5.8 Organic Area in Rajasthan (thousand ha) 105
5.9 Biofertiliser Production in Rajasthan (metric tonnes) 105
5.10 Organic Area in Maharashtra (thousand ha) 106
5.11 Biofertiliser Production in Maharashtra (thousand mt) 107
5.12 Operational Structure of National Programme for Organic Production 115
in India
6.1 State wise Organic Production in the North East Region of India 128
(2012-13)
7.1 Organic Food Market in India 135
7.2 Organic Food Market in India- Segmentation by Trade (2013-14) 136
7.3 Organic Product Industry - Segmentation by Crops Grown 137
7.4 Export of Organic Food from India 138
7.5 India’s Export Destinations for Organic Foods (2010-11 and 2013-14) 140
7.6 Organic Soybean Production by Country, 2011 146
7.7 Production and Sales of Organic Soybeans 146
8.1 Supply Chain System in Organic Product Sales 151
8.2 Policy Interventions for Market Development 162

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8
List of TABLES

Table No. Title Page No.

2.1 Region-wise Growth of Organic Agricultural Land (2008-13) 38

3.1 Estimated Sales of Organic and Total Fluid Milk Products in 48
the United States (2006-2013)
3.2 Organic Hot Beverages Market in the United States 51
3.3 Organic Juice Market in the United States 52
3.4 Comparison of Prices of Conventional and Organic Vegetables 60
in the United States (US$ per unit)
3.5 Comparison of Prices of Conventional and Organic Fruits in 61
the United States (US$ per unit)
3.6 Price Paid by the First Receiver for Organic Poultry and Eggs 61
3.7 Top 10 Organic Markets in Europe 66
3.8 German Production and Imports of Organic Products (2009-10) 71
3.9 Organic Products Imports in France (2009) 75
3.10 Sales Channels of Organic Products in Switzerland (2009) 80
5.1 State-wise Production of Organic Products in India 101
5.2 Details of Subsidy Received by the Top 5 States under Capital 109
Investment Subsidy Scheme (CISS) of NPOF through NABARD
for Organic Input Production
5.3 Top 5 States Receiving Financial Assistance under the National 111
Horticulture Mission for Promotion of Organic Farming
5.4 Top 5 States Receiving Financial Assistance for Promotion of 112
Organic Farming under Rashtriya Krishi Vikas Yojna (RKVY)
6.1 Fertilizer Consumption in the North East Region of India 126
6.2 Area under Organic Agriculture in the North East Region of India 127
6.3 Ginger Production in the North Eastern States of India 129
6.4 Area and Production of Organic Large Cardamom in 129
East and North East India

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 Table No. Title Page No.

6.5 Area, Production and Productivity of Pineapples in 130

the North East Region of India
6.6 Area, Production and Productivity of Organic Turmeric in 131
the North East Region of India
6.7 Area, Production and Productivity of Litchi in Assam and Tripura 131
6.8 Physical Progress under Horticulture Mission for the North East 133
Region of India and Himalayan States (2011-12)
6.9 Financial Assistance Provided for Promotion of Organic Farming 134
under Horticulture Mission for North East and Himalayan States
7.1 Top Ten Export Destinations of Indian Organic Foods 141
7.2 Organic Products and Key Producing States in India 147
7.3 Major Segments in Organic Sector - Growth Trends 148

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List of BOXES

Box No. Title Page No.

1 Fruits and Vegetables Marketing Chains in the United States 47

2 Organic Dairy Production 48
3 Organic Dairy Marketing Channels in the United States 49
4 Organic Coffee 52
5 Organic Processed Food Marketing Chain 56
6 Marketing Chain for Organic Grains, Oilseeds and Legumes 59
in the United States
7 Major Pineapple Producing Belts in the North East region 130
8 Major Litchi Producing Belts in the North East Region 132

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12
Executive Summary

Introduction According to the latest FIBL-IFOAM

survey, approximately 43.1 million ha
Organic agriculture produces of land in the world was organically
products using methods that preserve managed in the year 2013. There has
the environment and abstain from been a considerable rise in the area
the usage of synthetic materials, undergoing organic management
such as pesticides and antibiotics. surging from 11 million ha in 1999 to
Organic farmers and food processors 43.1 million ha in 2013.
follow a defined set of standards to
produce organic foods and fibres. Global Production and
These organic standards cover the Trade of Organic Foods
product from farm to table, inclusive
of soil and water quality, pest Globally, Oceania has been leading in
control, livestock practices as well as terms of land under organic agriculture
regulations for utilizing food additives and contributed approximately 40 per
and technologies, such as irradiation. cent of total organic agricultural land.
International Federation of Organic Europe held a share of 27 per cent and
Agriculture Movement (IFOAM), the accounted for the second largest area
worldwide umbrella organization for the under organic agriculture, globally,
organic agriculture movement through during 2013.The Latin American
its IFOAM Basic Standards for Organic region held a share of 15 per cent
Production and Processing (IBS) sets in the worldwide land under organic
the standards for organic agriculture, agriculture and managed nearly 6.6
production and processing based million ha of land organically in the year
on four main principles; Principle of 2013.The organically managed area
Health, Principle of Ecology, Principle in North America represented nearly
of Fairness, and Principle of Care. 7 per cent of the global area under

13
 organic cultivation in 2013. Asia had for health and environment. Organic
3.4 million ha of land under organic foods, which was earlier considered a
agriculture and this constituted about niche product, is presently being sold
8 per cent of the aggregate organically through a wide variety of channels in
cultivated land, globally. Africa, with the United States, including farmers
1.2 million ha of agricultural land market, natural product supermarkets
under organic cultivation constituted and conventional supermarkets.
3 per cent of the global land under According to the Nutrition Business
organic agriculture. Journal, the organic foods sales in
the United States have escalated
Australia, in the Oceania region, from US$ 15.6 billion in 2006 to an
had the largest land under, organic estimated value of US$ 34.8 billion,
management. This was followed by in 2014. Sales of organic products
Argentina, in Latin America, which in the United States, in 2012, were
had approximately 3.2 million ha of estimated at US$ 28.4 billion, which
organically managed land. Other accounted for over 4 per cent of the
countries with significant organic total United States’ food sales. The
land area, globally, are the USA, organic foods sales are anticipated to
China, Spain, Italy, France, Germany, have increased at a compound annual
Uruguay and Canada. growth rate (CAGR) of 10.5 per cent,
during the period 2006 to 2014.
Organic fruits and vegetables are the
According to Organic Monitor, the
major items of sales among the various
international sales of organic foods
organic foods categories in the United
and drinks were approximately
States. The sales of organic fruits and
US$ 72 billion in 2013. The major
vegetables is expected to increase
demand for organic products has
at a CAGR of 12 per cent, as the
been mainly in the North American and
value of sales is anticipated to have
European regions. Other significant
risen from US$ 5.37 billion in 2005 to
market is Japan in the Asian region.
US$ 15.06 billion in 2014.Organic
Organic Markets dairy is the second largest segment
in the organic food grouping, in terms
The United States of value, totalling 6 per cent of total
dairy production in the United States.
Consumption of organic foods has The sales of organic dairy is expected
been rising significantly in the United to have increased at a CAGR of 10.4
States, primarily driven by the concerns per cent from US$ 2.1 billion in 2005

14
to US$ 5.1 billion in 2014.The sales of organic products in Germany, in
of organic beverages in the United 2013, stood at Euro 7.55 billion, and
States was anticipated to have risen this accounted for 4 per cent of the
at a CAGR of 9.3 per cent as the total foods sales in Germany.
value of sales are expected to have
risen from US$ 1.7 billion in 2005 to The organic market in France has
US$ 3.8 billion in 2014.The value of been steadily rising over the years
sales of organic packages/prepared and a similar trend is expected in
foods is estimated to have risen at the future. The organic market in
a CAGR of 9.8 per cent during the France, in 2013, was valued at Euro
period 2005 to 2014, from US$ 1.6 4.4 billion, representing an increase
billion in 2005 to US$ 3.7 billion in of approximately 10 per cent over the
2014. previous year. The French organic
market has expanded at a compound
Europe annual growth rate of 13.5 per cent
during the period 2005 to 2013, as
the value of sales increased from
According to FiBL and IFOAM, in
Euro 1.6 billion to Euro 4.4 billion.
2013, the second largest market for
organic products globally, after the
As per World of Organic Agriculture
United States, is European Union,
2015, the United Kingdom is the third
with a share of 40 per cent of the
largest organic market in Europe,
organic market worldwide. The
and represented 8.6 per cent of the
organic market in Europe, in 2013
aggregate organic sales in Europe
was worth Euro 24.3 billion while the
during the year 2013. The organic
organic market in the European Union
market in the United Kingdom was
was worth Euro 22.2 billion during the
valued at Euro 2.1 billion during the
same year. year 2013, and it grew at a year-on-
year growth rate of 7.7 per cent during
Germany is the largest market for this period. During the period 2007 to
organic products in Europe accounting 2013, the organic products sales in
for 31.3 per cent of the share in the the United Kingdom has declined at a
European market in 2013. According compound annual rate of 3.2 per cent,
to a report by USDA, Germany is the down from Euro 2.56 billion in 2007
second largest organic foods market to Euro 2.1 billion in 2013 due to the
globally and ranks second only to economic recession and decreased
the United States. The value of sales organic production.

15
 Switzerland had the highest per capita 2002 develops the laws that regulate
consumption of organic foods globally, the creation, production, handling,
which amounted to approximately labelling, trade and enforcement of
Euro 210 per capita during the year all USDA organic products. USDA
2013. The Swiss organic market size requires organic farmers and food
was nearly Euro 1.69 billion in 2013, handlers to meet uniform organic
and registered a year-on-year growth standards, and make certification
rate of 11 per cent. According to the mandatory for operations with organic
study by FiBL and IFOAM, Switzerland sales of over US$ 5,000. USDA has
ranked fifth in the category of market accredited approximately 50 US State
size in Europe. and private certification programs and
over 30 foreign programs.
Japan
Organic certification verifies that
The organic market in Japan is still in the farm or handling facility located
a maturing stage, as there is restricted anywhere in the world compiles
supply of organic foods in Japan. with the USDA organic regulations
The country depends on imports
and allows the producers to sell,
for around 60 per cent of its organic
label and represent the products as
foods demand, which indicates that
organic. Presently, approximately
the growth potential of the organic
30,000 organic farms and processing
market is significant. According to
facilities around the world are
the Organic Market Research Project
certified as complying with the USDA
(OMRP) survey conducted by IFOAM,
organic standards. Their certification
Japan, the organic foods sales
is managed by certifying agencies
constituted 1 per cent of the Japanese
foods market, and were valued at located in the US and the world.
approximately US$ 1.3 billion to
US$ 1.4 billion in 2010. Any land used to produce raw organic
commodities must not have had
Organic Standards and prohibited substances applied to it
Regulations for the past three years. Until the
thirty six month transition period is
USA met the producer may not sell, label
or represent the products as organic
The National Organic Program or use the USDA organic or certifying
(NOP) implemented by USDA in agent’s seal. Actual certification costs

16
or fees vary widely depending on the control authority. Every consignment
certifying agent and the size, type of organic products imported from
and complexity of the operations. countries outside the EU, excluding
Certification costs may range from the European Economic Area and
a few hundred to several thousand Switzerland, must be accompanied
dollars and ordinarily there is an by a certificate of inspection.
application fee, annual renewal fee,
assessment on annual production The EU organic logo indicates that
or sales and inspection fee. After the product is in full conformity with
the certification is done, the USDA the conditions and regulations for the
Organic Certification Cost-Share organic farming sector established by
Program can reimburse up to 75 the European Union under Council
percent of the certification costs. Regulation (EC) No 834/2007 and
the Commission Regulation (EC)
EU No 889/2008. The organic logo for
the processed products indicates
The Council Regulation (EC) No. that at least 95% of the agricultural
834/2007 establishes the legal ingredients are organic. Adjacent to
framework for all levels of production, the EU organic logo, a code number
distribution, control and labelling of the control body is displayed along
of organic products, which may with the location from where the
be offered and traded in the EU. agricultural raw materials comprising
The Council Regulation applies to the products have been farmed.
the following agricultural products,
including aquaculture and yeast: living Japan
or unprocessed products; processed
foods; animal feed; and seeds and The Japanese Agricultural Standards
propagating material; (JAS Standards) for organic plants
and organic processed foods
In order to import an organic product makes labelling of organic products
into the European Union there mandatory, in accordance with the
is a need to comply with the EU revision of the Law concerning
legislation and in particular both Standardisation and Proper Labelling
organic and general foods legislation. of Agricultural and Forestry Products.
The importers of organic products The JAS standards for organic
must register with a control body or products were made in compliance

17
 with the Codex Guidelines. According Organic Farming in India
to the Japanese Organic Standards
for organic plants and processed The cultivated area under organic
foods of plant origin, only those certification has increased at a CAGR
items to which the certified operators of 33.5 per cent, as it increased
attach JAS logos can be labelled as from 0.04 million ha in 2003-04 to
“organic”. nearly 0.72 million ha in 2013-14.
The cultivated area under organic
There are two methods of importing certification rose during the years
organic foods in Japan. In the first 2006-07 to 2008-09; however it fell
method, The Ministry of Agriculture, in 2009-10 and declined further in the
Forestry and Fisheries (MAFF) subsequent years. The area under
registers Japanese Certifying Bodies
wild harvest rose from 2.43 million ha
or Overseas Certifying Bodies, which
in 2006-07 to 4.00 million ha in 2013-
certify producers, manufacturers and
14. Consequently, the total area under
other business entities related to
organic farming increased from 2.97
agriculture and forestry products. The
million ha in 2006-07 to 4.72 million
certified producers then produce or
ha in 2013-14.
manufacture products and attach the
JAS marks to the products.
The production of certified organic
produce in India declined at a
Government agencies or quasi-
governmental organisations of the compounded annual rate of 7.5 per
countries, with organic equivalence, cent during the period 2009-10 to
issue export certificates to certify 2013-14 as the quantity of produce
the organic products produced or reduced from 1.7 million tonnes in
manufactured in the countries, and 2009-10 to approximately 1.24 million
were graded in accordance with the tonnes in 2013-14.
organic system of the respective
countries. Importers certified by Madhya Pradesh has been the
registered Japanese certifying leading State in terms of production of
bodies import organic foods and re- organic foods during the year 2012-
label the Organic JAS mark to the 13, and its share in the aggregate
products in Japan. This is applicable organic foods production was nearly
only to organic agricultural products 32 per cent. The area under organic
and organic agricultural processed certification in Madhya Pradesh
products. declined at a compounded annual rate

18
of 2.4 per cent from 2.8 million ha to Government Initiatives to Promote
2.6 million ha during the period 2009- Organic Farming
10 and 2012-13. Himachal Pradesh
was the second largest State in terms National Project on Organic
of area under organic farming in India, Farming
in 2012-13, although the quantity
of production has been meagre as
The National Project on Organic
compared to other States. The area
Farming (NPOF) is a Central Sector
under organic farming increased at a
Scheme implemented during the
CAGR of 26 per cent from 0.7 million
Tenth Five Year Plan with an outlay
ha to 1.4 million ha during the period
of Rs. 57.04 crore. The scheme
2009-10 to 2012-13.
was subsequently expanded in the
Eleventh Five Year Plan with an outlay
The area under organic farming in
of Rs. 101 crore. The primary objective
Rajasthan increased at a CAGR
of the NPOF Scheme is to encourage
of 22.8 per cent during the period
the production of food organically,
2009-10 and 2012-13, from 260.8
and promote manufacture and usage
thousand ha to 483.3 thousand ha.
The State occupied the third position of organic and biological inputs, such
in terms of area under organic as bio-fertilizers, organic manure, bio-
cultivation in the country and ranked pesticides and bio-control agents.
fourth in terms of organic production,
during the year 2012-13. Capital Investment Subsidy for
Setting up of Organic Inputs
The organic acreage in Maharashtra Production
expanded at a CAGR of 28 per cent
from 35.4 thousand ha in 2009-10 to The NPOF provides financial
74.4 thousand ha in the year 2012- assistance for fruits and vegetables
13, accounting for around 1.4 per waste compost units by providing
cent of the aggregate organic area in for 33 per cent of the capital cost of
the country. The organic production the project, subject to a ceiling of
increased at a CAGR of 71.8 per cent Rs. 63 lakh. Further, NPOF provides
from 53.5 thousand mt in 2009-10 to subsidy for the construction of bio
271.1 thousand mt in 2012-13. Cotton, fertilizer or bio pesticide production
oilseeds, fruits and vegetables, unit to an extent of 25 per cent of the
pulses are the organic crops majorly capital cost of the project subject to a
produced in the State. ceiling of Rs. 40 lakh. The remaining

19
 cost is envisaged as credit support State Agricultural Universities (SAUs),
from financial institutions and margin spread across 12 States. The crops
money. The subsidy is credit linked for which package of practices for
and back-ended and mobilised organic farming have been developed
through NABARD. include basmati rice, rain fed wheat,
maize, red gram, chickpea, soybean,
National Project on Management of groundnut, mustard, isabgol, black
Soil Health and Fertility (NPMSF) pepper, ginger, tomato, cabbage and
cauliflower.
The National Project on Management
of Soil Health and Fertility (NPMSF) National Horticulture Mission
was implemented during the Eleventh
Five Year Plan period with an outlay This is a Centrally Sponsored Scheme;
of Rs. 429.85 crore, to promote launched in 2005-06, the Scheme
the balanced and judicious use of aims at strengthening the growth of
fertilizers and organic manure on soil the horticulture sector comprising of
test basis. This Scheme provides fruits, vegetables, roots and tuber
financial assistance at Rs. 500 per crops, mushroom, spices, flowers,
ha for promoting the use of organic aromatic plants, cashew and cocoa.
manure. NHM provides financial assistance for
establishing vermi compost units and
Network Project on Organic HDPE vermi beds. Assistance is also
Farming by ICAR being provided under the Mission for
organic certification of Rs.5 lakh for a
The Network Project on Organic group of farmers covering an area of
Farming initiated by the ICAR in the 50 hectares.
Tenth Five Year Plan at the Project
Directorate for Farming Systems Rashtriya Krishi Vikas Yojna
Research, Modipuram, Uttar Pradesh,
involves developing package of Assistance for decentralized produ-
practices for different crops and ction and marketing of organic
farming systems under organic fertilizers is available under Rashtriya
farming in different agro-ecological Krishi Vikas Yojna (RKVY) for projects
regions of the country. The project has formulated and approved by the State
been running at 13 centres including Level Sanctioning Committee.

20
Regulatory Mechanism for Organic genuineness and the originality of the
Products in India product, the trademark “India Organic”
has been created and owned by the
The National Programme for Organic Government of India. It is granted
Production (NPOP) defines the on the condition of compliance
regulatory mechanism in organic with the National Standards for
products prevalent in India. It is Organic Production (NSOP). Only
such exporters, manufacturers and
regulated under two different acts
processors whose products are duly
for the export and domestic market
certified by the accredited inspection
in India. The nodal regulatory
and certification agencies, is granted
body for the Programme for export
the licence to use the logo, which is
requirements is the Agricultural and
governed by a set of regulations.
Processed Food Products Export
Development Authority (APEDA)
Organic Farming in the North-East
under the Ministry of Commerce and
Region of India
Industry, Government of India. The
Agricultural Produce Grading, Marking
The NE region of India, where
and Certification Act (APMC) monitors
agricultural production is
the domestic and import market.
predominantly organic by default, can
The Programme is governed by the
be instrumental in increasing India’s
Agricultural Marketing Advisor (AMA)
organic agricultural exports. Realising
under the Ministry of Agriculture;
the potential for the development of
Government of India. The National
organic farming, a sum of Rs. 100
Steering Committee under the
crore has been allocated by the
NPOP is responsible for formulating
Government of India in its Union
a National Accreditation Policy and Budget for the development of
Programme and also operates as organic farming in the NE states in the
the National Accreditation Body. The financial year 2014-15. This initiative
Programme also frames the national is anticipated to enable the NE states
standards for organic products and to benefit from the development of
the regulations involved in the usage commercial organic farming and alter
of the National Organic Certification the agricultural mode from inorganic
Mark. to organic.

In order to demonstrate and establish Despite the fillip given to organic

the credibility and communicating the cultivation, the area under organic

21
 cultivation in the NE region of India enabling the organic food market
recorded a decline at a CAGR of 13.4 in India to increase steadily. The
per cent during the period 2009-10 organic products industry is mostly
and 2012-13 from 97 thousand ha export oriented accounting for a
to 63 thousand ha. In the year 2012- share of around 70 percent of the
13, the NE region of India accounted industry. The key export destinations
for approximately 1.2 per cent of of Indian organic products are the
the aggregate acreage maintained USA, Canada, South Africa, and the
organically in the country. Amongst European countries. Germany is one
the North Eastern States, Sikkim is of the top 10 trading partners for the
the leading State, constituting around organic foods exports from India.
73 per cent of the total organic area
Other key export destinations include
in the region. Nagaland is the second
Australia and Japan.
largest State in terms of area under
organic farming in the North Eastern
Organic cotton and textiles is the
Region of India (15 per cent) followed
by Meghalaya (6 per cent), Assam (4 largest exporting organic segment
per cent) and Mizoram (2 per cent). from India. Other organic products
Assam is the largest producer of with high demand in the international
organic foods in this region accounting markets are tea, basmati rice, pulses,
for nearly 72 per cent of the total honey, spices, coffee, and fruits,
organic food production in the region, such as mangoes, bananas, and
followed by Meghalaya. sugarcane. India is a major exporter
of organic mangoes to the USA.
Organic Products: Status of
Industry and Trade from India The exports of organically managed
foods have been witnessing a rising
As per Industry Sources, the Organic trend over the years both in terms
food market in India was valued at of value as well as volume. The
Rs. 675 crore (~ USD 150 Million) export of organic foods increased
during the year 2009-10. The market at a CAGR of 18 per cent in value
has been estimated to be worth Rs. terms as the exports increased
1928 crores (~ USD 306 Million) from Rs. 498.2 crores in 2007-08 to
during the year 2013-14, growing approximately Rs. 1328.61 crores in
annually at the rate of 30 per cent. 2013-14. Concomitantly, the volume
The augmentation in the disposable of exports has risen at a CAGR of 29
income and concerns for health are per cent from 38 thousand tonnes in

22
2007-08 to nearly 178 thousand by Asia. The quantity of imports by
tonnes in 2013-14. UAE in 2013-14 was 171 tonnes and
valued at Rs. 4.26 crore. Israel, with
Europe has been a major market for import of organic foods from India
organic foods exports from India. The worth Rs.3.72 crore, is the third largest
share of EU in total exports of organic importer of Indian organic foods in the
foods was 41.7 per cent during the Asian region. The other significant
year 2013-14. Apart from countries of Asian importers of organic foods from
the EU, Switzerland was the leading India are Sri Lanka (7 percent), South
importer of Indian organic foods in Korea (6 percent), Philippines (5
Europe accounting for 7 percent of the percent), China (4 percent), Iran and
share of European imports of organic Singapore (3 percent each).
foods from India in value terms, and 6
percent in terms of quantity.
Australia and New Zealand are other
significant export destinations for
USA accounted for 37.6 percent of India’s organic foods exports with
India’s exports of organic foods in a share of 1.1 per cent and 0.3 per
the year 2013-14. In terms of value,
cent, respectively.
exports to USA were valued at Rs.
498 crore and the quantum of exports
The Way Forward
was 75 thousand tonnes during the
year 2013-14. Canada accounted
The rising awareness of the population
for 13.7 percent of the exports in
about the various benefits derived
2013-14.
from the consumption of organic
foods and beverages is expected to
In 2013-14, Japan was the leading
increase the market size for global
Asian country that imported organic
organic food and beverages. An
foods from India with nearly 43 percent
expansion in the number of organic
share in the value of aggregate
exports of organic foods from India to food retailers globally, caused due
the Asian region. In terms of volume, to a surge in the demand for organic
Japanese imports of Indian organic foods, is anticipated to lead to growth
foods stood at 309 tonnes in 2013-14. in market. In spite of the cost of organic
UAE was the second largest Asian foods being greater than conventional
country importing organic foods from foods, an augmentation in the market
India constituting 11 percent of the for organic foods is expected in the
total imports of Indian organic foods future.

23
 Exports are forecast to continue to be Challenges and Strategies
the growth driver for the Indian organic
products industry. India majorly Supply Chain Management
exports organic processed food
products, organic rice, beverages and Supply Chain Systems
other cereals and millets to the USA,
Canada, Europe, and select South The supply chain of organic products
East Asian countries. The Government industry is often faced with challenges
of India through policy measures has with respect to poor collection
been promoting organic farming, channels, insufficient production of
which can be a profitable strategy to organic products, poor transportation
raise the income level of the small facilities and lack of proper processing
and medium farmers. Some States, facilities in-line with the global
such as Sikkim have already declared organic standards. Under supply of
their farms as completely organic. appropriate storage infrastructure and
There are many States where the quality control also remains a difficult
production is by default organic due area. Although many organisations
to minimal or no use of chemical farm in India have developed clear quality
inputs. Uttaranchal is one such State. standards, often together with the
However, to market organic products farmers, and have included them
internationally, obtaining globally in their contracts, complying with
accepted certification is mandatory. contracts has been a challenge for
the staff directly involved in purchase
For the enterprises in the organic from the farmers. Adequate training
industry, in order to boost trade in of farmers, producers and processors
Indian agricultural products and also has been of considerable
capture a significant share of global challenge.
market, it is an imperative that India
becomes home to such organic Strategies
products, which may give the country
and its products a competitive Improvements in the distribution
edge in global market. The global (setting up own cold room,
competitiveness for organic products purchasing air-conditioned truck for
exported from India is marked with transportation) and the packaging
a number of weaknesses, whereas (packaging done fully by company
lot of opportunities do exist in the staff, setting up specific packaging
domestic and international market. centre) may be considered to

24
address the supply chain challenges. automatic identification of products,
Focusing on total quality management conveyors, order-picking systems,
at each point in the supply chain is of RFID, sortation equipment, and
considerable importance. Developing software and systems integrations.
direct business relations, planning
sales in line with production, and Size of farms and collaboration
developing advance purchasing
scheme may make the supply chain The production of produce in small
more efficient. to medium farms is rather limited,
amounting to a few hundred tonnes.
Food Origin and Mileage This challenge is particularly evident
in sectors, such as dairy, poultry,
The concept of food mileage, which fruits and vegetables, where scale
refers to the distance the food is and linkage with primary processing
transported, from the time of its is critical. Similarly, marketing
production, until it reaches the channels are more difficult to access
consumer, gains prime importance for smaller producers. Further, many
in the case of organic food products. buyers seem to be ambivalent about
Since the past decade, the country of channels of distribution.
origin of the food and food mileage
are becoming increasingly important. Strategies
Maintaining supply volumes and
supply continuity are major concerns Aggregation of the unorganized
for most food companies. small organic producers by forming
cooperatives and producer companies
Strategies may enable the producers to put
together their produce, obtain funds,
Streamlining logistics is key to possess the processing and storage
minimize food mileage, which may facilities in the proximity of production,
include minimizing the lead time and strengthen the bargaining
from farm to shelf and increase the power. Working as cooperatives and
shelf life of fresh organic foods. This producer companies may also help the
would require, revamping warehouse producers focus more on production
management, order management strategies, by delegating operations
and transportation management by and marketing to hired professionals.
way of implementation of integrated Aggregation may also facilitate
automated storage/retrieval systems, trainings in marketing as well as on

25
 specialized methods of production to aspects of the products. In doing
the farmers and producers. so, efforts need to go into capacity
building, production related issues,
Handling and Stock Management quality parameters and the logistics
of procuring products, especially
Stock control procedures and from remote and inaccessible areas.
stock management have been a Organic certification is becoming
challenging area for the organic increasingly important in relation
products industry. Organisations to marketing. Supermarkets are
often struggle with keeping their potentially attractive channels for the
information up to date and, as a sale of organic products. However,
result, the information generated they are often very demanding in
is not always used as effectively as terms of product quality, availability
could be. Poor documentation has and price.
been a considerable challenge for the
industry with respect to certification, Strategies
market entry and product positioning.
Pro-active certification, opting for
Strategies good packaging techniques, product
development as per consumer
preferences, collaboration among the
Total Quality Management is essential
organic sector for generic promotion
in handling and stock management,
activities and adopting effective
which may include a contingency
marketing methods by usage of media
plan for handling wastage. Monitoring
and display messages can enhance
purchase, waste, and sales are
the organic products sales.
important for informed decision
making, planning of production, and
purchase volume. Effective use of Cost, margins, price setting and
data generated by proper record value addition
keeping is key to make the system
effective. Price premium of organic products
in comparison with conventional
Marketing and Sales Management products is often a marketing
challenge for sale of organic products.
Marketing of organic products Pricing has also been a limiting factor
involves both the social and ecological during the economic recession when

26
more producers turn to organic crucial for organic products industry
production, and consumer markets when promoting alternative qualities
shrink. The prices for organic products in a competitive market environment.
vary significantly between different Despite in many developing
companies, different retail formats countries, national regulations for
and across product categories, which organic agriculture, being in place,
also is a significant challenge for the there is no effective regulation yet in
organic industry. place controlling the use of the terms
“organic” in most of these countries.
Strategies Consumer confusion and loss of
confidence in the organic products
Initial determination of basic price by can create long-term implications for
the producer, followed by future pricing the organic market.
based on more specific cost-benefit
calculations of organic production may Strategies
be regarded as an effective pricing
mechanism for organic products. Pro-active certification is essential
The premium price, to be fixed for to gain customer’s trust especially if
organic products, must be acceptable the produce is not sold directly from
in mature markets. Incorporating a the farm, but through third party,
condensed supply chain, making use such as retail shops. Self-inspection
of the arrangement of direct marketing systems involving both producers and
and instructing the farmers to use a consumers should also be recognised
Participatory Guarantee Scheme, for establishing credibility.
so that it involves lesser cost, can
enable reduction in the prices of Sector cooperation and market
organic products, as compared to norm building
conventional farm products.
Collaboration in the sector has been
Sector Development a challenging area mainly due to its
small size. Often it is observed that
Market assurance and certification there is limited level collaboration
between the exporting companies
Establishing credibility through and organisations focussing on the
proper certification is particularly domestic market. Collaboration is

27
 also weak, where there are a few investments in farm-undertakings,
pioneering organisations in a country, such as machinery, storage and soil
to keep their unique image as pioneer. fertility building mechanisms. Organic
In larger countries, it is also logistically techniques are generally more labour
difficult for small local organisations intensive and thus the wage cost
and individuals, with fewer funds rises.
and geographically distant from each
other, to work together. Strategies

Strategies There is vital need for a programme

that is particularly designed to provide
More cooperation with other aid to the organic farmers during the
organic trading organisations is three year conversion period. The
necessary in order to promote policy should involve the provision of
organic consumption. Joint publicity annual payment during the transition
campaigns with contribution from period, to compensate for the loss
different stakeholders (producers, of income occurred in the course
processors, traders, consumers, of converting from non-organic to
competent government departments) organic.
can create more impacts among the
consumers compared to the individual Issues in Certification
efforts.
This procedure requires extensive
Challenges and Strategies Specific paperwork, detailing farm history,
to Indian Organic Products and usually including the results of
Industry soil and water tests. It also involves
annual on-farm inspections and the
Transition Assistance fee needs to be paid by the growers
to the certification bodies for annual
surveillance. The cost involved along
The conversion period may turn
out to be a difficult phase for the with the prolonged procedure and
farmers owing to several direct lack of knowledge and understanding
and indirect costs involved in the is acting as an obstacle in the organic
process. Moreover, during the early certification procedure in India,
stages of the transition, there is particularly for the small and marginal
requirement of heavy and additional farmers.

28
Strategies the organic sector would be productive
in enhancing knowledge related to
In order to persuade the farmers to organic production. Encouraging
undertake the certification process, the development of seeds, varieties
there is a need to make the procedures and livestock breeds suitable for
simple and less expensive. the organic farming system would
Government initiatives may be facilitate the extension of organic
required to bring down the cost of farming.
certification. Furthermore, increased
assistance should be provided for the Market intelligence
Participatory Guarantee Scheme.
The information available in the
Limited knowledge on organic country regarding organic products
production produced and exported is limited,
and thus do not lead to any business
There is also limited availability of or policy decisions. Data are also
suitable designs of organic farming not available to calculate the prices
systems for various climatic conditions of different organic commodities
and crops, supported through under variety of farming cultures of
appropriate technologies. Availability India. In the absence of appropriate
of insufficient biomass on-farm; and and adequate information, a vague
inaccessibility of external inputs, such mechanism of organic pricing and
as organic manures and pesticides; premiums prevails.
organic ways of post-harvest handling
and packing; have also been cited as Strategies
challenges in organic production in
India. There is an urgent need to undertake
cost benefit analysis and developing
Strategies a framework for price discovery of
organic commodities. Moreover,
Increased funding for research, strengthening of data collection and
education and extension activities dissemination is also required to take
and promoting continued economic informed decision on markets and
analysis of the issues and trends in products that have potential in India.

29
 The undertaking of comprehensive moisture, freezing, insect damage,
studies on organic niches of India disease and weeds. Also, there is
would be advantageous in bringing income loss for producers transitioning
organic farmers into the export to organic production.
market, with comparative advantage.
Strategies
Insurance Options for Risk
Management It is mandatory to develop viable and
effective risk management programs
Vagaries arising out of natural to address the needs of organic
calamities are common to both farmers and safeguard the organic
conventional and organic farming. farmers from losses. There is also a
There are various perils in organic felt need of an insurance coverage
farming, which may cause damage for producers transitioning to organic
to crops such as drought, excess production.

30
1. Introduction

Organic farming systems have been Agriculture Movement  (IFOAM), the

attracting increasing attention over worldwide  umbrella organization  for
the last one decade because they are the  organic agriculture  movement
perceived to offer some solutions to through its IFOAM Basic Standards
the problems currently besetting the for Organic Production and Processing
agricultural and food sector. Food (IBS) sets the standards for organic
scares, such as mad cow disease, agriculture, production and processing
E. coli contaminations, and pesticide based on four main principles:
poisonings, as well as concerns over
genetic engineering (GE) in foods, • The Principle of Health;
have stimulated interest in organic
foods. On a similar trend environmental • The Principle of Ecology;
and ethical concerns have stimulated
• The Principle of Fairness; and
growing interest in other organic
products, such as organic fibres, • The Principle of Care
pigments etc. Until recently, consumer
response to such incidents was All generally accepted organic rules
localized or at most affected a single and standards worldwide, governed
country. With increasing trade, the by these four principles, prohibit use
impacts of these events on consumer of synthetic fertilizers, pesticides,
behavior are more widespread as growth regulators, and livestock feed
more sources are utilized for imports. additives, and require long-term soil
management, emphasis on animal
Organic products are distinguished from welfare, and extensive record keeping
non-organic or conventional products and planning. Certain activities, such
by the methods used in their production as the use of genetically modified
and processing, rather than by stock, application of sewage sludge to
observable or testable characteristics. organic acreage, and food irradiation
International Federation of Organic are also prohibited.

31
 Standards and Regulations Organic Farming and Development
Support
The number of countries with organic
standards has increased to 86, and
Both the private and public develop-
there are another 26 countries that are
ment initiatives have contributed
in the process of drafting legislation.
considerably, in the last 25 years,
There has been a significant growth in
to the growth of the organic sector
the number of certification bodies. The
in many countries of the world.
total number of certification bodies in
Activities have related to, for instance,
2012 was 576; up from 549 in 2011.
building up the capacities of different
Most of the certification bodies are
stakeholder groups in the organic
located in European Union, South
sector, developing domestic and
Korea, the United States, China,
international markets, and developing
India and Canada. Asia currently has
local standards and legislations.
more organic certification bodies than
One of the current initiatives is the
Europe.
proposed Organic Research Centres
Alliance (ORCA), hosted by FAO, which
A growing number of organic producers intends to internationally network and
are certified through Participatory strengthen existing institutions with
Guarantee Systems (PGS) across the scientific credentials and empower
world. PGS are locally focused quality them to become centers of excellence
assurance systems. It is estimated in trans-disciplinary organic agriculture
that around 31,000 small operators research.
are involved in PGS world-wide. The
leading countries with regard to PGS International trade, an engine for
are located in the global South. Asia growth can substantially contribute
has the largest number of producers to poverty reduction in developing
involved in the PGS, with 16,000 countries. The Trade, Climate Change
producers involved, and more than and Environment Programme of
3,860 producers certified. the International Trade Centre (ITC)
supports the organic sector through
Several organic standard setters the provision of market information,
have also developed draft standards training in standards compliance, and
for climate “add-ons” for organic trade promotion; by supporting policies
certification, and it is expected that the favorable to organic agriculture and
use of carbon labeling by retailers will trade; and by facilitating business
grow considerably in the future. contacts. The FAO, IFOAM and

32
UNCTAD, have in place the Global Food safety is the top reason driving
Organic Market Access (GOMA) Japanese interest in organic food.
project. The aim of GOMA is to facili-
tate equivalence, harmonization and Worldwide markets for organic
other types of cooperation in order to products have been expanding, with
simplify the process for trade flow of annual growth rates of 15 to 40 per
products among the various organic cent in developed markets. In spite
guarantee systems. Currently, GOMA of the slowdown in global economy,
is on its way to finalise the Asian international sales of organic products
Regional Organic Standard (AROS) continue to rise. According to the
for the Asian region in line with the Organic Monitor, the worldwide sales of
other existing regional standards for Organic food and drink were estimated
developing countries, such as Pacific at US$ 72 billion during the year
Organic Standard (POS), and East 2013. However, the organic market is
African Organic Product Standard currently facing a supply crunch with
demand exceeding the supply.
(EAOPS). These harmonized regional
standards are aimed at facilitating
Organic Agriculture in India
trade of organic products inter and
intra region and with other regions.
The growth of organic agriculture in
India has three dimensions and is
Organic Trade
being adopted by farmers for different
reasons. First category of organic
The organic products market is
farmers are those which are situated
supported by consumers in most of
in no-input or low-input use zones; for
the countries in the world. Reasons for
them organic is a way of life and they
purchasing organics are similar across are doing it as a tradition. Second
countries. In Europe and the United category of farmers are those which
States, parameters such as taste, have recently adopted the organic
freshness, and quality, besides, health in the wake of ill - effects of modern
and safety, rank among the top reasons agriculture, may be in the form of
for organic purchases, especially for reduced soil fertility, food toxicity
produce. Environmental protection or increasing cost and diminishing
is the second most important reason returns. The third category comprise
presented by retailers in Europe for of farmers and enterprises, which have
endorsing organic products. The systematically adopted the commercial
perception that organic foods are organic agriculture to capture emerging
healthier is widespread among buyers. market opportunities and premium

33
 prices. While majority of the farmers thousand tonnes in volume terms
in first category are traditionally (or by during the year 2013-14. The export of
default) organic they are not certified; organic food has increased at a CAGR
second category farmers comprise of 23.9 per cent during the period
of both certified and un-certified, but 2010-11 to 2013-14 in value terms.
majority of third category farmers
are certified and are the commercial With the growth in the global organic
organic farmers. market remaining relatively unaffected
during the economic slowdown,
Currently, India has the largest number significant demand growth in new
of organic producers in the world. markets in new regions, such as
The cultivated area under organic the Asia Pacific, and India’s organic
certification has been estimated at market perceived to be growing at
0.72 million ha while the area under a steady rate, the current Study
wild harvest was approximately 4 endevours to investigate the various
million ha in 2013-14. mature markets of organic products
in the world; India’s potential as a
Around 1.24 million tonnes of certified supplier of organic products; current
organic products were produced in challenges pertaining to the industry,
India in 2013-14, which included all the strategies to overcome them, and
varieties of food products namely thereby increasing its foothold in the
Sugarcane, Cotton, Oil Seeds, Basmati international trade. As organic products
rice, Pulses, Spices, Tea, Fruits, Dry industry is largely unorganized globally,
fruits, Vegetables, Coffee and their and the data reporting is predominantly
value added products. The production survey-based, the information and data
is not limited to the edible sector but reporting pertaining to the industry
includes organic cotton fiber, and have considerable lag, and is also
functional food products. scarce. Given the limitations, this Study
attempts to provide trend analysis
The exports of organic food were using information from various press
estimated at approximately Rs.1328.61 reports interviews and also printed
crores in value terms and nearly 178 authenticate sources.

34
2. Global Land under Organic
Cultivation

The Exhibit 2.1 below presents from 31.5 million ha in 2007 to 43.1
the aggregate global organic land million ha in 2013. The land under
including the in-conversion areas. organic agriculture increased on a
According to the latest FiBL-IFOAM year-on-year basis by 14.9 per cent
Survey, approximately 43.1 million ha from 37.5 million ha in 2012 to 43.1
of land in the world was organically million ha in 2013.
managed in the year 2013. There has
been a considerable rise in the area Region-Wise Organic Area
undergoing organic management
surging from 11 million ha in 1999 to Globally, Oceania has been leading in
43.1 million ha in 2013. The expanse terms of land under organic agriculture
of area under organic agriculture and contributed approximately 40 per
increased at a compound annual cent of total organic agricultural land.
growth rate (CAGR) of 5.4 per cent Organically managed land in Oceania

Exhibit 2.1: Global Organic Area (2007-2013)

Source: FiBL& IFOAM

35
 increased by 41.8 per cent to 17.3 was stable during the year 2013 at 3
million ha in 2013, in comparison to the million ha. The significant countries
previous year. According to FiBL and in North America practising organic
IFOAM, Australia accounts for more agriculture are USA and Canada with
than 98 per cent of the organic land 2.2 million ha and 0.9 million ha of
in Oceania, followed by New Zealand organic agricultural land, respectively,
and Samoa. during the year 2013.

Europe held a share of 27 per cent and Asia had 3.4 million ha of land
accounted for the second largest area under organic agriculture and this
under organic agriculture, globally, constituted about 8 per cent of the
during 2013. Organic acreage in aggregate organically cultivated land,
Europe increased at a year-on-year globally. China and India are the
basis by 3 per cent from 11.2 million major countries in terms of organic
ha in 2012 to 11.5 million ha in 2013. cultivation, accounting for 62 per cent
Spain, with 14 per cent share accounts and 15 per cent, respectively, of the
for the largest acreage of organic land total organic land in Asia during the
in Europe, followed by Italy (12%), year 2013. The organic area in Asia
France (9%) and Germany (9%). increased by 6.25 per cent or by 0.2
million ha in 2013, in comparison to
The Latin American region held a the previous year. The organic area
share of 15 per cent in the worldwide in Asia is beginning to recover after a
land under organic agriculture and loss of half a million hectares in India
managed nearly 6.6 million ha of in 2012. Among the Asian countries,
land organically in the year 2013. The the ones with the highest share of
leading countries practising organic organic agricultural land in the year
farming in this region are Argentina, 2013 were Timor-Leste and Mongolia
Uruguay and Brazil. The aggregate with shares of 6.6 per cent and 4.7 per
organic area in this region declined cent, respectively.
by 0.2 million ha during the year 2013
when compared to the preceding Africa, with 1.2 million ha of agricultural
year. land under organic cultivation
constituted 3 per cent of the global
The organically managed area in North land under organic agriculture. Land
America represented nearly 7 per under organic cultivation in Africa
cent of the global area under organic grew by 9.1 per cent in the year 2013
cultivation in 2013. The organic acreage compared to the previous year, as the

36
 Exhibit 2.2: Region –Wise Share of Organic Land in
Global Organic Agricultural Land (2013)

Total - 43 million ha

Source: FiBL& IFOAM

organic acreage rose from 1.1 million According to the FiBL and IFOAM
ha in 2012 to nearly 1.2 million ha in Survey, with 17.2 million ha, Australia,
2013. Uganda, Tanzania, Ethiopia in the Oceania region, had the largest
and Tunisia are the major countries land under, organic management. This
practising organic agriculture in the was followed by Argentina, in Latin
continent. America, which had approximately
3.2 million ha of organically managed
Table 2.1 presents the growth of land land. However, land under organic
under organic cultivation in the various agriculture in Argentina declined at a
compound annual growth rate of 7.1
regions. Oceania recorded the highest
per cent from 4.3 million ha in 2009
growth rates during the period as the
to 3.2 million ha in 2013. According
organically managed land increased
to FiBL and IFOAM, the USA with 2.2
by 7.4 per cent during the period 2008
million ha of organic agricultural land
to 2013. This was followed by Europe, was the third largest country in terms
Africa and North America with growth of area of organic agricultural land.
rates of 6.7 per cent, 5.9 per cent and Other countries with significant organic
2.9 per cent respectively. However, land area, globally are China, Spain,
Latin America presented a fall in the Italy, Germany, France, Uruguay and
aggregate organic agricultural land. Canada.

37
 Table 2.1: Region-wise Growth of Organic Agricultural Land (2008-13)

Region 2008 2009 2010 2011 2012 2013 CAGR

  million ha %
Africa 0.9 1.0 1.1 1.1 1.1 1.2 5.9

Asia 3.4 3.6 2.8 3.7 3.2 3.4 0.0

Europe 8.3 9.2 10.0 10.5 11.2 11.5 6.7

Latin America 7.2 7.7 7.5 6.9 6.8 6.6 -1.7

Northern America 2.6 2.7 2.5 3.0 3.0 3.0 2.9

Oceania 12.1 12.2 12.2 12.2 12.2 17.3 7.4

Total 34.4 36.3 36 37.4 37.5 43 4.6

Source: FiBL& IFOAM

Exhibit 2.3: Major Countries with Largest Organic Agricultural Land (2013)

Source: FiBL& IFOAM

38
According to the FiBL & IFOAM Survey Organic Producers
during the year 2013, the share of
organic agricultural land to the world’s As per the FiBL & IFOAM Survey
agricultural land was approximately 2015, there were approximately 2
0.98 per cent. Taking the regions million organic producers worldwide
under consideration, Oceania has the during the year 2013.There was a
highest share of organic agriculture year-on- year growth rate of nearly
land to total agricultural land (4.1 5.3 per cent in the aggregate number
of organic producers in the year 2013.
per cent), followed by Europe (2.4
Asia was reported as the leading
per cent) and Latin America (1.1 per
region with the largest number of
cent). In the countries of the European
organic producers globally, and it
Union there were nearly 10.2 million
accounted for nearly 36% of the
hectares under organic agricultural
organic producers worldwide. The
management in 2013, constituting
number of Asian organic producers
5.7 per cent share in the agricultural grew at year-on-year growth rate of 6.6
land. Falkland Islands have the highest per cent in the year 2013. With a share
share of (36.3 per cent) the organic of 29 per cent, Africa reported a rise
land in the total agricultural land, of nearly 0.2 per cent in the number
followed by Liechtenstein, Austria and of organic producers, globally, in the
Sweden. year 2013.

Exhibit 2.4: Countries with Highest Share of Organic Agricultural Land (2013)

French Guiana

Source: FiBL & IFOAM

39
 As reported by the FiBL & IFOAM countries with significant number of
Survey, India was the leading country organic producers include Uganda
in terms of number of organic and Mexico which had around 9.5 per
producers, and the total number of cent and 8.5 per cent of the aggregate
organic producers reported was nearly organic producers worldwide, respect-
650,000 in 2013. The other major ively.

Exhibit 2.5: Region-Wise Share of Organic Producers (2013)

Total - 2 million

Source: FiBL& IFOAM

40
3. Leading International
Organic Markets

There is a huge demand for organic in organic agriculture and without

products worldwide with the growing the usage of toxic chemical inputs,
health consciousness among the they desire to purchase organically
consumers. According to Organic produced products. Consumer
Monitor, the international sales awareness regarding the benefits of
of organic food and drink were organic food products continues to
approximately US$ 72 billion in grow, making organic farming a viable
2013. The major demand for organic and lucrative farming activity for the
products has been mainly in the North innumerable producers in the United
American and European regions. States.
Other significant market is Japan in
the Asian region. According to the Nutrition Business
Journal, the organic food sales in
Market for Organic the United States have escalated
Products in the United from US$ 15.6 billion in 2006 to an
States estimated value of US$ 35 billion, in
2014 (Exhibit 3.1). Sales of organic
Consumption of organic foods has products in the United States, in 2012,
been rising significantly in the United were estimated at US$ 28.4 billion,
States, primarily driven by the concerns which accounted for over 4 per cent of
for health and environment. Organic the total United States’ food sales. The
foods, which was earlier considered a organic food sales are anticipated to
niche product, is presently being sold increase at a compound annual growth
through a wide variety of channels in rate (CAGR) of 10.5 per cent, during
the United States, including farmers the period 2006 to 2014. Consumer
market, natural product supermarkets demand for organic food has exhibited
and conventional supermarkets. a persistent growth, since the time
Since organic certification assures the USDA established National
the buyers that the products have Organic Production Standards in
been grown, and handled according 2002. While the organic food sales
to stringent procedures followed maintained a double digit growth rate,

41
 Exhibit 3.1:US Organic Food Sales and Annual Growth (2006-2014E)

*2012-2014 Sales Values are estimates

Source: Nutrition Business Journal

Exhibit 3.2: Organic Food Sales Trend in the United States

Total - US$ 13.3 billion Total - US$ 25.7 billion

Total - US$ 35 billion

*2014 Sales Value is estimated

Source: Nutrition Business Journal

42
the sector suffered a setback during Sale of organic beverages as a
the recessionary periods 2007-2009. percentage of organic food sales
During this period, the year-on- year in the United States registered a
growth rate in organic food sales in marginal decline from 12.4 per cent
the United States fell from 17.3 per in 2005 to 11.4 per cent in 2011, and
cent in 2007 to 5.4 per cent in 2009. is expected to reduce further to 11
However, organic food sales in USA per cent in 2014. Likewise the share
picked up in 2010. of packaged food along with bread
and grains in organic food sales
The sales of organic food have has also witnessed a diminishing
displayed a rising trend as the value trend. Contrarily, the share of snack
of organic sales are estimated to have food, meat, fish, poultry, as well as
risen from US$ 13.3 billion in 2005 condiments in organic food sales is
to US$ 35 billion in 2014. Segment forecasted to ascend in the coming
of organic food that have registered years in the United States.
significant growth in sales in the United
States are fruits and vegetables, dairy, Among the total value of select organic
beverages, packaged/prepared food, items imported by the United States,
bread and grains, snack foods, meat, vegetables, fruits and nuts accounted
fish, poultry and condiments (Exhibit for 32.06 per cent in 2013, and stood
3.2). at US$ 441.43 million. Among all the
items imported under the vegetables,
Fruits and vegetables have fruits and nuts category, bananas hold
consistently been the principal item a major share of 58.6 per cent during
of sale in the organic food segment the year 2013. The major suppliers of
in United States. The share of dairy organic bananas to the United States
in the organic food sales in the are Ecuador (22.3 per cent), Colombia
United States, has shown a decline (21.7 per cent), Guatemala (18.7 per
as the share contracted from 16.1 cent), Honduras (15.9 per cent) and
per cent in 2005 to 15.7 per cent in Costa Rica (10.4 per cent). Ecuador,
2011, consequently it is anticipated the leading exporter of bananas to the
to decline further to 14.6 per cent in world is the largest supplier of organic
2014. One of the reasons for decline bananas to the United States. Most
in the share of diary in total organic of the organic bananas produced in
food sales was the high price of Ecuador, are cultivated in farms that
feed due to which the organic dairy are located in the mountain areas
farmers across the country are where pest pressure is lower than in
unable to produce more and meet the the conventional areas of cultivation.
augmenting demand. The second dominant supplier of

43
 organic bananas to the USA is There has been a substantial rise in
Colombia, whose exports are on the the import of organic apples by the
rise due to the increased investments United States, as the value of imports
in organic banana plantations in the has risen from US$ 5.7 million in
country. 2011 to US$ 14.9 million in 2013. The
chief exporters of organic apples to
The second significant organic fruit the United States are Chile (64 per
imported by the United States are cent), Argentina (16 per cent), New
mangoes with a share of 22.8 per cent
Zealand (13 per cent) and Canada
in the total imports of fruits, vegetables
(7 per cent). Organic apples find a
and nuts. Mexico exports the largest
high demand in the United States
quantity of organic mangoes to the
mainly driven by large sales in the
United States with a share of 53.2
per cent in 2013. Due to the high United States supermarkets. The
demand for the product in the United sale of organic apples has had a
States, Mexico, the major producer boost due to significant increase in
of mangoes has been expanding the product assortment and distribution.
production, in the recent years. The The other products imported under
other notable exporters of organic the organic fruits, vegetables and
mangoes to the United States are nuts category are almonds, bell
Peru, Brazil and Guatemala. India peppers, blueberries, garlic, pears
also exported organic mangoes to and quinces.
the United States, though with a
minuscule share of 0.07 per cent in Organic Fruits and Vegetables
the total imports of organic mangoes
by the United States, during the year Organic fruits and vegetables have
2013. continued to be the major item of
sale among the various organic food
Avocados occupied a 4.28 per cent
categories over the years in the
share in the aggregate imports of
United States. The sale of organic
organic fruits, nuts and vegetables, by
fruits and vegetables is expected to
the USA during the year 2013. Mexico
is the principal supplier of organic increase at a CAGR of 12 per cent,
avocados to the United States, with as the value of sales is anticipated to
a share of 99 per cent in total imports rise from US$ 5.37 billion in 2005 to
of organic avocados by the USA. The US$ 15.06 billion in 2014. The growth
exports of organic avocados from rate in organic fruits and vegetables
Mexico to the USA have increased sales suffered a setback during the
at a CAGR of 5.7 per cent during the recession in 2007-2009, however the
period 2011 to 2013. market revived back in 2010.

44
Exhibit 3.3: Sales of Organic Fruits and Vegetables in the United States (US$ Billion)

*2012-2014 Sales Value is estimated

Source: Nutrition Business Journal

Exhibit 3.4: Certified Organic Fruits and Vegetables Acreage in

the United States (2011)

Total - 154.71 thousand acres Total - 147.44 thousand acres

*Other fruits acreage includes peaches, cherries and other stone fruits
*Other vegetables acreage includes ginger, blue corn, popcorn, shallots, sweet potatoes, yams and
many other speciality crops.
Source: USDA, Economic Research Service

45
 The total area under fruit production included under this classification are
under certified organic cultivation in mixed vegetables, lettuce, carrots,
the United States was approximately tomatoes, other vegetables. Lettuce
154.71 thousand acres in 2011, and representing approximately 23.7 per
the cultivation of grapes accounted cent of the organic area is grown
for the largest share. The acreage widely in California, Arizona and
under organic grapes has risen Nevada. Carrots occupied 8.2 per
from 28.28 thousand acres in 2008 cent share in the certified organic
to 38.66 thousand acres in 2011. vegetables acreage, and California
California is the largest organic grape accounts for around 94 per cent
producing state, with a share of 88 of the organic carrot production in
per cent in the aggregate acreage,
the country. California is also the
followed by Washington (7 per cent)
predominant tomato growing state
and Oregon (3 per cent). Apple with a
in the United States and accounts
share of around 12.6 per cent in the
for 86 per cent of the acreage under
certified organic fruit acreage is the
vegetables cultivation.
second most extensively grown fruit
in the United States. Organic apples
The Organic Fruits and Vegetables
are majorly produced in Washington
Marketing Chain
and California. Citrus fruits occupying
12 per cent in certified organic
The organic fruits and vegetables
fruit acreage is grown in California
marketing chain in the United States
and Florida. The other significant
involves growers, packers and
categories of fruits considered are
shippers. In some cases, a firm grows,
Tree nuts (15 per cent), Berries (8.3
packs and ships the produce, while in
per cent), Subtropical fruits (10.7 per
cent) and other fruits (16.4 per cent), some other cases, a firm grows, but
including peaches and cherries. another firm packs and ships. After
shipping, the produce are either sold
The vegetables acreage in the to a retailer, or sent to a terminal
United States under certified organic market where wholesalers sell it to
cultivation declined at a CAGR of retailers. Organic produce are also
1.9 per cent, from 156 thousand sold directly to the consumers through
acres in 2008 to 147.44 thousand farmers market, community supported
acres in 2011. The vegetables agriculture and farm stands.

46
 Box 1: Fruits and Vegetables Marketing Chains in the United States

Fresh produce
• Farm > shipper > wholesaler > natural food retailers
• Farm > shipper > wholesaler > conventional retailer
• Farm > shipper > speciality broker > retailer
• Farm > shipper > natural food retailer
• Farm > shipper > conventional retailer
• Farm > consumer farmers markets, roadside stands, U-pick, community
supported agriculture

Organic Dairy milk sales in the United States have

been rising. The sale of organic dairy
Organic dairy is the second largest is expected to increase at a CAGR
segment in the organic food grouping, of 10.4 per cent from US$ 2.1 billion
in terms of value, totalling 6 per cent
in 2005 to US$ 5.1 billion in 2014
of total dairy production in the United
(Exhibit 3.5). The sales of organic
States. The sale of organic dairy
milk products increased by 4.10 per
products in the US was worth US$ 4
cent in 2012, while the total fluid milk
billion in 2011, and the share of dairy
in organic food sales, in the same year products sales declined by 1.81 per
was around 15.7 per cent. Organic cent in 2012.

Exhibit 3.5:Sales of Organic Milk in the United States

(US$ Billion)

*2012-2014 Sales Value is estimated

Source: Nutrition Business Journal

47
 Table 3.1: Estimated Sales of Organic and Total Fluid Milk Products in the United
States (2006-2013)

Share of organic
Organic Milk Total Fluid Milk milk products in
Year
Products Products total fluid milk
products
Million Lbs %
2006 1062 55,251 1.92
2007 1412 55,049 2.56
2008 1676 54,967 3.05
2009 1602 55,446 2.89
2010 1811 54,528 3.32
2011 2073 53,723 3.86
2012 2158 52,748 4.09
2013 2264 51,645 4.38
Source: USDA Agricultural Marketing Service

BOX 2 : Organic Dairy Production

Organic milk cost exceeds the conventional cost mostly because of high
feed cost and more intensive use of labour and capital in the organic dairy
industry.

The conversion from conventional to organic production necessitates the cow

to be fed a diet consisting of at least 80 per cent organic feed for nine months
and then 100 per cent organic feed for the next three months. Otherwise,
organic dairy products must make use of milk from animals that have been
raised organically for at least 1 year prior to producing the milk. The process
used to bottle organic milk and to make and pack cheese, ice cream, yogurt
and other dairy products must also be certified. The processor is required to
keep organic and non-organic products separated, and must prevent organic
products from contact with prohibited substances.

The cows reserved for organic milk production are raised in a herd separate from
conventional dairy cows. The animals are not given hormones or antibiotics;
instead they receive preventives and dietary supplements of vitamins and
minerals. These requirements add to production costs and leads to challenges
for widespread adoption of organic practices. The transition from conventional
dairy to organic dairy requires changes in animal husbandry, land and crop
management as well as a complex certification process.

48
 BOX 3: Organic Dairy Marketing Channels in the United States

• Milk (from one or several farms) > on farm dairy (pasteurize and bottle) >
regional distributors

• Milk (from one or several farms) > off farm dairy (pasteurize and bottle) >
regional distributors

• Milk (from one or several farms) > off farm processors of cheese, butter,
yogurt or dry milk > distribute regionally and nationally

• Milk (from several farms) > dairy (pasteurize and bottle, or process
into cheese or ice cream, for example) > distribute nationwide through
a marketing cooperative (under a brand name), mainly through private
distribution networks, sometimes with a regional label

• Milk produced under contract (from several farms) > dairy (pasteurize
and bottle, or process into cheese or ice cream for example) > distribute
nationwide under a brand name, mainly through private distribution
networks

According to a report by the indicates towards a thriving demand

Agricultural Marketing Service, for organic milk products in the United
USDA, the sales of aggregate milk States.
products for February 2014 was
approximately 195 million pounds, The National Organic Program in the
which was 18.5 per cent more from United States was enforced in October
the sales recorded in February 2013. 2002. Since 2005, the number of
The total conventional milk products certified organic milk cows increased
sales for February 2014 were 3 per significantly; however, this growth rate
cent below the value of sales recorded became constant during the period
in the previous year. A further analysis 2008 to 2011. According to Kreig
revealed that the organic whole milk 2007, the yield of organic milk cow is
sales and the organic reduced fat milk about 70 per cent of the conventional
sales were 27.2 per cent and 26.9 per milk cows mainly because of absence
cent above the value of sales of those of use of hormones on the organic
in 2013, respectively. The trend thus, milk cows. The shortage in organic

49
 Exhibit 3.6 : Certified Organic Milk Cows in the USA (thousands)

Data not available for 2009

Source: USDA, Economic Research Service

milk production and a rise in the beverages, however, has been

organic fluid milk retail prices in the displaying a downward trend over the
recent years, in the United States is years. While the year-on-year growth
mainly due to low feeding rates by the rate in sales was approximately 11.8
farmers as a result of increase in the per cent in 2006, it declined to 7.4
feed cost used for organic milk cows. per cent in 2011. The sale of organic
beverages decreased considerably
Organic Beverages
during the year 2009, due to decline in
demand, as the consumers decided to
The sale of organic beverages in the
United States is anticipated to rise at cut back on their expenditures during
a CAGR of 9.3 per cent as the value recession. Moreover, the share of
of sales are expected to rise from organic beverages in the aggregate
US$ 1.7 billion in 2005 to US$ 3.8 organic food sales has diminished
billion in 2014. The year-on-year from 12.4 per cent in 2005 to 11.4 per
growth in value of sales of organic cent in 2011.

50
 Exhibit 3.7: Sales of Organic Beverages in the USA (US$ Billion)

*2012-2014 Sales Value is estimated

Source: Nutrition Business Journal

Table 3.2: Organic Hot Beverages Market in the United States

  Retail Value (US$ Million) CAGR*%

Organic Hot Drinks 2009 2010 2014* 2010-14
Organic Coffee 160.8 171.2 243.6 9.2
Organic Fresh Coffee 154.8 164.9 236.3 9.4
Organic Instant Coffee 6.1 6.2 7.4 4.5
Organic Tea 162.1 170 214.2 5.9
Organic Black Tea 36.2 38.1 45.2 4.4
Organic Fruit/Herbal Tea 91.3 95.1 121.4 6.3
Organic Green Tea 34.6 36.9 47.6 6.6
Other Organic Hot Drinks 4.7 4.4 4.3 -0.6
*2014 retail value is forecast
Source: Euromonitor 2011

51
 Table 3.3: Organic Juice Market in the United States

  Retail Value (US$ Million) CAGR*%

Organic Juices 2009 2010 2014* 2010-14
Organic Concentrates 18.1 17.3 16.5 -1.3
Organic Fruit/Vegetable Juice 323.1 329.9 377.3 3.4
Organic 100per cent Juice 189.5 198.0 236.0 4.5
Organic Juice Drinks(Up to 24per cent Juice) 44.7 42.5 40.7 -1.1
Organic Nectars(25-99per cent Juice) 88.9 89.3 100.6 3
*2014 retail value is forecast
Source: Euromonitor 2011

The organic hot beverages market at approximately US$ 243.6 million in

in the United States consists 2014. The retail value of organic tea
predominantly of organic coffee and is expected to surge from US$ 170
organic tea. The retail value of organic million in 2010 to US$ 214.2 million in
coffee is anticipated to increase at 2014 and a similar trend in sales for
a CAGR of 9.2 per cent during the organic juice has also been estimated
period 2010 to 2014, and estimated (Table 3.3).

BOX 4: Organic Coffee

Organic coffee is grown using methods that have a lesser impact on the
environment. Organic production systems maintain the fertility of the soil and
reduce the usage of toxic pesticides and fertilizers. The coffee sold in the US
as organic must be produced in accordance with the US Standards for organic
production, and certified by an agency accredited by the US Department of
Agriculture. The US requirements for organic coffee production include farming
without synthetic pesticides or other prohibited substances for three years,
and a sustainable crop rotation plan to prevent erosion, the depletion of soil
nutrients and control of pests. Organic coffee products include decaffeinated,
caffeinated, flavoured and instant coffee, organic coffee ice cream and yogurt,
coffee sodas, hard candies and chocolate covered beans.

52
 Exhibit 3.8: Imports of Organic Coffee in the United States (2013)

Total - US$ 253.34 million

Source: USDA GATS

The imports of organic coffee in share of 14 per cent was the second
the United States have declined largest exporter of organic coffee to
substantially from US$ 526 million the United States in 2013, followed
in 2011 to US$ 253 million in 2013.
by Mexico, Colombia, Ethiopia,
Peru was the largest exporter of
Guatemala and Brazil. Indian exports
organic coffee to the United States
with a share of 22 per cent in the of organic coffee to the United States
total imports of organic coffee by had a low share of around 0.07 per
the United States. Indonesia with a cent in 2013.

53
 Exhibit 3.9: Imports of Organic Black and Green Tea in the United States (2013)

Source: USDA GATS

The imports of organic green tea in green tea from Japan has diminished
the United States has declined at from US$ 10.4 million in 2011 to
a compound annual growth rate of US$ 8.7 million in 2013. India is the
1.7 per cent, as the value of imports third largest exporter of organic green
decreased from US$ 22 million in 2011 tea to the United States, while the
to US$ 21.3 million in 2013. China was other suppliers are United Kingdom,
the largest supplier of organic green Morocco and Germany.
tea to the United States in 2013, with
a share of approximately 47.7 per cent The imports of organic black tea
in the total imports of organic green into the United States have risen at
tea by the United States. Imports of a CAGR of 17 per cent as the value
green tea from China have increased of imports increased from US$ 15.2
at a CAGR of 7.3 per cent during the million in 2011 to US$ 20.8 million in
period 2011 to 2013. Japan was the 2013. India is the leading supplier of
second major supplier of organic green organic black tea to the United States,
tea to the United States, and had a and the value of imports has grown
considerable share of 40.7 per cent in substantially from US$ 4.7 million in
its total imports of organic green tea in 2011 to US$ 8.6 million in 2013. Sri
2013. However, the supply of organic Lanka with a share of 17.3 per cent in

54
 Exhibit 3.10: Organic Wine Imports in the United States (2013)

Total - US$ 255.7 million

Source: USDA GATS

the total imports is the second largest Wine sold in the United States as
supplier of organic black tea to the organic, whether imported from the
United States followed by Canada, European Union, Latin America or
United Kingdom and China. South Africa, or indigenous, has to
meet strict standards, which also
The United States imported organic includes regulations of Alcohol and
wine worth US$ 255.7 million in 2013.
Tobacco Tax and Trade Bureau
France has been the largest supplier
(TTB) and specific sulphite labelling
of organic wine to the United States.
requirements. Organic wine from
The other major suppliers of organic
the United States is also exported to
wine to the United States are Italy (29
per cent), New Zealand (8 per cent), Canada, European Union, Japan and
Spain (7 per cent) and Chile (6 per Taiwan.
cent). Organic wine is made without
using prohibited substances and Organic Packaged Food
genetic engineering, and in addition,
the production is overseen by the The sale of organic packaged/
USDA National Organic Program. prepared foods in the United States

55
 has been rising as is exhibited in in 2005, 2011 and 2014, respectively.
Exhibit 3.11. The value of sales of
organic package prepared foods is Organic processed foods mostly
estimated to rise at a CAGR of 9.8 include frozen vegetables, pasta,
per cent during the period 2005 to canned vegetables, and sauces.
2014, from US$ 1.6 billion in 2005 to There are two basic marketing
US$ 3.7 billion in 2014. The growth channels for processed food (Box 5).
in the sales value however, has
been declining over the years, as the The imports of organic vegetable oil
growth rate declined from 19 per cent in the United States amounted to
in 2006 to 4.0 per cent in 2009 and US$ 165.7 million in 2013, and Italy
then increased marginally to 7.8 per is the largest exporter of organic
cent in 2011. The share of organic vegetable oil to the United States
packaged foods as a percentage of with a share of almost half of the total
aggregate organic food sales has imports. The other major suppliers
also been diminishing with 12.2 per are Spain, Tunisia, Turkey, Greece,
cent, 10.8 per cent and 10.6 per cent Argentina, and Chile.

Exhibit 3.11:Organic Packaged/Prepared Food Sales in the United States (US$ Billion)

*2012-2014 Sales Values are estimates

Source: Nutrition Business Journal

BOX 5: Organic Processed Food Marketing Chain

• Farm > manufacturer > wholesaler > retailer

• Farm > shipper/procurer > manufacturer > wholesaler-retailer

56
 Exhibit 3.12: Organic Veg Oil Imports by the United States(2013)

Source: USDA GATS

Organic Bread and Grains and it is anticipated to decline further

to 9.1 per cent in 2014.
The sales of organic bread and
grains in the United States have been
Exhibit 3.14 displays the production of
increasing over the years, and it is
organic grains in the certified organic
expected to grow at a CAGR of 9.6
farms in the United States. Grains
per cent the value of sales estimatedly
rising from US$ 1.4 billion in 2005 to
produced organically in the United
US$ 3.2 billion in 2014. However, the States includes corn, wheat, oats,
share of organic bread and grains in barley, sorghum, rice, spelt, millet,
the sale of organic food as a whole buckwheat, rye and other grains such
has been diminishing from 10.2 per as milo, triticale, kamut, amaranth
cent in 2005 to 9.6 per cent in 2011, and quinoa.

57
 Exhibit 3.13: Organic Bread and Grain Sales in the United States
(US$ Billion)

*2012-2014 Sales Values are estimates

Source: Nutrition Business Journal

Exhibit 3.14: United States Certified Area Under Organic Grain Production in
Thousand Acres

Data not available for 2009

Source: USDA, Economic Research Service

58
 Box 6: Marketing Chain for Organic Grains, Oilseeds and Legumes
in the United States

• Farmer > cooperative > cleaner > manufacturer > distributor

• Farmer > cleaner > manufacturer > distributor
• Farmer > cooperative > cleaner > broker > manufacturer > distributor
• Farmer > cleaner > broker > manufacturer > distributor
• Farmer > marketing agent (often contracts with farmers, and cleans) >
manufacturer
• Farmer > cooperative > processor of feed grain > distributor > livestock
producer
• Farmer > processor of feed grain > distributor > livestock producer

The United States imports of US$ 16.05 million in 2013. The imports
organic rice (semi/ whole milled) has of organic soybeans in the United
increased at a CAGR of 11.3 per States have also expanded in the
cent from US$ 24.4 million in 2011 to recent years, from US$ 41.8 million
US$ 30.2 million in 2013. Thailand is in 2011 to US$ 110.3 million in 2013.
the leading supplier of organic rice to China contributed 44 per cent to the
the United Sates, and accounting for a total imports of organic soybeans by
share of 60 per cent in the total imports the United States followed by India,
of organic rice by the United States in Canada and Argentina. The imports
2013. Second only to Thailand in the of yellow dent corn amounted to
supply of organic rice is India (23 per US$ 50.5 million in 2013 and the key
cent), whose exports of organic rice suppliers of this product to the United
to the United States have increased States were Argentina (42 per cent),
at a CAGR of 13.03 per cent during Canada (31 per cent) and Brazil
the period 2011 to 2013. Other major (26 per cent).
suppliers of organic rice are Argentina
(8 per cent), China (2 per cent) and Organic Product Pricing in the
Italy (2 per cent). United States

According to the United States Certified organic products are

Bureau Trade data, the imports of generally more expensive than their
organic durum wheat have increased conventional counterparts as organic
from US$ 0.7 million in 2011 to food supply is limited in comparison

59
 to its demand, thus leading to an of mandatory segregation of organic
upsurge in prices. The production and conventional produce, especially
cost for organic products is also for processing and transportation.
typically higher because of greater
Marketing and distribution chain for
labour inputs per unit of output.
organic products is comparatively
Post-harvest handling of relatively
smaller quantities of organic food inefficient further adding to the costs
also induces higher costs because of handling.

Table 3.4: Comparison of Prices of Conventional and Organic Vegetables

in the United States (US$ per unit)

Vegetable Package Conventional Organic

Artichoke cartons, 24s 25.79 32.18

Cabbage 45 lb cartons, medium 15.28 42.08

Carrots 25 lb sacks loose, JBO 7.78 24.70

Cauliflower cartons, film wrapped, 12s 21.69 37.11

Lettuce(Green leaf) cartons, 24s 18.04 32.64

Lettuce(Romaine) cartons, 24s 21.36 38.38

Mesculin Mix 3 lb cartons 6.56 11.08

Onions, Dry 40 lb cartons 22.2 32.25

Spinach cartons, bunched, 24s 20.13 39.6

Potatoes 50 lb cartons, US. No.1 15.05 39.01

Tomatoes, Cherry Flats 12 1-pt cups with lids 18.02 43.88

Sweet Potatoes 40 lb cartons, U.S. No 1 22.25 35.49

Source: USDA, Economic Research Service

60
 Table 3.5: Comparison of Prices of Conventional and Organic Fruits in
the United States (US$ per unit)

Fruit Package Conventional Organic

Apples cartons tray pack 80s,88s 35.05 53.11

Avocados cartons 2 layer 34.69 53.17

Raspberries flats 12 6-oz cups with lids 29.99 36.97

Strawberries flats 8 1-lb cntrs with lids 15.7 27.08

Bananas 40 lb cartons 15.6 25.69

Oranges 7/10 bushel cartons 21.7 36.6

Pears 4/5 bushel cartons 35.13 57.64

Source: USDA, Economic Research Service

Table 3.6: Price Paid by the First Receiver* for Organic Poultry and Eggs

Poultry Eggs
Year Conventional Organic Year Conventional Organic
Dollars per pound Dollars per dozen/carton
2004 0.7 2.1 2004 0.7 2.3
2005 0.7 2.2 2005 0.6 2.3
2006 0.6 2.2 2006 0.6 2.3
2007 0.8 2.2 2007 1.0 2.4
2008 0.8 2.4 2008 1.2 2.6

Source: USDA, Economic Research Service

*First receivers are those entities that purchase the processed products from the poultry or egg company,
such as retailer, distributor, or manufacturer.

61
 Organic Market in Europe the land under organic agriculture has
risen at a compound annual growth
According to FiBL and IFOAM, in rate of 6.7 per cent from 8.3 million
2013, the second largest market ha to 11.5 million ha (Exhibit 3.15).
for organic products globally, after
the United States, is the European In the year 2013, nearly 11.5
Union with a share of 40 per cent of
million hectares of land in Europe
the organic market worldwide. The
was managed organically and this
organic market continued to grow even
constituted 27 per cent of the global
though stagnation was witnessed in
organic agricultural land. The organic
some of the European countries due
agricultural land in Europe comprised
to the economic recession.
2.4 per cent of the aggregate
agricultural land in Europe, while it
The organic agricultural land in
constituted a share of 5.7 per cent
Europe increased at a compound
annual growth rate of 7.5 per cent of the total agricultural land in the
during the period 2000 to 2013. The European Union. In comparison to
area managed organically increased 2012, the agriculturally managed land
significantly in 2009, with a year- on- in Europe has increased at a year-
year growth rate of 10.8 per cent; on-year growth rate of 2.7 per cent.
however, the growth rates have According to the FiBL IFOAM survey,
declined marginally in the following 17 per cent of the organic producers
years. During the period 2008 to 2013, in the world are in Europe.

Exhibit 3.15:Organic Agricultural Land in Europe

Source: FiBL & IFOAM (2015)

62
With 1.6 million hectares, Spain Liechtenstein with the highest share
occupied around 14 per cent of the of 31 per cent, followed by Austria
organic agricultural land in Europe (19.5 per cent), Sweden (16.3 per
in 2013. Italy accounted for 12 per cent) and Estonia (16 per cent).
cent of the organic agricultural land
in Europe and the area under organic
Exhibit 3.18 presents the development
farming has risen at 12.8 per cent
of the European organic market
during 2013 compared to the previous
over the years. The organic market
year. France is the third in ranking
in Europe, in 2013, was worth Euro
and constitutes 9 per cent of the
organically managed area followed 24.3 billion while the organic market
closely by Germany and Poland in the European Union was worth
(Exhibit 3.16). Euro 22.2 billion during the same
year. The market for organic products
Exhibit 3.17 represents the quantity in Europe and in the European Union
of organically managed land as a has increased at a compound annual
percentage of the total agricultural growth rate of 7.4 per cent and 6.9 per
land in the European countries. The cent, respectively, during the period
leading country in this category is 2008 to 2013.

Exhibit 3.16: Top 10 Countries with Largest Organic Agricultural

Land in Europe, 2013

Source: FiBL & IFOAM (2015)

63
 Exhibit 3.17: Top 10 Countries with the Highest Share of Organic Agricultural
Land in Europe (%), 2013

Source: World of Organic Agriculture

Exhibit 3.18: Organic Market in Europe and the European Union

Source: World of Organic Agriculture

64
Germany continues to be the leading growth rate of 30.1 per cent, 18.4 per
market for organic products in Europe cent and 14.2 per cent, respectively,
with retail sales worth 7.6 billion during the period 2009 to 2013.
Euros in 2013. The second major
market for organic products in Europe The Greek organic market has
is France with sales worth Euro 4.4 not displayed a significant trend of
billion, followed by the UK, where the expansion, as the value of sales has
organic sales in 2013 aggregated to increased from Euro 58 million in 2009
2.1 billion Euros. The organic product to Euro 60 million only in 2013. The
sales are primarily from the Northern organic market in the Netherlands
European countries. The Southern has been presenting constant growth
European countries have a smaller as the value of sales increased at a
market for organic products and have growth rate of 7.5 per cent during the
displayed sluggish growth rates during period 2009 to 2013.
this period. The Central and Eastern
European countries are becoming The organic market in UK had been
significant exporters of organic foods displaying impacts of the economic
with internal markets developing recession since 2009, continuing
considerably in countries like Czech till 2011; however, in 2012 signs of
Republic, Poland and Hungary. recovery have been observed. The
value of the UK organic market in 2013
The organic market in Denmark has is worth Euro 2.1 billion occupying 8.6
increased at a compound annual per cent of the market share among
growth rate of 3.0 per cent during the the European markets. The Italian
period 2009 to 2013, as the value of organic market has been growing at
sales increased from Euro 0.8 billion a compound annual growth rate of
in 2009 to Euro 0.9 billion in 2013. The 7.5 per cent during the period 2009
Irish organic market has exhibited to 2013; however, its share in the
stagnation while in Sweden the European organic market decreased
organic market has shown a marginal from 11 per cent in 2007 to 8.3 per
growth of 9.3 per cent during the four cent in 2013.
year period of 2009 to 2013. The
organic market in Finland, Norway and Exhibit 3.19 displays the share of
Switzerland has revealed significant organic sales as a percentage of
growth rate as the value of the market the total retail food sales (excluding
has increased at a compound annual catering) in the European countries.

65
 Denmark has the highest share of Sweden with sales worth Euro 1 billion
organic sales to total food sales in 2013 had a share of 4.3 per cent as
of around 8 per cent, followed by a percentage of the aggregate retail
Switzerland and Austria. food sales.

Table 3.7: Top 10 Organic Markets in Europe

Country 2009 2010 2011 2012 2013 CAGR

  Billion Euros  
Germany 5.8 6.0 6.6 7.0 7.6 7.0
France 3.0 3.4 3.8 4.0 4.4 10.0
UK 2.1 2.0 1.9 2.0 2.1 0.0
Italy 1.5 1.6 1.7 1.9 2.0 7.5
Switzerland 1.0 1.2 1.4 1.5 1.7 14.2
Austria 0.9 1.0 1.1 1.1 1.1 5.1
Sweden 0.7 0.8 0.9 0.9 1.0 9.3
Spain 0.9 0.9 1.0 1.0 1 2.7
Denmark 0.8 0.8 0.9 0.9 0.9 3.0
Netherlands 0.6 0.7 0.8 0.8 0.8 7.5

Source: World of Organic Agriculture

Exhibit 3.19: Share of Organic Products in Total Retail Food Sales in Europe (2013)

Source: World of Organic Agriculture

66
 Exhibit 3.20: Top 5 Organic Markets in Europe

Germany
31%

Source: World of Organic Agriculture

According to a survey carried out However, in many counties the meat

by the Organic Data Network, in based market is not developed due
2013, fruits and vegetables are the to lack of production capacities and
potential organic products in demand high price premiums. There exists a
in Europe. A burgeoning demand market for organic wine in France and
for fruits and vegetables has been Croatia. A boost has been observed
witnessed in Italy, Ireland, Norway, in the demand for organic milled
Sweden and Germany. There is an cereal products in Czech Republic,
enriched demand for fresh produce Finland and Norway and the products
in the organic markets as compared are sold through the supermarket
to the conventional market in Europe. channels. Organic bread and bakery
Many countries, particularly the products are also highly demanded in
Northern European countries, have Switzerland, the Netherlands, France,
displayed rapidly growing demand Sweden, Finland and Germany.
for organic animal products, such as
meat and meat based products, and Germany
milk and dairy items.
Germany is the largest market for
According to the Survey, there was organic products in Europe accounting
considerable market share for organic for 31.3 per cent of the share in the
meat and meat products in Belgium, European market in 2013. According
the Netherlands, Finland and France. to a report by USDA, Germany is the

67
 second largest organic food market declined by 0.9 per cent in 2009 due
globally and ranks second only to to the economic downturn, and has
the United States. The value of sales been picking up since 2010.
of organic products in Germany,
in 2013, stood at Euro 7.55 billion, Exhibit 3.22 represents the product-
and this accounted for 4 per cent of wise share of organic food sales
the total food sales in Germany. As in Germany. With a share of 20 per
can be observed in the Exhibit 3.21 cent in the aggregate food sales, in
below, the sales of organic products
2013, organic fruits and vegetables
has increased at a CAGR of 10.5
were the major item in demand in
per cent as the value of sales rose
Germany. Dairy Products and cheese
from Euro 2.05 billion in 2000 to Euro
accounted for 15 per cent share in the
7.55 billion in 2013. The year-on-year
organic food sales in 2013. The other
growth rates, however, have declined
over the years from 31.7 per cent in potential organic items with significant
2001 to 7.2 per cent in 2013. The demand in Germany are bakery
sale of organic products in Germany products, meat and beverages.

Exhibit 3.21: Domestic Market for Organic Products in Germany

Source: Data from 2000-2009; Hamm and Rippin 2009

Data for 2010, 2011 and 2012 Arbeitskreis Biomarkt based on GfK, Nielsen, BioVista and Klaus Braun
2013 data from World of organic agriculture (2015)

68
 Exhibit 3.22: Organic Food Sales in Germany, 2013

Total - 7.55 billion euros

Source: AMI Analysis 2014 based on Gfk household Panel data

Sales Channels for Organic Products Germany is heavily dependent on

in Germany imports of organic foods as the
demand has been rising while the
According to a study by the Agricultural production levels are falling. Organic
Market Information Service, the cereals imported by Germany are
three notable channels for sales of wheat, maize, spelt, rye, barley,
organic foods in Germany are mainly rice and oats. Around 15 per cent of
natural food stores, supermarkets the organic cereals available in the
and discounters. Other channels German market were imported, while
include butchers, bakeries, and fruit the other 85 per cent were produced in
and vegetable stores. Supermarkets, the country during the year 2009-10.
discounters and drug stores are the Imports of organic cereals in Germany
most significant channels for the sale have risen from 114,000 metric tons
of organic foods with a share of 50 in 2009-10 to nearly 156,000 metric
per cent in the organic food sales, tons in 2012-13, accounting for 17
followed by natural food stores with a per cent of the organic cereals in the
share of 31 per cent in 2012. country. A majority of the imports are

69
 Exhibit 3.23: Sales Channels for Organic Products in Germany, 2012

Source: Arbeitskreis Biomarkt based on GfK, Nielsen and Klaus Braun

sourced from Romania, Ukraine and carrots growing area in Germany was
Hungary. Organic rice in Germany is allocated for the production of organic
mostly imported from Italy, India and carrots. Other potential organic
Pakistan. Approximately, 42 per cent vegetables in demand in Germany
of the organic maize in the German with high import levels are tomatoes
market was imported from Romania, and sweet peppers.
Italy, Slovakia and Hungary.
Organic apples and organic bananas
As for protein crops, around 24 per are the most potential organic fruits
cent of all organic protein crops in the in demand in Germany. Imports are
country were imported during 2009- the only source of supply of organic
10. Germany depends on imports for bananas in Germany. Leading
the supply of organic oilseeds with suppliers of organic bananas to
imports accounting for about 76 per Germany are Colombia, Ecuador and
cent of the total availability of oilseeds Dominican Republic.
in the market. Germany imports
organic soybean from Italy, Romania, Due to an upsurge in the demand for
Kazakhstan, India, Argentina and animal products, such as pork and
Brazil. Carrots are the most demanded eggs, the demand for organic animal
organic vegetable in Germany. In feed and soybean has also been
2009-10, about 14 per cent of the rising.

70
 Table 3.8: German Production and Imports of Organic Products (2009-10)
German Share of
Imports
production Imports in
Product in metric Main countries of origin for imports
in metric Production
tons
tons (per cent)
Cereals 114,000 667,000 15  
Italy, Kazakhstan, Romania, Hungary,
-Wheat 70,000 185,000 27
Russai, Slovakia, (Ukraine)
-Maize 18,000 25,000 42 Romania, Italy,Slovakia,Hungary
-Spelt 10,000 80,000 11 Italy, Slovakia, Hungary
-Rye 8,000 200,000 4 Lithuania, Austria, Latvia, Russia
-Barley 11,300 89,000 11 Russia
-Rice 3,500   100 Italy, India, Pakistan
-Oats 1,600 82,000 2 Finland,Denmark,Sweden
Protein Crops 14,600 45,000 24  
-Field beans 2,400 14,300 14 Lithuania, Romania
-Field peas 10,000 16,400 38 Lithuania, Russia, Slovakia
-Lupines 1,000 13,700 7 Lithuania, Poland
-Lentils 340   100 Canada, Turkey
Oil seeds 41,640 13,000 76  
Italy,Romania,Kazakhstan, India, Argentina,
-Soybean 19,000 1,400 93
Brazil
-Sunflower
11,000 2,050 84 Romania, Brazil, Argentina, China
kernels
-Linseed 5,200 300 95 Canada,Argentina,China, Russia
-Sesame 640   100 Egypt, Uganda
-Rapeseed 5,000 10,000 33 Romania,Russia,Kazzkhstan,Hungary
Potatoes 38,000 100,000 28 Austria ,Israel, Egypt, The Netherlands
Vegetables        
-Carrots 47,000 50,000 48 Netherlands, Israel, Italy
-Tomatoes 18,000 4,000 82 Spain, Netherlands, Italy, Israel
-Sweet
5,900 600 91 Spain, Israel, The Netherlands
peppers
-Onions 4,500 8,500 35 Netherlands, Argentina, Egypt
-Cucumbers 4,600 4,500 51 Spain, The Netherlands, Bulgaria
Fruits
-Strawberries  1100  2280  33  Spain, Italy
-Apples 26,000 26,000 50 Italy, Austria, Argentina, New Zealand
-Bananas 72,000   100 Colombia, Ecuador, Dom. Rep
Pork 7,000 24,400 22 The Netherlands, Austria, Denmark, Italy
Sugar 2,500 49,000 5 Brazil, Paraguay, Ecuador
Eggs(Million
97 383 20 The Netherlands, Italy
pieces)
Milk 97,000 545,500 15 Denmark, Austria
Source: FiBL & IFOAM

71
 France per cent as an impact of the economic
recession. The organic food market in
The organic market in France has France was approximately 2 per cent
been steadily rising over the years of the total food market in 2011.
and a similar trend is expected in the
future. The organic market in France, In the year 2013, the organic area
in 2013, was valued at Euro 4.4 in France was 1.1 million hectares
billion, which represents an increase representing a growth of 2.7 per cent
of approximately 10 per cent from the in comparison to the organic area
previous year. The French organic in 2012.The organic land in 2013
market has expanded at a compound constituted approximately 3.9 per
annual growth rate of 13.5 per cent cent of the total agricultural land.
during the period 2005 to 2013, as The share of the market size in France
the value of sales increased from in relation to the rest of the economies
Euro 1.6 billion to Euro 4.4 billion. in Europe has been increasing from
However, during the period 2008 to 12 per cent in 2007 to 17.4 per cent
2013, value of sales ascended at a in 2009, and then further to 18.1 per
compound annual growth rate of 11.1 cent in 2013.

Exhibit 3.24: Organic Market in France

Source: Agence Bio 2010 and previous editions of the Agence Bio yearbook
FiBL-AMI Survey

72
Fruits and vegetables occupy a Exhibit 3.26 provides the sales
significant position in the French channels for the organic foods in
organic market accounting for nearly France in 2012, with general retailers
16 per cent share in the market. The occupying 45.6 per cent of the share.
other major sectors in the organic The other notable channels are
market are milk and dairy, followed by specialised retailers, small shops
beverages, meat, bakery products and
such as butchers and bakeries, direct
processed fruits and vegetables. The
sales and catering. The products sold
environmental impact, nutrition and
in the organic speciality stores are
health benefits are the main drivers
groceries, dairy, fruits, vegetables and
behind purchase of organic food by
bread. The conventional supermarkets
French consumers. In recent years,
the demand for processed food and and discounters also sell similar set
groceries, such as pasta and cereals of products, while in the case of direct
have been exhibiting strong growth sales from producers to consumers,
trends, as that of food supplements, the food items traded are generally
such as eggs and fish products. fruits and vegetables and wine.

Exhibit 3.25: Sales of Organic Products in France, 2013

Total - 4.4 billion euros

Source: Agence Bio

73
 Exhibit 3.26: Organic Sales Channels in France, 2012
Catering 4%

Direct
Small Sales
shops (bakeries, 11.8%
butchers etc.)
4.4%
General
Retailers
45.6%
Specialised
Organic
Retailers 34.1%

Total - Euro 4 billion

Source: FiBL

Table 3.9 presents the import More or less, all organic products in
of organic foods in France. The the live stock and wine sector are
market for organic foods in France of French origin. Approximately 75
was worth Euro 3.04 billion in 2009
per cent of the organic products
and constituted 38 per cent of total
consumed in France are produced
domestic market of organic products.
domestically. The share of imports
About a quarter of the organic milk
and dairy products are imported into in the total organic food is exhibiting
France. A substantial portion of the a persistent decline as per FiBL &
smoked fish in 2009 was imported IFOAM. Imported organic foods as a
into France. The imports of organic percentage of the total organic foods
fruits and vegetables in 2009 were in the French market declined from
of the value of Euro 339.95 million, 38 per cent in 2009 to 25 per cent in
comprising around 65 per cent of 2012.
the market share. The fresh as well
as dry fruits and vegetables were
The exports of organic foods produced
imported by Morocco, Peru, Ecuador,
Dominican Republic and Turkey. in France have risen by 61 per cent
between 2011 and 2012, from Euro
However, the domestic production of 192 million to Euro 309 million at the
organic foods in France is on the rise. wholesale stage.

74
 Table 3.9: Organic Products Imports in France (2009)

Organic products (2009) Market Size Imports Share of imports

Euro Million %
Beef 136 1.36 1%
Pork 35 2.8 8%
Lamb 30 0 0%
Poultry 93 2.79 3%
Eggs 196 1.96 1%
Milk 240 60 25%
Dairy products 235 58.75 25%
Cured meat 50 15 30%
Catering 80 32 40%
Smoked sea fish 25 23 92%
Food products, various sweetened 315 214.2 68%
Food products , various salted 272 144.16 53%
Wines 298 2.96 1%
Vegetable drinks 57 44.46 78%
Fruits and vegetable juices 77 57.75 75%
Other drinks 6 1.2 20%
Frozen foods 34 22.75 65%
Bread/flour 340 136 40%
Fruits and vegetables 523 339.95 65%
Total 3041 1155.58 38%

Source: Agence Bio 2010

75
 United Kingdom 2.56 billion in 2007 to Euro 2.1 billion
in 2013 due to the economic recession
As per the World of Organic Agri- and decrease in organic production.
culture 2015, the United Kingdom
is the third largest organic market In the year 2013, the area under
in Europe and represented 8.6 per organic management in the United
cent of the aggregate organic sales Kingdom was approximately 0.57
in Europe during the year 2013. million hectares and it constituted
According to The Soil Association nearly 3.3 per cent of the total
Organic Market Report 2014, the agricultural land. The organic area in
organic market in the United Kingdom the United Kingdom reduced by 3.8
has displayed growth and was worth per cent during the year 2013, as the
Euro 2.1 billion during the year 2013 area under organic acreage fell by
and it is expected that this trend would 0.02 million hectares.
continue in 2014.
Product-wise Sales
The organic market in the United
Kingdom was valued at Euro 2.1 Exhibit 3.28 represents the sales
billion during the year 2013, and it of organic products in the United
grew at a year-on-year growth rate of Kingdom, and dairy represents the
7.7 per cent during this period. During major product category with 31 per
the period 2007 to 2013, the organic cent share in the aggregate sales. A
products sales in the United Kingdom major reason for the rise in organic
has declined at a compound annual sales has been the boost in the
rate of 3.2 per cent, down from Euro organic milk sales as it is highly in

Exhibit 3.27: Organic Sales in the UK

Source: FiBL& IFOAM

76
 Exhibit 3.28: Sales of Organic Products in the UK, 2013

Source: Soil Association, Organic Market Report 2014

demand. As per the report by The Online sales by grocery store, Ocado,
Soil Association, twenty two pence in the fourth largest organic retailer in
every pound spent in supermarkets the UK has also displayed a rise in
on organic products in 2013 was the sales value. As per the report
used for purchasing organic milk by Soil Association, UK’s leading
or yoghurt. The other significant organic purchases are bananas, blue
categories of organic foods include berries, apples, carrots, large fruit
fruits and vegetables, canned/ and vegetable boxes, semi skimmed
packaged foods, meat products, baby milk and chicken.
foods, confectionery products, beer/
wine and bakery products. The other sales channels include box
schemes, online purchases, health
Distribution and Sales Channels and whole food shops, home delivery
specialists, selective urban retailers
Sales done by multiple retailers and farmers’ markets. However,
occupied the largest share in 2013, the revenue earned by the farmers
and Sainsbury’s being the largest markets on sale of organic products
organic retailer in the UK constituted had decelerated due to poor weather
29 per cent of the market share. conditions.

77
 Exhibit 3.29: Organic Sales Channels in the UK, 2013

Source: Soil Association, Organic Market Report 2014

Switzerland the Swiss organic sales increased at

a compound annual growth rate of
As per the FiBL and IFOAM, 13.5 per cent, from Euro 0.79 billion
Switzerland had the highest per in 2007 to Euro 1.69 billion in 2013.
capita consumption of organic According to the study by FiBL and
foods globally, which amounted to IFOAM, Swizerland ranked fifth in the
approximately Euro 210 per capita category of market size in Europe.
during the year 2013. Moreover, in
2013, among the European countries, According to FiBL and IFOAM,
Switzerland has the second largest the area in Switzerland that was
organic market share constituting organically managed aggregated up
6.9 per cent. The size of the organic to 128.1 thousand ha during 2013.
market in Switzerland has been With a share of about 12.2 per cent of
displaying a persistent rise as can organic agricultural land, Switzerland
be noted in the Exhibit 3.30. As had the sixth largest share of organic
reported by Bio Suisse, the Swiss agricultural land globally in 2013.
organic market size was nearly Euro
1.69 billion in 2013, and registered Exhibit 3.31 displays the sale of
a year-on-year growth rate of 11 per organic foods in Switzerland. During
cent. During the period 2007 to 2013, the year 2013, fruits and vegetables

78
 Exhibit 3.30: Organic Sales in Switzerland (Euro billion)

Source: FiBL& IFOAM

Exhibit 3.31: Sales of Organic Products in Switzerland,2013

Total - 1.69 billion euros

Source: Bio Suisse 2014

79
 had a share of 20% in the organic sales had a market share of 9.1 per
market which was closely followed cent. The items with considerable
by dairy products. The other items market shares were eggs, bread and
largely demanded by consumers in milk. The highest growth rates were
Switzerland is bakery products, meat, reported in the sales of meat and
prepared meals, beverages and fruits, growing at 16 per cent each in
eggs. the year 2013.

As per the recent study by AC Nielsen The Swiss organic food market is
(excluding organic specialized
mainly dominated by the two chains of
retailers, direct marketing, and
supermarkets Coop and Migros, which
discount stores), the Swiss organic
together accounted for 73 per cent of
market reached a market share of
the market share in the country, in the
6.9 per cent during the year 2013 in
year 2009 and this share increased
comparison to the market share of 5.2
per cent during the year 2009. The by 2 per cent in 2013. The other
study also reported that all products sales channels include specialised
registered an increase in sales value organic shops, direct marketing, small
in the year 2013, in addition to the retailers, department stores, bakers
market shares. The fresh produce and butchers and discounters.

Table 3.10: Sales Channels of Organic Products in Switzerland (2009)

Market
  Turnover Growth
Share
  CHF Million per cent per cent
Coop 764 5.8 49.4
Migros 365 6 23.6
Specialised organic shops 229 1.5 14.8
Direct marketing 80 9.6 5.2
Small retail 16 2.3 1
Departmental stores, butcheries, bakeries 52 -7.9 3.4
Discounters 40 471.4 2.6
Total 1546 7 100

Source: The Organic Market in Europe, FiBL

80
Organic Market in Japan The organic market in Japan is
still in a maturing stage, as there is
Organic foods constitute a small restricted supply of organic foods in
but surging portion of the Japanese Japan. The supply of organic foods in
market. According to the Organic Japanese market has been fluctuating
Market Research Project (OMRP) and uncertain. The price of organic
Survey conducted by IFOAM Japan, ingredients is also higher than their
the organic foods sales constituted 1 conventional counterparts.
per cent of the Japanese foods market,
and were valued at approximately However, the awareness and demand
US$ 1.3 billion to US$ 1.4 billion in for safe and healthy organic products
2010. The market for natural foods is rising in Japan. With increasing
was estimated at around US$ 6 billion, awareness about organic foods,
which is nearly five times the size of demand for “Yuuki Shokuhin” or
the organic market. According to the organic foods is projected to rise in
Japanese Ministry of Agriculture, Japan.
Forest and Fisheries (MAFF), the
organic share in domestically grown Japan depends on imports for
agricultural foods was only 0.24 per around 60 per cent of its organic
cent in 2011; however, the share was food demand, which indicates that
higher as compared to the share in the growth potential of the organic
the previous decade (0.10 per cent in market is significant. Additionally,
2001). the occurrence of incidents, such as
accidents in nuclear power plants
Currently, along with small and resulting in radiation and ruination
specialized shops, chain stores and of plentiful agricultural land may also
super markets also sell variety of drive the demand and appreciation of
organic products in Japan. Some prices for organic foods in Japan.
supermarkets, such as Kinokuniya
have more than 200 domestic and Organic agricultural land in Japan
imported organic products available
in their stores. According to industry Exhibit 3.32 presents the area under
estimates, in 2012, organic sales organic agriculture in Japan. There has
in Japan witnessed an increase of been no growth in organic agricultural
around 12 per cent. land in the year 2010; however, a

81
 growth of 3.7 per cent was witnessed in Japan, and its share in the overall
in the year 2011. The most significant production has consistently risen.
escalation in the organic agricultural The production of organic vegetables
land occurred in 2012 with a growth of has increased at a CAGR of 7.4 per
approximately 13 per cent. There has cent during the ten year period 2001
been a significant increase of around to 2011. The share of production
1,210 hectares in 2012 over the 2011 of organic vegetables in the overall
estimates. Organic agricultural land production, has displayed a growth
in Japan during the year 2013 was from approximately 58 per cent in
stable at 10611 hectares. The area 2001 to around 69 per cent in 2011.
under organic agriculture in Japan The organic vegetables produced
has increased at a compound annual in Japan include radishes, carrots,
growth rate of 4 per cent during the cabbage, spinach, egg plant and
period 2009 to 2013. The organic tomatoes.
agricultural land, as a percentage of
aggregate agricultural land was 0.27 The domestic production of organic
per cent in 2013. fruits in Japan has grown at a CAGR
of 5 per cent during the period 2001
The domestic production of JAS to 2011. As far as the share of organic
certified agricultural products fruits in the aggregate production
increased at a CAGR of 5.6 per is concerned, it has exhibited only
cent during the period 2001 to 2011. marginal changes over the years,
Vegetables have persistently been from 4.1 per cent share in the
the leading item of organic production aggregate organic production in 2001

Exhibit 3.32: Organic Agricultural land in Japan

Source: FiBL and IFOAM

82
to 3.9 per cent in 2011. Organic rice is The cultivation of organic green tea
another significant item of production has increased at a CAGR of 7.9
in Japan, and the production has per cent during the period 2001 to
risen at a CAGR of 2.5 per cent 2011, and its share in the aggregate
from 7.8 thousand metric tons in production rose from 2.7 per cent to
2001 to 10 thousand metric tons in 3.4 per cent, during the same period.
2011. However, the share of organic
rice in domestically produced JAS Exhibit 3.34 presents the share of
Organically Certified products has organic agricultural production in the
been displaying a declining trend from total agricultural production in Japan.
23 per cent in 2001 to 20 per cent The share of organic production has
in 2007, and further to 17 per cent, displayed a modest growth over
during the year 2011. The production the years as it increased from 0.1
of wheat, which accounted for 1.8 per cent in 2001 to 0.24 per cent
per cent of the aggregate production of the total agricultural production
of organic agricultural products in in 2011. However, Ministry of
Japan, has expanded at a CAGR of Agriculture, Forestry and Fisheries
4.1 per cent, during the period 2001 (MAFF), the Government of Japan,
to 2011. The production of organic has been encouraging organic
soybean has shown a sustained farming in Japan by way of policy
decline over the years; however, the implementations at central and local
production levels improved in 2011. government levels, directed towards

Exhibit 3.33: Trend in Domestic Production of JAS Certified

Organic Agricultural Products

Source: MAFF

83
 promotion of production, distribution the imported vegetables and fruits
and consumption of organic food in Japan include carrots, onions,
products. broccoli, taros, garlic and ginger.

Organic soybean is the principal The domestic production of JAS

item of import among the organically certified organic agricultural pro-
certified agricultural products in Japan, cessed products has declined at
and constituted around 39.6 per cent a CAGR of 8.0 per cent during the
in the aggregate imports in 2011. The period 2005 to 2011. As can be
Japanese have a high preference to observed in the Exhibit 3.36, the
purchase organically grown soybeans, share of vegetables in the aggregate
due to safety and health reasons. The organic agricultural production has
import demand for this item has been displayed a marginal rise from 3 per
rising as the local bean production cent in 2005 to 5 per cent in 2011. The
declines, and the buyers are ready to production of processed vegetables
pay a substantial price premium for it. has grown at a CAGR of 3.2 per cent
Organic vegetables and organic fruits during the period 2005 to 2011. The
are the next major items of import with production of organic fruits declined
a share of 28.9 per cent and 19 per at a CAGR of 9.7 per cent during the
cent, respectively, in the aggregate period 2005 to 2011, and its share in
imports in 2011. According to MAFF, aggregate production also declined

Exhibit 3.34: Share of Organic Agricultural Production in Total Agricultural

Production in Japan (percentage)

Source: MAFF

84
correspondingly. The production of The total imports of JAS certified
organically processed soy products organic agricultural processed
has consistently been the leading products, certified outside of Japan,
item of production. The rising demand amounted to approximately 49.5
for tofu, natto, miso and soy sauce thousand metric tonnes, in volume
has led to this increase. However, the terms, during the year 2011. The share
share of soy products in the aggregate of vegetables (58.9 per cent) in the
organically processed products has aggregate imports was the highest,
declined from 77 per cent in 2005 to followed by fruits (7.9 per cent) and
70 per cent in 2011. soy products (3.4 per cent).

Exhibit 3.35: Import of JAS Certified Organic Agricultural Products,

Certified Outside of Japan (2011)

Total - 68.7 thousand metric tonnes

Source: MAFF

85
 Exhibit 3.36: Trends in Production of JAS Certified Organic Agricultural
Processed Food Products in Japan

Source: MAFF

Exhibit 3.37: Import of JAS Certified Organic Agricultural Processed Products,

Certified Outside of Japan (2011)

Source: MAFF

86
4. Organic Standards and
Regulations

Organic Certification in the Organic Certification and

United States Accreditation

Agricultural Marketing Services of Organic certification verifies that

USDA implemented the National the farm or handling facility located
Organic Program (NOP) in 2002 with anywhere in the world compiles
a view to encourage organic farming with the USDA organic regulations
and instil consumer assurance. The and allows the producers to sell,
NOP develops the laws that regulate label and represent the products as
the creation, production, handling, organic. Presently, approximately
labelling, trade and enforcement of 30,000 organic farms and processing
all USDA organic products. USDA facilities around the world are certified
harmonized the differing standards as complying to the USDA organic
among the various States and private standards. Their certification is
certification organizations that had managed by certifying agencies
emerged by the late 1990’s. located in the US and the world.

USDA requires organic farmers and Organic Standards

food handlers to meet uniform organic
standards, and make certification The organic standards describe
mandatory for operations with organic the specific requirements that must
sales of over US$ 5,000. USDA has be verified by a USDA-accredited
accredited approximately 50 US State certifying agent before the products
and private certification programs can be labelled USDA organic.
and over 30 foreign programs. The
certifying agencies review applications Organic crops: The USDA organic
from farmers and processors for seal verifies that irradiation, sewage
certification eligibility, and qualified sludge, synthetic fertilizers, prohibited
inspectors conduct annual onsite pesticides, and genetically modified
inspection of organic operations. organisms were not used.

87
 Organic livestock: The USDA organic intermediate processor, the assurance
seal verifies that producers met animal of the organic product’s integrity.
health and welfare standards, did not
use antibiotics or growth hormones, The USDA organic regulations
used 100% organic feed, and provided recognize four categories of organic
animals with access to the outdoors. products:

Organic multi-ingredient foods: • Crops: A plant that is grown to be

The USDA organic seal verifies that harvested as food, livestock feed,
the product has 95% or more certified fiber, or used to add nutrients to
organic content. If the label claims that the field.
it was made with specified organic
ingredients, it is confirmed that those • Livestock: Animals that can be
specific ingredients are certified used for food or in the production
organic. of food, fiber or feed.

Accreditation to USDA Organic • Processed products: Items that

Standards have been handled and packaged
or combined, processed and
Accreditation authorizes private, packaged.
foreign, or State entities to certify farms
or processing facilities. Certifying • Wild crops: Plants from a growing
agents are accredited by the USDA site that is not cultivated.
and are located throughout the United
States and around the world. Certifying Around 82 certifying agencies are
agents are responsible for ensuring currently USDA-accredited, and
that the USDA organic products meet authorized to certify operations to
or exceed all organic standards. the USDA organic standards. Of
these 48 agencies are based in the
The farm or handling facility may United States itself, and 34 are based
be certified by a private, foreign, or in foreign countries. Most certifying
State entity that has been accredited agencies are directly accredited by
by the USDA. Certifying agents are the USDA NOP. Twenty additional
responsible for ensuring that USDA certifying agencies are authorized
organic products meet all organic through recognition agreements
standards. Certification provides between the United States and the
the consumer, whether end-user or foreign governments.

88
Transition Period Organic Certification Cost

Any land used to produce raw organic Actual certification costs or fees vary
commodities must not have had widely depending on the certifying
prohibited substances applied to it agent and the size, type and complexity
for the past three years. Until the of the operations. Certification costs
thirty six month transition period is may range from a few hundred to
met the producer may not sell, label several thousand dollars and ordinarily
or represent the product as organic there is an application fee, annual
or use the USDA organic or certifying renewal fee, assessment on annual
agent’s seal. During this transition production or sales and inspection
period USDA provides technical fee. After the certification is done,
and financial assistance through its the USDA Organic Certification Cost-
Environmental Quality Incentives Share Program can reimburse up to 75
Program (EQIP). percent of the certification costs.

Exhibit 4.1: Organic Certification Process in the United States

Source: USDA

89
 Usage of USDA Organic Seal • defined organic farming more
accurately by describing its
If the product has a valid organic objectives and principles;
certificate from an NOP accredited
certifying agent or is authorized through • f u r t h e r h a r m o n i s e d o r g a n i c
an international trade partnership with production rules within the EU, by
the United States, the USDA Organic putting an end to national rules for
seal may be used. The certifying agent animal products;
will review and approve all labels prior
to the use to ensure compliance. In • introduced the possibility of
case the product has not been certified exceptions to the rules under
organic by an authorized certifying the responsibility of the member
agent then the USDA organic seal is states;
not allowed to be used.
• linked the organic control system
Organic Certification in the to the Official Food and Feed
EU Controls(OFFC) provided in
Regulation (EC) No 882/2004 and
EU Regulation on Organic made obligatory to the accreditation
Farming of private control body;

The first EU legislation on organic • restructured the import regime:

farming, Council Regulation (EEC) in addition to the recognition of
2092/91 in 1991, has been a major third countries for the purpose of
factor for the growth of the EU’s equivalence, the EU is now able
organic farming sector. It put forward to recognise directly the control
a legal definition of organic farming bodies active in third countries
through laying down the production for the purpose of equivalence
rules and defined control and labelling or compliance. The system of
requirements. This helped in providing individual authorisations granted by
a base for the protection of consumers the member states, consignment
and organic farmers against misleading by consignment, is being phased
organic claims. out and is envisaged to be ended
till 2014.
This regulation was substantially
revised with the adoption of Council While adopting Council Regulation (EC)
Regulation No (EC) 834/2007 in June No 834/2007, the Council earmarked a
2007 which notably: series of issues, regarding in particular,

90
the scope of regulation, the prohibition which can transfer nutrients to
of the use of Genetically Modified the plants. Organic farmers use
Organism (GMO) and the functioning multiannual crop rotation, including
of the internal market and control legumes and other green manure
system. crops, and apply livestock manure
or organic material in order to
The EU Requirements increase the fertility and the
biological activity of the soil.  To
EU Rules on Production prevent the development of pests,
diseases and weeds, organic
• L e g a l F r a m e : T h e C o u n c i l farmers are not allowed to use
Regulation (EC) No. 834/2007 synthetic pesticides or herbicides.
establishes the legal framework for Multiannual crop rotation and
all levels of production, distribution, appropriate cultivation techniques
control and labelling of organic play a role in the protection of
products, which may be offered plants against pests, diseases and
and traded in the EU. The Council weeds. The collection of wild plants,
Regulation applies to the following growing naturally in natural areas,
agricultural products, including forests and agricultural areas is
aquaculture and yeast: considered as organic production
method provided that those areas
- Living or unprocessed have not, for a period of at least
products; three years before the collection,
received treatment with products
- Processed foods;
other than those authorised for use
- Animal feed; and in organic production. 
- Seeds and propagating
material • Regulation on livestock: As per
the regulation on livestock, the
Collection of wild plants and organic livestock must be born
seaweed is also included in the and raised on organic farms. For
scope of this regulation. breeding purposes, non-organically
raised animals may be brought
• Plant production rules: The onto a holding under specific
plant production rules specify that conditions. Taking into account the
the usage of soluble fertilisers is husbandry principles, the number
strictly limited and it is crucial to of livestock must be limited with
boost the fertility of the soil through a view to minimising overgrazing,
the activity of soil organisms, poaching of soil, erosion, or

91
 pollution caused by animals or by the 2012 harvest, organic wine
the spreading of their manure. With growers are allowed to use the
regards to reproduction, natural term “organic wine” on their labels.
methods must be used, artificial The labels must also show the EU-
insemination is however allowed. organic-logo and the code number
of their certifier, and must respect
• EU processed products: The other wine labelling rules.
preparation of processed organic
food must be kept separate in EU Rules on Trade:
time or space from non-organic
food. The product must be • Import/export : Trade in Organic
produced mainly from ingredients Products
of agricultural origin. The following
ingredients may be used: additives, Import of organic products into the
processing aids, flavourings, European Union
water, salt, preparations of micro-
organisms and enzymes, minerals, In order to import an organic
trace elements, vitamins, as
product into the European Union
well as amino acids and other
there is a need to comply with the
micronutrients in foodstuffs for
EU legislation and in particular
particular nutritional uses, but
both organic and general food
only in so far as they have been
legislation. The importers of
authorised for use in organic
organic products must register with
production.
a control body or control authority.
Every consignment of organic
• Aquaculture: The regulation,
products imported from countries
set conditions for the aquatic
production environment and outside the EU, excluding the
impacts on other species.  It deals European Economic Area and
with the separation of organic and Switzerland, must be accompanied
non-organic units and specifies by a certificate of inspection. This
animal welfare conditions including certificate can be issued by:
maximum stocking densities, a
measurable indicator for welfare. - A control body recognized by the
EU
• Organic wine: New EU rules for
“organic wine” have been agreed - The control authorities or control
by the Standing Committee on bodies authorised by a country
Organic Farming (SCOF). From recognised by the EU

92
 - The control authorities or • Certifying Organic production
control bodies authorised by for export to the EU
the competent authority of the
authorising Member State, in case In case the organic production is not
of import authorisation. covered by the above mentioned
trade agreements that EU has with
The original certificate of inspection the third world countries then the
must be present together with following approach is followed.
the imported organic products The European Union has accepted
to the relevant Member State’s control authorities or control bodies
authority. for certifying organic production
outside the Union according
Export from EU to other countries to equivalent production rules.
These authorities or bodies issue
Some of the arrangements of the documentary evidence attesting
EU with trade partners require that organic products and organic
EU exporters to comply with their operators comply with organic
import regimes. rules equivalent to those of the EU,
as well as certificates of inspection
• Equivalency Agreement for export of organic products to
the EU.
With regard to the Equivalency
Agreement, the EU and third Organic Logo
countries have recognised each
other’s organic production rules The EU organic logo indicates that
and control systems as equivalent the product is in full conformity with
under their respective rules. Trade the conditions and regulations for the
opportunities depend on the organic farming sector established by
specific arrangement the European the European Union. The organic logo
Union has with the following third for the processed products indicates
countries namely, Argentina, that at least 95% of the agricultural
Australia, Canada, Costa Rica, ingredients are organic. Adjacent to
India, Israel, Japan, New Zealand, the EU organic logo, a code number of
Switzerland, Tunisia, and the the control body is displayed along with
United States of America, as well the location from where the agricultural
as members of the European raw materials comprising the product
Economic Area (Norway and have been farmed. The organic
Iceland). logo symbolises that the product is

93
 in conformity with the regulations Inspection System for Organic
mentioned in Council Regulation (EC) Products
No 834/2007 and the Commission
Regulation (EC) No 889/2008. The 1. R e g i s t r a t i o n o f r e g i s t e r e d
European Commission’s Directorate certification bodies
General for Agriculture and Rural Based on the standards specified
Development has in place a detailed
by the JAS law, the Minister of
user manual, which includes concrete
Agriculture, Forest and Fisheries
guidelines for the application of the EU
receives applications, performs
Organic Logo.
assessments, and consequently
registers certifying bodies.
Organic Certification in
Japan
2. Certification of certified operators
Certification Process under JAS The farms producing organic plants
and processed food manufacturers
The Codex Alimentarius Commission send certification applications to
adopted the “Guidelines for the those registered certifying bodies
production, Processing, Labelling and who in turn grant them certification
Marketing of Organically Produced on the basis of assessments
Foods” in 1999. As a result, the conducted on the Technical Criteria
Japanese Agricultural Standards for certifying.
(JAS Standards) for organic plants
and organic processed foods were 3. Inspection of certified operators
established and labelling of organic To confirm whether producers
products was made mandatory, in and manufacturers are operating
accordance with the revision of the
in compliance with organic JAS
Law concerning Standardisation
standards, inspection is conducted
and Proper Labelling of Agricultural
at least once a year.
and Forestry Products. The JAS
standards for organic products were
4. Grading by certified operators
made in compliance with the Codex
Guidelines. According to the Japanese The certified farms producing
Organic Standards for organic plants organic plants and manufacturers
and processed foods of plant origin, of processed foods, grade the
only those items to which the certified products they manufacture, attach
operators attach JAS logos can be the Organic JAS logos and supply
labelled as “organic”. the products to the marketplace.

94
 Exhibit 4.2: Inspection Certification System for Organic Products

Grading Grading

Source: MAFF, Government of Japan

95
 Import Requirements for Organic produce, or manufacture products
Foods in Japan and attach JAS marks to the
products.
There are two methods of importing
organic foods: 2. Labelling of Organic JAS Marks
by importers certified by Registered
1. Grading by Registered Japanese Japanese Certifying Bodies:
Certifying Bodies or Registered
Overseas Certifying Bodies • Third party certifiers under
legislations of overseas countries
• The Ministry of Agriculture, Forestry whose organic rules and
and Fisheries (MAFF) registers standards are approved by Japan
Japanese Certifying Bodies or as equivalent, certifies organic
Overseas Certifying Bodies. products in accordance with the
organic rules and standards of
• Those Registered certifying bodies respective countries.
certify producers, manufacturers
and other business entities of • Government agencies or quasi-
agricultural and forestry products. governmental organisations of the
countries with organic equivalency,
• The certified producers, manu- issue export certificates to certify
facturers or other business entities the organic products produced or

Exhibit 4.3: Certification by Registered Japanese Certifying Body or Registered

Overseas Certifying Body

Source: MAFF, Government of Japan

96
 manufactured in the countries were • This is applicable only to organic
graded in accordance with the agricultural products and organic
organic system of the respective agricultural processed products.
countries.
• As of October 2013, the EU
• Importers certified by registered countries, Australia, United
Japanese certifying bodies import States, Argentina, New Zealand
organic food and re-label the and Switzerland are noted as
Organic JAS mark to the products possessing equivalence in Article
in Japan. 15-2 of the JAS Law.

Exhibit 4.4: Procedure of Certification of Importers Certified by Registered Japanese

Certifying Bodies

Source: MAFF

97
 5. Organic Farming in India

A rea u nder O rganic of 9.9 per cent during the period

Certification 2008-09 to 2013-14 from 1.21 million
ha to 0.72 million ha. The cultivated
In organic certification system, both area under organic certification rose
the cultivable as well as wild harvest during the years 2006-07 to 2008-09,
collection1 area can be certified. A wild however it fell in 2009-10 and declined
crop that is intended to be sold labelled further in the subsequent years, with
or represented as organic must be an exception in 2011-12, after which
harvested from an area that had no a significant reduction occurred in
application of prohibited substances 2012-13, which recovered partly in
and the procedure used for harvesting the following year. The area under
should be such that it does not have wild harvest has increased at a CAGR
adverse effects on the environment. of 5.5 per cent, from 3.06 million
ha in 2008-09 to 4.00 million ha in
Exhibit 5.1 displays the cultivated 2013-14.
area under organic certification and
the wild forest harvest collection area The total area under organic farming
in India. The cultivated area under increased at a CAGR of 2 per cent as
organic certification has increased the organic acreage rose from 4.27
at a CAGR of 33.5 per cent, as it million ha to nearly 4.72 million ha
increased from 0.04 million ha in 2003- during the period 2008-09 and 2013-
04 to nearly 0.72 million ha in 2013-14. 14. However, organic area declined
However, the cultivated area under at a year-on-year growth rate of 9.4
organic certification has declined at a per cent in the year 2013-14 by 0.49
compound annual growth rate (CAGR) million ha.

1
Wild harvest collection area is any plant or portion of a plant that is collected or harvested
from a site which is not maintained under cultivation or other agriculture management.

98
 Exhibit 5.1: Cultivated, Wild and Total Area under Organic Certification in India

Source: National Centre of Organic Farming

Production a significant rise in the quantity of

organic food produced during the
The production of certified organic year 2010-11, which decreased in
produce declined at a CAGR of 7.5 the subsequent years. Nevertheless,
per cent during the period 2009-10 the quantity of production increased
to 2013-14 (Exhibit 5.2). There was around 0.6 million mt during 2012-13

Exhibit 5.2: Production of Certified Organic Produce in India

Source: Lok Sabha Unstarred Question No.3130 dated 11-02-2014

99
 as compared to the previous year. organic cultivation in India. Leading
The production again declined by State, producing organic foods in
4.6 per cent during 2013-14 from 1.3 India during the year 2012-13, was
million mt to 1.24 million mt.
Madhya Pradesh, with a share of
32 per cent in the total quantity of
State-wise Area under Organic
Certification organic products produced in the
country followed by Karnataka and
Exhibit 5.3 represents the share of Maharashtra, with 24 per cent and 20
states with maximum acreage under per cent, respectively.

Exhibit 5.3: Top 5 States in Acreage under Organic Production in India

Karnataka,
3%

Rajasthan,
6%
Total - 4.6 million Total - 5.2 million ha

Source: Lok Sabha Unstarred Question No.3130 dated 11-02-2014

100
 Table 5.1: State-wise Production of Organic Products in India

State Production
  2009-10 2010-11 2011-12 2012-13
(Wild+ (Wild+ (cultivable (Wild+
  organic) organic) production) organic)
  (thousand mt)
Madhya Pradesh 164.7 1220.8 83.4 425.9
Himachal Pradesh 237.1 75.0 0.5 0.2
Rajasthan 23.6 265.3 138.6 95.9
Maharashtra 53.5 694.3 211.7 271.1
Uttar Pradesh 970.8 294.2 27.5 47.8
Gujarat 26.4 191.7 9.9 37.9
Karnataka 45.5 220.9 10.3 322.5
Uttarakhand 10.0 79.8 22.4 29.0

Source: Lok Sabha Question No.3130 dated 11-02-2014

Organic Farming in Select The organic production in the state

States increased at a CAGR of 37.3 per cent
during the period 2009-10 to 2012-
Madhya Pradesh 13. The share of Madhya Pradesh in
the aggregate organic production in
Madhya Pradesh has been the leading the country during the year 2012-13
state in terms of area under organic
was approximately 32 per cent. The
cultivation, except for the year 2011-
Madhya Pradesh State Organic Policy
12, when the State’s share displayed
was framed in August 2010 to boost
a decline. The area under organic
organic production and create an
certification declined at a CAGR of
2.4 per cent from 2.8 million ha to 2.6 integrated value chain for the organic
million ha during the period 2009-10 farm produce. The State has inherent
and 2012-13. There was a substantial advantages for organic farming as
rise in the area managed organically there are many natural grasslands
during the year 2012-13 relative to the and large expanse of area with very
previous year. low input usage. In the year 2012-13,

101
 Exhibit 5.4: Organic Area in Madhya Pradesh (million ha)

Source: Lok Sabha Unstarred Question No.3130 dated 11-02-2014

nearly half of the area under organic year. The bio fertiliser production in
cultivation in India was in Madhya Madhya Pradesh increased at a CAGR
Pradesh and in the same year, Madhya of 14 per cent from 848.4 tonnes in
Pradesh produced approximately 32 2008-09 to nearly 1408.08 tonnes in
per cent of the aggregate organic food 2012-13.
produced in the country. The crops that
can be organically grown in Madhya Himachal Pradesh
Pradesh include maize, sorghum,
pearl millets, grains, pulses, fruits, Farmers in Himachal Pradesh have
vegetables and oilseeds like Niger, been traditionally dependent on organic
safflower and castor. ways of farming and in 2012-13 it was
the second largest state in terms of
Exhibit 5.5 displays the bio fertiliser area under organic farming in India,
production in the state of Madhya although the quantity of production
Pradesh over the years. There has has been meagre as compared to
been a constant rise in the production other states. The area under organic
of bio fertilisers until 2010-11; however, farming increased at a CAGR of 26
the production declined in the next per cent from 683.7 thousand ha

102
 Exhibit 5.5: Biofertiliser Production in Madhya Pradesh (metric tonnes)

Source: Annual Report 2012-13, National Centre of Organic Farming

Exhibit 5.6: Area under Organic Cultivation in Himachal Pradesh (thousand ha)

Source: Lok Sabha Unstarred Question No.3130 dated 11-02-2014

103
 to 1364.7 thousand ha during the Rajasthan
period 2009-10 to 2012-13. Vegetables,
fruits along with cereals, such as The area under organic farming in
maize and sorghum are produced Rajasthan increased at a CAGR of
organically in the State. There has 22.8 per cent during the period 2009-
been a substantial fall in the quantity 10 and 2012-13, from 260.8 thousand
of organic produce in the State from ha to 483.3 thousand ha. The state
237.1 thousand mt in 2009-10 to occupied the third position in terms of
approximately 0.2 thousand mt in area under organic cultivation in the
2012-13. country and ranked fourth in terms of
quantity of organic production during
Exhibit 5.7 presents the bio fertiliser the year 2012-13. There has been
production in the State over the years,
a considerable rise in the quantity
as recorded by the National Centre
of organic production from the state
of Organic Farming. The production
during the four year period from
was nil in the year 2008-09; however,
23.6 thousand mt in 2009-10 to
it picked up in 2009-10 and increased
nearly 95.9 thousand mt in 2012-13.
further in the following year, post
Around 2 per cent of the bio fertiliser
which, the production declined by a
production in the country was
sizeable amount. In 2012-13, however,
contributed by Rajasthan during the
the bio fertiliser production in Himachal
Pradesh was again nil. year 2012-13.

Exhibit 5.7: Biofertiliser Production in Himachal Pradesh (metric tonnes)

Source: Annual Report 2012-13, National Centre of Organic Farming

104
 Exhibit 5.8: Organic Area in Rajasthan (thousand ha)

Source: Lok Sabha Unstarred Question No.3130 dated 11-02-2014

Exhibit 5.9: Biofertiliser Production in Rajasthan (metric tonnes)

Source: Annual Report 2012-13, National Centre of Organic Farming

105
 Maharashtra The year-on-year growth rate in the
quantity of organic foods produced in
The organic acreage in Maharashtra the State in the year 2012-13 was 28
expanded at a CAGR of 28 per cent per cent. Cotton, oilseeds, fruits and
from 35.4 thousand ha in 2009-10 to vegetables, pulses are the organic
74.4 thousand ha in the year 2012- crops majorly produced in the State.
13. The organic area in Maharashtra
accounted for around 1.4 per cent The bio fertiliser production in the State
of the aggregate organic area in increased at a CAGR of 47 per cent
the country. The organic production during the period 2008-09 and 2012-
increased at a CAGR of 71.8 per cent 13 and the amount produced rose from
from 53.5 thousand mt in 2009-10 to the levels of 1249.87 mt to 5897.91
271.1 thousand mt in 2012-13. The mt. The bio- fertiliser production in
quantity produced rose drastically in 2012-13 reduced by 33 per cent as
2010-11, but eventually reduced in the production declined by 2846 mt
2011-12, and also in the following year. during that period.

Exhibit 5.10: Organic Area in Maharashtra (thousand ha)

Source: Lok Sabha Unstarred Question No.3130 dated 11-02-2014

106
 Exhibit 5.11: Biofertiliser Production in Maharashtra (thousand mt)

Source: Annual Report 2012-13, National Centre of Organic Farming

Government Initiatives to centres at Bangalore, Bhubaneswar,

Promote Organic Farming Panchkula, Imphal, Jabalpur and
Nagpur.
National Project on Organic
Farming The primary objective of the NPOF
Scheme is to encourage the production
The National Project on Organic of food organically, and boosting the
Farming (NPOF) is a Central Sector manufacture as well as the usage of
Scheme which got implemented in the organic and biological nutrients like
Tenth Five Year Plan. It commenced bio-fertilizers, organic manure, bio-
as a pilot project and came into effect pesticides and bio-control agents.
from 01.10.2004, with an outlay of Rs. The scheme is also aimed to act as a
57.04 crores. The scheme prolonged nodal agency for the implementation of
in the Eleventh Five Year Plan with an quality control regime for bio-fertilizers
outlay of Rs. 101 crore. The scheme and organic fertilizers, as per the
was being implemented in 2012-13 requirements of the Fertilizer Control
with an allocation of Rs. 21 crores. Order. Additionally, the goals that the
The NPOF is being implemented by Government of India envisages to
National Centre of Organic farming achieve through the execution of the
at Ghaziabad and its six regional NPOF Scheme are listed below:

107
 • To attempt regular testing and group low cost certification system
assure unrestrained supply of such as PGS;
mother cultures of bio-fertilizers
and other micro organisms for • To create an understanding about
nutrient mobilization and plant organic food among consumers
protection; through seminars and conferences
and trade fairs;
• To organise certificate courses
demonstrating the cultivation of • Facilitation of evaluation and
organic food and on farm resource monitoring services to the
management; Central and State Governments
for implementation of organic
• To arrange for trainings beneficial in agricultural schemes;
coaching the State Government’s
quality control analysts and Capital Investment Subsidy for
inspectors concerned with the
Setting up of Organic Inputs
implementation of Fertilizer Control
Production
Order, 1985;
The NPOF provides financial
• To encourage the undertaking of
assistance for fruits and vegetables
research, surveys and studies on
waste compost units by providing for
biological soil health assessment
33 per cent of the capital cost of the
under different farming systems
project, subject to a ceiling of Rs. 63
and practices;
lakhs. The ceiling has been enhanced
• To function as the apex centre from Rs. 60 lakhs to Rs. 63 lakhs with
specializing in information and effect from 1st April 2014. Further, NPOF
data collection on all aspects of provides subsidy for the construction of
organic farming and dissemination bio fertilizer or bio pesticide production
of information through print and unit to an extent of 25 per cent of the
electronic media; capital cost of the project subject
to a ceiling of Rs. 40 lakhs. The
• To render assistance to the existing remaining cost is envisaged as credit
certification systems in defining support from financial institutions and
standards and implementation margin money. The subsidy is credit
protocols and providing surveillance linked and back-ended and mobilised
support to alternative farmer’s through NABARD.

108
 Table 5.2: Details of Subsidy Received by the Top 5 States under Capital Investment
Subsidy Scheme (CISS) of NPOF through NABARD for Organic Input Production

Name of States Amount of Subsidy Approved

 2009-10   2010-11   2011-12  2012-13

(Rs. Lakh)
Maharashtra 38.46 13.75 43.08 23.01
Andhra Pradesh 10 23.25 20 20
Madhya Pradesh 5.04 0 0 2.26
Haryana 0 14.75 0 2.03
Assam 2.6 1.38 22.32 0.75
Rest of India 203.14 176.1 70.71  
TOTAL 259.24 229.23 156.11 48.04

Source: Lok Sabha Starred Question No.246 dated 27.08.2013

According to an Annual Report of Sector Scheme on Central Fertilizer

NABARD, during the year 2013-14, Quality Control and Training Institute
under the National Project on Organic or Regional Laboratories had been
Farming a subsidy of Rs. 3.41 crore subsumed in the Scheme with effect
was released in respect of six units. from 1st March 2009. This Scheme
Cumulatively, Rs.17.42 crores has provides financial assistance at Rs.
been released as on 31st March 2014 500 per ha for promoting the use of
for 651 units. organic manure.

National Project on Management of National Project on Management of

Soil Health and Fertility (NPMSF) Soil Health and Fertility (NPMSF) and
National Project on Organic farming
The National Project on Management (NPOF) have been subsumed under
of Soil Health and Fertility (NPMSF) the National Mission for Sustainable
had been taken up from 2008-09, to Agriculture (NMSA) in the 12th Five
promote the balanced and judicious Year Plan, and these are envisaged
use of fertilizers and organic manure to be implemented under Soil Health
on soil test basis with an outlay of Management (SHM) component of
Rs. 429.85 crore during the Eleventh NMSA with effect from 1st April 2014.
Five Year Plan period. The Central The two sub-components of SHM

109
 are soil health, Integrated Nutrient renders demonstrations to make the
Management (INM) and Organic farmers aware about several aspects
Farming. of organic farming.

Network Project on Organic Farming National Horticulture Mission

by ICAR
This is a Centrally Sponsored Scheme
The Indian Council for Agriculture launched in 2005-06 for strengthening
Research (ICAR) has evolved a the growth of the horticulture sector
technology for the preparation of comprising of fruits, vegetables, roots
vermi-compost from various rural and and tuber crops, mushroom, spices,
urban wastes in order to encourage flowers, aromatic plants, cashew
the spread of organic farming in the and cocoa. Under this scheme, the
country. Moreover, advanced strains of Government of India provides support
bio fertilizers specific to different crops to an extent of 85 per cent, while the
and soil types are being developed
rest 15 per cent is contributed by
under the network project on bio
the State Governments. During the
fertilizers. Additionally, the ICAR
Twelfth Five Year Plan it was resolved
have initiated the Network Project on
to subsume the schemes of National
Organic Farming in the Tenth Five
Horticulture Mission and few other
Year Plan with lead centre at Project
significant policies for development
Directorate for Farming Systems
of horticulture under the umbrella of
Research, Modipuram, Uttar Pradesh,
Mission for Integrated Development
which is involved in developing
package of practices for different crops of Horticulture (MIDH).
and farming systems under organic
farming in different agro-ecological In order to foster the growth of organic
regions of the country. The project is farming, and the farmers adopting
running at 13 centres including State organic farming for perennial and
Agricultural Universities (SAUs), non-perennial fruit crops, vegetables,
spread across 12 States. The crops for aromatic plants, and spices, additional
which package of practices for organic assistance are being given at 50 per
farming have been developed include cent of cost, over and above the area
basmati rice, rain fed wheat, maize, red expansion programme for a maximum
gram, chickpea, soybean, groundnut, area of 4 ha per beneficiary, spread
mustard, isabgol, black pepper, ginger, over a period of three years. In the
tomato, cabbage and cauliflower. event of cultivation of vegetables
ICAR also organises trainings and organically, assistance limit is up

110
to Rs.10,000 per ha spread over a to a maximum of Rs. 50,000 per
period of three years. Additionally, beneficiary for a unit having a size
with the objective of advocating the of 30’×8’×2.5’. In order to aid the
organic farming system, assistance manufacture of HDPE vermi beds
may also be used for generating on- of 96 cubic feet (cft) size (12’×4×2’),
farm inputs. assistance to an extent of 50 per cent
of the cost are being granted. Similarly,
NHM also includes providing financial assistance is also being provided for
assistance for establishing vermi organic certification of Rs.5 lakh for a
compost units and HDPE vermi beds group of farmers covering an area of
at 50 per cent of the cost subject 50 hectares.

Table 5.3: Top 5 States Receiving Financial Assistance under the National Horticulture
Mission for Promotion of Organic Farming

Year -wise Financial Assistance

State
2009-10 2010-11 2011-12 2012-13
  (Rs. Lakhs)

Karnataka 752.25 325.47 237.15 544.17

Orissa 89.25 0 76.50 425.00

Jharkhand 25.50 17.47 63.75 227.50

Chhattisgarh 901.00 1007.25 1462.72 172.50

Rajasthan 105.23 63.76 48.88 102.00

Rest of India 2024.02 1199.27 789.80 466.83

Total 3897.25 2613.22 2678.80 1938.00

Source: Lok Sabha Starred QuestionNo.246 dated 27.08.2013

111
 Rashtriya Krishi Vikas Yojna Regulatory Mechanism for
Organic Products in India
Assistance for decentralized production
and marketing of organic fertilizers is The National Programme for Organic
also available under Rashtriya Krishi Production (NPOP) defines the
Vikas Yojna (RKVY) for projects regulatory mechanism and is regulated
formulated and approved by the State under two different acts for the
Level Sanctioning Committee. export and domestic market in India.
The NPOP notified under Foreign
There are various schemes of APEDA Trade Development and Regulation
to provide support to organic farming. (FTDR) Act pertains to the export
In addition, Government has been requirements. The regulatory body
spreading awareness about organic under the FTDR Act is Agricultural
farming through various extension and Processed Food Products Export
activities, such as exhibitions and fairs, Development Authority (APEDA) of
agri-clinics and agri-business centres, India functioning under the Ministry of
mass media support activities, radio Commerce and Industry, Government
talks and kisan melas. of India. The NPOP notified under the

Table 5.4: Top 5 States Receiving Financial Assistance for Promotion of Organic
Farming under Rashtriya Krishi Vikas Yojna (RKVY)

Amount of assistance approved

Name of State
2009-10 2010-11 2011-12 2012-13
(Rs. Lakhs)
Uttar Pradesh 398 1537 1656 2818

Karnataka 0 50 2800 2100

Andhra Pradesh 12 71 0 1500

Gujarat 197 280 10816 1163

Assam 0 450 900 1157

Rest of India 5309 10603 14459 4238

TOTAL 5916 12991 30631 12976

Source: Lok Sabha Starred Question No.246 dated 27.08.2013

112
Agricultural Produce Grading, Marking ALIMENTARIUS and International
and Certification Act (APMC) monitors Federation of Organic Agriculture
the domestic and import market. The Movements (IFOAM).
regulatory body which governs it is the
Agricultural Marketing Advisor (AMA) Operational Structure
under the Ministry of Agriculture,
Government of India. The NPOP is implemented by a
National Steering Committee
The NPOP standards for production comprising members from the Ministry
and accreditation system have of Commerce and Industry, Ministry of
been recognized by the European Agriculture, Agricultural and Processed
Commission and Switzerland as Food Products Export Development
equivalent to their country standards. Authority (APEDA), Coffee Board,
USDA has also accepted the conformity Spices Board, Tea Board, and other
a s s e s s m e n t s y s t e m o f N P O P. Government and private organisations
Consequently, products certified by an associated with the organic movement.
Indian accredited certification agency The Ministry of Commerce and Industry,
under NPOP can be exported to Government of India, has also created
Europe, Switzerland and USA without the National Steering Committee,
the requirement of re-certification. which is responsible for formulating
a National Accreditation Policy and
Organic Certification Programme; the Ministry also frames
the national standards for organic
The National Programme on Organic products and the regulations involved
Production (NPOP) was launched in the usage of the National Organic
by The Ministry of Commerce and Certification Mark. The National
Industry, Government of India, 2001 Steering Committee also operates as
under the FTDR Act. The Programme the National Accreditation Body.
documents the standards for organic
production in India, methodology The functions of the National
and requirements involved with Accreditation Body include the drawing
the accreditation of inspection and up of procedures for evaluation
certification bodies, and the national and accreditation of certification
organic logo and regulations. The programmes, formulating procedures
standards have been formulated in for evaluation of agencies implementing
accordance with the international the programme and accreditation of
standards, such as those of CODEX inspection and certification agencies.

113
 An Evaluation Committee is appointed • When certified organic seed and
by the National Accreditation Body plant materials are not available,
for supervising the implementation of chemically untreated conventional
certification programmes held by the materials shall be used;
eligible inspection and certification
agencies. APEDA, on behalf of the • The use of genetically engineered
National Accreditation Body, receives seeds, pollen, transgene plants or
and screens the applications from the plant material is prohibited.
certification agencies, coordinates
and arranges evaluation visits to Duration of conversion period
ascertain the credentials of certification
programmes of the applicants. Standards
Depending on the suggestions of
the Evaluation Committee, eligible • Plant products produced can be
inspection and certification agencies certified organic when the national
are accredited by the National standards requirements have been
Accreditation Body. The accredited met during a conversion period of
inspection and certification agencies at least two years before sowing,
appoint inspectors for scrutinizing the or in the case of perennial crops
operations, and certifying the organic other than grassland, at least
status of products and operations. three years (thirty-six months)
before the first harvest of products.
N ationa l Standard s for The accredited inspection and
Organic Production certification agency may decide
in certain cases (such as idle use
Crop Production for two years or more) to extend or
reduce the conversion period, in
Choice of crops and varieties the light of previous status of the
land, but the period must equal or
Standards exceed twelve months;

• Organic seed and plant materials • The conversion period can be

shall be used. The Certification extended by the certification
programme shall set time limits for programme depending on,
the requirement of certified organic e.g., past use of the land and
seed and other plant material; environmental conditions;

114
 Exhibit 5.12: Operational Structure of National Programme for Organic
Production in India

Source: National Centre of Organic Farming

115
 • The certification programme may Fertilisation Policy
allow plant products to be sold as
“produce of organic agriculture in Standards
process of conversion” or a similar
description during the conversion • B i o d e g r a d a b l e m a t e r i a l o f
period of the farm; microbial, plant or animal origin
shall form the basis of the
• For the calculation of inputs for fertilisation programme;
feeding, the feed produced on
the farm unit during the first year • The certification programme shall
of organic management, may be
set limitations to the total amount
classified as organic. This refers
of biodegradable material of
only to feed for animals, which are
microbial, plant or animal origin
themselves being reared within
brought onto the farm unit, taking
the farm unit and such feed may
not be sold or otherwise marketed into account local conditions and
as organic. Feed produced on the specific nature of the crops;
the farms in accordance with
the national standards is to be • The certification programme shall
preferred over conventionally set standards, which prevent
grown / brought-in feeds. animal run from becoming over-
manured where there is a risk of
Diversity in Crop Production pollution;

Standards • Brought-in material (including

potting compost) shall be in
• Where appropriate, the certification
programme shall require that accordance with the standards;
sufficient diversity is obtained in
time or place in a manner that • Manures containing human
takes into account pressure from excreta (faeces and urine) shall
insects, weeds, diseases and not be used;
other pests, while maintaining or
increasing soil organic matter, • Mineral fertilisers shall only be used
fertility, microbial activity and in a supplementary role to carbon
general soil health. For non based materials; Permission for
perennial crops, this is normally, use shall only be given when other
but not exclusively, achieved by fertility management practices
means of crop rotation. have been optimised;

116
• Mineral fertilisers shall be applied Organic Agriculture and other
in their natural composition and relevant criteria shall be used to
shall not be rendered more judge if the product is acceptable.
soluble by chemical treatment. Branded products must always be
The certification programme may evaluated;
grant exceptions which shall be
well justified. These exceptions • Thermic weed control and physical
shall not include mineral fertilisers methods for pest, disease and weed
containing nitrogen; management are permitted;

• The certification programme shall • Thermic sterilisation of soils to

lay down restrictions for the use of combat pests and diseases is
inputs such as mineral potassium, restricted to circumstances where
magnesium fertilisers, trace a proper rotation or renewal of
elements, manures and fertilisers soil cannot take place. Permission
with relatively high heavy metal
may be given by the certification
content and/or other unwanted
programme only on a case by
substances eg. basic slag, rock
case basis;
phosphate and sewage sludge;

• All equipments from conventional

• Chilean nitrate and all synthetic
farming systems shall be properly
nitrogenous fertilisers, including
cleaned and free from residues
urea are prohibited.
before being used on organically
Pest, Disease and Weed Management managed areas;
including Growth Regulators
• The use of synthetic herbicides,
Standards fungicides, insecticides and other
pesticides is prohibited.
• Products used for pest, disease
and weed management, prepared • The use of synthetic growth
at the farm from local plants, regulators and synthetic dyes are
animals and micro-organisms, are prohibited;
allowed. If the ecosystem or the
quality of organic products is likely • The use of genetically engineered
to be jeopardised, the Procedure organisms or products is
to Evaluate Additional Inputs to prohibited;

117
 • A c c r e d i t e d c e r t i f i c a t i o n • The clearing of primary forest is
programmes shall ensure that prohibited;
measures are in place to prevent
transmission of pests, parasites • Relevant measures shall be taken
and infectious agents; to prevent erosion;

Contamination Control • E x c e s s i v e e x p l o i t a t i o n a n d
depletion of water resources shall
Standards not be allowed;

• In case of reasonable suspicion • The certification programme

of contamination, the certification shall require appropriate stocking
programme shall make sure that an rates which do not lead to land
analysis of the relevant products to degradation and pollution of ground
detect the possible sources of and surface water;
pollution (soil and water), shall
take place to determine the level • Relevant measures shall be taken
of contamination; to prevent salination of soil and
water.
• For protected structure coverings,
plastic mulches, fleeces, insect Collection of Non-cultivated Material
netting and silage rapping, only of Plant Origin and Honey
products based on polyethylene
and polypropylene or other Standards
polycarbonates are allowed. These
shall be removed from the soil after • Wild harvested products shall
use and shall not be burnt on the only be certified organic if derived
farmland. The use of polychloride from a stable and sustainable
based products is prohibited. growing environment. Harvesting
or gathering the product shall
Soil and water Conservation not exceed the sustainable yield
of the ecosystem, or threaten
Standards the existence of plant or animal
species;
• Clearing of land through the means
of burning organic matter, e.g. • Products can only be certified
slash-and burn, straw burning shall organic if derived from a clearly
be restricted to the minimum; defined collecting area, which

118
 is not exposed to prohibited respective to species, geographical
substances, and which is subject considerations and general health
to inspection; of animals;

• The collection area shall be at • Herd animals shall not be kept

an appropriate distance from individually. The certification
conventional farming, pollution and programme may allow exceptions,
contamination; e.g., male animals, small holdings,
sick animals and those about to
• The operator managing the give birth.
harvesting or gathering of the
products shall be clearly identified Length of Conversion Period
and be familiar with the collecting
area in question. Standards

Animal Husbandry • Animal products may be sold as

“product of organic agriculture” only
Animal Husbandry Management after the farm or relevant part of it
has been under conversion for at
• The certification programme shall least twelve months, and provided
ensure that the management of the organic animal production
the animal environment takes into standards have been met for the
account the behavioural needs of appropriate time;
the animals;
• The certification programme shall
• All animals shall have access to specify the length of time by which
open air and/or grazing appropriate the animal production standards
to the type of animal and season shall be met. With regard to dairy
taking into account their age and and egg production, this period
condition, to be specified by the shall not be less than 30 days;
certification programme;
• Animals present on the farm at the
• When the natural day length is time of conversion may be sold
prolonged by artificial lighting, for organic meat if the organic
the certification programme standards have been followed for
shall prescribe maximum hours 12 months.

119
 Brought in animals per cent in the following cases and
with specific time limits:
Standards
• Unforeseen severe natural or
When organic livestock is not available, manmade events;
the certification programme shall allow
brought-in conventional animals • Considerable enlargement of the
according to the following age limits: farm;

• 2 day old chickens for meat • Establishment of a new type of

production; animal production on the farm;

• 1 8 w e e k o l d h e n s f o r e g g • Small holdings.
production;
Food Processing and Handling
• 2 week old for any other poultry
piglets up to six weeks and after Standards
weaning;
• Organic products shall be protected
• Calves up to 4 weeks old which from co-mingling with non-organic
have received colostrum and are products;
fed a diet consisting mainly of full
milk; • All products shall be adequately
identified through the whole
• Certification programmes shall set process;
time limits (not exceeding 5 years)
for implementation of certified • The certification programme shall
organic animals from conception set standards to prevent and control
for each type of animal; pollutants and contaminants;

• Breeding stock may be brought • Organic and non-organic products

in from conventional farms at an shall not be stored and transported
annual rate not exceeding 10 per together except when labelled or
cent of the adult animals of the physically separated;
same species in the organic farm.
For brought-in breeding stock the • Certification programme shall
certification programme shall allow regulate the means and measures
a higher yearly maximum than 10 to be allowed recommended for

120
 decontamination, cleaning or • Other substances used in traps;
disinfection of all facilities where
organic products are kept, handled, • Irradiation is prohibited;
processed or stored;
• There shall never be direct
or indirect contact between
• Besides storage at ambient
organic products and prohibited
temperature, the following
substances (e.g. pesticides). In
special conditions of storage are
case of doubt, it shall be ensured
permitted:
that no residues are present in the
organic product;
o Controlled atmosphere
o Cooling • P e r s i s t e n t o r c a r c i n o g e n i c
o Freezing pesticides and disinfectants are
o Drying not permitted. The certification
programme shall set up rules to
o Humidity regulation
determine which protection agents
o Ethylene gas is permitted for
and disinfectants may be used.
ripening
Ingredients, Additives and
Pest and Disease Control
Processing Aids

Standards
Standards

For pest management and control the

• In cases where an ingredient
following measures shall be used in
of organic agriculture origin is
the order of priority:
not available in sufficient quality
or quantity, the certification
• Preventive methods such as
programme may authorise use of
disruption, elimination of habitat
non organic raw material subject to
and access to facilities;
periodic re-evaluation. Such non-
organic raw material shall not be
• Mechanical, physical and biological
genetically engineered;
methods;
• The same ingredient within one
• Pesticidal substances allowed product shall not be derived both
according to the national from an organic and non-organic
standards; origin;

121
 • Water and salt may be used in o Filtration.
organic products;
• Extraction shall only take place with
• Minerals (including trace elements), water, ethanol, plant and animal
vitamins and similar isolated oils, vinegar, carbon dioxide,
ingredients shall not be used. The nitrogen or carboxylic acids. These
certification programme may, grant shall be of food grade quality,
exceptions, where use is legally appropriate for the purpose;
required or where severe dietary,
or nutritional deficiency can be • Irradiation is not allowed;
demonstrated;
• Filtration substances shall not be
• Preparations of micro-organisms made of asbestos nor may they
and enzymes commonly used in be permeated with substances
food processing may be used, which may negatively affect the
with the exception of genetically product.
engineered microorganisms and
their products; Packaging

• The use of additives and processing Standards

aids shall be restricted.
The materials used must not affect the
Processing Methods organoleptic character of the product
or transmit to it any substances in
Standards quantities that may be harmful to
human health.
• The following kinds of processes
are approved: Labelling

o Mechanical and physical; Standards

o Biological; • The person or company legally

responsible for the production or
o Smoking; processing of the product shall be
identifiable;
o Extraction;
• Single ingredient products may
o Precipitation; be labelled as “produce of organic

122
 agriculture” or a similar description organic origin, the indication
when all standards requirements that an ingredient is organic
have been met; may appear in the ingredients
list. Such product may not be
• Mixed products where not all called “organic”.
ingredients, including additives,
are of organic origin may be • Added water and salt shall not
labelled in the following way (raw be included in the percentage
material weight): calculations of organic
ingredients;
o Where a minimum of 95 per
cent of the ingredients are • The label for in-conversion products
of certified organic origin, shall be clearly distinguishable from
products may be labelled the label for organic products;
“certified organic” or similar
and should carry the logo of the • All raw materials of a multi-
certification programme; ingredient product shall be listed
on the product label in the order
o Where less than 95 per cent of their weight percentage. It shall
but not less than 70 per cent of be apparent which raw materials
the ingredients are of certified are of organic certified origin and
organic origin, products may which are not. All additives shall be
not be called “organic”. The listed with their full name. If herbs
word “organic” may be used and/or spices constitute less than
on the principal display in 2 per cent of the total weight of
statements like “made with the product, they may be listed as
organic ingredients” provided “spices “ or “herbs “without stating
there is a clear statement of the percentage;
the proportion of the organic
ingredients. An indication that • O r g a n i c p r o d u c t s s h a l l n o t
the product is covered by be labelled as GE (Genetic
the certification programme Engineering) or GM (Genetic
may be used, close to the Modification) free in order to avoid
indication of proportion of potentially misleading claims about
organic ingredients; the end product. Any reference to
genetic engineering on product
o Where less than 70 per cent of labels shall be limited to the
the ingredients are of certified production method.

123
 Storage and Transport be taken to prevent possible
contamination from any pesticide
Standards or other treatment not listed.

• Where only part of the unit is Organic Logo

certified and other products are
non-organic, the organic products In order to demonstrate and establish
should be stored and handled the credibility and communicating
separately to maintain their the genuineness and the originality
identity; of the product, the trademark “India
Organic” is created and owned by
• Bulk stores for organic product the Government of India. It is granted
should be separate from on the condition of compliance
conventional product stores and with the National Standards for
clearly labelled to that effect; Organic Production (NSOP). Only
such exporters, manufacturers and
• Storage areas and transport processors whose products are duly
containers for organic product certified by the accredited inspection
should be cleaned using methods and certification agencies, is granted
and materials permitted in organic the licence to use the logo, which is
production. Measures should governed by a set of regulations.

124
6. Organic Farming in North
East India

India’s North East region stretches Thirdly, the farmers in the NE region
from the foothills of the Himalayas have an added advantage as majority
in the eastern region and shares its of the households maintain livestock,
boundaries with countries, such as which in turn leads to the facilitation of
Bangladesh, Bhutan, China, Nepal ready availability of on-farm manures,
and Myanmar. It includes the seven which could be utilised for organic
states – Arunachal Pradesh, Assam, agriculture. Additionally, heavy rainfall
Manipur, Meghalaya, Mizoram, received by the region helps in the
Nagaland, Tripura and Sikkim, known production of biomass including weeds,
as the seven sisters. The region is rich shrubs and herbs, which may be used
in natural resources and is potential for farming organically.
region for organic farming by virtue of
availability of large stretches of virgin Table 6.1 displays the fertilizer
land and crops grown without the use consumption in NE region of India.
of chemicals. There are vivid reasons Assam is the leading consumer
for the expansion of organic farming in of fertilizers in the NE region. The
the North Eastern (NE) region of India. Government of Sikkim initiated the
Firstly, the usage of inorganic fertilizers Organic Mission in 2003 and banned
and pesticides in this region has been the use of chemical fertilizers in the
scanty; secondly, the benefits of green State from the same year. Thus, the
revolution could not be reaped by the cultivable land in Sikkim is organic
farmers in this region as the system of and the farmers in the state are
production remained low input based. traditional users of organic manure.
It is also assumed that the production The States of Nagaland, Mizoram and
gap due to adoption of organic Sikkim envisage practising 100 per
agriculture may be negligible; rather, cent organic agriculture. The Sikkim
there may be chances of augmenting Government envisages converting the
the productivity based on grounds entire State into an organic farming
of organised organic management. State by 2015.

125
 Table 6.1: Fertilizer Consumption in the North East Region of India

State 2010-11 2011-12 2012-13

Thousand tonnes
Assam 277.06 275.65 275.65
Tripura 15.94 18.64 25.44
Manipur 6.5 8 10.84
Meghalaya 5.03 4.76 4.85
Nagaland 1.42 1.44 2.17
Arunachal Pradesh 0.83 0.68 0.57
Mizoram 5.6 1.19 1.76
Sikkim 0 0 0
Total 312.38 310.36 321.28
Source: Ministry of Agriculture, Government of India

Since the NE region has tremendous is the promotion of organic cultivation

potential for the development of organic of horticultural crops. The Institute
farming, a sum of Rs. 100 crore has has been also carrying out various
been allocated by the Government promotional activities for organic
of India in its Union Budget for the farming and is involved in the process
development of organic farming in the of establishing organic model farms
NE states in the financial year 2014-15. in different states in the NE region.
This initiative is anticipated to enable The Institute, in collaboration with
the NE states to benefit from the International Competence Centre
development of commercial organic for Organic Agriculture (ICCOA),
farming and alter the agricultural mode Bangalore, also conducts trainings on
from inorganic to organic. The NE Organic Farming and Certification in
region, where agricultural production the North Eastern States.
is predominantly organic, can be
instrumental in increasing India’s The Agricultural and Processed Food
organic agricultural exports. Products Export Development Authority
(APEDA), has been building external
The Central Institute of Horticulture has market linkages for the food processing
been established for the development units with large corporates in the sector
of horticulture in this region. One of in the NE region. The corporates have
the major objectives of the Institute established novel organic farms for

126
Joha rice and sugarcane in Assam, a substantial augmentation in the
passion fruit in Manipur and pineapple organic cultivable area in Sikkim, and
in Tripura. These are now under the the acreage rose from 7.4 thousand
management of the respective State ha in 2009-10 to 46.6 thousand ha
Governments. in 2012-13. Nagaland is the second
largest State in terms of area under
Area and Production organic farming in the NE region and
contributes 15 per cent in the aggregate
The area under organic cultivation in area. The organic area in Nagaland
the north east region has declined at reduced considerably in 2010-11
a CAGR of 13.4 per cent during the relative to the previous year; however,
period 2009-10 and 2012-13 from 97 the State has been displaying a rising
thousand ha to 63 thousand ha (Table trend in organic area since then.
6.2). In the year 2012-13, the NE Nagaland is followed by Meghalaya
region accounted for approximately (6 per cent), Assam (4 per cent) and
1.2 per cent of the aggregate acreage Mizoram (2 per cent) in terms of area
maintained organically in the country. under organic production. Assam is
Amongst the North Eastern states, the largest producer of organic foods
Sikkim is the leading State, constituting in this region accounting for nearly 72
around 73 per cent of the total organic per cent of the organic production in
area in the region. There has been the region followed by Meghalaya.

Table 6.2: Area under Organic Agriculture in the North East Region of India

States 2009-10 2010-11 2011-12 2012-13

  (ha)
Arunachal Pradesh 1897.27 243 520.43 231.49
Assam 6223.12 2047.33 2048.27 2299.21
Manipur 10871.3 2792.03 1296.91 11.25
Meghalaya 2254.12 2419.67 288.23 3580.49
Mizoram 38674.62 12544.13 7023.97 1182
Nagaland 29715.28 1603.54 7762.6 9771.96
Sikkim 7393.09 1726.34 25716.55 46560.4
Tripura 281.06 348.39 4.05 209.72
North East Total 97309.86 23724.43 44661.01 63846.52
All India Total 4551899 4427519 5550405 5211142

Source: Lok Sabha Unstarred Question No.3130 dated 11-02-2014

127
 Exhibit 6.1: State wise Organic Production in the North East Region of India (2012-13)

Manipur
0.4%

Assam
71.8%
Meghalaya
26.3%

Tripura
0.5%
Arunachal
Pradesh
0.9%

Source: Lok Sabha Unstarred Question No.3130 dated 11-02-2014

Potential Organic Crops Amongst the NE states, Assam is the

leading state with respect to area as
Organic Ginger well as quantity produced.

Ginger is an important cash crop in Organic Large Cardamom

India. North East region is emerging
as India’s organic ginger hub. Organic Large cardamom is an important cash
ginger is being cultivated in the crop cultivated in Sikkim and West
traditional ginger growing villages of
Bengal. The production of organic
Assam, Sikkim, Mizoram, Arunachal
cardamom has declined at a compound
Pradesh and Meghalaya. During the
annual growth rate of 1.2 per cent from
Tenth Five Year Plan, it was proposed
4.3 thousand tonnes in 2008-09 to 4.1
to cover 1000 ha under the Scheme
thousand tonnes in 2012-13. During
for Organic Cultivation of Ginger with
2012-13, the aggregate area under
a financial target of Rs. 137.50 lakhs.
In 2012-13, the area under ginger large cardamom production in North
cultivation in the NE region accounted East region of India was estimated at
for roughly 44 per cent share in terms 26.1 thousand ha. Sikkim contributed
of area and 55 per cent in terms of approximately 84 per cent of the
production in the all India estimates. quantity produced in 2011-12. The

128
 Table 6.3: Ginger Production in the North Eastern States of India
Area (‘000 Hectare) Production (‘000 MT) Productivity (MT/Hectare)
States/UTs 2013-
2011-12 2012-13 2013-14# 2011-12 2012-13 2011-12 2012-13 2013-14#
14#
Arunachal
6.8 7.0 7.0 53.0 57.0- 57.0 7.79 8.14 8.14
Pradesh

Assam 16.99 17.84 17.84 125.42 136.83 136.83 7.38 7.67 7.67

Manipur 2.4 2.4 2.4 3.84 3.84 3.84 1.6 1.6 1.6

Meghalaya 9.44 9.44 10 56.8 56.8 56.8 6.02 6.02 5.68

Mizoram 6.5 7.28 7.0 37.0 28.39 30.0 5.69 3.9 4.29

Nagaland 5.32 5.32 5.32 36.0 36.0 36.0 6.77 6.77 6.77

Sikkim 8.51 9.25 9.25 48.0 51.56 51.56 5.64 5.57 5.57

Tripura 1.8 1.8 1.8 7.6 7.6 7.6 4.22 4.22 4.22

# Second Advanced Estimate

Source: Ministry of Agriculture, Government of India

Table 6.4: Area and Production of Organic Large Cardamom in

East and North East India
State 2008-09 2009-10 2010-11(P) 2011-12(P) 2012-13(P)
Produc- Produc- Produc- Produc- Produc-
Area Area Area Area Area
tion tion tion tion tion
(ha) (tonnes) (ha) (tonnes) (ha) (tonnes) (ha) (tonnes) (ha) (tonnes)
Sikkim 23729 3675 23729 3540 23679 3310 23155 3234 22755 3483
West
3305 625 3305 640 3305 608 3305 626 3305 662
Bengal

P; Provisional
Source: Spices Board of India

plant is a perennial bush and is used State in the region contributing to

as a spice as well as an ingredient in approximately 15 per cent in terms
many Ayurvedic preparations. of area and 17 per cent in terms of
aggregate production in the country
Organic Pineapples in 2012-13. There is huge demand
for organic pineapples worldwide,
Organic pineapples have huge export particularly in Europe. In view of its
potential and are abundantly grown in potential, APEDA has sanctioned an
almost the entire NE region. The leading Agri Export Zone for the export of
states in pineapple production in the organic pineapples in Darjeeling. The
NE region are Assam, Tripura, Manipur, varieties of pineapples produced in
Meghalaya and Nagaland. Assam North East region of India include Kew,
is the largest pineapple producing Giant Kew, Queen and Mauritious.

129
 Table 6.5: Area, Production and Productivity of Pineapples in
the North East Region of India
  2010-11 2011-12 2012-13
Pro- Produc- Pro- Produc- Pro- Produc-
STATE Area Area Area
duction tivity duction tivity duction tivity
(000 (000 (000 (000 (000 (000
  (mt/ha) (mt/ha) (mt/ha)
ha) mt) ha) mt) ha) mt)
Assam 14 220.7 15.8 14.8 231.4 15.6 16.24 268.8 16.6
Tripura 6.8 153.3 22.6 11.6 153.7 13.3 11.84 165 13.9
Manipur 12.2 104.4 8.6 12.6 116.6 9.3 13.06 124.1 9.5
Meghalaya 9.7 86.0 8.9 10.6 112.9 10.7 10.82 109.4 10.1
Nagaland 3.7 57.5 15.5 8.9 100.6 11.3 9.0 85.0 9.4
Arunachal
10.9 34.4 3.2 11.9 66.8 5.6 12.28 67.58 5.5
Pradesh
Total 57.3 656.3 74.6 70.4 782.0 65.8 73.24 819.9 65.0

Source: Indian Horticulture Database 2013

BOX 7: Major Pineapple Producing Belts in the North East region

Assam Kamrup, Karbi Anglobg, Cachar, Dima Hasao, Hailakandi

Manipur Kangpokpi, Thoubal, Churachandpur, Imphal East, Bishnupur,
Chandel
Meghalaya Ri Bhoi, East Khasi, Garo Hills, West Khasi Hills, Jaintia Hills
Mizoram Aizwal, Lunglei, Chhimtuipui, Champhai, North South and Western Part
of Mizoram, Chhimheipui
Nagaland Mokokchung, Wokha, Kohima, Zunheboto, Dimapur, Mon, Tuenchang,
Phek, Kiphire, Longleng, Peren
Sikkim North, West East and South districts of Sikkim
Tripura South Tripura, West Tripura, North Tripura, Dhalai
Source: Indian Horticulture Database 2013

Organic Turmeric the quantity produced in 2013-14

amounted to 22.99 thousand metric
Turmeric is produced organically in tonnes. In terms of productivity in
all the states in the NE region. Assam turmeric, Manipur is the dominant state.
is the major producer of turmeric The North Eastern states put together
in the NE states and contributes to contribute to approximately 7.7 per
approximately 56 per cent of the total cent of the aggregate production in the
area under production in the region. country and account for nearly 14 per
Mizoram is the leading producer cent of the total area under turmeric
of turmeric in the NE region and production in India.

130
 Table 6.6: Area, Production and Productivity of Organic Turmeric in
the North East Region of India
Productivity (MT/Hect-
Area (In ‘ 000 Hectare) Production (In ‘ 000 MT)
are)
States/UTs
2011- 2012- 2013- 2011- 2012- 2013- 2011- 2012- 2013-
12 13 14# 12 13 14# 12 13 14#
Arunachal
0.65 0.64 0.64 3.1 2.86 2.86 4.77 4.47 4.47
Pradesh
Assam 15.47 16.24 16.24 13.3 15.43 15.43 0.86 0.95 0.95

Manipur 1.4 1.4 1.4 16.4 16.4 16.4 11.71 11.71 11.71

Meghalaya 1.94 1.94 1.94 9.98 9.98 9.98 5.14 5.14 5.14

Mizoram 4.78 6.05 6.05 23.9 22.99 22.99 5.0 3.8 3.8

Nagaland 0.12 0.12 0.12 0.5 0.5 0.5 4.17 4.17 4.17

Sikkim 0.85 1.3 1.3 2.9 4.68 4.68 3.41 3.6 3.6

Tripura 1.3 1.3 1.3 6.59 6.59 6.59 5.07 5.07 5.07

# Second Advanced Estimate

Source: Ministry of Agriculture , Government of India

Organic Litchi The varieties of litchis grown are

Shahi, China, Bombai and Late Large
The major litchi producing states in
Red. The share of Assam in the
the NE region are Assam and Tripura.
aggregate litchi production in 2012-
It is also grown in minor quantities
13 was approximately 8.6 per cent,
in Manipur, Meghalaya, Nagaland
and Sikkim. The fruit is cultivated in while that of Tripura was 3.1 per cent,
organic conditions in these States. respectively.

Table 6.7: Area, Production and Productivity of Litchi in Assam and Tripura
  2010-11 2011-12 2012-13
Pro- Produc- Produc- Produc- Pro- Produc-
STATE Area Area Area
duction tivity tion tivity duction tivity
(000 (000 (000 (000
  (mt/ha) (000 mt) (mt/ha) (000 mt) (mt/ha)
ha) mt) ha) ha)
Assam 5.2 40.5 7.8 5.3 41.5 7.8 5.63 49.6 8.8
Tripura 2.9 16.6 5.6 3.2 16.6 5.2 3.46 18 5.2

Source: Indian Horticulture Database, 2013

131
 BOX 8 : Major Litchi Producing Belts in the North East Region
Assam Dibrugarh, Goalpara, Sonitpur, Lakhimpur, Jorhat, Golaghat,Kamrup,
Nalbari, Barpeta, Bongaigaon, Nagaon
Manipur Imphal West, Bishnupur, Imphal East, Thoubal, Churachandpur,
Chandel
Meghalaya East Khasi Hills, Ri- bhoi, Garo Hills
Sikkim North Sikkim, East Sikkim, South Sikkim and West Sikkim

Source: Indian Horticulture Database 2013

Others The Mission is a part of the Mission for

Integrated Development of Horticulture
In North East India arecanut or betel (MIDH) Scheme, being implemented
nut, locally called supari, is grown on a for the development of horticulture in
large scale in Assam, Tripura, foothills the North Eastern and the Himalayan
of Meghalaya, Mizoram, Nagaland, States, including Sikkim, and the
Manipur and Arunachal Pradesh. Himalayan states of Jammu and
Passion fruit is cultivated in the North Kashmir, Himachal Pradesh and
East region in natural conditions. Both Uttarakhand. The Mission consists of
the crops hold considerable export four Mini Missions, which individually
potential. In NE Region, passion fruit address particular objectives and covers
is grown in Meghalaya, Manipur, the entire spectrum of horticulture from
Mizoram, Nagaland and Sikkim. The production to consumption through
juice of passion fruit is extensively used backward and forward linkages. The
in confectionaries and preparation of Scheme has various aims, such as
pie, cakes and ice creams. Joha rice technology generation through farm
cultivated in Assam has also been demonstrations, setting up of nurseries,
recognised for its export potential. area expansion under high yielding
These crops are mostly grown in varieties, encouraging mechanisation
natural organic conditions without use and boosting processing and value
of any chemical inputs. addition. Additionally, one of the
significant objectives of this scheme
Government Initiatives is to boost organic cultivation in the
region. In order to achieve this goal,
National Horticulture Mission for vermi compost units have been set up
North East Region of India and in the North Eastern and Himalayan
Himalayan States States. Manipur was the leading state

132
with nearly 2200 units being set up in under the Mission, detailed research
2011-12. Under this programme nearly was carried out as a part of this Mission,
101 certification units were set up and including a Study on development of
among these 94 were established in package of practices on organic ginger
the North East region. Technology and the suitable dosage of organic and
generation being an important target bio fertilizers.

Table 6.8: Physical Progress under Horticulture Mission for the North East Region of
India and Himalayan States (2011-12)

Organic Vermi compost Certification of

State
Farming units Organic farming
(ha) (nos.) (No.)

Arunachal Pradesh 1362 180 7

Assam 0 100 0

Manipur 0 2200 0

Meghalaya 0 0 0

Mizoram 0 0 0

Nagaland 0 200 0

Sikkim 4800 0 87

Tripura 0 892 0

Himachal Pradesh 314 120 0

Jammu & Kashmir 130 0 7

Uttarakhand 507 0 0

Total 7113 3692 101

Source: HMNEH Annual Report 2011-12

133
 Table 6.9: Financial Assistance Provided for Promotion of Organic Farming under
Horticulture Mission for North East and Himalayan States

Financial Assistance Provided

States
2009-10 2010-11 2011-12 2012-13
(Rs. Lakh)

Arunachal Pradesh 131.0 25.8 123.48 243.45

Assam 173.1 28.6 35.6 97.3

Manipur 78.0 51.3 110.0 260.1

Meghalaya 0 0 0 0

Mizoram 126.2 152.0 16.5 20.0

Nagaland 190.0 81.5 123 202.5

Sikkim 315.25 332.48 492.5 558.48

Tripura 141.0 130.4 79.4 52.0

Jammu  & Kashmir 61.5 67.25 117.1 165.91

Himachal Pradesh 107.0 216.28 398.21 79.45

Uttarakhand 84.31 201.1 53.6 59.56

Total 1407.36 1286.61 1549.39 1738.65

Source: Lok Sabha Annexured Starred Question No.246, dated 27.08.2013

134
7. Organic Products: Status
of Industry and Trade from
India

As per Industry Sources, the Organic The organic product industry in India
food market in India was valued at can be broadly classified into two
Rs. 675 crore (USD 150 Million) during heads: organic foods and other organic
the year 2009-10. The market has products. The organic food industry
been estimated to be worth Rs. 1928 in India can be categorized into six
crores (USD 306 Million) during the product segments: Vegetables and
year 2013-14, growing annually at the Fruits; Processed Foods and Other
rate of 30 per cent. The augmentation Processed Items; Dairy Products;
in the disposable income and concerns Beverages; Bread and Grains; and
for health are enabling the organic food Meat, Fish, and Poultry. The other
market in India to increase steadily. organic products segment include

Exhibit 7.1: Organic Food Market in India

Source: Exim Bank Analysis

135
 organic oilseeds, cotton, textiles, Organic cotton and textiles is the
spices and condiments, aromatic oils largest exporting segment from India.
and oleoresin, medicinal and herbal Other organic products with high
plants and products, and honey. demand in the international markets
are tea, basmati rice, pulses, honey,
The organic product industry in India spices, coffee, and fruits such as
can be mainly segmented by trade, mangoes, bananas, and sugarcane.
crops produced and products sold or India is a major exporter of organic
in demand. mangoes to the US.

Segmentation by Trade The domestic sales segment accounts

for around 30 percent of total organic
The organic product industry is mostly products sales from India, which has
export oriented. The exports segment been witnessing a sharp growth in the
accounts for a share of around recent years. According to the industry
70 percent of the industry (Exhibit sources, the Indian market for organic
7.2). Due to high sale price of organic products is growing at 30 percent to 40
products, resulting out of high cost of percent annually.
production, major demand originates
from the developed countries. The key Segmentation by Crops Grown
export destinations of Indian organic
products are the USA, Canada, South The Ministry of Agriculture, Govern-
Africa, and the European countries. ment of India, estimates that organic

Exhibit 7.2: Organic Food Market in India- Segmentation by Trade (2013-14)

Domestic,
31%

Exports,
69%

Total - Rs.1928 crore

Source: Exim Bank Analysis

136
food products account for nearly Export of Organic Foods from
1 percent of the total food products India
grown in India1.The cultivated area
under organic certification in India was Exhibit 7.4 displays the export of
approximately 0.72 million hectares, organic foods from India during the
while the area in wild harvest in period 2007-08 to 2013-14. The
2013-14 was nearly 4 million hectares. exports of organically managed foods
Total area under organic farming have been witnessing a rising trend
in India is estimated at 4.72 million over the years both in terms of value
hectares (including wild harvest) during as well as volume. The value of
2013-14. According to ASSOCHAM, exports of organic foods increased at
the Indian organic farming market is a compound annual growth rate of 18
valued at Rs. 2500 crores (Exhibit 7.3). percent during this period with exports
Medicinal and herbal plants constitute increasing from Rs. 498.2 crores to
the major portion of organic product Rs.1328.61 crores. The volume of
industry when segmented by crops exports presented considerable growth
grown. as it increased at a compound annual

Exhibit 7.3: Organic Product Industry - Segmentation by Crops Grown

Total - Rs.2500 crore

Source: Assocham

1
Organic Food Market in India 2012-16, TechNavio Analysis

137
 growth rate of 29 percent during the Europe has been a major market for
same period from 38 thousand tonnes organic food exports for India in both
to 178 thousand tonnes. In the year the years. However, the share of EU
2013-14, the exports of organic foods has declined during the analysed
increased at a year-on-year growth period. The share of EU in total exports
rate of 15 percent in value terms of organic foods in 2010-11 was
and 11 percent in volume terms,
approximately 52.2 percent, while the
respectively.
share in 2013-14 was 41.7 percent. In
2013-14, exports of organic foods to
Exhibit 7.5 present the export
the European Union valued Rs. 553.85
destinations of organic foods from India
crores and the volume of exports
for the year 2010-11 and 2013-14. The
was nearly 56.9 thousand tonnes.
export of organic foods from India has
risen at a compound annual growth Apart from countries of the European
rate of 23.9 percent from Rs.698.6 Union, Switzerland was the leading
crores in 2010-11 to Rs.1328.61 crores importer of Indian organic foods in
in 2013-14. In volume terms, there Europe. Switzerland accounted for
has been a growth of 36.5 percent as 7 percent of the share of European
the volume of exports increased from imports of organic foods from India in
70 thousand tonnes to 178 thousand value terms, and 6 percent in terms
tonnes during the same period. of quantity.

Exhibit 7.4: Export of Organic Food from India

Source: Lok Sabha Starred Question No.268 dated 25th July,2014

138
USA accounted for 16.5 percent crore. Israel, with import of organic
of India’s exports of organic foods foods from India worth Rs.3.72 crore,
in 2010-11, with the share rising is the third largest importer of Indian
significantly to 37.6 percent in the year organic foods in the Asian region. The
2013-14. In terms of value, exports other significant Asian importers of
to USA increased from Rs.115 crore organic foods from India are Sri Lanka
in 2010-11 to Rs. 498 crore in 2013- (7 percent), South Korea (6 percent),
14. Rising trend in exports can be Philippines (5 percent), China (4
observed in volume terms as well, as percent) Iran and Singapore (3 percent
the quantum of exports increased from each).
13 thousand tonnes to 75 thousand
tonnes during the analysed period. Canada accounted for 14.3 percent of
the aggregate organic foods imports
Asia was the third largest importing from India and this share declined
region of Indian organic foods and marginally and reached 13.7 percent
constituted approximately 15.4 in 2013-14. Although the share of
percent share in India’s aggregate Canada in total exports of organic
exports of organic foods. This share foods from India has fallen, the volume
declined substantially in 2013-14 to as well as the value of imports has
2.8 percent. displayed a rise in absolute terms. The
import of organic foods by Canada
In 2013-14, Japan was the leading from India increased at a compound
Asian country that imported organic annual growth rate of 36.8 percent
foods from India with nearly 43 percent and 22 percent in terms of quantity
share in the value of aggregate and value, respectively.
exports of organic foods from India to
the Asian region. In terms of volume, The share of exports of organic foods
Japanese imports of Indian organic from India to Australia has been stable
foods stood at 309 tonnes in 2013- during the analysed period, 2010-
14. UAE was the second largest 11 and 2013-14; however, while the
Asian country importing organic value of exports has ascended, the
foods from India and constituted 11 quantum of exports has deteriorated
percent of the total imports of Indian over the years. Similar is the case
organic foods by Asia. The quantity with respect to India’s organic foods
of imports by UAE in 2013-14 was exports to New Zealand; the exports
171 tonnes and valued at Rs.4.26 of Indian organic foods have surged

139
 in terms of value, while in terms of 14, the exports of organic foods from
volume it declined. The quantity of India to Africa was valued at Rs. 1.73
import of Indian organic foods by New crore, and South Africa constituted
Zealand has marginally declined at a major share of 43 percent in the total
compound annual growth rate of 0.5 exports. Egypt’s import of organic food
percent during the period 2010-11 and amounted to 12 tonnes in 2013-14
2013-14, while the value of imports and had a share of 18 percent in the
has increased at a compound annual value of aggregate imports of organic
growth rate of 30.6 percent during the foods by Africa from India. The islands
same period. of Seychelles and Mauritius had a
share of 15 percent and 12 percent,
Africa occupied 0.1 percent share in respectively, in the value of exports of
the aggregate exports of organic foods organic foods to Africa from India.
from India in both the years 2010-11
and 2013-14. However, the quantity Table 7.1 displays the top ten
of exports of Indian organic foods destinations for organic foods from
decreased at a compound annual India. The European Union with a
growth rate of 29 percent, while the share of 59 percent registered a
value increased at a compound annual significant growth both in quantity and
growth rate of 24 percent during the value of exports from India during the
analysed period. In the year 2013- two year period 2011-13. The value

Exhibit 7.5: India’s Export Destinations for Organic Foods

Australia
1.1%
Total - Rs.698.6 crore Total - Rs.1328.61 crore

Source: Lok Sabha Starred Question No.268 dated 25th July, 2014

140
of exports of organic foods from India organic cotton, which needs
to the European Union increased certification in order to be claimed as
at a year-on-year growth rate of 34 organic. Consumers globally are eager
percent during the same period. The to buy organic apparels, fabrics and
other significant Indian organic foods other products manufactured without
importing regions are USA, Canada, the usage of pesticide residues. As
Switzerland, Bangladesh, Japan, UAE India is the largest producer of organic
and Malaysia. fibres and textiles, there are many
opportunities for the production and
Organic Cotton
export of organic textiles throughout
Cotton grown without the use of the world. A majority of the textiles
synthetically compounded chemicals produced is being exported to Europe
and fertilizers is considered as and the US.

Table 7.1: Top Ten Export Destinations of Indian Organic Foods

  2012-13 2011-12
 Country/ Region Volume Value Volume Value
(tonnes) (Rs. Crore) (tonnes) (Rs. Crore)
European Union 82835.37 678.51 51138.86 505.29

USA 34292.35 228.72 37630.23 197.94

Canada 33645.8 146.05 19848.91 66.66

Switzerland 3455.27 27.57 2161.51 21.04

Bangladesh 805.48 23.56 330.75 4.6

Japan 199.22 11.11 232.77 8.79

UAE 1728.46 10.6 167 2.02

Malaysia 560.06 6.62 42.87 0.74

Australia 468.26 6.6 349.14 5.15

New Zealand 409.68 2.57 499 2.97

Total 160277 1155.81 115417.2 839.34

Source: Lok Sabha Starred Question No.268 dated 25th July 2014

141
 As per the Textile Exchange Organic In consideration to the rising demand
Cotton Market Report 2013, India was for organic textiles, India’s Agricultural
the largest producer of organic cotton and Processed Food Products Export
globally. China displayed reasonable Development Authority (APEDA), has
volume of growth in the production of developed Indian Standard for Organic
organic cotton, while the production of Textiles (ISOT) under the National
organic cotton in Turkey dropped. Thus, Programme for Organic Production
in 2012-13, China was the second (NPOP) which is intended to provide
largest producer of organic cotton a major boost to the textile industry.
followed by Turkey. The other major As per the notice by the Director
organic cotton producing countries are General of Foreign Trade (DGFT),
Tanzania, USA, Burkina Faso, Egypt, Ministry of Commerce, Government of
Mali, Uganda, and Peru. India any product exported as organic
product will be required to be certified
As per the Farm and Fiber Report, by the National Program for Organic
the total area under organic cotton Production (NPOP). The standards for
global production in 2011-12 was organic textiles cover the cultivation
nearly 316,907 ha with 637,153 bales and production of organic fibres
and the manufacturing, processing,
of cotton fiber production.
packaging, labelling and distribution
of organic textiles. The objective
According to the Organic Cotton
behind this standardisation is to certify
Market Report, the global retail sales
all the possible operations from the
of organic cotton reached an estimate
cultivation, including the harvesting
value of US$ 3.2 billion in 2008,
and finally up to the final product.
registering a 63% increase over the
The final product may include fibres,
US$ 1.9 billion market value in the
yarns, fabrics, made-up and garments
previous year. There has been a
including home textile products.
growth in the market over the years
as the retail market size for organic
As per the Annual Report of National
cotton in the year 2012 reached
Centre of Organic Farming 2012-13,
US$ 8.9 billion accounting for a 31%
the production of organic cotton in
growth as compared to the the year
2012-13 was nearly 111.38 thousand
2011, when the retail market size was
mt and there has been a drastic fall in
approximately US$ 6.8 billion.
the production in the two year period

142
as the production in 2010-11 was be regular availability of organic seeds
approximately 552.38 thousand mt. for the farmers. The demand of the
The major organic cotton growing farmers should be communicated
states in India are Madhya Pradesh, to the seed producing companies
Maharashtra and Orissa. The most along with the guarantee of buying
critical challenge faced in organic the output, and requisite financial
cotton production is the shortage of advances of around 12 months ahead.
non-GMO seeds. The seed industry Moreover, the farmers must also have
both in public and private sector is the certainty that their output is sold.
focussed on catering to the created Thus, the seed supply chain needs to
demand for BT-Hirsutum hybrid, be developed by matching the demand
leaving the non-BT farmers with limited and link groups. The supply chain
choices. can be upgraded if the stakeholders
cooperate and make their contribution
As per Cotton Connect, the organic at the apt time.
cotton sector is at a crucial stage of
development, where in the sector faces Independent seed production can
the possibility of a global shortfall of up be done by producer groups, as it
to 50% in 2015. There might be a gap is a remunerative venture and the
between the demand and supply, as dependency on seed companies
the brands continue to consume huge reduces. Moreover, along with the
varieties of organic cotton, regardless private seed producing companies,
of the decline in production. seeds can be procured from the
public sector as well, such as the
Some of the issues related to the State Farmers Cooperatives, National
cultivation of organic cotton are: and State Seed Cooperation, for
instance.
Seed Supply: Due to the rising
demand of the GM cotton seeds, the Seed Research and development:
seed producing companies are not Since the farmers are not aware and
interested in the production of the educated enough about the pest,
non-GM seeds which are required for disease and nutrient management,
the organic cotton production. As per they have to depend on expensive
ICCOA, most of the non-GM seeds bioinputs that are sourced at exorbitant
belonged to the old stock. Thus, it is rates from the private sector causing
extremely important that there should the cost of farming to rise. There is a

143
 need for enhancement in the research establish better cotton as a sustainable
and development activities. The mainstream commodity. Cotton Initiative
agricultural research organisations is a voluntary programme, with a view
should augment their research on to produce cotton taking into account
organic cotton seeds and identify the protection of the environment and
better quality hybrids simultaneously be economical. As per
the Yes Bank Report “Cotton Market
Farmers Encouragement: It is essen- and Sustainability in India”2012; the
tial for the farmers to be aware of the standards developed by the BCI tend
organic farming and its advantages. to take a moderate approach towards
The formation of a farmers group can sustainable cotton. The purpose
be very beneficial as they can promote of this standard is to transform the
the concept on this environmentally market by bridging the gap between
sustainable way of farming. There unsustainable cotton and organic
should be the usage of better cotton. The production process is
communication tools and increased manageable by the farmers, and not
extension services to deliver trainings governed by stringent protocols. The
to the farmers. The farmers need to demand for Better Cotton was created
be enlightened about the notion of by the retailers like IKEA, Marks &
compost making, green maturing, Spencer’s, Levi’s, Adidas and H&M.
inter cropping and other such organic Later several partners of the global
methods to improve the cotton yield retailers joined in the process.
along with an addition to the farmer’s
revenue Organic Soybean

An Alternative to Organic Cotton Better Organic soy, since the 1970’s, has
Cotton Initiative: been beneficial in preserving the
soil and eco system and reducing
The Better Cotton Initiative is a the usage of agrochemical inputs.
holistic approach to sustainable cotton Soybeans have a wide variety of uses
production which covers the three as it has high protein content and
pillars of sustainability: environmental, is used in the animal feed industry.
social and economic. The system is Moreover, it is processed for human
designed to ensure the exchange consumption and made into products
of good practices and to encourage like soy milk, soy flour, soy protein,
the scaling up of collective action to tofu and many retail products. Globally,

144
approximately 87% of the soybean farming that will require 100% of
production is crushed for soy meal protein foodstuffs for monogastric
and soy oil and the remaining is for animals (eg. Poultry), be of organic
direct human consumption. Since origin in the near future (European
such a large proportion of soybean is Commission 2012). As the European
produced for animal feed, the demand Union is the second largest market
growth for high protein diets globally is for organic foods, it is expected that
having an impact on the demand and the implementation of this regulation
growth of the soybean production. As will have an important impact on the
per the State of Sustainability Initiatives future supply and demand of organic
Review 2014, the major producers of soybean for feed.
organic soybeans globally are China,
USA, Brazil, Argentina and India. Organic certified soybean are sourced
from seven countries namely China
As per the International Federation (58%), United States (15%), Canada
of Organic Agriculture Movement (4%), India (3%), Austria (3%),
(IFOAM), in 2013 almost 30 per cent Argentina (3%) and Italy (3%).
of the global organic oilseed area
is utilized in cultivation of soybean, In India, organic soybean is the largest
followed by sunflower seeds and traded commodity and as per APEDA,
peanuts. During 2013, the global area among the organic food products
under organic oilseed production was exported, the organic soybeans have
approximately 224.6 thousand ha. the largest share of nearly 70%. There
is growing demand for organic meat
In the last three years (since 2008), in North America, which is leading to
reported estimates of organic soybean increased organic livestock production
production and harvested area have with a proportionally growing demand
more than tripled, with an average for organic feed. According to the
annual growth rate of 48 per cent, United States Bureau Trade Data,
although this is largely due to an India is a significant exporter of
incorporation of Chinese production organic soybeans to the United States,
volumes into the statistics for the second only to China. India exported
first time in 2010. It is expected that approximately 27% of the United
the production of organic soybeans States’ imports from the world. There
will increase over the years; partly was a major rise in exports from India
due to an EU Regulation on Organic to USA, in terms of value, which

145
 Exhibit 7.6: Organic Soybean Production by Country, 2011

Total - 599315 metric tonnes

Source: SSI Review, 2014

Exhibit 7.7: Production and Sales of Organic Soybeans

Source: SSI Review, 2014

146
increased from US$ 5.3 million in Indian Organic Products Industry –
2011 to US$ 29.8 million in 2013. Way Forward
The other competing countries in
India‘s export of organic soybean Exports are forecast to continue to
to the United States are Canada, be the growth driver for the Indian
Argentina, Romania and Kazakhstan.
organic products industry. India
The organic soybean used majorly
majorly exports organic processed
as an animal feed has considerable
food products, organic rice, beverages
demand in the United States as the
and other cereals and millets to the
Organic Livestock Requirements by
the USDA include that only 100% USA, Canada, Europe, and select
certified organic feed should be fed to South East Asian countries.
the livestock, except for trace minerals
and vitamins used to meet animal’s Organic products market in India,
nutritional requirements. currently is predominantly metro
based. It is estimated that around

Table 7.2: Organic Products and Key Producing States in India

147
 95 per cent of the organic brands Based on the world export demand
market exists in the top 10 metros and products exported from India, the
e.g., Delhi (NCR), Kolkata, Mumbai, key organic segments in India are:
Pune, Chennai, Bengaluru and the
• Beverages – Tea
other Tier II cities – e.g. Indore, Nasik,
and Nagpur. • Organic rice
• Organic Wheat Flour
The domestic market for organic
• Organic Millets/Flours
products in India is underdeveloped,
considering the historical growth in • Organic Pulses
the organic farming activity in India.
• Organic Ghee
The growth under various organic
segments in India is estimated by • Organic, Cold Pressed Edible
various studies, which is presented Oils
in Table 7.3. The growth estimates
provides significant insights on the Based on the farm production and
potential of these segments. largest area under production, the key
organic segments in India include:
Table 7.3: Major segments in Organic
Sector- Growth Trends • O r g a n i c c o t t o n – ( e x p o r t e d
Growth in 5 years predominantly; used in organic
Product (beginning 2010) clothing)
(%)
• Organic rice
Spices (all ) 14
Pepper 5 • Organic wheat
Turmeric 4.5 • Organic pulses
Tea 14
• Organic millets
Rice 11
Fruits (all) 8
In India, presently, two kinds of
Banana 15
strong under-currents of organic
Mango 5
farming is seen; from limited to rapidly
Orange 5
increasing certified organic farms,
Pineapple 5
mainly producing for a premium price
Herbal extracts 8
in the domestic or export market, and
Cotton 8
the large number of those noncertified
Source: Yes Bank

148
organic farms, which produce for has been rooted in the farmer ’s
their own households accessing local approaches. For enterprises in organic
markets only. The Government of India industry, in order to boost trade
through policy measures has started in Indian agricultural products and
promoting organic farming, which can capture a significant share of global
be a profitable strategy to raise the market, it is an imperative that India
becomes home to such organic
income level of the small and medium
products, which give the country and
farmers. Some states, such as Sikkim
its products a competitive edge in
have already declared their farms as
global market.
completely organic. There are many
States where the production is by
The global competitiveness for organic
default organic. Uttaranchal is one
products exported from India is marked
such state. However, to market organic with a number of weaknesses, whereas
products internationally, obtaining lot of opportunities does exist in the
globally accepted certification is domestic and international market.
mandatory. The major threats are from that of
competition from other peer countries
India’s long tradition of ecological for which area-specific varieties are to
agriculture, in many different forms be developed.

149
 8. Organic Market: Challenges
and Strategies

The trade in organic products is ‘Ecological dumping’ is becoming more

growing rapidly. Growth rates in the common and is a practice strongly
sector show that the organic products, resisted by the organic movement.
which supplied only to niche markets, There is a very real difference between
a few years ago, have now entered production in-keeping with the holistic
mainstream marketing channels. principles of the organic movement
Although the growing market offers and the purely commercial production
considerable opportunities, it also of ‘natural’, ‘biological’, or ‘organic’
poses several challenges. Besides products, such as organic cash crops
market related challenges, such as in monoculture.
supply chain and certification issues,
Bio-colonialism is one of the major
ecological and social dumping and or
challenges facing the organic
bio-colonialism have also emerged as
movement. Given the much greater
significant challenges to the organic
economic wealth and ‘buying power’
movement itself.
of the developed countries, many
products of organic quality find their
Over the last decade, organic products
way into these premium markets and
have been marketed in increasingly
so become unavailable to local and
larger quantities outside the area in
regional populations. Much more effort
which they are grown. Whilst seasonal and marketing creativity is needed if
production and regional markets organic food is to become accessible
remain an important objective in to more people throughout the world.
organic farming, there are nevertheless
plenty of export opportunities for Besides, the challenges faced by
such products from the developing the organic product industry may be
countries, such as coffee, tea, cacao, broadly classified under supply chain
bananas, spices, herbs and other management, marketing, and product
subtropical and tropical products. and sector development.

150
Supply Chain Management organisations involved in wholesale,
retail or operating home delivery
Supply Chain Systems systems, a basic flowchart prescribed
which is as given in Exhibit 8.1.
Supply chain management is one
of the key issues to the success Different organisations apply quality
of developing an organic market. control measures at the different levels
Efficiency and quality management of the supply chain.
are determining factors and need
particular attention. Key issue in quality Organizing the supply has been a
development is the establishment of a long standing challenge, particularly
quality assurance system throughout when dealing with fresh produce,
the supply chain. This involves quality such as vegetables and with different
of raw materials, procurement control (contracted) producers. Contact with
system, processing quality, packaging, the producers is sometimes not easy
and stock management. Both the (lack of reliable telephone or other
marketing organisations and the communication network, farmer groups
producers need to apply a Total Quality not well organised) and sometimes
Management (TQM) for their operation last-minute orders from customers
so that product quality is continuously cannot be included.
maintained.
Often the increasing demand for
Channeling supplies for organic organic products cannot be served
markets is a complex process because of poor collection channels,
involving multiple stakeholders. For insufficient production of organic

Exhibit 8.1: Supply Chain System in Organic Product Sales

Source: IIRD

151
 products, poor transportation facilities Strategies
and (in case of processed goods)
lack of proper processing facilities Several organisations involved with
in-line with organic standards. The the trade in organic products plan
undersupply of appropriate storage a number of future changes. These
infrastructure is also referred to as a changes relate to improvements in
major challenge in the supply chain of the distribution (setting up own cold
the organic produce. room, purchasing air-conditioned
truck for transportation) and the
Quality control remains a difficult packaging (packaging done fully by
area. Although many organisations company staff, setting up specific
in India have developed clear quality packaging centre). Another focus
standards, often together with the area is to have better control over
farmers, and have included them in quality and availability; for example,
their contracts, it is difficult for the staff by establishing quality control at each
directly involved in purchasing from the point in the supply chain.
farmers to always comply with contract
strictly, especially when farmers have Some of the strategies that may
no other sales outlets and pressurizes address the supply chain management
collection staff to accept all their challenges in the organic trade
produce. In addition, when amounts include:
are not similar to what was ordered it
becomes difficult for the staff to find the • D e v e l o p d i r e c t b u s i n e s s
balance between quality and having relations;
enough product.
• Quality is the key: Implement and
Adequate training of farmers, follow diligently quality assurance
producers and processors also has scheme, TQM;
been of considerable challenge. There
is a large knowledge gap spanning • Planning sales in line with the
the marketing system in place, the production;
value chain (i.e., activities that a firm
performs to deliver a valuable product • Develop advance purchasing
or service for the market) and the value scheme to meet the farmers’
delivery network (i.e., supply chain expectations of sales volumes at
network) in the organic food system. desired price;

152
• Provide training to the producers; • This may include implementation
of integrated automated storage/
• Te c h n o l o g i c a l d e v e l o p m e n t retrieval systems, automatic
important to improve efficiency identification of products,
and lower cost of production. conveyors, order-picking systems,
RFID, sortation equipment,
Food origin and mileage
and software and systems
The concept of food mileage, integrations.
which refers to the distance the
food is transported from the time Size of farms and collaboration
of its production until it reaches the
consumer, gains prime importance The majority of organic farms are small,
in the case of organic food products. privately-owned, family enterprises.
Since the past decade, the country of These independent operations often
origin of the food and food mileage struggle with economic scale. The
are becoming increasingly important. production of produce in small to
Maintaining supply volumes and medium farms is rather limited,
supply continuity are major concerns amounting to a few hundred tonnes.
for most food companies. This challenge is particularly evident
in sectors, such as dairy, poultry, fruit
Further, organic food import also and vegetables, where scale and
highlights the issue of food mileage, and linkage with primary processing is
is linked to agricultural sustainability, critical. Further, organic food requires
as “organic food imports” do not match more resources, particularly human
with local food production, freshness resources, during production. Farming
and community cohesion. is a capital-intensive business,
and productivity is enhanced with
Strategies
investment in new equipment. Similarly,
marketing channels are more difficult to
• Streamlining logistics is key
access for smaller producers. Further,
to minimize food mileage. To
many buyers seem to be ambivalent
minimize lead time from farm to
about channels of distribution.
shelf and thereby increase the
shelf life of fresh food, a holistic
approach is required, which may Strategies
include revamping warehouse
management, order management • Collectivisation of the unorganized
and transportation management, small organic producers;

153
 • Forming or connecting with shelf life and minimising waste. Any
cooperatives and producer loss due to deterioration is loss of
companies enable the producers to potential income as well as increased
put together their produce, obtain cost.
funds and possess the processing
and storage facilities strengthening Stock control procedures and stock
the bargaining power; management are very important in
organic product industry in order
• C o o p e ra ti ve s a n d p ro d u ce r to accurately manage the flow of
companies employ professionals products, including purchase, sales
for tasks, such as accounting and and waste, so that informed decisions
marketing, so that the farmers can be made on planning of production,
can solely focus on production prices and purchase amounts and
strategies; timing. Stock control procedures
are also essential to prevent mixing,
• Enabling the small and marginal particularly when the organisation is
farmers utilize the facilities of handling different grades, for example
storage and processing units in the certified organic, in-conversion organic
proximity of production. This would and conventional produce, in the same
empower the farmers to engage product category. However, many
better with other participants in organisations struggle with keeping
the market; their information up to date, and as
a result, the information generated
• Providing trainings in marketing is not always used as effectively as
as well as on specialized methods could be.
of production to the farmers and
producers, so that they are able In general, organisations dealing with
to adapt to the current trends in organic products receive the products
organic product market. from their producers and store these
in their own storage areas. Upon
Handling and Stock Management delivery or pick up of the produce,
farmers receive a receipt from the
As post-harvest chemicals and organisation. Payments are made on
processing additives are generally to the spot or after a mutually agreed
be avoided in organic production, good period; for example once a month.
and quick post-harvest handling as well Most organisations have a centralised
as accurate stock flow management is record for all products in the storage,
important to maintain quality, longer usually handled by the marketing

154
managers or another specific staff, and unsold stock that cannot be stored
mostly they do not use stock inventory (mostly fresh produce) many
planning procedures. initiatives could be followed such
as giving away to the hospitals,
Documentation is generally very crude orphanages or to small hotels in
based on simple forms and a regular, the city. Leftovers can sometimes
mostly monthly, inventory based on be also given away free as a
the average monthly sales of the promotion.
products. Some organisations use a
spreadsheet computer application, to Marketing and Sales Management
record and summarise the information
generated. However, sometimes this Marketing of organic products,
consolidation is done with delays, worldwide as well as in India, generally
which makes the actual use of the could be distinguished as follows:
information generated less effective.
• Direct Sales/Farmers Markets,
Strategies for example the organic bazaars
organised by the Institute for
• Total Quality Management is also Integrated Rural Development
essential in handling and stock (IIRD);
management;
• Retail;
• Monitoring purchase, waste,
and sales are important so that • Wholesale/Retail/Export.
informed decisions can be made
on planning of production, and Most organisations fall into the second
purchase volume; category, but some organisations
also do wholesale or low volume
• Making the system effective and exports. Marketing organic products
use the data generated. E.g. For is an educational process and it takes
reordering packaging materials many years to educate the people.
and packed products, it is useful Marketing efforts are related to both
to set a reorder level for each item, the social and ecological aspects
at which the purchase process is of the products. In doing so, a lot
initiated; of efforts need to go into capacity
building, production related issues,
• Having contingency plan for waste quality parameters and the logistics
(promotion at some times). E.g., for of procuring products, especially

155
 from remote and inaccessible areas. • G o o d p a c k a g i n g w i t h c l e a r
However, in most cases the products (corporate) identity;
sell more because of their quality and
competitive pricing, rather than the • Product development (in maturing
social marketing. The key is quality of market consumers ask for more
produce; it is the fundamental criteria variety of products);
to secure the market position and
product branding. • Collaboration with others in
the organic sector for generic
Organic certification is also becoming promotion activities;
increasingly important in relation to
marketing, as there are many self
• Using the media (print, television
claimed green products in the market.
and radio);
Consumer confusion and loss of
confidence on organic products can
• Display messages: on quality,
create long-term implications for future
benefits of organic, health,
market. This is especially true for new
consumers having little knowledge fairtrade, help indigenous people,
about the organic products. direct from producer (may change
over time as market develops).
Supermarkets are potentially attractive
channels for the sale of organic Customer Servicing
products. However, they are often
very demanding in terms of product • Obtaining regular feedback of
quality, availability and price. Usually, customers on products and
supermarkets, dictate the type of services;
packaging material for the products
they will purchase, which creates • Providing regular information
additional expenses for the marketing about products, sales (location,
organisation or the producers. timing);

Strategies • Staff interacting with customers

should have adequate knowledge
Marketing Communication
on organic farming, products and
services, and be able to convey
• Pro-active with certification
effectively the philosophy of the
(expensive, but essential to build
consumer trust); operation;

156
• S t r a t e g i s i n g w a y s t o b u i l d review the price of organic products
trust (particularly at start) for is even more important when the local
certification; economy is in recession and more
producers turn to organic production,
• Customer communication should as happened in the last few years in
be easy and convincing for all many countries in Asia.
strata of customers;
Organic farmers largely assume that
• Readiness for Supermarkets the produce from an organic farm
(interesting market but very will command a premium price. The
demanding); inflated prices often reflect the usually
small scale of production and the
• Staff interacting with dealers underdevelopment of the market.
should have extensive knowledge
on organic farming, products and The prices for organic products
services, and be able to convey vary significantly among different
effectively the philosophy of the companies, different retail formats and
operation. across product categories. It has been
determined that the prices are generally
Cost, margins, price setting and lower, when lesser middlemen are a
value addition part of the supply chain. When there
are many intermediaries participating
The price of an organic product has in the system, the price rises and
a direct impact on sale. Currently, the farmers are able to attain a very
organic products are purchased mostly minimal portion of the price premium.
by high income group consumers
Strategies
whose decision to purchase is not so
much influenced by price. However,
• Initially, basic price may be
for market expansion to broader
determined by the producer,
consumer groups price becomes a
but future pricing should be
critical factor for market success.
based on more specific cost-
benefit calculations for organic
The failure to make a price comparison
production;
with conventional products is often a
marketing challenge for organisations • Setting price of organic products in
involved in manufacture and sale relation to conventional products
of organic products. The need to (making that comparison);

157
 • Premium being fixed for organic Organic certification is becoming
products must be acceptable in increasingly important, as there are
mature markets (10-20%). many self-claimed green products in
the market. Consumer confusion and
• Reaching economies of scale loss of confidence in the organic product
is important for sustainable can create long-term implications for
development; the organic market.

• I n c o r p o r a t i n g a c o n d e n s e d Strategies
supply chain, making use of the
arrangement of direct marketing • Pro-active in obtaining certifi-
and instructing the farmers to use a cation;
Participatory Guarantee Scheme,
so that it involves lesser cost, can • Though certification is a cost-
enable reduction in the prices of intensive exercise, it is essential
organic food, comparatively.
to gain consumers’ trust, especially
if the produce is not sold directly
Sector Development
from the farm, but through the third
party, such as retail shops;
Market assurance and certification

• Alternatively, farmer-consumer
Establishing credibility is particularly
relationship is essential;
crucial when promoting alternative
qualities in a competitive market
• S e l f - i n s p e c t i o n s y s t e m s ,
environment. Despite the fact that
several Asian countries, such as which involve both producers
China, India, Thailand and Malaysia, and consumers, should be
have developed national regulations for recognised.
organic agriculture, there is no effective
regulation in place yet controlling Sector cooperation and market
the use of the terms “organic” in norm building
most of the markets in this region.
Some local certifiers, both private Although an organic marketing initiative
and governmental, are operational in is generally supposed to focus on
this region; however, the use of their sales, ensuring constant supply is
services is still mostly on a voluntary as also an important element. For an
basis. organic marketing sector to develop

158
and grow, initiatives for the sector as a create more impacts among
whole is required including a full array consumers compared to individual
of services for production support as efforts.
well as for the full chain of custody,
from farm to table. Challenges and Strategies
Specific to Indian Organic
In a number of countries, different Products Industry
actors have developed mechanisms for
collaboration. However, as the number Transition Assistance
of players in the organic market is
small, there is not much possibility for The conversion period may turn
collaboration. Some of the exporting out to be a difficult phase for the
companies also don’t show interest farmers owing to several direct and
in collaborating with organisations indirect costs involved in the process.
focussing on the domestic market. As far as the yield behaviour of
Sometimes, where there are a few farms undergoing conversion is
pioneering organisations in a country, concerned, it largely depends upon the
they also are not eager to collaborate agricultural practices followed before
because they wish to keep their unique the conversion. Conversion from a
image as pioneer. In larger countries, traditional low external input system of
it is also logistically difficult for small cultivation rarely results in lower yields.
local organisations and individuals, However, when switching from external
with fewer funds and geographically input intensive forms of agriculture, the
distant from each other, to work yield may decline significantly, at least
together. in the initial years of conversion – until
the natural soil tilth and fertility are
Strategies sufficiently developed.

• More cooperation with other Moreover, during the early stages of

organic trading organisations is the transition, there is requirement of
necessary in order to promote heavy and additional investments in
organic consumption; farm-undertakings, such as machinery,
storage and soil fertility building
• Joint publicity campaigns with mechanisms. Organic techniques
contribution from different stake- are generally more labour intensive
holders (producers, processors, and thus the wage cost rises. Cost
traders, consumers, competent may also arise from information and
government departments) can knowledge seeking, which is required

159
 for certification and labelling from an facilitating the sale of organic products
established certification agency. The to consumers. This procedure requires
high cost of inspection and eventually extensive paperwork, detailing farm
certification, which needs to be done history and usually including the
during the conversion period, adds to results of soil and water tests. It also
the expenses. involves annual on-farm inspections
and the fee needs to be paid by the
The prime hurdle faced by an organic growers to the certification bodies
farmer during the transition period is for annual surveillance. Moreover
the inability to sell his produce at a records in written form related to day
premium price because during the to day farming and marketing should
official transition period products be made available for inspection at
cannot be sold as organic. any time.

Strategies Most certifiers charge inspection and

certification fees based on the number
• There is vital need for a programme
of person days involved along with
that is particularly designed to
the fees for the issue of certificates.
provide aid to the organic farmers
Occasionally different fees are applied
during the three year conversion
for small farmers, large farmers and
period;
processors or traders.
• The policy should involve the
provision of annual payment during The cost involved along with the
the transition period; to compensate prolonged procedure and lack of
for the loss of income occurred in knowledge and understanding is
the course of converting from non- acting as an obstacle in the organic
organic to organic; certification procedure in India,
• While per hectare financial support particularly for the small and marginal
is available in several State and farmers.
Central Government Schemes
there is a lot of scope to spread Further, the third party certification
these initiatives in the rest of the system involves inherent expense
country. and paperwork in a multi-level system
and discourages the small organic
Issues in Certification producers from being certified. It is
generally designed for the produce
As per the National Centre of Organic meant for exports and not considered
Farming, the process of Organic feasible for the small and marginal
certification is aimed at regulating and farmers.

160
Strategies Strategies

• In order to persuade the farmers • Capacity building of producers on

to undertake the certification organic farming techniques;
process, there is a need to make
the procedures simple and less • Balancing demand and supply of
expensive; organic input requirement;

• Government initiatives may be • Increased funding for research,

required to bring down the cost of education and extension activities
certification; and promoting continued economic
analysis of the issues and trends
• Increased assistance should be in the organic sector;
provided for the Participatory
Guarantee Scheme. • Encouraging the development
of seeds, varieties and livestock
Inadequate knowledge on organic
breeds suitable for the organic
production
farming system would facilitate the
extension of organic farming.
Organic farmers in India often report
of not getting a proper, system based
Market intelligence
understanding of organic farming,
they rather use isolated technologies.
The information available in the country
There is also non-availability of suitable
regarding organic products produced
designs of organic farming systems
and exported is limited, and thus do
for various climatic conditions and
crops, supported through appropriate not lead to any business or policy
technologies. Availability of insufficient decisions. Data are also not available
biomass on-farm and inaccessibility to calculate prices of different organic
of external inputs, such as organic commodities under variety of farming
manures and pesticides, organic ways cultures of India. In the absence of
of post-harvest handling and packing appropriate and adequate information,
have also been cited as challenges in a vague mechanism of organic pricing
organic production in India. and premiums prevails.

161
 Strategies • There is a need for comprehensive
studies on organic niches of India to
• There is an urgent need to
help bring organic farmers into the
undertake cost benefit analysis
export market, with comparative
and developing a framework
advantage. The survey on potential
for price discovery of organic
niche crops for organic farming
commodities;
under different agro-ecological
• Strengthening of data collection zones and farming cultures across
and dissemination is also required India, will naturally lead to mapping
to take informed decision on of organic niches of India.
markets and products potential
for India; Insurance Options for Risk
Management
• Research covering assessment of
demand scenario in major export Vagaries arising out of natural
markets is also required in order to calamities are common to both
match the supplies from India conventional and organic farming.

Exhibit 8.2: Policy Interventions for Market Development

Source: B.K. Sikka, Sapna A. Narula and M.S. Jairath

162
There are various perils in organic of organic farmers in a more
farming, which may cause damage focussed way, such that losses
to crops such as drought, excess can be avoided and there is
moisture, freezing, insect damage, enough revenue to support diverse
disease and weeds. Also, there is operation;
income loss for producers transitioning
to organic production. • There is a necessity of an
insurance coverage for producers
Strategies transitioning to organic production.
This would enable a farmer to even
• T h e d e v e l o p m e n t o f v i a b l e out his income and reduce the
and effective risk management stress of worrying about possible
programs that address the need losses.

163
 Annexure - 1

List of Accredited Certification Bodies under NPOP

Name of the
Accreditation Scope of
Certification Certification Mark
Number Accreditation
Agency

Bureau
NPOP
Veritas
NPOP/
Certification
NAB/001 USDA
India (BVCI)
NOP
Pvt. Ltd.

NPOP
ECOCERT NPOP/
India Pvt. Ltd. NAB/002 USDA
NOP

NPOP
IMO Control NPOP/
Pvt. Ltd. NAB/003 USDA
NOP

Indian
NPOP
Organic
NPOP/
Certification
NAB/004 USDA
Agency
NOP
(INDOCERT)

NPOP
Lacon Quality
NPOP/
Certification
NAB/006 USDA
Pvt. Ltd.
NOP

164
OneCert NPOP
Asia Agri NPOP/
Certification NAB/008 USDA
(P) Ltd. NOP

NPOP
(not for EU)
SGS India Pvt. NPOP/
Ltd. NAB/009
USDA
NOP

NPOP
Control
NPOP/
Union
NAB/0010 USDA
Certifications
NOP
(w.e.f: 01-07-2013)

Uttarakhand
NPOP
State Organic
NPOP/
Certification
NAB/0011 USDA
Agency
NOP
(USOCA)

APOF Organic
Certification NPOP/
NPOP
Agency NAB/0012
(AOCA)

Rajasthan NPOP
Organic
NPOP/
Certification USDA NOP
NAB/0013
Agency (w.e.f 01-07-
(ROCA) 2015)

NPOP
Vedic Organic
NPOP/ USDA
Certification
NAB/0014 NOP
Agency
(w.e.f 01-10-
2011)

165
 ISCOP (Indian
Society for
NPOP/
Certification NPOP
NAB/0015
of Organic
Products)

NPOP
Food Cert
NPOP/ USDA
India
NAB/0016 NOP
Pvt. Ltd
(w.e.f 1-6-
2011)

NPOP
Aditi Organic
NPOP/ USDA
Certifications
NAB/0017 NOP
Pvt. Ltd
(w.e.f 1-6-
2010)

(w.e.f: 22-10-2014)

Chhattisgarh
Certification NPOP/
NPOP
Society, India NAB/0018
(CGCERT)

Tamil Nadu
Organic
NPOP/
Certification NPOP
NAB/0019
Department
(TNOCD)

NPOP

Intertek India NPOP/ USDA

Pvt. Ltd. NAB/0020 NOP
(w.e.f 01-10-
2011)

166
Madhya
Pradesh NPOP
NPOP/
State Organic (w.e.f 01-10-
NAB/0022
Certification 2011)
Agency

NPOP

Biocert India NPOP/

Pvt. Ltd NAB/0023 USDA NOP
(w.e.f 01-12-
2011)

Odisha State
Organic
Certification NPOP/
NPOP
Agency NAB/0025
(OSOCA)

Natural
Organic NPOP/ NPOP
Certification NAB/0026
Agro Pvt. Ltd.

(w.e.f:1-12-2011)

Fair Cert
Certification NPOP/
NPOP
Services Pvt. NAB/0027
Ltd.

167
 Gujarat
NPOP
Organic
Products NPOP/
Certification NAB/0028
(w.e.f
Agency
20.06.2014
(GOPCA)

Uttar Pradesh NPOP

State Organic NPOP/
Certification NAB/0029 (w.e.f
Agency 20.06.2014)

Source: ncof.dacnet.nic.in

168
Annexure - 2

Inspection and Certifications Charges in India

according to Organic Regulation by
IMO Control India Private Limited

Certification ac-
Additional NOP Additional JAS
Category Type of service cording to NPOP
certification (Rs) certification(Rs)
(Rs)
- Inspection (on site)
- Travel(time)
- ICS audit & 2,950/- per day
travel(on site) 2,950/- per day
-
-
Groups of small - Evaluation (at -
10,500/- per day -
Holders with In- office) -
10,500/- per day -
ternal Control - Certification lump- -
19,000/(lump- -
Systems(ICS) sum 4000/(lumpsum)
- Additional Certifi- sum) 3,000/- 25000/(lumpsum)
1000/(lumpsum)
cation (lumpsum)
- Procedures for a
ICS Sub group
- Inspection (on site)
- Travel(time) 4,950/- per day
Groups of farm- - -
- Evaluation (at 4,950/- per day
ers - without - -
office) 10,500/- per
ICS,100% exter- - -
- Certification lump- day 19,000/-
nal inspection 4000/(lumpsum) 25000(lumpsum)
sum (lumpsum)

- Inspection (on site)

Individual Farms - Travel(time) 6,950/- per day - -
- Evaluation (at
(less than 25 6,950/- per day - -
office)
ha), Small Pro- 6,950/- per day - -
- Certification lump-
cessors 9,500/-(lumpsum 25000/(lumpsum) 25000(lumpsum)
sum

- Inspection (on site)

Individual Farms/ - Travel(time) 10,500/- per day
- -
E s t a t e s ( l e s s - Evaluation (at 10,500/- per day
- -
than 80 ha), Me- office) 10,500/- per
- -
dium sized Pro- - Certification lump- day 13,000/-
3500/(lumpsum) 25000/(lumpsum)
cessors sum (lumpsum)

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 - Inspection (on site)
Estates (more - Travel(time) 14,000/- per day
- -
t h a n 8 0 h a ) , - Evaluation (at 14,000/- per day
- -
Manufacturers, office) 14,000/- per
- -
E x p o r t e r s / I m - - Certification lump- day 16,500/-
4500/(lumpsum) 25000/(lumpsum)
porters sum (lumpsum)

Any input requested

Off-farm inputs
after the annual in-
acceptance (for
spection 500/-per input 500/-per input
inputs restricted
Any input used without
according to the
request and accep- 1000/-per input 1000/-per input
standards)
tance
1000/- per certifi- 1000/- per certifi-
cate (transactions cate (transactions
within India) OR within India) OR
1,500/- per cer- 1,500/- per cer-
tificate (exclusive tificate (exclusive
Certificates of
For each transaction of overseas cou- of overseas cou-
Inspection
rier charges) OR rier charges) OR
2,800/- per certifi- 2,800/- per certifi-
cate (inclusive of cate (inclusive of
overseas courier overseas courier
charges) charges)
Special services
Based on spe- Within India 1,750/- per hour - -
cific requests
from clients or Outside India 6,000/- per hour 6,000/- per hour 6,000/- per hour
authorities
Tr a v e l & H o t e l E x -
-Actuals, where
penses - -
applicable
-Actuals
Communication Ex-
Expenses
penses*
-Actuals, where
Laboratory Analysis - -
applicable

Note *: Communication expenses include costs incurred by IMO towards telephone calls,
faxes, photocopies, couriers charges related to each project.
Budget: Based on above mentioned fees, a detailed estimation of the overall costs will be
presented before each inspection. The project mandator has to approve the cost estimate
before the inspection.
Payment: An advance payment of 80% of the overall estimated costs is necessary before
the inspection. Balance is to be paid when the report is finalized, on the basis of the detailed
invoice enclosed with the final report.
Source: APEDA

170
 RECENT OCCASIONAL PAPERS
OP. No. Title
108. Select West African Countries: A Study of India’s Trade and Investment
Potential
109. Indian Leather Industry: Perspective and Export Potential
110. GCC Countries: A Study of India’s Trade and Export Potential
111. Indian Petroleum Products Industry : Opportunities and Challenges
112. Floriculture : A Sector Study
113. Japanese & U.S. Foreign Direct Investments in Indian Manufacturing:
An Analysis
114. Maghreb Region: A Study of India’s Trade and Investment Potential
115. Strengthening R & D Capabilities in India
116. CIS Region: A Study of India’s Trade and Investment Potential
117. Indian Chemical Industry: A Sector Study
118. Trade and Environment: A Theoretical and Empirical Analysis
119. Indian Pharmaceutical Industry : Surging Globally
120. Regional Trade Agreements: Gateway to Global Trade
121. Knowledge Process Outsourcing: Emerging Opportunities for India
122. Indian Mineral Sector and its Export Potential
123. SAARC: An Emerging Trade Bloc
124. Indian Capital Goods Industry - A Sector Study
125. Financial Liberalization and Its Distributional Consequences
126. ECOWAS: A Study of India’s Trade and Investment Potential
127. Indian Textile and Clothing Industry in Global Context: Salient Features and
Issues
128. Fair Trade : Fair Way of Enhancing Export Value
129. Indian Automotive Industry: At The Crossroads
130. CARICOM : A Gateway to the America
131. IBSA : Enhancing Economic Cooperation Across Continents
132. MSMEs and Globalisation: Analysis of Institutional Support System in India
and In Select Countries
133. International Trade, Finance and Money: Essays in Uneven Development
134. Sikkim: Export Potential and Prospects
135. Mizoram: Export Potential and Prospects
136. Floriculture: A Sector Study
137. Biotechnology Industry in India: Opportunities for Growth
138. Indian Gems and Jewellery: A Sector Study
139. SADC: A Study of India’s Trade and Investment Potential
140. Innovation, Imitation and North South Trade: Economic Theory and Policy
141. Comesa (Common Market for Eastern and Southern Africa):
A Study of India’s Trade and Investment Potential
142. Indian Shipping Industry: A Catalyst for Growth
143. New Renewable Energy in India: Harnessing the Potential

171
 144. Caribbean Community (Caricom): A Study of India’s
Trade and Investment Potential
145. West African Region: A Study of India’s Trade and
Investment Potential
146. India’s Trade and Investment Relations with LDCs
(Least Developed Countries): Harnessing Synergies
147. Indian Electronic Industry : Perspectives and Strategies
148. Export Potential of Indian Plantation Sector:
Prospects and Challenges
149 Mercosur : A Study of India’s Trade and Investment Potential
150. Openness and Growth of the Indian Economy: An Empirical Analysis
151. The Commonwealth: Promoting a Shared Vision on Trade and
Investment
152. Southern African Development Community (SADC):
A Study of India’s Trade and Investment Potential
153. Strategic Development of MSMEs: Comparison of Policy Framework and
Institutional Support Systems in India and Select Countries
154. Indian Chemical Industry : Exploring Global Demand
155. Technological Interventions In Indian Agriculture for Enhancement of
Crop Productivity
156. Exports of Services and Offshore Outsourcing: An Empirical Investigation
in the Indian Context
157. Indian Ocean Rim Association for Regional Co-operation (IOR-ARC):
A Study of India’s Trade and Investment Potential
158. West Africa: A Study of India’s Trade and Investment Potential
159. The Effects of Financial Openness: An Assessment of the Indian
Experience
160. Comparison of Labour Laws: Select Countries
161. India’s Trade and Investment Relations with Cambodia, Lao PDR,
Myanmar, Vietnam (CLMV): Enhancing Economic Cooperation
162. Indian Horticulture-Imperatives to Enhance Trade from India
163. India’s Trade and Investment Relations with Gulf Cooperation Council
(GCC): Strengthening Economic Ties
164. India’s Hi-Tech Exports: Potential Markets and Key Policy Interventions
165. Outward Direct Investment from India: Trends, Objectives and Policy
Perspectives
166. East African Community (EAC): A Study of India’s Trade and Investment
Potential
167. Trade Liberalization, Product Variety and Growth
168. Research & Development in BRICS: An Insight
169. Indian Capital Goods Industry: A Sector Study
170. Bangladesh: A Study of India’s Trade and Investment Potential
171. Indian Electronic Goods Industry: Neutralizing Trade Deficit with China
172. Indian Steel Industry: Export Prospects
173. Value Addition Chains and Trade in Manufactured Commodities in South-
East Asia

172
EXIM BANK’S MAJOR PROGRAMMES
Bank’s Major Programmes

173
 EXPORT-IMPORT BANK OF INDIA
HEAD OFFICE
Centre One Building, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005.
Phone : (91 22) 22172600 Fax : (91 22) 22182572 E-mail : [email protected]
Website : www.eximbankindia.in
LONDON BRANCH
5th Floor, 35, King Street, London - EC2V8BB, United Kingdom,
Phone : (44) 20 77969040 Fax : (44) 20 76000936 E-mail: [email protected]

INDIAN OFFICES OVERSEAS OFFICES

Ahmedabad Addis Ababa
Sakar II, Floor 1 , Bole Kifle Ketema, Kebele - 19, (03/05)
Next to Ellisbridge Shopping Centre, Ellisbridge P. O.,
Ahmedabad 380 006. House No. 015-B,
Phone : (91 79) 26576852/26576843 Addis Ababa, Ethiopia
Fax : (91 79) 26577696 Phone : (251 116) 630079
E-mail : [email protected] Fax : (251 116) 610170
Bangalore Email : [email protected]
Ramanashree Arcade, Floor 4,
18, M. G. Road, Bangalore 560 001. Dubai
Phone : (91 80) 25585755/25589101-04
Level 5, Tenancy 1B,
Fax : (91 80) 25589107
E-mail : [email protected] Gate Precinct Building No. 3,
Dubai International Financial Centre,
Chandigarh PO Box No. 506541, Dubai, UAE.
PHD House, Floor 1, Sector 31-A, Dakshin Marg,
Chandigarh 160 031 Phone : (971 4) 3637462
Phone : (91 172) 2641910/12/39/49 Fax : (971 4) 3637461
Fax : (91 172) 2641915 E-mail : [email protected]
E-mail : [email protected]

Chennai Johannesburg
Overseas Towers, Floors 4 & 5, No. 756-L, Atrium on 5th, Floor 2, Tower East,
Anna Salai (Opp. TVS), Chennai - 600 002. Sandton City, Johannesburg,
Phone : (91 44) 28522830, 28522831
South Africa
Fax : (91 44) 28522832
E-mail : [email protected] Phone : (27 11) 3265103/13
Fax : (27 11) 7844511
Guwahati E-mail : [email protected]
NEDFI House, Floor 4, G. S. Road,
Dispur, Guwahati-781006
Phone : (91 361) 2237607, 2237609 Singapore
Fax : (91 361) 2237701 20, Collyer Quay,
E-mail : [email protected] # 10-02, Singapore 049319.
Hyderabad Phone : (65) 65326464
Golden Edifice, Floor 2, 6-3-639/640, Raj Bhavan Road, Fax : (65) 65352131
Khairatabad Circle, Hyderabad 500 004. E-mail : [email protected]
Phone : (91 40) 23307816-21 Fax : (91 40) 23317843
E-mail : [email protected]
Washington D.C.
Kolkata 1750 Pennsylvania Avenue NW,
Vanijya Bhawan, Floor 4, (International Trade Suite 1202, Washington D.C. 20006,
Facilitation Centre), 1/1 Wood Street, Kolkata 700 016.
United States of America.
Phone : (91 33) 22833419/22833420
Fax : (91 33) 22891727 Phone : (1 202) 223 3238
E-mail : [email protected] Fax : (1 202) 785 8487
E-mail : [email protected]
New Delhi
Statesman House, Ground Floor,
148, Barakhamba Road, New Delhi 110 001. Yangon
Phone : (91 11) 23474800 House No. 54/A, Ground Floor,
Fax : (91 11) 23322758/23321719 Boyarnyunt Street,
E-mail : [email protected]
Dagon Township,
Pune Yangon, Myanmar.
44, Shankarseth Road, Pune 411 037. Phone : (95) 1389520
Phone : (91 20) 26403000
Mob. : (95) 931281726
Fax : (91 20) 26458846
E-mail : [email protected] Email : [email protected]

174