In this article we will discuss about:- 1. The Organic Export Market 2. Constraints and Opportunities for Organic Products 3. Unfair Trends in the Market 4. Fair Trade.
The Organic Export Market:
Recent years have seen very rapid growth in organic farming, particularly in Europe and the United States, but also in many other regions of the world including China, Latin America, and Africa. In the European Union, certified and policy-supported organic production accounted for just 100,000 ha on 6300 holdings in 1985, or less than 0.1% of the total utilizable agricultural area (UAA).
By the end of 1998, this had increased to more than 2.8 Mha (nearly 2.1% of total UAA) on 113,000 holdings, a 30-fold increase in 13 years. There are differences between farm types with a larger proportion of mixed farms managed organically than specialized dairy or arable units.
Consumer demand for “healthier” food has been considered one of the major factors influencing increased consumer demand for organic food. This perception is probably reflected in the lower consumption of livestock products among the consumers most likely to buy organic food.
A survey of consumer choice in the United Kingdom showed that apart from health concerns, organic food was bought for environmental and animal welfare reasons. Approximately 70% of consumers buying organic food mentioned these two factors.
Alongside the increase in the supply base, the market for organic produce has also grown. Statistics on the overall size of the market for organic produce are still very limited. Recent estimates have suggested that the retail sales value of the European market for organic food was of the order of US$5-7 billion in 1998. In Canada, the growth of the market for organic produce was approximately 25% per annum.
There has been a significant change in the development of the market for organic products, from supply-driven to demand led. In response, the role of multiples and multi-nationals in the processing, sale, and marketing of organic produce is increasing and the proportion or organic food purchased from specialist organic operations and local marketing schemes is decreasing as a result.
The trade in organic products is growing rapidly and becoming a reality throughout the world. Growth rates in the sector show organic products, that a few years ago supplied niche markets, have now entered mainstream marketing channels. Already 30,000 organic farmers are certified in Italy.
In Scandinavian countries like Sweden and Finland and in Switzerland some 8% of farming is (certified) organic. Austria leads the world with 10% organic farming and in some Austrian provinces such as Salzburg and Tirol, the proportion is almost 50%. Although some in the organic movement might question whether we are straying from the path of ‘healthy natural’ growth, it cannot be denied that we are heading for a boom.
Respected organic market analysis, such as Professor Ulrich Hamm in Germany, have forecast in annual growth rate of between 20 to 30%. In some countries, this might be as high as 50 per cent. The largest organic trader in the UK predicts that the organic market worldwide will increase from US$ 11 billion to US$ 100 billion over the next ten years with the USA, Europe and Japan leading the way. In this context, Denmark’s plans to make organic products account for 20% of the total domestic food market by the turn of the century seem far from being a green dream.
Approximately 1% of the U. S. food supply is grown using organic methods. In 1996, this represented over $3.5 billion in retail sales. Over the past six years sales of organic products have shown an annual increase of at least 20%. Organic foods can be found at natural foods stores, health food sections and produce departments of supermarkets and at farmers’ markets, as well as through grower direct-marketing such as C. S. A. s (Community Supported Agriculture).
Many restaurant chefs across the country are using organic produce because they desire its superior quality and taste. Organic food is also gaining acceptance on a worldwide basis, with nations like Japan and Germany becoming important international organic food markets.
Though only a small percentage of farmers are expected to become organic producers, consumers demand for organically produced food and fibre products provides new market opportunities for farmers and businesses around the world. For many years, and with great success, the private sector alone has developed the concepts and markets for organic products. However, the surge in consumer interest has created new interest from the public sector, and developing countries are particularly in need of good information.
The export opportunities offered by the so-called developed world have clearly been a major stimulus in getting organic farming established in many countries. It is unlikely that organic agriculture would have developed so successfully in the northern hemisphere if there had been no demand pressure. Supplying a market in which demand outstrips supply is a producer’s dream.
This has been the case with organic farming for a long time and figures show that this trend is set to continue. Yet, the sector has shown it is also vulnerable and that prices can collapse if there are sudden and exceptional increases in the supply of particular products. Therefore, marketing with a clearly targeted strategy is a must for organic products.
The organic market is a special one, partly because premium prices are involved. It requires a special effort. Attention should be given to meeting the requirements of a guarantee system that will ensure organic quality and allow consumers to develop their preferences for organic products with a feeling of trust.
The World Food summit Plan of Action recognized the importance of appropriate input technologies, farming techniques and other sustainable methods, such as organic farming, to assists farming operations to be profitable, with the goal of reducing environmental degradation, while creating financial resources within the farming operation.
Constraints and Opportunities for Organic Products:
1. The demand for organic products has created new export opportunities for the developing world. While some consumers express a preference for locally-grown organic foods, the demand for a variety of foods year-round makes it impossible for any country to source organic food entirely within its own borders.
As a result, many developing countries have begun to export organic products successfully (e.g., tropical fruit to the European baby food industry, Zimbabwean herbs to South Africa, six African nations export cotton to the European Community).
Typically, organic exports are sold at impressive premiums, often at prices 20 per cent higher than identical products produced on non-organic farms. The ultimate profitability of organic farm varies, however, and few studies have assessed the long-term potential for such market premiums. Nevertheless, under the right circumstances the market returns from organic agriculture can potentially contribute to local food security by increasing family incomes.
2. Farmers are denied access to developed country organic markets for two to three years after beginning organic management since such countries will not certify land and livestock as organic before that time, arguing that it is necessary for the purging of chemical residues. However, products produced on land under organic management for at least one year but less than the two-three year standard can be sold as transitional organic, although few markets have developed for such products.
3. In most cases farmers and post-harvest businesses seeking to sell their products in developed countries must hire an organic certification organization to annually inspect and confirm that these farms and businesses adhere to the organic standards established by various trading partners.
The cost for this service can be expensive, although it varies in relation to farm size, volume of production, and the efficiency of the certification organization (e.g. IFOAM certification costs a maximum of 5 per cent of sales value). Few developing countries have certification organizations within their borders, and even when sufficient resources are available to pay for certification farmers often lack the information to find credible inspectors.
4. While most developing country have focused on export markets in the developed world, domestic market opportunities for organic food or eco-food may also be exploited. In China, for example, there is a growing market for “green food” which, according to government grading standards, is produced without certain pesticides and fertilizers and with biological methods. Chinese farmers also produce organic food for export (e.g. tea to the Netherlands, soybeans to Japan).
5. Whether the intent is to sell organic products domestically or abroad, reliable market information is difficult to obtain. There is virtually no systematic production or market survey data being collected with which to assess the rate and pattern of organic market growth.
In particular, no projections for the market in the developing world have been made, nor have markets systematically been identified for developing country exports. Estimates of the public’s willingness to pay premiums, the impact of regional and tastes, and the incidence of market fraud have not been undertaken.
6. There is a growing consumer demand in the developed countries for healthy food. This change in the consumer preference reflects the increasing concern about the dangers associated with the consumption of food containing small quantities of food additives and pesticide residues.
As the organically produced food is devoid of such harmful additives and residues, it is regarded as healthy food and, as such, enjoys special consumer preference. To the average consumer in the developed countries, organically produced food is more acceptable than the food produced under the conventional agricultural system because of the special qualities possessed by the former in regard to taste and nutrition.
7. In the developing countries organically produced food has not yet gained consumer acceptance to any appreciable extent. This is despite the presence of harmful chemical residues at higher concentrations in vegetables, fruits and other farm produce.
In India, through one meal comprising of chapattis, rice, dal, vegetables, salad (mixture of onions, tomatoes, carrot and cucumber), curd and banana/orange or grapes as dessert, one consumers 0.5 mg of DDT and BHC plus some malathion and endosulphan. This is 40 times more than the amount what an average American or European consumers. These pesticide residues lead to all kinds of chronic diseases of the heart, brain, kidney and liver including cancer.
8. There is lack of awareness among the people of the developing countries about poisons in the food they are consuming daily. Even for those who are aware of the dangers of poison in food, they do not have easy access to organic products. Wherever such products are available, they are costlier than the conventionally produced items mainly because organic agriculture does not enjoy the benefit of subsidy.
However, there are still parts of India and other developing countries where people have access only to organic (chemical-free) foods because agro-chemicals have not yet penetrated into interiors and hinterlands. Unluckily, this fortunate situation may not prevail for long as agriculture is being developed as an industry without regard to the carrying capacity of the natural resource base.
9. On the other hand, in the developed countries there is a rapid awareness with regard to organically grown and processed foods and related issues. In Europe and U.S.A. in addition to Reform Houses on also sees special counters in departmental stores exclusively for organic products. In the west, supermarkets are generally considered as a threat by environmental lists, but they may still have a role to play.
By introducing a wholly different segment of the consumer population to organic foods, supermarkets can help increase sales of organic products, improve the consistency of supply by creating greater demand and increase overall customer awareness of organic issues. These supermarkets can plough the vast masses of consumers, turning non-users into light user, and light users into regular customers of organic specialty stores.
A problem for specially stores and supermarkets is consumer resistance to the higher price of organic products. In spite of this, consumers who are aware are willing to pay higher price for such products not only because they taste better, but also because of the realization that, in the process, they are supporting organic farming and thus protecting the environment.
10. Organic agriculture is not only leading the way to viable alternatives to modern development models, but it is also part of the solution to global environment problems. Now, more than ever, opportunities exist for the organic market to expand from less than 1 per cent of overall food sales to between 10 and 20 per cent by the turn of the century. There are, however, critical and sometimes very sensitive issues to be addressed in order to sustain a growing market for organically produced food.
Unfair Trends in the Market:
Over the last ten years organic products have been marketed in increasingly larger quantities outside the area in which they are grown. Whilst seasonal production and regional markets remain an important objective in organic farming, there is nevertheless plenty of export opportunities for such products from the South as coffee, tea, cacao, bananas, spices, herbs and other subtropical and tropical products.
‘Ecological dumping’ is becoming more common and is a practice strongly resisted by the organic movement. There is a very real difference between production in keeping with the holistic principals of the organic movement and the purely commercial production of ‘natural’, ‘biological’, or ‘organic’ products such as organic cash-crops in monoculture.
It is not enough to exclude what is known as ‘ecological dumping’ from the organic sector. Given the holistic nature of our movement, we also care about social aspects. In joining forces with the Fair Trade movement we also hope to be able to seriously challenge the ‘social dumping’ that involves the exploitation of cheap labour and child labour.
Bio-colonialism is one of the major challenges facing the organic movement. Given the much greater economic wealth and ‘buying power’ of the North, many products of organic quality find their way into these premium markets and so become unavailable to local and regional populations. Much more effort and creativity is needed if organic food is to become accessible to more people throughout the world. The SEKEM initiative is a good example of how this can be achieved.
Community supported agriculture with direct links between producer and consumer, in Japan are Asia known as TEKEI, offer a way of getting out of the bio-colonialism trap. Today, there are organic shops in India and Malaysia, farmer markets in Brazil, and organic produce in supermarkets in Argentina. Box schemes and home delivery of organic products are also being set up in several southern countries.
Very often organic farming systems begin with the production of ‘cash crops’ and gradually, with the knowledge gained in producing for export, the whole farming unit is converted to organic systems. Thus, planting shadow trees in coffee plantations and using compost is often followed by introducing organic methods into the cultivation of staple foods such as corn and beans.
There has always been agricultural trade. Trade remains a necessity whether it is barter between neighbors or long-distance trade facilitated by money. Trade makes it possible for house-holds to supplement their own production and satisfy their need for food and money whilst exploiting comparative advantages.
In this century, there has been an enormous expansion in trade supported by cheap fossil energy, agro- chemicals, refrigeration and increasingly sophisticated forms of transport. At the same time, the buying power of urban populations in both the North and South have combined with trade liberalization and globalization to give a powerful stimulus to markets every-where.
This trade expansion has brought benefits to many agricultural producers and consumers. However, it has also been responsible for an uncontrolled concentration of power and wealth in the hands of a few countries, companies and persons, most of whom can be found in the industrial West. Control over capital and knowledge-intensive technologies, unfair trade practices including the dumping of cheap subsidized food and the manipulation of small farmers whose market choices are already limited have seriously effected small farmers everywhere.
At the same time the capacity of industrialized countries to protect their own agricultural markets and the worsening terms of trade between agricultural and industrial products have also contributed to the decline and poverty of many agricultural communities. As small, market-oriented farmer lose out to larger farmers and the non-farming professions, and trans-national companies gain control over international commercial flows and agricultural production, many leave their land to search for jobs elsewhere.
This not only leads to an increasing gap between rich and poor but also to the loss of food security, ecological degradation, pollution and the decline of indigenous knowledge and cultural diversity. Market- oriented agriculture and agricultural trade can lead to a serious depletion of soil fertility, soil erosion and a loss of biodiversity. Agriculture under such circumstances is not ecologically sustainable.
However, agricultural trade and market-oriented agriculture do not have to be a trap for the small farmer. Fair and green trade offers important economic and ecological opportunities for sustainable development.
Fair Trade:
Alternative approaches are being developed in reaction to the free trade model. Since the 1970s, the Fair Trade movement has been developing fast. Important organizations buy direct from Southern producer partners, pay a fair price and establish long-term working relationship. Initially, health food and Fair Trade shops were important alternative trade outlets.
Today, however, Fair Trade products can be found in most supermarkets. Trade organizations that respect the principals of Fair Trade and accept external monitoring by labeling organizations, are awarded a seal of approval. The fundamental principal of Fair Trade is equal partnership between Southern producers, Northern importers, labeling organizations,
Fair trade is always associated with production in the developing world. However, we need fair and real cost covering prices for farmers all over the world. And here the organic market has something to offer all farmers. Organic production often requires more effort and may result in lower (‘optimum rather than maximum’) yields. Also, as millions of consumers all over the worlds have come to realize – ‘nature has its price’.
Therefore, growing numbers of consumers are prepared to pay premium prices because they know they are getting premium quality products in return. In calculating the price of organic products more factors are involved than in the pricing of conventional products. Demand, for example, plays a much bigger role.
The complex of aspects involved makes it difficult for us to discuss price finding and setting mechanisms in the organic sector here. However, we can say that premium prices ranging from 20% to 30% seem to be normal and when combined with often higher fair trade premiums, they make it possible for small farmers to continue to work their land, feed their families and enjoy real development.
Fair Trade and Trade Development:
‘Fair trade’ covers a wide range of ideas. Fair trade is seen as a conscious decision to help small producers in the Third World become viable exporters of their own produce and to support their learning process. Fair Trade does not mean, however, that other forms of trade are unfair.
Fair trade, of course, is not agricultural commodities and agricultural producers. All disadvantaged producers of any marketable product fall within the definition of the fair trade movement. In practice the fair trade labeling movement and organizations such as Equal Exchange in the USA and ATJ in Japan are mainly concerned with coffee, cocoa, tea, bananas, honey and sugar. The older alternative trading organizations work on a smaller scale and deal with thousands of food and non-food products. In this article we focus on small, cooperatively organized, agricultural commodity producers.
Small Farmers Disadvantage:
Major international agriculture commodities are frequently produced by small farmers who have no secure title to land. Their land holdings are small and they are unable to assert their civil and economic rights even when these are protected by law. Their access to market often depends on long and exploitative chains of intermediaries. Not only do they lack bargaining power, they have no access to information on world market prices.
It is difficult for small farmers to acquire the technology and technical skills and the cost of financial services are frequently beyond their reach. As many farm in fragile, near subsistence economies, their choices of survival strategies are not necessarily rational from the economic and ecological point of view. Due to imperfections in the market, lack of transparency and politically inspired distortion, small farmers tend to receive lower prices for their produce.
Dilemma:
There are many reasons why the problems of small farmers should be addressed. First, maintaining and boosting the economic viability of smallholdings puts a brake on migration to overcrowded cities incapable of offering employment alternatives. Second, creating an effective economic and institutional environmental makes it possible for people to exploit the market potential of their area.
Finally, supporting farmers’ initiatives by encouraging co-operatives and associations enables them, collectively, to gain fair access to the (world) market: trade is better than aid. In recent years, fair trade labeling has increased the effectiveness of such interventions.
Fair Trade Labeling:
Fair trade labeling aims to develop market niches where newcomers to the world market can learn the ins and outs of this type of trade in a relatively protected environment. In doing so, it is tries to provide small farmers’ organizations with fair access to the (world) market, under conditions appropriate to their needs. The movement also supports farmers’ organizations in their attempt to secure working capital and long-term loans for investments, market information, communications, management support and technical assistance.
Promoters of Fair Trade:
Over the years, alternative trading organizations have promoted fair trade through specialize chains of (Third) World shops. The movement began about 30 years ago in the Netherlands and the Fair Trade Organization is still one of the most dynamic organizations in the field. Today, trading organization are found in almost all industrialized countries and most of them share supplies’ databases.
In the eighties, the movement stagnated World Shops could not cope with the demand for markets coming from Third World suppliers. Mainstream distribution networks had to be accessed and pressure built up to professionalize the network of World Shops. This lead to the development of fair trade certification and tested in the model was first developed and tested in the Netherlands under the name Max Havelaar.
Later is spread within and outside the European Union until today certification and labeling is carried out in some 15 countries. Some use the name ‘Max Havelaar’, others have chosen names and labels that reflect their own national and cultural identity. However, all are members of Fair Trade Labelling International. Coming up to standard
Action for Fair Trade:
Fair trade organizations have been working with Southern producer organizations for decades to try and ensure that they receive a decent income for their work. Only recently, however, have fair trade products begun to reach mainstream Northern markets.
Coffee is probably the most successful fair trade product. It is also the most important traded commodity after oil and the main export for many Southern countries. Most comes from family-owned farms in developing countries. Fair trade organizations work with the producer organization, promote the sale of fair trade coffee, monitor buyers and roasters and guarantee that labeled products meet fair trade criteria. The ethical trading organizations bear the costs of inspecting producers.
The fair trade market was boosted by the development of recognizable fair trade marks awarded for products that met clear criteria. However, it was the development of a clearly recognizable brand. Cafe-direct, that brought fair trade coffee into mainstream retail outlets and within easy reach of consumers.
Cafe-direct was developed by a partnership of four fair trade organizations that bought coffee from 14 producer organization in Africa and Latin America. Sales have increased dramatically over the last five years and Cafe-direct controls 3% of the roast and ground market and 2% of the instant market in the United Kingdom despite being 10% more expensive than most conventional brands.
As well as higher income and greater security, fair trade can also lead to environmental benefits. Fair trade can also lead to environmental benefits. Fair trade organizations often work with producers to improve the ecological sustainability of production.
Progress in Fair Trade Marketing:
Fair trade certification has helped bring fair trade products into mainstream European distribution networks. Sales of coffee and bananas have increased tenfold. Today, small farmers are able to sell 14,000 tons of coffee with a trade value of some US$ 40 million in this way.
In the Netherlands the market share of fair trade coffee has risen from 0.2% to 2% and in Switzerland to 5%, Mechanisms and alliances have been created to make substantial amounts of short and medium- term ethical bank loans available. While the impact to fair trade labeling appears to be unquestioned, its global impact should not be overestimated. In a global perspective, fair trade is no more than a tiny niche market.
Although its impact is growing, results have been reached under very special market conditions and at a time when world market prices were persistently below subsistence level. Under these circumstances, fair trade offered a valuable alternative to those who had their name on the Fair Trade Labelling Procedures ‘Register and who had secured an outlet for their product.
However, not all organizations used (were able to use) this opportunity to effectively develop the capacity to survive under ‘normal’ market conditions. In 1994, coffee prices on the world market started to return to ‘normal’ levels, i.e. above the floor price established by the fair trade labeling organizations. For many farmers’ organizations, the price premium of US$ 0.05 per pound above the market price was insufficient, while the inflexibilities inherent in the fair trade model eroded a substantial part of the price premium.
A growing number of farmers’ organizations who had been operating within the fair trade market ran into serious trouble despite higher-than-market prices, while others managed to survive and went onto develop into strong and went on to develop into strong and respected co-operative organizations, addressing the economic needs and rights to many thousands of small farmers and their families.
Protectionism:
Unless alternative approaches to trade become mainstream, the inequity and environmental damage inherent in conventional trading practices will remain. There is need for a more appropriate economic framework to redirect the world economy towards sustainability.
This is not a feasible option in the short-term. A more immediate approach would be a new type of protectionism in which governments formulate trade regulations based on socially fair and ecologically sound standards capable of creating enabling conditions for green and Fair Trade.
Priority to Local Economics:
Even if such legislation were to be adopted, it would not be possible to eliminate completely the negative social and environmental effects of international trade. There will always be an important group of farmers who are unable to compete on the (inter) national market and whose farms fall in the margins of the globalizing economy.
International trade is wholly dependent on fossil energy, itself an important source of pollution and, in this sense, International Trade is inherently unsustainable. To avoid the environmentally unsound transport of agricultural products over long-distances and a risky dependence on distant consumers, sustainable development and protection of the local economy. Particular attention should be paid to marginalized peoples and guaranteeing ecological and cultural appropriateness.
Strengthening the local economy fosters a community’s sense of social and environmental accountability, self-reliance, food security, cultural and biological diversity and the commitment to conserving its natural resources base. Indigenous people in the Andes protect the cultural, ecological and economic integrity of their communities by sustaining barter – which as a system is probably more widely spread than officially recognized – as an important element of their economic and cultural system.
Strengthening Local Economics:
In many communities economic activities function at an unnecessarily low level as money and local natural resources leak away into the wider market economy. Local exchanges of goods and services can be greatly enhanced by the development of local money systems. Local money system has successfully stimulated the local economy in Argentina. Many local groups and communities in the North and in the South are currently experimenting with these Local Exchange and Trade Systems (LETS).
Critical Factors:
It would seem that in some cases fair trade procedures have not been adapted to the operational needs of farmers’ organizations, especially under present unstable market conditions. In addition, the fair trade labeling organizations have not paid sufficient attention to the development and organization of the necessary management support services. Management is also a critical factor at farmer level.
The minimum scale of operations needed to run an export business is far beyond the scope of small and often isolated farmers. Lacking the management skills needed to operate the business, they have to hire in managers over whom they may have little control.
If there is no effective control and accountability is not enforced, the temptation to address private interests above co-operative interests can be irresistible and leads to serious problems. In this way a vicious circle develops and the co-operative is excluded from credit and loans because it has become un-creditworthy and its commercial liability has been further compromised by inadequate quality control.
Many co-operative organizations, however, have successfully exploited the opportunities of the fair trade market and built up and diversified their businesses to the benefit of their members. Critical success factors seem to be the availability of highly component and reliable management, sustained management support, and market diversification into conventional, fair trade and organic markets.
Challenges:
There are several major challenges facing the fair trade and organic market. A strategy must be developed to facilitate the merger of ecological and fair criteria incorporating social fairness and ecological responsibility as preconditions for sustainable production. Criteria must be adapted to the operational needs and limitations to Third Worlds realities and international markets.
At the same time the management and information gap must be closed and a solution found to the recurrent problem of credit. It is clear that the certifying organizations cannot solve these huge problems on their own. Strong global alliances with trade and industry, development organizations, ethical (and conventional) financial institutions, universities and consultants are needed in order to build a system that works and hence challenges ‘business as usual’.
Trade Opportunities:
In today’s globalize world, export success is one of the major routes to economic progress for developing countries. But the conditions for success are changing as producers face rising environmental expectations in key export markets, resulting from tightening regulations, new corporate practices and changes in consumer values and lifestyles.
There new expectations reflect the growing recognition that current patterns of consumption, particular in the richer, industrialized world, are not environmentally sustainable. Profound changes in the ways in which goods and services are produced, traded and consumed will be required, both to reduce the burden on the global environment and to ensure that a growing population has resources to meet its needs.
For these who can adapt to these requirements and start moving to anticipate trends, there are new opportunities to be found in sustainable trade that can generate financial, environmental and social benefits. Already growing numbers of farmers in the Sought are receiving higher prices and more long-term security by selling their products into environmentally friendly or fair trade markets in the North. Consumer demand for organic products is gradually increasing in responding to concerns about the environmental and health implications of industrial agriculture.
New Opportunities in a Growing Market:
Latin American producers have been quick to tap into these markets. The organic sector in Mexico, for example, is now estimated to be worth US$ 500 million and Argentina is making serious efforts to development its organic sector with sales rising from US$ 1.5 million to US$ 20 million in the last six years.
This rapid development has been supported by efforts to overcome the bureaucracy surrounding EU recognition imported organic goods. Argentina became the first developing country to obtain a place in the EU provisional list, thereby gaining market advantages.
New products have no established market; emerging markets suffer from either insufficient supply or over-supply of products. This contradiction also rules emerging markets for eco-friendly produce, necessitating a balancing act between supply and demand. Investments have to be made; initial losses, though inevitable, need to be pegged down, through judicious promotional campaigns and production planning, to avoid a demand-supply gap.
No compromise is possible regarding timely production targets, both qualitative and quantitative, to satisfy and maintain the trust of an emerging clientele. Production has to be so organized that producers are able to conventional inputs. Here the issues are the short shelf-life (of eco-friendly inputs such as bio-fertilizers and bio-control agents which are living organisms) and the crop-specific or pest-specific action of many of these. The fact that these inputs are in great demand and in large quantities, but only during specific times -grow in season – complicates production planning and marketing.
Third, being eco-friendly also implies minimizing environmental damage in the course of transport and storage of the produce. Since energy-intensive operations have to be curtailed, transport and cold storage of eco-friendly foods for the right market become controversial. To overcome such dependence on non-renewable energy, production systems tuned to local markets and seasonal products may be well worth exploring.
However, wherever local production potential is limited, the required product range, be it for a healthy diet or a healthy, has to be met through export from high-potential areas.
Alternative Markets:
Experiments to develop parallel markets have shown that it is not easy to do so. The problems encountered range from regularity of supplies and storage problems (space, shelf-life and eco-friendly storage methods) to retaining the goodwill of consumers. The tiniest upset can result in clients dropping out. There are several realities about alternative marketing that are gradually coming to light.
Role of the Trader:
It is almost impossible for a small organic farmer to sell all his/her produce in the village. This calls for a whole chain of arrangements, including the presence of a trader. Fair trade considerations mean that a balance of power has to be ensured between producer and trader. To achieve this, producers’ collective must be organized. More often than not, in our villages, the trader is a key socioeconomic actor – as money lender, input supplier, transport provider and linking agent with the larger market.
By providing flexible and timely loans, assured transport and access to markets, he becomes an ally of small-scale producers, despite their indebtedness to him. He influences farmers’ crop choices by being their financier and by sharing his intimate knowledge of markets; in turn he also creates a system for loan recovery.
Quality Guarantee:
Any opportunity to earn quick money can increase the chances of producers and marketers cutting corners. It is not uncommon to come across organic produce with pesticide residues eco-friendly inputs that are either spurious or have crossed the prescribed expiry date being marketed.
Such problems arise because of some unethical elements operating among producers and traders. Hence, quality guarantee through inspection and certification by independent bodies becomes inevitable. Besides quality, fair trade also implies that profit margins in the production-trade chain need scrutiny and certification.
Who should pay for inspection and certification? Reasonably speaking, the producer, trader and consumer should share the expenses. For effectiveness, a local-level certifying body could be constituted and governed by representatives from organizations of producers, traders and consumers. It could assume responsibility for defining standards, checking quickly, and even promoting the use of eco-friendly produce. To bolster this, the retail outlet should use an identifiable tag to indicate the marketing of certified produce.