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Economic Viability of Organic Farming in Haryana

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 ECONOMIC VIABILITY OF ORGANIC
FARMING IN HARYANA

FINAL REPORT

OF
INDIAN COUNCIL OF SOCIAL SCIENCE RESEARCH
AWARDED
RESEARCH PROJECT [NO. 2-152/2010-RP]

SUBMITTED TO:
INDIAN COUNCIL OF SOCIAL SCIENCE RESEARCH
NEW DELHI

PROJECT DIRECTOR:
DR. RAMPHUL OHLAN

INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

MAHARSHI DAYANAND UNIVERSITY, ROHTAK
HARYANA
2016
 ACKNOWLEDGEMENTS
The report would not have been released in its present form without the
meticulous editing of Dr. T. R. Kundu, Professor Emeritus, Department of Economics,
Kurukshetra University, Kurukshetra, Haryana. I owe a huge debt of gratitude to him. I
would like to express my profound appreciation to Engineer Har Sarup Chahal, Vice-
Chancellor, Maharshi Dayanand University, Rohtak, Haryana, for his inspiration and
understanding. My thanks are due to Professor Brajesh Jha, Institute of Economic
Growth, University of Delhi, New Delhi, for his valuable suggestions and untried help
throughout the work.
Professor K. K. Verma, Director Research, Maharshi Dayanand University,
Rohtak, and his official staff deserve for special mention due to prompt execution of the
administrative approvals of the project. My colleague, Professor Neelam Jain, Dean and
Director, Institute of Management Studies and Research, Maharshi Dayanand University,
Rohtak, deserves for special mention for providing infrastructural services and her
academic support in successful completion of the study.
Mr. Payush, Research Assistant, helped me in the collection of data, construction
of figures, analysis and interpretation of results and revising the manuscript. Gratefully, I
make liberal use of ‘we’ in the text.
I gratefully acknowledge the financial support received from the Indian Council
of Social Science Research, New Delhi. I must express my gratitude to the officers at the
Indian Council of Social Science Research, New Delhi, for their kind cooperation at
various stages of this project. I am also thankful to few organic farmers in Haryana
without their participation in the focus group discussion the requisite information would
not have been received.
I would like to express my heartfelt gratitude to Dr. Anshu Ohlan, my wife, for
being supportive throughout my time here and for helping me with proofreading. Any
errors that remain are, of course, the scholar’s sole responsibility.

Dr. Ramphul Ohlan

2
 TABLE OF CONTENTS

Content Page No.

Acknowledgements 2

List of Tables 4

List of Figures 5

List of Abbreviations 6

Executive Summary 7-11

Chapter 1 INTRODUCTION 12-28

Chapter 2 REVIEW OF LITERATURE 29-38

Chapter 3 GLOBAL ORGANIC FARMING 39-54

Chapter 4 ECONOMICS OF ORGANIC FARMING IN 55-60

HARYANA

Chapter 5 CONSTRAINTS IN ORGANIC FARMING IN 61-73

HARYANA

References 74-79

3
 LIST OF TABLES

Sr. No. Title Page No.

Table 3.1 World Organic Agriculture Land, 2011 41
Table 3.2 Leading Organic Producers, 2011 47
Table 4.1 Input-use Pattern of Organic and Inorganic Wheat 56
Crops by Selected Sample Farmers of Haryana: 2012-
13 (per acre)
Table 4.2 Labour-use Pattern in Different Operations of Wheat 57
Production under Organic and Inorganic Farming in
Haryana: 2012-13 (hours/per acre)
Table 4.3 Economics of Organic and Inorganic Wheat Cultivation 58
in Haryana: 2012-13 (Rs/acre)

Table 4.4 Input-use Pattern of Organic and Inorganic Paddy 59

Crops by Selected Sample Farmers of Haryana: 2012-
13 (per acre)
Table 4.5 Economics of Organic and Inorganic Paddy Cultivation 60
in Haryana: 2012-13 (Rs/acre)

Table 5.1 Production Constraints of Organic Farming in 68

Haryana

Table 5.2 Manures, Bio-Fertilizers and Plant Protection 69

Constraints of Organic Farming in Haryana

Table 5.3 Marketing and other Major Constraints of Organic 71

Farming in Haryana

4
 LIST OF FIGURES

Sr. No. Title Page No.

Figure 3.1 Growth of the World Organic Agricultural Land, 1999- 39
2011

Figure 3.2 Ten Countries with the Largest Increase of Organic 40

Farmland, 2011

Figure 3.3 Distribution of Organic Agricultural Land by Region, 41

2011
Figure 3.4 Countries With the Highest Shares of Organic 42
Agricultural Land, 2011
Figure 3.5 Growth of the Number of Organic Producers, 2000-2011 42
Figure 3.6 Distribution of Organic Producers by Region, 2011 43
Figure 3.7 Ten Countries with the Most Organic Producers, 2011 43
Figure 3.8 Development of Organic Land Use 44
Figure 3.9 Use of Permanent Crop Land (Total 2.6 million hectares) 45
Figure 3.10 Use of Arable Crops Land (Total 6.3 million hectares) 45

5
 LIST OF ABBREVIATIONS

APEDA Agricultural and Processed Food Products Export Development Authority

COROS Common Objectives and Requirements of Organic Standards
DAP Diammonium Phosphate
EU European Union
FAO Food and Agriculture Organization
FIBL Research Institute of Organic Agriculture
FYM Farmyard Manure
GDP Gross Domestic Product
GMO Genetically Modified Organisms
GOI Government of India
GOM Global Organic Mark
GR Green Revolution
GSDP Gross State Domestic Product
h Hectare
HAFED Haryana State Co-operative Supply and Marketing Federation Limited
HYV high yielding varieties
IFOAM International Federation of Organic Agriculture Movements
IFPRI International Food Policy Research Institute
kg Kilogram
m Million
mm Millimeter
NCOF National Centre of Organic Farming
NGO Non-government Organizations
NPK Nitrogen, Phosphorus and Potassium
OFA Organic Federation of Australia
OGS Organic Guarantee System
PGS Participatory Guarantee Systems
RIRDC Rural Industries Research and Development Corporation
Rs Indian Rupee
US United States of America
USDA United States of Agriculture
UN United Nations
WHO World Health Organization
WRI World Resources Institute

6
 EXECUTIVE SUMMARY

Organic agriculture is best known as a method of agriculture where no synthetic

fertilizers and pesticides are used. The emphasis in organic agriculture is on using inputs
in a way which encourages the biological processes of available nutrients and defence
against pests, i.e., the resource “nature” is manipulated to encourage processes which
help to raise and maintain farm productivity. According to Food and Agriculture
Organization, organic farming is a holistic production system of crops that avoids the use
of synthetic and chemical inputs like fertilizers, pesticides, growth regulators. Organic
farming system depends mainly on crop rotation, crop residues, animal manures,
legumes, green manures, off-farm organic residues, mineral bearing rocks, natural
pesticides and biological pest control to maintain soil productivity and supply important
nutrients. Moreover, organic farming is a pathway to an evergreen revolution.
In the study, we have assessed the economic viability of organic farming in
Haryana. To do so, we interacted with organic farmers and witnessed organically matured
crops in Haryana. A focus was on the analysis of the major constraints faced by farmers
in the adoption of and to continue with organic farming practices. An attempt has been
made to review the literature on economic viability of organic farming. We have
examined the growth trend in organic farming for the world at large. We have noted the
attitude of farmers as a consumer of organic produces as well. A comparison of the
results of the study has been made with those of earlier studies. The information was
collected mainly through the focus group discussion method. We have also made an
experiment of organic farming for wheat, rice and vegetables at the principal
investigator’s own farm. Our main findings are as follows:
1. We find that the area covered by organic farming constitutes a tiny part of the
world’s total agricultural land, only 0.9% in 2011. The Oceania has devoted largest
proportion of the agricultural land to organic farming, 2.9% in 2011. In absolute
term, the area under organic farming has grown more than thrice during the last
decade. China has devoted the largest land to organic farming. It is followed by
India, Spain, Canada, France, Poland, Russian Federation, Kazakhstan, Turkey and
Romania.

7
2. Our analysis indicates that the countries with the highest share of organic agricultural
land included Malvinas, Liechtenstein, Austria, France, Sweden, Estonia, Samoa,
Switzerland, Czech Republic and Latvia. The number of organic producers has
grown significantly during the last decade. The largest number of organic producers
is in India. The largest proportion of the world’s total organic land has been devoted
to arable crops, the cereals constitute the highest share.
3. We find that the claim made by government agencies (e.g., National Centre of
Organic Farming) and/or non-government organizations regarding the significant
adoption of organic farming in Haryana is not true. In other words, there are few
organic farms in Haryana.
4. We note that organic farming practices reduce the crops yield drastically in Haryana.
5. There is a sharp lack of organic certification of farms in the State.
6. We note that any government or non-government agency has not made any provision
(e.g., price incentive) to procure organic farm produces in Haryana. More
importantly, the premium prices are not available to organic farm producers.
7. Organic farmers are not able to find consumers for their produces, i.e., market forces
do not derive organic farming in Haryana. Moreover, the markets for organic farm
products are not efficient in Haryana.
8. Similarly, few farm products sellers use organic label as a marketing strategy and
charge higher prices from the consumers.
9. There is a lack of financial incentives (e.g., organic conversion subsides) for adoption
or continuing with organic farming.
10. We note that in the absence of price incentives, the majority of farmers has readopted
conventional farming.
11. We find that farmers in Haryana are well aware about the adverse consequences of
conventional farming on sustainable agricultural development. Ideologically, farmers
in Haryana appreciate organic farming.
12. It has been observed that the farmers in Haryana are interested in alternative farming
without any economic loss.
13. Few big landlords and spiritual gurus have adopted organic farming for their self
consumption ignoring its economic consequences.

8
14. We find that persistent barriers to farm conversion in Haryana include lack of
premium price, dominance of conventional farmers, limited availability of and access
to production and market information, training in the management system and cost of
conversion-related investments.
15. The adoption of organic farming has been found to be negatively related to age.
16. Women have higher levels of environmental concerns regarding organic farming.
17. The awareness about organic farming is positively related to education level.
18. One of identified barriers to the adoption of organic farming practices is that it is
more labour and management intensive than conventional farming.
19. Organic farms are more dependent on hired labour.
20. Dependence on off farming income sources to subsidize farm operations and capital
investment is found to be positively related to adoption of organic farming.
21. Adoption of organic farming is positively related to the farm size.
22. We note that organic farms are more diversified.
23. We find that economic factors such as profitability, productivity and efficiency tend
to override pro-environmental attitudes when deciding to adopt organic farming.
24. We note that farmers have higher levels of general environmental awareness and
concerns than non-farmers.
25. The adoption of conservation technologies and practices was facilitated by
interpersonal contact with agricultural extension agents and NGOs.
26. The consumers’ interest in organic products is increasing in Haryana.
27. The main information sources about organic products are advertisement, shops,
media, consumers of organic products, eventually other sources.
28. The increase in demand for organic products is associated mainly with the customers’
education and increase in their awareness about the quality of farm products and their
contribution to human health.
29. Consumers who put strong emphasis on healthiness when shopping for food perceive
a higher importance of organic attribute and are more likely to buy organic food.
30. The perceived price importance when shopping negatively influences: (1) the
perceived importance of organic food, and (2) consumer purchasing behaviour.
31. The perceived importance of organic food has a positive impact on actual purchasing
behaviour.
9
32. Altruistic motives positively affect: (1) the perceived importance of organic food, and
(2) organic purchasing behaviour.
33. The perceived importance of convenience related to availability, placement within
the store and packaging characteristics negatively affects a) the perceived importance
of organic food and b) consumer purchasing behaviour.
34. Search for nutrition information positively affects: (a) organic purchasing motives,
(b) the perceived importance of organic food, and (c) purchasing behaviour.
35. Evidence from the qualitative work conducted during 2011-2013 in rural Haryana
points to the absence of well-established networks among organic producers, and
between them and other actors in the chain of distribution. Small producers who
switch to organic methods appear unable to reap the benefits from the higher prices
and the institutional support for organic farming.

36. Finally, we find that organic farming provides low yield, low profit and low returns
over variable cost in Haryana. The situation was worst in cultivation of organic wheat
in comparison of paddy. In addition, the premium prices for organic wheat and paddy
were not available in Haryana. Based on our findings it may be concluded that
presently organic farming is economically not viable in Haryana.

POLICY IMPLICATIONS

The main policy implications of our findings are as follows:

 In order to enhance the sustainability of agriculture in Haryana, government should
focus on crop diversification. More emphases should place on the production and
processing of value added farm products. There is a need for more focus on
development of basic infrastructure like roads, irrigation facilities, farm
electrification, marketing facilities.
 In order to instill farmers for adoption of organic farming practices attention might be
paid for organic certification facilities, input subsidies, demo-practices and
development of value chains spectrum of organic produces.
 Presently, the simple replacement of synthetic fertilizers and other chemical inputs
with organic inputs and biologically active formulations is not a viable option for
Haryana. Instead, farmers in Haryana may lay emphasis on appropriate cropping and
farming models ensuring on-farm diversity and nutrient cycling, conservation and
10
 use of organic/biological sources of nutrients, cultural practices conducive to the
conservation of soil and water resources and natural and/or biological methods of
pest and disease suppression.
 In the absence of essential requirements for adopting organic agriculture, the
alternative is integrated plant nutrition system involving the combined use of
organics and in-organics. This system could be practiced until conditions become
satisfactory for the switch over to organic agriculture. Income loss due to reduced
yields in the initial years of transition, however, constitutes a major hurdle, especially
for poorer farmers. It is thus important to support farmers in overcoming the
obstacles during the conversion period.
 We cannot think about the complete eradication of chemicals, fertilizers for feeding
this population size because this will reduce the production of food crops. We should
produce quality and healthy food by making rational use of these chemicals. We can
feed population in many ways like in the form of good food, saving water and the
environment from the pollution created by these chemicals. Therefore, we have to go
for eco-friendly farming so that the food should not have the harmful remains of
chemicals.
 In order to increase the income of farmers, there is a vast scope for encouraging the
livestock activities in Haryana.
 In order to popularize organic farming in Haryana sincere efforts need to be made by
the extension agencies to motivate farmers to adopt improved production technology
to minimize the yield gap. The district level farm science center such as Krishi
Vigyan Kendra should identify the problems of the farmers and feedback and
solution of constraints be provided in time to farmers. Manure and bio-fertilizer and
other inputs must be made available through societies and other distribution centres
at village level and it should ensure for supply of quality inputs to farmers to enhance
productivity level. Government officers and other network should be established in
each village to produce organic products from farmers. In addition, the Government
should announce the separate minimum support prices for organic products.

11
 CHAPTER 1
INTRODUCTION

1.1 BACKDROP

Haryana is the state known being for the breadbasket of India, and a worldwide
shining example of how the Green Revolution (GR) and industrial agriculture greatly
increased the yield of the food crops. Apart from meeting its own requirement for
foodgrains, Haryana ranks second in contribution to wheat to the Central Pool despite the
very small acreage under farming. It accounted for 27.8% (i.e., 69.24 lakh tonnes) of
procurement of wheat for the Central Pool in 2011-12. This has been possible due to the
introduction of high yielding cultivars of wheat and rice, creation of irrigation
infrastructure, hard work of innovative farmers, and excellent policy support for
promoting improved technologies in the State. Agriculture plays a vital role in Haryana’s
economy, in spite of the decline in the share of agriculture sector in the Gross State
Domestic Product (GSDP) from 32.0% in 1999-2000 to 15% in 2013-14, about 80%
population of the state still depends upon agriculture for its livelihood.
The economic growth of the State has become more sensitive to the growth rates
in the industry and services sectors during the past few years but the recent experience
suggests that high GDP growth without consistent and rapid agricultural growth is likely
to accelerate inflation in the State, which would jeopardize the larger growth process.
Therefore, the growth of the Agriculture and Allied Sector continued to be a critical
factor in the overall performance of the State economy. Besides, Haryana agriculture
significantly contributes to export earnings. The Basmati rice produced in Haryana finds
an easy market abroad. It is an important source of raw material as well as of demand for
many industries. In the year 2011-12, the agriculture and allied sector in Haryana
recorded the growth rate of 7.4%, while the corresponding figure for the country at large
was 5%. The major crops grown in Haryana are: wheat, rice, mustard, cotton, sugarcane
and bajra (Statistical Abstract of Haryana, 2014).
Haryana is located in the northwest part of the country and the climate is arid to
semiarid with average rainfall of 455 mm. Around 70% rainfall receives during the
12
month from July to September and the remaining rainfall receives during Dec. to Feb.
The total geographical area of the state is 4.42 million hectares (m ha), which is 1.4% of
the geographical area of the country. The cultivable area is 3.8 m ha, which is 86% of the
geographical area of the state out of which 3.62 m ha, i.e., 96.2% is under plough. Thus,
there is hardly any scope to bring more area under cultivation. The agriculture production
can only be increased through enhanced cropping intensity, change in cropping pattern,
improvement in seeds of high yielding varieties, better cultivation practices and post
harvest technology, etc.
The gross cropped area of the state is 6.51 m ha and net cropped area is 3.62 m ha
with a cropping intensity of 179.69% in the year 2012-13 (Economic Survey of Haryana,
2014). The 84% of net-cropped area is irrigated. In the State, about 68.17% of the
cropped area is under food grains and the remaining 31.83% area is under non-food
grains. The food grains comprise mainly cereals and pulses with weights of 67.06 and
1.11% respectively. Non-food grains consists of oilseeds, fiber and miscellaneous crops
with weights 6.09, 16.60 and 9.14% respectively. The contribution of area under Wheat
and Paddy crops to the total gross area sown is likely to be about 59.3% in 2013-14. The
area under Paddy crop is estimated to be 12.28 lakh hectares in 2013 and the area under
Wheat crop is likely to be 24.90 lakh hectares in 2013-14. The total number of farm
holdings is 15.28 lakh. Index of agricultural production of all crops moved moderately
from 104.88 in 2007-08 to 105.57 in 2009-10. Thereafter, it moved considerably to
109.10 in 2010-11. But it decreased from 121.86 in 2011-12 to 115.65 in 2012-13.
Similarly, the index of agricultural production of cereals moved from 106.45 in 2007-08
to 113.46 in 2010-11 reflecting an increase of 6.59% during the period. It increased
considerably to 126.07 in 2011-12 but the same decreased to 114.05 in 2012-13.
The indices of agricultural production for oilseeds increased from 81.79 in 2007-
08 to 121.20 in 2008-09. However, it decreased to 115.01 in 2009-10 and 128.03 in 2010-
11. But it decreased to 100.02 in 2011-12 and it increased to 128.74 in 2012-13. The
indices of agricultural production for fibers registered an increase of 2.03% while moving
from 108.88 in 2007-08 to 111.09 in 2009-10. It dropped to 101.21 in 2010-11 by 8.89%
but it increased to 151.89 in 2011-12. It decreased to 138.16 in 2012-13.
The average size of operational holding in Haryana is 2.25 hectares compared to
the national average of 1.23 hectares, next to Punjab in North India. The marginal and
13
small farmers are accounted for 46.1% of these holdings. The medium and large farmers
have 19.3% and 34.7% of total farm holdings respectively.
Haryana has made great strides in food production during the era of Green
Revolution. However, this success resulted in second-generation problems such as a
declining resource base, especially reduction in soil organic carbon content, multiple
nutrient deficiencies, poor soil health, hydrological imbalance, decline in underground
and above ground biodiversity and pollution of soil, water and environment. In addition,
there had been a gradual decline in the water table in areas having good quality ground
water due to the cultivation of high water requiring crops like rice, wheat, sugarcane and
cotton. The major limitations of Haryana soil are: (a) the poor organic carbon, and (b)
deficiency of micronutrients.

1.2 A CRITIQUE OF THE GREEN REVOLUTION

The term green revolution coined by Dr. William Gaud of the U.S. Department of
Agriculture in 1968 is a general one that is applied to revolutionary progress taking place
in the wheat and rice fields of many Third World countries, in terms of yield per hectare.
It is not specific to India. However, it was most successful in India. The world’s worst
recorded food disaster happened in 1943 in British-ruled India. Known as the Bengal
Famine, an estimated four million people died of hunger that year alone in Eastern India
(that included today's Bangladesh). The initial theory put forward to ‘explain’ that
catastrophe was that there as an acute shortfall in food production in the area. However,
an Indian economist Dr. Amartya Sen (recipient of the Nobel Prize for Economics, 1998
for his work in Welfare Economics) has established that while food shortage was a
contributor to the problem, a more potent factor was the result of hysteria related to
World War II, which made food, supply a low priority for the British rulers. Indian
traders who hoarded food in order to sell at higher prices further exploited this hysteria.
Nevertheless, when the British left India four years later in 1947, India continued
to be haunted by memories of the Bengal famine. It was therefore natural that food
security was a paramount item on free India's agenda. This awareness led, on one hand,
to the green revolution in India and, on the other, legislative measures to ensure that
businessmen would never again be able to hoard food for reasons of profit.
However, the term green revolution is applied to the period from 1967 to 1978. Between
14
1947 and 1967, efforts to achieve food self-sufficiency were not entirely successful.
Efforts until 1967 largely concentrated on expanding the farming areas. However,
starvation deaths were still being reported in the newspapers. In a perfect case of
Malthusian economics, population was growing at a much faster rate than food
production. This called for drastic action to increase yield. The action came in the form of
the green revolution.
The green revolution resulted in a record grain output of 131 million tons in 1978-
79. This established India as one of the world's biggest agricultural producers. India also
became an exporter of food grains around that time. Yield per unit of farmland improved
by more than 30% between 1947 (when India gained political independence) and 1979
when the green revolution was considered to have delivered its goods. The crop area
under High Yielding Varieties (HYV) seeds grew from 7% to 22% of the total cultivated
area during the 10 years of the green revolution. More than 70% of the wheat crop area,
35% of the rice crop area and 20% of the millet and corn crop area used the HYV seeds.
About a decade into the green revolution, in the mid-1970s, criticism of the new
production model began to emerge as proof of detrimental environmental impacts and
negative socioeconomic consequences of the green revolution increased (Freebairn, 1995;
UNRISD, 1975). Only farmers who were able to receive credit could afford fertilizers
and the resources required to access irrigation. The need for rising levels of fertilizer to
maintain the same level of crop output caught many farmers in a vicious circle of soaring
costs, leading to poverty among a third of the region’s farmers in the 1980s and 1990s
(UNDP, 2004). The level of debt among farmers in Punjab was nearly four times the
national average. Many of the small farmers who went bankrupt were forced to sell or
lease their land to more wealthy neighbours, or companies, who had the economic and
technical resources, and this has led to a steep reduction in smallholdings in Punjab (Brar
and Gill, 2001; Patel, 2007), down 41% just between 1990 and 2000 (IFPRI, 2007).
Many argued that this model had been intended, not primarily to assist farmers or feed
the poor, but rather to produce cheap food for the urban consumer. This urban consumer
may be unaware of the environmental degradation, bankruptcy, and displacement in rural
areas, and how this relates to for example higher urban crime rates and social costs
(Sethi, 2006).

15
 Norman Borlaug, the founding father of the green revolution, and many with him,
have trivialized the environmental consequences of the green revolution, and argue on the
other side that the green revolution preserved millions of hectares of forests and other
wildlife habitat from being cultivated, thanks to the increased production on existing
farms (Borlaug, 2000). That may be the case, but this type of increased production cannot
continue forever on the same land area. The World Resources Institute (WRI) and others
point out that about 8.5 million hectares of agricultural land had been left infertile already
by the early 1990s, from environmental pollution and falling groundwater levels, leaving
higher salt deposits in the soil (Byerlee, 1992; Patel 2007; Shiva, 1992; WRI, 1994).
The majority of expenditures on GR technologies were invested in Punjab and
Haryana, which had the most fertile land in India and the largest average farm size. The
government disregarded the marginalized majority of farmers with smaller pieces of land,
living in resource scarce regions and states with fewer resources. They constitute 75% of
all farmers in India, cultivating on just above 30% of the land (Patel, 2007). The
sustainability of green revolution became doubtful which led to the need of an alternative
farming model, nature friendly farming system.

1.3 DEFINING ORGANIC FARMING

Organic agriculture is best known as a method of agriculture where no synthetic

fertilizers and pesticides are used1. Although many single techniques used in organic
agriculture are used in a wide range of agricultural management systems, what
differentiates organic agriculture is the focus of the management. The emphasis in
organic agriculture is on using inputs (including knowledge) in a way which encourages
the biological processes of available nutrients and defence against pests, i.e., the resource
“nature” is manipulated to encourage processes which help to raise and maintain farm
productivity. According to Food and Agriculture Organization (FAO) organic farming is
a holistic production system of crops which avoids the use of synthetic and chemical
inputs like fertilizers, pesticides, growth regulators and livestock feed additives. Organic
farming system depends mainly on crop rotation, crop residues, animal manures,

1
The word “pest” is used in this study as an umbrella word referring to all forms of life of negative
influence on farm productivity, including insects, weeds, fungi, nematodes, livestock parasites, etc.
Similarly, the word “pesticide” covers all agricultural biocides such as insecticides, herbicides, fungicides,
nematicides and anthelmintics.
16
legumes, green manures, off-farm organic residues, mineral bearing rocks, natural
pesticides and biological pest control to maintain soil productivity and supply important
nutrients like nitrogen (N), phosphorus (P) and potassium (K). Moreover, organic
farming is a pathway to an evergreen revolution. As can be seen from the list in Exhibit
1.1, in organic agriculture, management is directed towards preventing problems, while
stimulating processes which assist in nutrition and pest management.
Furthermore, the FAO put the objectives of organic farming succinctly: organic
agriculture improves food access by increasing productivity, diversity and conservation
of natural resources, by raising incomes and by reducing risks for farmers. Improvement
also results from sharing of knowledge among farmers. These benefits lead to poverty
reduction and a reversal of rural outward migration.
Exhibit 1.1
Farmer Oriented Organic Management Practices
Soil management practices include increasing humus content and biological activity as
well as meeting mineral deficiency of soils:
 manipulation of crop rotations and strip-cropping: deep and shallow rooted plants
bring different nutrients to the surface; different crops require different nutrients;
 growing green manure;
 under sowing;
 application of rock dust, manure, crop and agro-industry residues, household
waste, compost;
 soil tillage, such as use of an implement which aerates the soil.
Pest management practices include:
 manipulation of crop rotations, to minimize survival of crop-specific pests (in the
form of, for example, insect eggs, fungi) which can infest the next crop;
 strip cropping, to moderate spreading of pests over large areas;
 manipulation of pH-level or moisture level of the soil (in irrigated areas);
 manipulation of planting dates, to plant at a time most optimal for the crop, or
least beneficial for the pest;
 adjustment of seeding rates, to achieve an optimal rate given the need to crowd
out weeds or avoid insects;
 use of appropriate plant varieties and livestock breeds for local conditions;
 implementation of stock culling programmes, which emphasize genetic resistance
against certain diseases;
 use of stock buying programmes, which minimize the import of diseases onto the
farm;
 limiting field size, which aids in weed management by livestock;
 biological control methods, to encourage natural enemies of pests by providing
habitat (for example hedges) or by breeding and releasing them in areas where
they are required;
17
  trapping insects, possibly with the use of lures such as pheromones;
 biological pesticides (for example, derris dust, pyrethrum, rotenone) of which the
active ingredient is short lasting, and which may be produced locally.
Post-harvest practices include:
 in temperate countries, grains can be well conserved when harvested and stocked
in conditions which allow air circulation (in jute sacs, ventilated silos, etc.);
 in tropical countries, humidity and high temperatures pose problems which can be
overcome through: harvesting at complete maturity and during dry weather;
storing without stripping off the bark; drying of grains under the sun before
storing; mixing sand, china-clay, or wood ash to grains; adding little quantities of
nut oil to niebe grains (very effective on weevil); addition of smoke or certain
plants to repel insects; etc.;
 in ancient Europe and the Mediterranean basin, grains were stored in buried pits
for several years: the anaerobic conditions of these pits prevented insect
proliferation and the grains underwent an initial fermentation which protected it
from insects and mouldiness, despite the high degree of humidity;
 traditional procedures allow conservation and enhancement of the nutritional
value of cereals and leguminous, such as: fomenting rice (rice is bathed, steamed
and dried) destroys insect eggs; transforming wheat in bourghoul (wheat is
germinated, boiled, dried and crushed) enriches the cereal with vitamins and
essential amino-acids (lysine) and pre-digest starch; fermenting certain
leguminous (for example, soy in the Far East and nere in Africa) gives high
nutritional quality products which can be conserved for years; fermented fish
sauce (nuoc-nam) allows simple fish conservation and offers an alternative to fish
drying, especially that the latter entails inevitable losses in tropical conditions.
Source: Scialabba (1999).

For market purposes, a strict definition of organic agriculture is required to

protect both producer and consumer interests. Definitions were first developed in the
private sector. The most widely adopted definition was developed and promoted by the
International Federation of Organic Agriculture Movements (IFOAM), a non-
governmental organization that has existed for 25 years (see Exhibit 1.2). The IFOAM
Principle Aims are used as guidelines for setting standards for organic agriculture in
individual countries. The word “organic” (or a similar word) is protected by law in a
number of countries (see U.S. definition in Exhibit 2). Long before the word was
legislated, the need was felt within organic agriculture circles to define the concept, and
to spell out, in considerable detail, what it meant in practice. The details, as described in
the standards, are the minimum requirements to which those working with organic
products (such as farmers, processors, transporters, retailers) need to keep themselves.
Apart from indicating to the producer which practices are allowed, standards (and the

18
certification structure which goes with them) safeguard fair competition within organic
management. That is, nobody can sell products under the name while using cheaper
practices which are not allowed under organic management. At the same time, standards
indicate clearly to the consumer what the conditions are under which the products are
grown.
Although minimum standards have been set for many countries, standards differ
between countries. At present, FAO/WHO/Codex Alimentarius Commission has
prepared internationally applicable organic agriculture standards to protect consumers
against deception and fraud. The Codex definition of organic agriculture is quoted in
Exhibit 1.3. The Codex Alimentarius Commission assists in harmonizing national
legislation and settling international disputes on trade in organic produce.
Exhibit 1.2
Market Purpose Definitions of Organic Farming
The word “organic” is legally protected in some countries. In the EU, for example, this
word has been protected since the early 1990s in English-speaking countries. The
equivalent in French, Italian, Portuguese and Dutch-speaking countries is “biological”,
and “ecological” in Danish, German and Spanish-speaking countries.
IFOAM definition:
The International Federation for Organic Agricultural Movements (IFOAM), established
in the early 1970s, represents over 600 members and associate institutions in over 100
countries. IFOAM (1996) defines the “organic” term as referring to the particular farming
system described in its Basic Standards. The “Principle Aims of Organic Agriculture and
Processing” are based on the following equally important principles and ideas:
 to produce food of high nutritional quality in sufficient quantity;
 to interact in a constructive and life enhancing way with all natural systems and
cycles;
 to encourage and enhance biological cycles within the farming system, involving
micro organisms, soil flora and fauna, plants and animals;
 to maintain and increase long-term fertility of soils;
 to promote the healthy use and proper care of water, water resources and all life
therein;
 to help in the conservation of soil and water;
 to use, as far as is possible, renewable resources in locally organized agricultural
systems;
 to work, as far as possible, within a closed system with regard to organic matter
and nutrient elements;
 to work, as far as possible, with materials and substances which can be reused or
recycled, either on the farm or
 elsewhere;
 to give all livestock conditions of life which allow them to perform the basic
19
 aspects of their innate behaviour;
 to minimize all forms of pollution that may result from agricultural practices;
 to maintain the genetic diversity of the agricultural system and its surroundings,
including the protection of plant and wildlife habitats;
 to allow everyone involved in organic production and processing a quality of life
conforming to the UN Human Rights Charter, to cover their basic needs and
obtain an adequate return and satisfaction from their work, including a safe
working environment;
 to consider the wider social and ecological impact of the farming system;
 to produce non-food products from renewable resources, which are fully
biodegradable;
 to encourage organic agriculture associations to function along democratic lines
and the principle of division of powers;
 to progress towards an entire organic production chain, which is both socially just
and ecologically responsible.

IFOAM notes that “Genetic engineering focuses on the genetic makeup without taking
into account the complete organism or system in which the organism functions. It is thus
a contradiction to the above mentioned principle aims of organic agriculture.”
US definition:
In 1980 the US Department of Agriculture defined the concept of organic agriculture as
follows: “...a production system which avoids or largely excludes the use of synthetically
compounded fertilizers, pesticides, growth regulators, and livestock feed additives. To the
maximum extent feasible, organic agriculture systems rely upon crop rotations, crop
residues, animal manure, legumes, green manure, off-farm organic wastes, mechanical
cultivation, mineral bearing rocks, and aspects of biological pest control to maintain soil
productivity and tilth, to supply plant nutrients, and tocontrol insects, weeds, and other
pests’. The report also included the following observation: “The concept of the soil asa
living system which must be “fed” in a way that does not restrict the activities of
beneficial organisms necessary for recycling nutrients and producing humus is central to
this definition.”

Exhibit 1.3
Codex Definition of Organic Farming
The Codex Alimentarius Commission has prepared guidelines for the production,
processing, labeling and marketing of organically produced foods. According to the
Codex definition:

Organic agriculture is a holistic production management system which promotes and

enhances agroecosystem health, including biodiversity, biological cycles, and soil
biological activity. It emphasizes the use of management practices in preference to the
use of off-farm inputs, taking into account that regional conditions require locally
adapted systems. This is accomplished by using, where possible, cultural, biological and
mechanical methods, as opposed to using synthetic materials, to fulfil any specific
function within the system. An organic production system is designed to:
20
 1) enhance biological diversity within the whole system;
2) increase soil biological activity;
3) maintain long-term soil fertility;
4) recycle wastes of plant and animal origin in order to return nutrients to the land,
thus minimizing the use of non-renewable resources;
5) rely on renewable resources in locally organized agricultural systems;
6) promote the healthy use of soil, water and air as well as minimize all forms of
pollution thereto that may result from agricultural practices;
7) handle agricultural products with emphasis on careful processing methods in
order to maintain the organic integrity and vital qualities of the product at all
stages;
8) become established on any existing farm through a period of conversion, the
appropriate length of which is determined by site-specific factors such as the
history of the land, and type of crops and livestock to be produced.

1.3.1 Differences between Organic and Conventional Farming

In organic agriculture one does not use chemical fertilizers and pesticides because
these can be harmful for nature, the environment and human health. These inputs, and
also genetically modified (GM) seeds, make farmers dependent upon standard industrial
solutions and obstruct local adaption and development of the farming system, which is
the basis of organic farming. Instead of chemical inputs, organic systems focus on
avoiding nutrient losses through recycling them, using manure and compost, green
manure and varied crop rotations or agro-forestry systems. The prevention of nutrient
losses also avoids environmental damage (e.g. damage to local water supplies). In
preference to using GM seeds, organic farmers prefer resilient indigenous varieties that
are adapted to local circumstances and have a natural resistance against pests, diseases
and drought.
Pests and diseases can harm the crops, reduce their yield and badly damage their
quality. A wide range of (often highly toxic) chemical pesticides has been developed to
control pests and diseases. Organic farming differs from conventional agriculture in that
it prohibits the use of chemical pesticides. Organic farmers employ other methods to
prevent an unacceptable level of pests and diseases; choosing strong varieties and
creating the best conditions for crop growth. Organic farmers improve the fertility and
structure of the soil through the use of for example compost. They plant a wide variety of
crops, often inter-cropping, and leave or plant species that can create habitat for
beneficial wildlife and/or improve the micro-climate.

21
 Weed control is another area where there is a big difference between conventional
and organic agriculture. Instead of using chemical herbicides, organic farmers use a
different toolkit to manage weeds. A wide crop rotation helps to prevent the
establishment of a few really difficult weeds which particularly thrive in monocultures.
Organic farmers use a mixture of good composting, fast growing crop varieties that
suppress weeds, mechanical weed-control, mulching, cover crops and hand weeding as
the main methods of weed control.
Whereas modern conventional farming uses chemical fertilizers to stimulate crop
production, organic farming relies on manure, on composting waste materials from the
farm and on recycling nutrients. The ideal model is a mixed farm, with food and fodder
crops and animals. In such a system the animals can eat the fodder, crop residues and
products that are not suitable for human consumption. The animal manure and the crop
residues are often composted together and used to fertilize the soil. Such compost is rich
in organic matter and in nutrients. This not only feeds the plants, but also all the other
organisms that live in the soil. Organically managed soils generally have a much higher
content of organic matter. This provides a better soil structure, allowing for stronger root
development and more water storage. Organic farmers use legumes and green manure to
fix nitrogen from the air and make it available for the crops.

1.3.2 Why Organic Farming

The aims of organic farming are to protect: (i) the environment, by using organic
management practices that do not have the adverse effects of conventional practices, and
(ii) the health of consumers, by the provision of organic products. Furthermore, a survey
of literature on benefits of organic farming brings out its following main implications: (a)
makes agriculture more remunerative, sustainable and respectable, (b) enhances natural
soil fertility and productivity by preventing the loss of soil and leaching of minerals, (c)
enriches biodiversity, increases soil “health” and provides more nutritious foods, (d)
requires less water and promotes water conservation, (e) improves and maintains agro
ecosystem and natural landscape for sustainable production, (f) depends mostly on
renewable on-farm resources, (g) encourages consumption of renewable energy
resources-mechanical and other alternate sources of fuel, (h) includes animals as an
essential part of organic system which helps maintaining soil fertility and also increases

22
the income of farmers, (i) ensures pollution–free air, water, soil, food and, natural
ecosystems, (j) protects and enhances traditional knowledge in farming, processing and
seed improvement leading to its protection for the future generations, (k) reduces the cost
of production through locally suitable methods and inputs, (l) produces adequate quantity
of nutritious, wholesome and best quality food and develops a healthy food culture, and
(m) reduces the food – mileage and, thereby, carbon emission.
Furthermore, interest in organic agriculture methods is growing, especially in
areas where the present farming system has degraded resources essential to agricultural
production (especially land). Non-production factors, such as farmer’s health, are also
mentioned as a reason for shifting to organic management. Consumers also have an
interest in organic agriculture. Consumer awareness of the environmental costs of
agriculture (such as the deteriorating quality of drinking water and soil, and the impact of
agriculture on landscape and wildlife) is increasing. The awareness of environmental
quality and health is often promoted by environmental groups, especially in developed
countries. The resulting demand for organic products creates the opportunity to sell
organic products at premium prices, enabling organic farmers to continue, and often
expand.

1.4 EMERGING ISSUES FOR HARYANA AGRICULTURE

As we have stated above, Haryana is among pioneer states that have successfully
implemented green revolution. Crop areas under high-yield varieties in Haryana needed
more water, more fertilizer, more pesticides and certain other chemicals. Because market-
purchased inputs needed for output, only resource-rich farmers were able to take
advantage of high-yielding cultivars. Small or marginal farmers have found it difficult to
benefit from HYVs, machinery and fertilizers in their fields due to which the wealth
disparities have widened further than before.
Fertilizer, the most important component and input of new technology has played
a very important role in enhancing the agricultural production and ushering in green
revolution in the State. Because of the introduction of High Yielding Varieties in the
State, the consumption of chemical fertilizers has increased steadily. The total
consumption of NPK (nutrients) is expected to be 1430 thousand tonnes in 2009-10. The
per hectare consumption of fertilizers in nutrient terms increased from 162 kg in 2005-06
23
to 200 kg in 2008-09. The corresponding figure for the country at large has increased
from 105.5 kg in 2005-06 to 128.6 kg in 2008-09. In 2008-09, Haryana’s per hectare
consumption of fertilizers was 56% higher than that of country as whole. As has been
duly acknowledged in the 11th Five Year Plan that indiscriminate use of chemical
fertilizers for decades has resulted in the decline of organic matter content of soils to less
than 1%. The use of pesticides has led to pest resurgence and difficulty in controlling
weeds. Indiscriminate use of artificial fertilizer and pesticide has caused severe water and
environmental pollution. The residue of chemical is of serious concern for the safety of
food and sustainable production. Organic farming ensures the production of palatable
food free from chemical residues.
In 1970s when High Yield Varieties of rice and wheat made their entry into India
in the form of green revolution, Haryana proved to be a successful story for them. HYVs
offered a higher level of per capita income that would be translated into a better lifestyle
and hence the progress of the nation along with meeting the growing demand for food
across the globe. It served these objectives largely. Resultantly, foodgrains production
touched an impressive figure of 161.66 lakh tonnes during 2008-09 as compared to 25.92
lakh tonnes during 1966-67 registering a more than six fold increase. However, what
does that translate into, in the long-run for Haryana’s growth? Is this growth sustainable?
Can Haryana keep its reputation of being the Food Basket of India? How will it make a
decision to sustain agricultural success? Analysis of these facts will be helpful in creating
a hypothesis regarding the future of Haryana’s Green Success.
Installing pumps and using higher amount of fertilizers have increased the cost of
production, thereby increasing the average debt taken by farmers. Every year, many
subsidies have to be provided to the farmers in form of cheap electricity, loan waivers
and lower interest rates. These costs are seldom counted as the costs of production in
awarding the success crown to Haryana.
The green revolution has led to reduced genetic diversity, increased vulnerability
to pests, soil erosion, water shortages, reduced soil fertility, micronutrient deficiencies,
soil contamination, reduced availability of nutritious food crops for the local population,
the displacement of vast numbers of small farmers from their land, rural impoverishment
and increased tensions and conflicts. The beneficiaries have been the agrochemical
industry, large petrochemical companies, manufacturers of agricultural machinery, dam
24
builders and large landowners. The “miracle” seeds of the green revolution have become
mechanisms for breeding new pests and creating new diseases.
Land holdings in Haryana have consequently shrunk in size, and many farmers,
unable to leave their land fallow, now grow the same food crops, year after year, on the
same plot of land. For most small farmers the use of fertilizers that could replenish their
soils is not economically feasible, due to increasing prices and climatic risks. The result is
land degradation, low yields, persistent poverty and widespread malnutrition.
The green revolution was based on the assumption that technology was a better
alternative for nature's limits. However, the assumption of nature as a source of shortage,
and technology as a source of plenty, leads to the creation of new technologies that create
new scarcities in nature through ecological destruction. The reduction in availability of
fertile land and loss of diversity of crops because of green revolution, illustrates that at
the ecological level, the green revolution produced scarcity, not abundance. It not only
led to ecological insecurity but also social and political insecurity.
The major beneficiaries of green revolution have been big farmers and the agrochemical
industries, because of increasing dependence of peasants on off farm inputs, they have
become increasingly dependent on those companies which manage the input of HYV
(High Yielding Variety) seeds.
One of the major problems of Haryana economy is the unemployment. Organic
farming is labor and knowledge-intensive whereas conventional farming is capital-
intensive, requiring more energy and manufactured inputs.
As reported by Government of India (GOI) in Eleventh Five Year Plan that the
Soil degradation through use of agro-chemicals is a serious issue that needs to be
addressed on a priority basis (p. 15, Agriculture). The soil degradation can be checked by
organic farming. About 16% of Haryana's cropped area is rain fed and it can be safely
assumed that high-input demanding crops are not grown on these lands. Fertilizer use on
dry lands is always less anyway as chemical fertilizers require sufficient water to
respond. Pesticide use in these lands would also be less as the economics of these hardy
or “not-so profitable” crops will not permit expensive inputs. These areas may be used
for organic farming providing excellent yields and without the necessity and effort of a
lengthy conversion period.

25
 The modern farming system aim at maximizing production through the use of
increased quantities of external inputs such as fertilizers and plant protection chemicals
without due consideration to their ill effects. Consequently, the traditional agronomic
practices such as green manuring use of farm waste, and other soil ameliorative measures
have not become part of the farming system. This has resulted in a slow but steady
decline in the productive capacity of the soil.

1.5 ORGANIC FARMING AND HARYANA

Organic farming has been received considerable attention in Haryana in the recent
years. In their search for a more sustainable agriculture, producers, consumers and
policymakers attempt to rediscover organic farming. Haryana government believes that
producer concerns to organic products and therefore market development should be
stimulated. Currently, the greater part of the agricultural budget for stimulating organic
farming is allocated to research, education and information dissemination. An
Agricultural and Processed Food Products Export Development Authority (APEDA)
approved internationally reputed organic certification agency, OneCert, has been
appointed for certification purpose in the state. It pays the certification fee of the fields
being organic.
According to the information available on the official website of the Haryana
State Co-operative Supply and Marketing Federation Limited (HAFED), an area of
around 1,000 acres has been earmarked for organic farming of basmati rice in three
districts of Kaithal, Kurukshetra and Karnal. The desi wheat would be cultivated in an
area of around 805 acres in Mewat and Jhajjar region. Apart from these two crops, Sirsa
district has been shortlisted for the cultivation of gram crop.

1.6 WHY THE STUDY

The Haryana case study offers a unique opportunity to analyze the feasibility of
changes in the use of inorganic inputs in crop production. The significant reduction in
pesticide use in the arable farming sector can be made possible by replacing chemical
control by mechanical methods (particularly in weed control) and biological control
methods (resistant cultivars, rotation) in the conventional production system. Because of

26
the most recent reduction plan and changing consumers’ perceptions, organic farming is
becoming a potentially attractive option for many field crop growers.

1.7 OBJECTIVES OF THE STUDY

The study is aimed at assessing the economic viability of organic farming in

Haryana and to identify the major constraints in adoption of organic farming in Haryana.
The specific objectives of our study are:
1. To review the recent literature on the economic viability of organic farming.
2. To examine the growth in organic farming for the world at large.
3. To assess the economic viability of organic farming in Haryana.
4. To identify the constraints faced by farmers in adoption of organic farming in
Haryana.

1.8 HYPOTHESES

The study has set out to examine the following hypotheses:

 Organic farming is economically viable in Haryana.
 The organic farm produces markets in Haryana are efficient.

1.9 METHODOLOGY FOR THE STUDY

1.9.1 Research Design

The study uses an exploratory research design. The research type is qualitative.
The data are collected mainly through focus group discussions. The economic viability of
organic farming system is assessed by estimating costs, returns and profits. To gauge
whether Haryana’s farmers will transit to organic farming same calculation has been done
for a conventional farming system and then the results are compared. No census or other
comprehensive listing of organic farms exists in Haryana state.2 Consequently, it was not
possible to select a random sample that represents the organic farm population. An ad hoc
procedure was used to locate organic farms, primarily word of mouth. Based on
information on location, size, length of time the farm had been operated using organic
methods, a preliminary judgment of each organic farmer's competence as a farm
manager, and the resources available, we reached to organic farms. The organic farms
selected in this manner are a series of case studies (a judgment sample). Of course, the
2
The information available from the official sources was neither updated nor true.
27
inability to statistical sample limits the extent to which inferences from the results can be
made to a larger population of Haryana farms. Under the circumstances, this was
unavoidable.
1.9.2 Sources of Data
The study is primarily based on primary data. The data used in the study are
mainly cross-sectional. The focus group discussion method has been used to obtain the
requisite information. The data on growth trends in organic farming in the world leading
producers are obtained from International Federation of Organic Agriculture Movements
(FIBL-IFOAM) survey.

1.10 ORGANISATION OF THE STUDY

The study is organized into five Chapters. Chapter 1 is introductory whereas in

Chapter 2 we present the review of literature on economic viability of organic farming.
Chapter 3 is devoted to study the growth trends in the organic farming for the world at
large. After providing the worldwide summary of organic farming in Chapter 3, Chapter
4 deals with the economic performance of the organic farming in Haryana. In this way,
Chapter 5 relates the major constraints faced by farmers in adoption of and continuing
with organic farming in Haryana.

28
 CHAPTER 2
REVIEW OF LITERATURE

This Chapter provides an analytical review of the existing relevant literature on

the economic viability of organic farming. This Chapter is organized into three sections.
In Section 2.2 we present the review of the significant empirical studies on the economic
performance of organic farming whereas Section 2.3 is devoted to the concluding
remarks.

2.2 Review of Literature

As per our observation, hardly any state specific study examines the economic
viability of organic farming in Haryana. However, few prominent studies that empirically
analyze the economic implications of organic farming for the rest of India and for other
countries are in order.
Adhikari (2009) compared the yield and economic performance of organic and
inorganic carrot production in Chitwan district of Nepal. It was reported that inorganic
production system had higher cost and higher revenue but organic production system had
higher benefit cost ratio. This revealed that adoption of organic carrot production system
was economically profitable than inorganic production system.
Argyropoulos et al. (2013) studied the development of the organic agricultural
sector in Greece, with respect to both farming and marketing. They reported that
development of organic farming is unbalanced. For example, organic green fodder is
grown 10 times more than demanded for organic livestock farming. Furthermore, while
many other products are imported to cover the country’s demand for organic produce,
Greek (unlabeled) organic products are sold as conventional. They highlight the
importance of establishing a monitoring procedure that evaluates the performance of
organic farming systems, including the outcome of labelled organic products. It is
suggested that the development of a sustainable organic agricultural sector, where
farming, marketing, economy, and knowledge are interconnected, requires the
development of research toward implementing a more sophisticated approach of
financing organic farming.
29
 Bjørkhaug and Blekesaune (2012) used spatial regression models to explore the
diffusion of organic farming in Norway. They find: (1) a connection between the level of
organic production, the population level in the municipalities, and access to consumers,
(2) a connection between the farm processing of organic products and the level of organic
farming, and (3) the neighbourhoods effect in the development of organic farming that
are especially strong in particular regions of Norway.
Charyulu and Biswas (2010) compared the production cost of organic and non-
organic farming for cotton, wheat, rice and sugarcane for Gujarat, Maharashtra, Punjab
and Uttar Pradesh. They found that the unit cost of production is lower in organic farming
in case of cotton and sugarcane crops whereas the same is lower in conventional farming
for paddy and wheat crops.
Christian and Hess (1999) analyzed the growth of organic farming in Austria.
They find that Austria has experienced a dramatic increase in organic farming among
those countries that comprise the European Union (EU). For example, in 1992,
approximately 2,000 farms were practicing organic, ecological, or biodynamic farming
methods. By 1997, the number of certified organic farms plus those in transition from
conventional farming had increased 10-fold to some 20,000 farms. The strong organic
movement in Austria can be attributed to: (a) government subsidies which provide
incentives to organic farmers, and (b) widespread acceptance of organic products and
their brand names by large food chains and supermarkets.
Clark (2009) analyzed the profitability of organic and conventional production
systems on typical farm in Indiana applying present net value net return indices. It is
found that organic crops with yield penalties can be profitable and competitive with
conventional crops. The lower organic production cost coupled with adequate price
premiums makes organic production competitive and profitable.
Dhandhalya et al. (2010) assessed the performance of organic and inorganic
wheat farming system in Saurashtra region of Gujarat state with specific focus on costs,
yields, profit and awareness status regarding organic farming in 2006-2007. They found
that in organic farming net profit obtain was 25.72% higher than conventional wheat. In
organic farming yield reduction was observed in initial years of adoption, but later on, it
takes normal level.

30
 Feinerman and Cornelis (2007) developed and applied a model to determine the
socially optimal hectare subsidy for a given level of public expenditure aimed at
stimulating organic farming using the data from the Dutch province of Flevoland. Their
empirical findings show that the level of socially optimal per-hectare subsidy increases
substantially with the elasticity of the social welfare function. The optimal subsidy
decreases significantly with the degree of farmers’ heterogeneity with respect to the
suitability of growing organic crops (OCs) as well as with the level of complementary
governmental services. So, the optimal subsidy and public services are policy substitutes.
Gardebroek et al. (2010) compared the production technology and production risk
of organic and conventional arable farms in the Netherlands applying Just–Pope
production functions. They find that within variation of output is significantly higher for
organic farms, indicating that organic farms face more output variation than conventional
farms. Their results indicate that in both types of farms, unobserved farm-specific factors
like management skills and soil quality are important in explaining output variability and
production risk. The results further indicate that land has the highest elasticity of
production for both farm types. Labour and other variable inputs have significant
production elasticities in the case of conventional farms and other variable inputs in the
case of organic farms. Manure and fertilizers are risk-increasing inputs on organic farms
and risk-reducing inputs on conventional farms. Other variable inputs and labour are risk
increasing on both farm types; capital and land are risk-reducing inputs.
Guan et al. (2005) compared the production technology and damage-abatement
process of conventional and organic farming systems by applying generalized
asymmetric specification that allows for both a negative productivity of pesticides and a
damage-abating role for labour and machinery for the Dutch arable farming sector. They
find that conventional farms rely substantially on pesticides and machinery for damage
abatement, whereas organic farms mainly rely on machinery use and changes in cultural
practices. The evidence of over-use of fertilizer in conventional farms strongly suggests a
nutrient reduction programme.
Kallas et al. (2010) assessed the decision to adopt organic farming practices using
Duration Analysis (DA) with farm-level data from a sample of vineyard farms in the
Spanish region of Catalonia. They find that farmers’ objectives influence the conversion

31
decision. Moreover, farmers who are not risk averse are more likely to adopt organic
farming.
Klepper et al. (1977) compared the economic performance and energy
intensiveness in terms of the relative value of crop output, net returns and labor
requirements on organic and conventional farms in the USA corn belt. They found that
the organic farms produced somewhat less crop output per acre of cropland than their
conventional counter-parts; however, the variable costs of crop production per acre were
higher for the conventional group. If fixed costs per acre did not differ between the two
groups as assumed, then the net returns to crop production were about the same for the
two groups. The organic group used considerably less energy per dollar of crop output
and per acre of cropland and had slightly greater labor input per acre. By these measures,
the organic group appears to be doing reasonably well despite the fact that they do not
use many of the chemical inputs that are generally regarded as key elements in the
productivity and prosperity of modern agriculture.
Kshirsagar (2008) compared the yield and profit of organic and inorganic
sugarcane in two districts of Maharashtra. It is found: (a) the yield from organic
sugarcane is 6.79% lower than the conventional crop, it is more than compensated by the
price premium received and yield stability observed on organic sugarcane farms, and (b)
organic sugarcane farming gives 15.63% higher profits and profits are also more stable
on organic sugarcane farms than the inorganic sugarcane farms.
Kumar et al. (2013) analysed the empirical relationship
between contractual arrangements and their enforcement in organic basmati paddy
farming using data collected from 40 agribusiness firms operating contract farming
schemes in Sonepat, Kamal, Kaithal and Kurukshetra districts of Haryana state pertaining
to the year 2011-12.3 They report that the provisions in designs of contract, viz. social
capita, assured price in advance, bonus clause and specific investment for infra structure
creation for carrying out production and post harvest operations in contract organic
basmati scheme are likely to promote contract fulfilment rate by farmers.
Kuminoff and Wossink (2010) developed a theoretical model to assess the dollar
compensation required to induce conventional growers to convert to organic by

3
Note that our field investigation team has observed that agribusiness firms’ official data on number of
organic farms in Haryana are far from reality. In other words, there are few organic farms in Haryana.
32
incorporating the uncertainty in producers’ expectations about future returns and about
the impact of policy changes on these expectations in particular. They demonstrate that
an increase in relative returns to organic today will increase conversion rates. Their
empirical switching regression model applied to data on organic and conventional
soybeans before and after major changes in US farm policy toward organic growers
suggests that sunk costs associated with conversion to organic coupled with uncertainty
about future returns can help to explain why there is so little organic farmland in the
USA.
Leifeld (2012) examined the long run impact of organic farming on soil organic
matter storage. The study confirms inferior use efficiency in some organic soils and thus
questions the claim of an overall sustainable use of the soil resource in organic farming
systems.
Lockeretz et al. (1981) studied of the income, costs and profitability of crop
production on organic and conventional farms in the USA Corn Belt. It was found that
labour requirements, the production and profitability achieved by organic farmers differ
from those of conventional farmers by considerably less than might be expected based on
the fundamental importance of chemicals in modern agricultural production.
Naik et al. (2009) investigated the level and factors affecting knowledge of
organic farming practices for farmers of four districts viz., Hisar, Sirsa, Karnal and
Kurukshetra in Haryana state by using a sample of 80 farmers applying correlation and
multiple linear regression. They found that nearly half of farmers had highly knowledge,
very few of them had low knowledge and remaining had medium level of knowledge
about organic farming practices. Education, mass media exposure and innovativeness
were positively and significantly related to the knowledge level .
Namdev et al. (2011) examined the socio-economic and production hindering
constraints organic farming practices for paddy cultivation in Jabalpur district of Madhya
Pradesh state. They reported that the maximum number of organic paddy growers have:
(1) hindrances in the cultivation of crop due to relative low level of production, (2) lack
of knowledge of recommended package of practices, (3) lack of capital, (4) unavailability
of input materials in the time of cultivation, (5) the lack of improved seed, (6) high price
of seed, and (7) low level of knowledge about seed variety and seed rate. The major
marketing constraints reported were lack of agencies for purchase of organic products,
33
non-remunerative prices. The other major constraints are the unavailability of
government facilities, lack of proper guidance, irregular visit of agriculture officers and
lack of testing facilities. It was suggested that sincere efforts be made by the extension
personnel to motivate farmers to adopt improved production technology to minimize the
yield gap and solution of constraints be provided in time to farmers.
Pandey and Singh (2012) reviewed the status, opportunities and constraints that
impede adoption of organic farming especially for small farm holders in India. They
reported that farmers’ apprehension towards organic farming in India is rooted in non-
availability of sufficient organic supplements, bio fertilizers and local market for organic
produce and poor access to guidelines, certification and input costs. Capital-driven
regulation by contracting firms further discourages small farm holders. It was suggested
that an integrated effort is needed from government and non-government agencies to
encourage farmers to adopt organic farming as a solution to climate change, health and
sustainability issue.
Park and Lohr (1996) used econometric model of a system of reduced-form
equations to evaluate the influence of supply and demand factors on equilibrium farm
price and quantity in wholesale markets for three organic crops, viz. broccoli, carrots, and
lettuce. They find that barriers to market expansion are due to both supply and demand
factors, but demand factors predominate. Equilibrium output will increase with demand-
side stimulation such as reductions in wholesaling costs and changes in the wholesale
margin ratio favoring organics. They suggest that education and advertising programs
initially should be targeted toward higher-income consumers, where such efforts may
flow back through the marketing chain to wholesalers. While moderating increases in the
conventional farm price and managing seasonality will increase equilibrium output,
demand factors overall play a greater role in expanding organic produce markets.
Ponti et al. (2012) analyzed a meta-dataset of 362 published organic–conventional
comparative crop yields. They conclude that organic yields of individual crops were on
average 80% of conventional yields, but variation was substantial (standard deviation
21%).
Poppenborg and Koellnerused (2013) used a behavioral approach to reveal the
determinants of farmers land use decisions between organic and conventional farming in
South Korea. They found that positive attitudes toward ecosystem services do not have
34
significant effect on decisions between organic and conventional farming. What rather
seems to influence farmers’ environmental attitude is the level economic incentives as
provided by schemes like payments for ecosystem services. In all, organic farming does
not seem to be chosen out of an environmental concern.
Reddy (2010) reviewed the global and Indian scenario with reference to organic
farming. It is reported that the key issues emerging in organic farming include yield
reduction in conversion to organic farm, soil fertility enhancement, integration of
livestock, certification constraints, ecology, marketing and policy support. It has been
argued that organic farming is productive and sustainable, but there is a need for strong
support to it in the form of subsidies, agricultural extension services and research.
Ramesh et al. (2010) ascertained the real benefits and feasibility of organic
farming in terms of production potential, economic performance and soil health in
comparison to the conventional farms. Their main findings are: (1) organically managed
farms have recorded lower productivity and yield losses, and (2) it is economically
feasible to practice organic farming when farmers are able to get premium price for their
produce and with the reduced cost of cultivation not depending upon the purchased off-
farm inputs.
Riordan and Cobb (2001) examined whole farm nutrient budgets, insect diversity
and the wider environmental economics of organic production compared with non-
organic management. They find that organic production can result in measurable
environmental gains, which can be valued in economic terms. The full environmental
account, however, remains elusive. They conclude that there is a plausible case for an
Organic Stewardship Scheme attached to the Rural Development Regulation.
Schader et al. (2013) calculated the cost-effectiveness of organic farming support
in achieving environmental policy targets compared to other agri-environmental
measures. They conclude that the cost-effectiveness of specific agri-environmental
measures is higher when implemented on organic farms rather than on non-organic
farms.
Singh and Grover (2011) assessed the input-use and cost pattern of organic and
inorganic wheat cultivation in Punjab for the period 2008-09. They report that the
significant reduction in its productivity level poses a serious challenge in terms of food
security of the nation. The average cost on marketing of organic wheat was Rs 150/acre
35
as against Rs 100/acre in case of inorganic wheat. The organic farming has been found
more labour-intensive. The total input cost was Rs. 624.3 per quintal for organic wheat
and Rs. 376.5 per quintal for inorganic wheat.
Shepherd et al. (2005) studied the determinants of consumer behaviour related to
organic foods in Swedish. They found that there is a discrepancy between attitudes and
behaviour regarding organic foods. This discrepancy seems to be explained by the fact
that consumers do not consider “organically produced” to be an important purchase
criterion. Also, organic foods are not perceived to surpass conventional ones regarding
taste and shelf life (two qualities rated to be of great importance) and because of the
perceived premium prices of organic foods. Health benefits were demonstrated to be
more strongly related to attitudes and behaviour toward organic foods than were
perceived environmental benefits.
Terry and Linda (1986) reviewed the literature on the economic implications of
organic farming in the USA. They report: (i) many farmers are turning to organic or “low
input” farming as a strategy for economic survival, (ii) studies that used yield data from
research plots as inputs to economic models show that organic farming equals or exceeds
conventional farming in economic performance, (iii) established organic farmers are less
vulnerable to natural and economic risks than conventional farmers because their systems
are more diversified, (iv) models that relied more heavily on hypothetical data showed an
economic disadvantage for organic farming, and (v) the contrasts in findings may have
been a result of the failure of the hypothetical models to incorporate valid assumptions on
conservation and efficient utilization of water, nutrients, fuel, labor, and capital.
Uematsu and Mishra (2012) examined whether USA organic farmers were better
off than conventional farmers in terms of farm household income. They find: (1) certified
organic farmers do not earn significantly higher household income than conventional
farmers, (2) certified organic crop producers earn higher revenue, they incur higher
production expenses as well, (3) certified organic producers spend significantly more on
labour, insurance and marketing charges than conventional farmers, and (4) the lack of
economic incentives can be an important barrier to conversion to organic farming.
Yadav (2012) reviewed the status of organic agriculture in India using secondary
data. It was reported that with more than 5 lakh farmers and more than 0.77 million ha
cultivated area under organic certification, India produces practically all types of organic
36
commodities. By March 2011 Haryana had brought more than 14763.61 million ha area
under certified organic cultivation.4
Yadav et al. (2013) assessed the training needs of agricultural extension workers
about organic farming in the North-Western Himalayas. They report that there is a need
to upgrade the knowledge and skills of extension workers in seven identified areas of
organic farming technology. Therefore, training courses on organic farming coupled with
practical demonstrations on important areas including bio-fertilizer technology, bio-
dynamic farming, homa farming, biological pest control, bio-rational pest management
techniques, record keeping and certification standards, grading/packing and marketing of
organic produce should be organized to update the knowledge and skill of the extension
workers of Himachal Pradesh State Department of Agriculture for the effective transfer
of such technology to their clients for harnessing the full potential of organic agriculture.
Zander et al. (2005) investigated the impact of organic farming support payments
on its sustainable development in the Europe. They find that organic farming payments
contribute on average 4–6% of gross output in the Western European countries and 4–
19% in the Eastern European countries studied. Organic farming payments account for
10–30% of family farm income plus wages in Western European study countries and—
after EU accession—up to three-quarters in some of the Eastern European countries, thus
highlighting the considerable vulnerability of organic farms to changes in organic
farming policy.

2.3 Concluding Remarks

Overall, the literature illustrates that yields of individual crops on organic farms
are on average below that of on conventional farms, but variation is substantial. The
organic farms yield gap significantly differed between crop groups and regions. The
organic–conventional yield gap increases as conventional yields increase. The organic
farms are less profitable when compared with conventional farms. There is a lack of state
specific study to assess the economic viability of organic farming in Haryana. The
present study is an attempt towards filling this gap in the literature. More specifically, we
gauge whether the conversion of conventional farms to organic farms is economically
feasible in Haryana or not.

4
This claim was not found true in the field survey made by our research team.
37
 Having studied the empirical literature on the economic performance of organic
farming, in the next Chapter we examine the growth trend in the organic farming for the
world at large.

38
 CHAPTER 3
GLOBAL ORGANIC FARMING

In this Chapter, we examine the trends in organic farming in the leading producers
and for the world at large. It is broadly divided into four sections. Section 3.1 relates the
growth trends in the area covered by organic agriculture and the number of organic
producers. In Section 3.2, we look at the development of the world organic market on a
regional basis. Section 3.3 provides an overview of the standard and regulations
developed for organic products. Section 3.4 summarizes the discussion.

3.1 TIME PROFILE OF WORLD ORGANIC FARMING

Figure 3.1 conspicuously displays the trend in growth of the world’s total organic
agricultural land during 1999-2011. A look at the figure reveals an increasing trend in the
world’s total organic agricultural land, increased from 11 million hectares in 1999 to 37.2
million hectares in 2011, a 238.18% growth. However, the world’s total organic
agricultural land area has remained stable between 2010 and 2011.
Figure 3.1
Growth of the World Organic Agricultural Land, 1999-2011

39
 Figure 3.2 displays the top ten countries which witnessed the largest increase in
organic farmland in 2011. A glance at the figure clears that in 2011 the highest growth in
organic farmland is noticed in China. It is closely followed by India with an increase of
304.3 million hectares. The other countries in the list are: Spain, Canada, France, Poland,
Russian Federation, Kazakhstan, Turkey and Romania.
Figure 3.2
Ten Countries with the Largest Increase of Organic Farmland, 2011

Table 3.1 gives the share of organic agriculture land in total agricultural land in
the year 2011. The table shows that there are 37.2 million hectares of organic agricultural
land (including in-conversion areas) in 2011. A cursory look at the last row of Table 3.1
reveals that only 0.9% of the world’s total agricultural land has been covered under
organic farming.
The distribution of organic land based on region is displayed in Figure 3.3. The
regions with the largest areas of organic agricultural land are Oceania (12.2 million
hectares, 33% of the world’s total organic agricultural land) and Europe (10.6 million
hectares, 29%) as shown in Figure 3.3. The Latin America has 6.9 million hectares of
organic farmland (18.4%) followed by Asia (3.7 million hectares, 10%), North America
(2.8 million hectares, 7.5%) and Africa (1.1 million hectares, 3%). The countries with the
most organic agricultural land are Australia (12 million hectares), Argentina (3.8 million

40
hectares) and the United States (1.9 million hectares). By region, the highest shares of the
total agricultural land are in Oceania (2.9%) and in the Europe (2.2%).
Table 3.1
World Organic Agriculture Land, 2011
Continent Organic agriculture land Share of total agriculture
(ha, 000) land (%)
Africa 1073.66 0.1
Asia 3706.28 0.3
Europe 10637.13 2.2
Lain America 6857.61 1.1
Northern America 2790.16 0.7
Oceania 12185.84 2.9
Total 37245.69 0.9
Source: FIBL-IFOAM Survey 2013.

In respect of growth in the area covered by organic farming on a regional basis,

we note that there has been an increase of the organic agricultural land in Asia, Europe,
North America and Oceania.
Figure 3.3
Distribution of Organic Agricultural Land by Region, 2011

Figure 3.4 depicts the top ten countries which have devoted highest part of their
agricultural land to the organic farming in 2011. It is clear from the figure that in these
ten countries more than 10% of the agricultural land is organic. The figure shows that

41
organic agriculture constitutes highest share in the Malvinas, 35.9%. It is followed by
Liechtenstein which has converted 29.3% of the total agricultural land into organic land.
The other countries in the list are Austria with a coverage of 19.7% area under organic
farming, France with 17.5%, Sweden with 15.4%, Estonia with 14.8%, Samoa 11.8%,
Switzerland with 11.7%, Czech Republic with 10.8% and Latvia with 10.4%.
Figure 3.4
Countries With the Highest Shares of Organic Agricultural Land, 2011

Figure 3.5 shows the growth trend in the number of the world’s total organic
producers during 2000-01 to 2011-12. A glance at the figure makes it clear that the
number of organic producers has exhibited an increasing trend, moved up from 0.25
million producers in 2000-01 to 1.8 million producers in 2011-12.
Figure 3.5
Growth of the Number of Organic Producers, 2000-2011

42
 Figure 3.6 displays the distribution of organic producers on the regional basis in
2011. The figure shows that 34% of the world’s total organic producers are in Asia,
followed by Africa (30%) and the Europe (16%).
Figure 3.6
Distribution of Organic Producers by Region, 2011

It may be seen from Figure 3.7 that the countries with the most organic producers
are: India (547’591), Uganda (188’625, in 2010) and Mexico (169’570) in 2011.
Figure 3.7
Ten Countries with the Most Organic Producers, 2011

It may be added here that about one third of the world’s total organic agricultural
land (12 million hectares) and more than 80% (1.5 million) of the organic producers are

43
in developing countries and emerging markets. The land use details were available for
almost 90% of the organic agricultural land. Unfortunately, some countries with very
large organic areas, such as Australia, Brazil, China and India had no or only little
information on their land use.
The information on the development of organic land use pattern during 2004-
2011 is displayed in Figure 3.8. A cursory look at the figure reveals that almost two-
thirds of the total organic agricultural land was grassland/grazing area (23.2 million
hectares). With a total of at least 6.3 million hectares, arable land constitutes 17% of the
organic agricultural land. An increase of 7% over 2010 was reported for the area covered
by arable crops. Most of this category of land is used for cereals including rice (2.6
million hectares), followed by green fodder from arable land (2.2 million hectares),
oilseeds (0.5 million hectares), protein crops (0.3 million hectares), and vegetables (0.2
million hectares).
Figure 3.8
Development of Organic Land Use

Figure 3.8 also shows that the permanent crops account for approximately 7% of
the organic agricultural land, amounting to 2.6 million hectares. It may be noted that
compared with the revised data of the previous survey, the permanent cropland has
remained steady.
The pattern of use of permanent crop land is shown in Figure 3.9. The figure
shows that the most important permanent crops are coffee (with 0.6 million hectares,
constituting almost one-fifth of the organic permanent cropland), olives (0.5 million

44
hectares), followed by nuts and grapes (0.3 million hectares each) and cocoa (0.2 million
hectares).
Figure 3.9
Use of Permanent Crop Land (Total 2.6 million hectares)

Most of the wild collection area (including areas for beekeeping) is in the Europe
(36% of the global total) and Africa (35%). Not much detail on the crops harvested is
available. Berries, medicinal and aromatic plants, and fruit are among the most important
crops. The information on share of different crops in the total arable crop land is shown
in Figure 3.10.
Figure 3.10
Use of Arable Crops Land (Total 6.3 million hectares)

45
 A look at the figure illustrates that cereals are accounted for the major part of the
total arable crop land, a share of 40% in 2011. Whereas vegetables cover only 4% of the
total arable crop land.

3.2 GLOBAL MARKET FOR ORGANIC PRODUCTS

We now turn to analyze the present state of the global market for organic
products. In spite of the slowdown in the global economy, international sales of organic
products continue to rise. The organic food & drink sales reached almost US $63 billion
in 2011. The market has expanded by 170% since 2002. The demand for organic products
is mainly in North America and Europe; these two regions comprise more than 90% of
sales. Although organic farming is now practiced in every continent, demand is
concentrated in these regions. The production of organic foods in other regions,
especially Asia, Latin America and Africa is mainly export-geared. The organic food
sector in some countries is almost entirely dependent on exports.
Table 3.2 summarizes the information on the leading organic producers in 2011.
The countries with the largest organic markets were the United States, Germany and
France in 2011. It may be seen from Table 3.2 that the largest single market was the
United States. The highest per capita consumption was in Switzerland, Denmark, and
Luxemburg. The highest market shares were reached in Denmark, Switzerland and
Austria. Next, we examine the present state of the organic market on regional basis.
Africa
There are slightly more than one million hectares of certified organic agricultural
land in Africa. This constitutes about 3% of the world’s organic agricultural land. There
were 541’000 producers. Uganda is the country with the largest organic area (with more
than 220’000 hectares) and with the largest number of organic producers. The country
with the highest share of organic agricultural land is the island state Sao Tome and
Principe with 8% of its agricultural area being organic. The majority of certified organic
produce in Africa is destined for export markets. Key crops are coffee, olives, cocoa,
oilseeds, and cotton. The European Union is Africa’s largest market for agricultural
produce. There is a growing recognition among policy makers that organic agriculture

46
has a significant role to play in addressing the pressing problems of food insecurity,
poverty, and climate change in Africa. Significant breakthroughs were achieved in 2012.
Table 3.2
Leading Organic Producers, 2011
Indicator World
Countries with data 2011: 162 countries
on certified organic
agriculture
Organic agricultural 2011: 37.2 million
land hectares
(1999: 11 million hectares)
Share of total 2011: 0.86 %
agricultural land
Further, non 2011: 32.5 million
agricultural hectares (2010: 43 million
Organic areas (mainly hectares; 2009: 41 million
wild collection) hectares)
Producers 1.8 million producers
(2010: 1.6 million
producers; 2009: 1.8
million producers)
Organic market size 62.9 billion US dollars
(2010: 59.1 billion US
dollars 1999: 15.2 billion
US dollars)
Source: Organic Monitor
Per capita 2011: 9.02 US dollars
consumption
Number of countries 86 countries
with organic (2010: 84 countries)
regulations 2011
Organic certifiers 2012: 576 certifiers
2010 (2011: 549; 2010 532)
Number of IFOAM 1.1.2013: 766 affiliates
affiliates from 117 countries
Sources: FiBL and IFOAM; for total global market: Organic Monitor; for number of
certifiers: Organic Standard/Grolink.
Leading Countries
-
Australia (12 mio. hectares, 2009)
Argentina (3.8 mio. hectares) US
(1.9 mio. hectares, 2008)
Falkland Islands (Malvinas) (35.9
%) Liechtenstein (29.3 %) Austria
(19.7 %)
Finland (7 million hectares)
Zambia (5.9 million hectares;
2009) India (4.5 million hectares)
India (547’591), Uganda (188'625,
2010), Mexico (169’570)
US (21 billion euros or 29 billion
US dollars), Germany (6.6 billion
euros or 9.2 billion US dollars)
France (3.7 billion euros or 5.2
billion US dollars)
Switzerland (177.4 euros or 250.4
USD), Denmark (161.9 euros or
225.7 USD) Luxemburg (134.3
euros or 187.3 USD)
-
South Korea, Japan, USA
Germany: 96 affiliates; India: 46
affiliates; China: 40 affiliates;
United States: 33 affiliates: The
Netherlands: 31 affiliates
47
 Currently, the Action Plan of the Ecological Organic Agriculture (EOA) Initiative
has been implemented on a pilot basis in six countries: Kenya, Tanzania, Uganda, and
Ethiopia in eastern Africa; Nigeria in western Africa; and Zambia in southern Africa. At
the Second African Organic Conference held in Lusaka, Zambia, in May 2012, “The
Lusaka Declaration on Mainstreaming Organic Agriculture into the African Development
Agenda” was adopted. It will be used to continue lobbying a comprehensive range of
stakeholders capable of unlocking the potential that organic/ecological agriculture offers
for Africa.
Asia
The total organic agricultural area in Asia is nearly 3.7 million hectares. This
constitutes 10% of the world’s organic agricultural land. There were almost 0.6 million
producers; 0.55 million are in India. The leading countries by area are China (1.9 million
hectares) and India (1.1 million hectares); Timor-Leste has the highest proportion of
organic agricultural land (almost 7%). Compared with 2010, organic agricultural land
increased by almost one million hectares, mainly due to major increases in China and
India. Market and trade data remain scarce.
The Asian market for organic products is growing at a steady rate. Rising
awareness of organic production methods is fuelling demand for organic food & drink.
The continent is, however, divided in terms of consumption and production. Most organic
product sales are from the affluent countries, such as Japan, South Korea, Taiwan, Hong
Kong, Malaysia and Singapore. However, a small share of the organic products sold is
grown in these countries. Large quantities of organic food & drink products (especially
processed foods) are imported from Australasia, Europe and the US into these countries.
Other Asian countries mainly have export-geared organic food sectors whereby
organic crops are grown for other regions. The Chinese revised organic rules,
implemented in March 2012, were the big topic in the region in 2012. Reports from
country contacts noted that 2012 has been a fair to good year for sector development.
Domestic markets based on participatory guarantee systems are growing. Resurgence in
regional collaboration, which was boosted by the IFOAM Organic World Congress held
in November 2011 in Korea, precipitated the reconstitution of Organic Asia as an Internal
Body of IFOAM.

48
Europe
As of the end of 2011, 10.6 million hectares of agricultural land in Europe were
managed organically on almost 290'000 farms. In Europe, 2.2% of the agricultural area,
and in the European Union, 5.4% of the agricultural area is organic. About 29% of the
world's organic land is in Europe. Compared to 2010, organic farmland increased by 0.6
million hectares. The countries with the largest organic agricultural area are Spain (1.6
million hectares), Italy (1.1 million hectares), and Germany (1 million hectares). There
are seven countries in Europe with more than 10% organic agricultural land:
Liechtenstein (29.3%), Austria (19.7%), Sweden (15.2%), Estonia (14.8%), Switzerland
(11.7%), Czech Republic (10.7%) and Latvia (10.4%). Sales of organic products were
approximately 21.5 billion Euros in 2011, an increase of 9% over 2010. The largest
market for organic products in 2011 was Germany with a turnover of 6.6 billion euros,
followed by France 3.8 billion euros) and the UK (1.9 billion euros) (see article by Diana
Schaack et al., page 224). The new research project OrganicDataNetwork that was
launched in early 2012 is expected to be a major step towards improving European
market data (see art icles by project coordinator Raffaele Zanoli, page 230, and by Home
et al., page 232).
Currently a revision process of the EU regulation is underway, which was started
with three hearings at the Commission in 2012. In January 2013, a consultation for the
review of the European policy on organic agriculture was launched by the European
Commission. Regarding organic farming research, it is expected that the successful work
of the Technology Platform TP Organics will result in more funding for organic farming
research under the European Union’s next framework programme. A number of country
reports about organic farming in south eastern European countries are included in this
book; they all show the increasing importance of organic farming in these countries:
Albania by Iris Kazazi and Thomas Bernet (page 234), Hungary by Zoltán Dezsény and
Dóra Drexler (page 239), Kosovo by Sylë Sylanaj (page 244), Monenegro by Natasa
Mirecki (page 246) and Serbia by Guido Haas (page 251).
Latin America
In Latin America, more than 315’000 producers managed 6.9 million hectares of
agricultural land organically in 2011. This constitutes 18% of the world’s organic land
and 1.1% of the region’s agricultural land. The leading countries are Argentina (4.2
49
million hectares), Uruguay (0.9 million hectares, 2006) and Brazil (0.7 million hectares).
The highest shares of organic agricultural land are in the Falkland Islands/Malvinas
(35.9%), French Guyana (17.5%), and the Dominican Republic (9.5%).
While exports remain the main activity, the domestic market for organic products
is becoming more diverse and is steadily growing; especially in Mexico, Costa Rica and
South America. The most developed domestic market is in Brazil, in which farmers’
street markets and cooperatives have been organized for 30 years, and where a balance
has been kept between domestic and international organic markets. Following Brazil,
other countries in the region, including Ecuador, Colombia, Mexico and Peru, have
started to develop alternative certification schemes and marketing strategies aiming at
directly reaching responsible consumers. The main destination markets for organic
exports, which constitute approximately 85% of the region’s production, are the
European Union, the United States, and Japan. For countries with tropical and mountain
ecosystems, the main organic export products are coffee, cacao, banana, and quinoa. For
countries with extensive land areas with pastures for animal grazing, the main products
are meat and wool. Argentina and Costa Rica are the only countries in the region with
third country status for the European Union although most Latin American countries are
applying for this status: a process that started ten years ago when governmental organic
regulations began to be developed in the region. For details see article by Patricia Flores
on page 258.
North America
In North America, almost 2.8 million hectares of farmland are managed
organically, of these nearly two million in the United States (2008 data) and 0.8 million
in Canada representing approximately 0.7% of the total agricultural area in the region and
7% of the world’s organic agricultural land.
Driven by consumer choice, the U.S. organic industry grew by 9.5% overall in
2011 to reach 31.5 billion US dollars in sales. Of this, the organic food and beverage
sector was valued at 29.22 billion US dollars, according to findings from the Organic
Trade Association’s (OTA’s) 2012 Organic Industry Survey. In the U.S., overall organic
product sales growth of 9.5% continued to outpace total sales of comparable
conventionally produced food and non-food items, which experienced 4.7% growth.
Organic food sales experienced 9.4% growth in 2011. The easing of the recession,
50
consumer price inflation due to input price increases, and consumers’ increasing desire
for convenience products were all factors that elevated growth for the year. The organic
food sector grew by 2.5 billion US dollars during 2011, with the fruit and vegetable
category contributing close to 50% of the growth. The fastest growing sector was the
meat, fish & poultry category, posting 13% growth over 2010 sales.
Canada‘s organic market continues to grow and broaden at the consumer level,
with evidence of many new product offerings, a continued “mainstreaming” of organic
products into conventional retail locations, and obvious growth in non-food sectors such
as personal care. In the absence of more current data, the Canada Organic Trade
Association (COTA) has maintained its estimated market value of 2.6 billion Canadian
dollars (2010), though it is likely this significantly underrepresents the true market place.
For the U.S. organic sector, the biggest milestone for 2012 was the signing and
implementation of an historic equivalency arrangement between the United States and
European Union (EU). In late 2012, Swiss and Canadian authorities announced an
equivalency arrangement between the two countries
Oceania
This region includes Australia, New Zealand, and Pacific Island states including
Fiji, Papua New Guinea, Tonga, and Vanuatu, among others. Altogether, there were
almost 14’000 producers, managing 12.2 million hectares. This constitutes 2.9% of the
agricultural land in the region and 33% of the world’s organic land. More than 98% of
the organic land in the region is in Australia (12 million hectares in 2009, 97% of which
is extensive grazing land), followed by New Zealand (133’000 hectares), and Samoa
(34’000 hectares). The highest shares of all agricultural land are in Samoa (11.8%),
followed by Australia (2.9%, 2009) and the Solomon Islands (1.6%). Growth in the
organic industry in Australia, New Zealand, and the Pacific Islands has been strongly
influenced by rapidly growing overseas demand; domestic sales are, however, also
growing. In Australia, the domestic market was valued at 1.15 billion Australian dollars
in 2011-121 and in New Zealand at 360 million New Zealand dollars (2011).
There has been little change in the last few years of the Australian regulatory
instruments overseeing sales of domestic and export products. The Australian Standard
for Organic and Biodynamic Products (AS6000) was published by Standards Australia in

51
2009 to establish a domestic standard for certification of organic products, but to date has
not been broadly adopted by the industry for certification. As the growth of the
Australian market continues, the structures of the industry informing policy development
are also undergoing some change. The peak body of the Australian industry, the Organic
Federation of Australia (OFA), has delivered considerable outputs and continues to
respond to Australian and international policy reviews in agriculture and food policy. As
to research, the Rural Industries Research and Development Corporation (RIRDC) has
practically ceased its activities related to organic farming and there seems to be very little
going on in the area of public funding of research and education that is specific to organic
agriculture in Australia.
Most of the organically certified products from the Pacific Islands are produced
for export. Key products are vanilla, coconut, and tropical fruit. The main international
markets are Australia and New Zealand, due to their proximity, although Japan is a
growing market and other markets include North America and the European Union.
Domestic markets for organic certified products are not very developed, and in some
cases are non-existent. National governments continue to support certification costs for
small holders in Samoa and Tonga. In September 2012, the Ministers of Agriculture and
Forestry Conference in Fiji endorsed the recommendation to include mainstream organic
agriculture into the agriculture strategies of the Secretariat of the Pacific Community and
that of the individual countries. This is an encouraging step and should facilitate
increased support for organic growers across the region. Momentum of the movement
remains strong across the region, and the outlook for the development of organics in the
region is positive. Interest in organic products from the region appears to be growing.

3.3 ORGANIC STANDARDS AND REGULATIONS

In this section, we provide a brief review of the standards and regulations

developed for organic farm produces. According to the FiBL survey on organic rules and
regulations, the number of countries with organic standards has increased to 86. There are
26 countries that are in the process of drafting legislation. A major development in 2012
was that the European Union and the United States achieved a breakthrough in their
negotiations concerning the mutual recognition of their organic standards and control
systems. The agreement makes it possible for organic products (with a few exceptions)
52
certified in the EU or the USA to be sold in the other country/region without any further
inspection or certification. The EU-US agreement came into force by July 1, 2012
together with the revised European import scheme for organic products. With the new EU
scheme, imports in the EU are possible for products certified by a control body
recognized for operations in the respective export country. The EU recognizes
certification bodies either via the so-called Third Country list or directly. In the Asian
region, the dominating topic in 2012 was the implementation of revised production rules
in China – further tightening the already strict rules.
In 2010, IFOAM led the way forward by creating the COROS – Common
Objectives and Requirements of Organic Standards. Standards deemed to be equivalent to
the COROS can be included in the IFOAM Family of Standards; to draw a line between
what is organic and what is not. The Family is a key part of the Organic Guarantee
System, which qualifies as a valid standard because it is deemed equivalent to the
COROS. Aiming to further lead and unite the organic world, IFOAM offers a branding
mark for products from operators in good standing in the OGS - the Global Organic
Mark. In 2012, IFOAM began forming partnerships in Thailand and Malaysia with the
first organizations to act as agents for spreading the Global Organic Mark in their
respective countries. IFOAM anticipates further promotion of the Mark in other
countries, by other agents and through direct efforts from the IFOAM Head Office itself.
The total number of certification bodies is 576; up from 549 in 2011. Most
certification bodies are located in the European Union, South Korea, Japan, the United
States, China, India and Canada. For the first time, Asia now has more organic
certification bodies than Europe. There has been a slight decrease in the number of
certification bodies in most regions of the world, although the number has increased
rapidly in South Korea.
The Participatory Guarantee Systems (PGS) are locally focused quality assurance
systems. They certify producers based on active participation of stakeholders and are
built on a foundation of trust, social networks, and knowledge exchange. It is estimated
that at least 41 PGS initiatives exist now on all continents, and a similar number of
initiatives are currently under development. Asia and Latin America remain the leaders in
terms of both the number of farmers certified through PGS and the level of recognition
achieved by the national governments.
53
3.4 SUMMING UP

In this Chapter, we have examined the growth trends in the world organic
farming. We note that the organic farming constitutes a tiny part of the world’s total
agricultural land, only 0.9% in 2011. The Oceania has devoted largest proportion of the
agricultural land to the organic farming, 2.9% in 2011. In absolute term, the area under
organic farming has grown more than thrice during the last decade. China has devoted the
largest land to the organic farming. It is followed by India, Spain, Canada, France,
Poland, Russian Federation, Kazakhstan, Turkey and Romania.
The countries with the highest share of organic agricultural land included
Malvinas, Liechtenstein, Austria, France, Sweden, Estonia, Samoa, Switzerland, Czech
Republic and Latvia. The number of organic producers has grown significantly during the
last decade. The largest number of organic producers is in India. The largest proportion of
the world’s total organic land is devoted arable crops: the cereals constitute the highest
share.
In spite of the slowdown in the global economy, international sales of organic
products continue to rise. Organic monitor estimates organic food & drink sales reached
almost US $63 billion in 2011. The market has expanded by 170% since 2002. Demand
for organic products is mainly in North America and Europe; these two regions comprise
more than 90% of sales. Although organic farming is now practiced in every continent,
demand is concentrated in these regions. Production of organic foods in other regions,
especially Asia, Latin America and Africa is mainly export-geared. The organic food
sector in some countries is almost entirely dependent on exports.
Having studied the present state of the organic farming for the world at large, the
next Chapter is devoted to a comparison of input use pattern and yield of organic crops
with that of conventional crops.

54
 CHAPTER 4
ECONOMICS OF ORGANIC FARMING IN
HARYANA

This Chapter relates the economics of organic farming in Haryana.5 The

conventional and organic farms are compared in terms of inputs use pattern, cost of
cultivation, yield, value of output and returns over variable cost. It is shown that presently
organic farming is economically not viable in Haryana. It is organized into three sections.
In Section 4.1, we present the inputs use pattern, cost of production, yield, value of output
and returns over variable cost for organic wheat. It is followed by an examination of
economic performance of the organic paddy cultivation in Haryana. Section 4.3
summarizes the main findings and concludes the discussion.

4.1 INTRODUCTION

The input-use pattern of organic and inorganic wheat cultivation in Haryana was
studied. The results are presented in Table 4.1. The organic pesticides used in organic
wheat were prepared by the mixture of many products like awk, sambola, onion, chilli,
neem, etc. Its average cost was about Rs 150/acre. The jeev amrit was prepared by
mixing the urine (10 litres) of cows, especially of indigenous varieties, with dung (10 kg)
and was applied with irrigation to the crops after a week. Cost on bio-dynamics
preparation was not included because very few farmers used this bio-fertilizer and it was
provided by an NGO at nominal charges.
In the case of inorganic wheat, a considerable amount was spent on urea, DAP,
herbicides and their applications to the crops. The average cost on marketing of organic
wheat was Rs 250/ acre as against Rs 150/acre in case of inorganic wheat, it was because

5
Note that the crops grown in organic farms in Haryana are wheat and rice. These are chief crops grown in
the state (Ohlan, 2012). For vegetables, viz., tomato, carats, potato, the principal investigator at his farm in
Rohtak district, Haryana, carried out three experiments. The major observations on organic farm produces
were: (1) yield declined drastically, (2) farm produce attractiveness worsened, (4) size reduced, and (5)
taste decreased.

55
of less number of organic wheat buyers which led to an increase in marketing hours and
consequently marketing cost.
Table 4.1
Input-use Pattern of Organic and Inorganic Wheat Crops by Selected Sample
Farmers of Haryana: 2012-13 (per acre)
Particular Organic growers Inorganic growers
(Quantity) (Quantity)
Seed (kg) 41 40
FYM + jeev amrit 82 40
(q)
Vermi compost (q) 4.5 -
Organic pesticides -
Plant protection - 1.20
spray (No.)
Urea (kg) - 120
DAP (kg) - 70
Herbicides (No.) - 1
Irrigation (No.) 4 4
Human labour 189 124
(hours)
Tractor (hours) 5.6 5.6
Harvesting/threshing 3 4
(hours)
Marketing (hours) 6 5
Source: Author’s Field Survey.
Table 4.2 provides the information on labour-use pattern in different operations of
wheat production under organic and inorganic farming in terms of hours/per acre in
Haryana in 2012-13. The table shows that the labour hours spent in various operations of
wheat cultivation were more in organic (187 hours/ acre) than inorganic (129/acre)
wheat. The labour requirement was almost similar in some operations such as land
preparation, sowing, irrigation, etc. in organic and inorganic wheat cultivation but
operations like interculture, manure preparations and application, biodynamics
preparation and usage, and preparation and application of vermicompost were found high
labour demanding. The threshing/harvesting and transportation cost in organic wheat is
slightly low in comparison of organic wheat. It may be due to less quantity of gross
straw. These labour-intensive operations enhanced the total labour requirement for
organic wheat cultivation considerably. Hence, organic farming has been found more
labour-intensive and generates more employment opportunities in the rural areas.

56
 Table 4.2
Labour-use Pattern in Different Operations of Wheat Production under Organic
and Inorganic Farming in Haryana: 2012-13 (hours/per acre)
Field operation Organic growers Inorganic growers
hours/per percentage hours/per acre percentage
acre share share
Land preparation 12 6.42 12 9.30
Sowing 2 1.07 2 1.55
Irrigation 18 9.63 18 13.95
FYM application - 0.00 10 7.75
Preparation of 14 7.49 - -
vermicompost and
its application
Preparation and 4 2.14 - -
application of
organic pesticide
FYM manure 28 14.97 - -
preparation and
application
Jeev amrit and 15 8.02 - -
biodynamics
preparation and
usage
Interculture 35 18.72 0.00
Chemical fertilizer - 0.00 16 12.40
application
Plant protection - 0.00 6 4.65
chemical
application
Threshing 28 14.97 32 24.81
/harvesting
Transportation 9 4.81 11 8.53
Others 22 11.76 22 17.05
Total 187 100 129 100
Source: Author’s Field Survey.
Table 4.3 gives the information on input cost, yield, value of product, gross
returns and returns over variable cost of organic and inorganic wheat cultivation in
Haryana in 2012-13. A look at Table 4.3 reveals that the net return over variable cost of
inorganic wheat (Rs 2832/acre) is about eight times higher than that of organic wheat (Rs
2832/acre). The returns over variable cost of inorganic wheat were Rs 19870/acre more in
comparison to organic wheat, and the difference was significant at 1% probability level.

57
 The low returns on organic wheat cultivation are mainly due low yield and
absence of premium price.
Table 4.3
Economics of Organic and Inorganic Wheat Cultivation in Haryana: 2012-13
(Rs/acre)
Field operation Organic growers Inorganic growers
Total input cost 9000 11235
Interest on working capital 200 250
Irrigation 1200 1200
Total variable cost 10400 12685
Yield(q/acre) 8 21.30*
Price (Rs./q) 1350α 1350
Value of main product 10800 28755
Value of by-product 2432 5182
Gross returns 13232 33937
Return over variable cost 2832 22702*
Note: * Significantly higher at 1% probability level (when compared inorganic wheat
with organic wheat). α = Premium price was not available to organic wheat in Haryana.

Source: Author’s Field Survey.

The yield of inorganic wheat (21.3 quintal/acre) is more than twice that of organic
wheat (8 quintal/acre). The total variable cost of inorganic wheat (Rs. 12685/acre) is
higher than that of organic wheat (Rs. 10400/acre). However, this difference in input
costs is fully mitigated by gap in their respective yield. Similarly, the profitability of
organic wheat is much below that inorganic wheat.
In view of low yield, low profit and low net returns over input cost, it may be
concluded that presently the production of organic wheat cultivation is economically
not viable in Haryana.

4.2 ECONOMIC PERFORMANCE OF ORGANIC PADDY

Table 4.4 contains the information on input-use pattern of organic and inorganic
paddy crops by selected sample farmers of Haryana in 2012-13. The table displays that
the seed requirement for both types of paddy is same. The human labour requirement in
organic paddy cultivation is higher than that of inorganic paddy, mainly due to
application of large doses of organic fertilizer and pesticides. In case of irrigation, some
inorganic growers use the chemical to reduce the soil water absorption power. Therefore,

58
in cultivation of inorganic paddy the irrigation requirement is less than that of organic
paddy.
Table 4.4
Input-use Pattern of Organic and Inorganic Paddy Crops by Selected Sample
Farmers of Haryana: 2012-13 (per acre)
Particular Organic growers Inorganic growers
(Quantity) (Quantity)
Seed (kg) 20 20
FYM + jeev amrit 82 20
(q)
Vermi compost (q) 4.5 -
Organic pesticides -
Plant protection - 2
spray (No.)
Urea (kg) - 60
DAP (kg) - 30
Herbicides (No.) - 1
Irrigation (No.) 10 9
Human labour 290 245
(hours)
Tractor (hours) 5.6 5.6
Harvesting/threshing 3 4
(hours)
Marketing (hours) 6 5
Source: Author’s Field Survey.
Table 4.5 illustrates the variable cost, yield, value of product, gross returns and
returns over variable cost of organic and inorganic paddy cultivation in Haryana in 2012-
13. A glance at Table 4.5 makes it clear that the net return over variable cost of inorganic
paddy (Rs 5702/acre) is about four times higher than that of organic paddy (Rs
1124/acre). The returns over variable cost of inorganic paddy were Rs 4578/acre more in
comparison to organic paddy, and this gap was significant at 1% probability level.
The low in returns on organic paddy is mainly due its low yield and absence of
premium price as in case of wheat. The yield of inorganic paddy (16 quintal/acre) is
significantly higher than that of organic paddy (10 quintal/acre). The total variable cost of
inorganic paddy (Rs 15294/acre) is higher than that of organic paddy (Rs 11356/acre).
However, this difference in input costs is fully mitigated by gap in their respective yield.
Similarly, the profitability of organic paddy is much below the inorganic paddy. These
results indicating low profit in organic farming are in line with the finding of Uematsu
59
and Mishra (2012) those argue that lack of economic incentives can be an important
barrier to conversion to organic farming.
In view of low yield, low profit and low net returns over input cost, it may be
concluded that presently the production of organic paddy cultivation is
economically not viable in Haryana.
Table 4.5
Economics of Organic and Inorganic Paddy Cultivation in Haryana: 2012-13
(Rs/acre)
Field operation Organic growers Inorganic growers
Total input cost 9386 13274
Interest on working capital 300 350
Irrigation 1670 1670
Total variable cost 11356 15294
Yield(q/acre) 10 16
Price (Rs./q) 1280 1280
Value of main product 12080 20480
Value of by-product 400 516
Gross returns 12480 20996
Return over variable cost 1124 5702
Note: * Significantly higher at 1% probability level (when compared inorganic paddy
with organic paddy). α = Premium price was not available to organic paddy in Haryana.

Source: Author’s Field Survey.

In respect of a comparison of effect of organic practices on economic
performance of the cultivation of wheat and paddy, it may be noted that it is more
disadvantageous to go for the production of organic wheat than that of organic paddy.
These results indicating poor yield of organic crops in Haryana lend further support to the
majority of the literature presented in Chapter 2.

4.3 SUMMING UP

To sum up, we have examined the economic viability of organic wheat and paddy
cultivation in Haryana. These are the chief crops grown in the state. We find that organic
farming provides low yield, low profit and low returns over variable cost. The situation
was worst in production of organic wheat. In addition, the premium prices for organic
wheat and paddy were not available in Haryana. Based on our findings we conclude that
presently organic wheat and rice cultivation is economically not viable in Haryana.

60
 CHAPTER 5
CONSTRAINTS IN ORGANIC FARMING
IN HARYANA

This Chapter deals with the production and financial constraints faced by farmers
in the adoption of and continuing with organic farming in Haryana. The information was
obtained by focus group discussion as well as through personal interview of the
individual farmers.6 This Chapter is broadly divided into four sections. Section 5.1 is
introductory one. In Section 5.2, we provide a thorough discussion of the constraints
faced by farmers in adopting organic farming. In what follows, Section 5.3 is devoted to
the quantitative analysis of farmers perceptions on organic farming. The way forward for
organic farming is provided in Section 5.4. The final Section concludes the discussion.

5.1 INTRODUCTION

It is well known that how difficult it is to be financially successful as a family

farmer in the Haryana State today. In many areas, farmers sell off their land to developers
because the land is worth more than the value of the crops they can grow and sell. Often
it is stated that organic farming is a more profitable way to go. In addition, activists
frequently say that everyone should be eating organic food because it is better for
people's health and the environment. However, we wondered about organic farming from
the farmers’ point of view. This Chapter is based on in-depth interviews conducted with
farmers living in different parts of the Haryana State.
Organic farmers from different regions of the Haryana identified a wide range of
risks to their operations in a series of focus group discussions during 2011 to 2013. The
focus groups were facilitated by Maharshi Dayanand University in the cooperation with a
research team from Institute of Management Studies and Research constituted to explore
the constraints faced by organic farmers. Marketing of organic production was seen as a
major risk, particularly by wheat and rice farmers. Focus group discussions participants

6
Five workshops for organic farmers were organized at Rohtak, Haryana, and constraints in adoption of
and continuing with organic farming were noted during 2010-2013.
61
producing wheat and rice—many of whom knew about and had not obtained crop
insurance—raised concerns about coverage offered, including the need for insurance to
reflect the higher prices received for organic crops. Most organic producers participating
in the focus groups had little knowledge of crop insurance. When provided with basic
information about crop insurance, operators of small fruit and vegetable farms were
sceptical about its usefulness for their type of operation.

5.2 MAJOR CONSTRAINTS IN ADOPTION OF ORGANIC FARMING

PRACTICES IN HARYANA
In this section, we investigate the barriers to a conversion to organic agriculture in
Haryana. Based on our focus group discussion we find out following constraints in the
adoption of and continuing with organic farming in Haryana.
Low Yield
A key issue in the debate on the contribution of organic agriculture to the future
of world agriculture is whether organic agriculture can produce sufficient food to feed the
world. Comparisons of organic and conventional yields play a central role in this debate.
Yields in organic crop production are in general significantly lower than under
conventional management. Recall from the introductory Chapter, Haryana has used
external input intensively, now switching from external input intensive forms of
agriculture, the yield may decline significantly, at least in the initial years of conversion
until the natural soil tilth and fertility are sufficiently developed. As we have already
noted that organic yields of individual crops are on average 40% of conventional yields.
The majority of organic farmers told that they did not observe the recovery in yield of
rice and wheat even after two or three years practicing organic farming which has
reduced their belief in organic farming in meeting their economic needs.
Pest and Weed Control
It is widely known that productivity of crops grown for human consumption is at
risk due to the incidence of pests, especially weeds, pathogens and animal pests. Crop
losses due to these harmful organisms can be substantial and may be prevented, or
reduced, by crop protection measures. Often minor crop losses are economically
acceptable; however, an increase in crop productivity without adequate crop protection
does not make sense, because an increase in attainable yields is often associated with an

62
increased vulnerability to damage inflicted by pests. The yield of cultivated plants is
threatened by competition and destruction from pests in Haryana. Many farmers point
that failure to pest and weed control leads to nil output, which is not affordable.
Low Profit
As we have noted in Chapter 4, the premium prices are not available for organic
produces in Haryana. Similarly, yields in organic farms are lower than conventional and
this is not compensated by lower cost of production. Consequently, organic farming is
less profitable in comparison of conventional farming in Haryana.
Decreasing Size of Farm Holding
It is widely known that because of increasing population pressure and rapid
diversion of cultivated land for non-agricultural purposes the average farm size in
Haryana has been shrinking continuously which was already very small. Besides, the
small and marginal farmers are the significant portion of agriculture in Haryana. In many
cases, the economic situation of these farmers is deprived which makes them out of
farming. Small farm size does not allow them for a long duration experiment
(transitional years of organic farming) for expected yield recovery. In other words, they
cannot afford the transition, even if they want to do so. Many small farmers told that they
could not produce organic cereals even for their families because they have to meet
others needs with marketable surplus received from conventional farming. It is clear that
one of the major difficulties of the new push for organic agriculture in Haryana is small
farm size.
High Indebtedness in Farmers
The biggest obstacle for farmers who would like to convert is that most of them
have so much debt to manage that they need a certain cash income each year, and
therefore have very little flexibility to weather a slightly smaller income for a year or two.
It has been extensively reported in the literature that the incidence of indebtedness―both
formal and informal―is very high in Haryana (for details, see NSSO, 2005). In the focus
group interview, many farmers state that they cannot go for a long gestation period
experiment of organic farming due to loan repayment pressure. Already living with little
means and high debts, they are understandably hesitant to enter any risky undertakings,
as one farmer explained: “Farmers are not financially strong; we have to keep taking
loans in order to continue farming. Most of us are in debt, and therefore we are not
63
motivated to convert even a part of our land into organic, despite our concerns about
health. We do not have any extra money to do something else or to think about anything
else.”
Ever-escalating Agricultural Land Sale Prices
In the recent years, specifically with the shift in political regime in 2005, the land
prices, both government and market prices, in Haryana have gotten fire, more than tripled
in last seven years7. Many farmers, for which living is very hard, have gone for selling
the land for non-farm use. This phenomenon is also discouraging farmers to adopt
organic farming practices.
Lack of Knowledge
Especially the smaller farmers are afraid of entering conversion, at least without
some guidance and moral support from others. Many said that if someone else converts
first, or if many others do it, they would join in. Ram Singh is one of those, he said he
would do what all the other farmers are doing, but he does not know anyone who does
organic farming in his area. There is much uncertainty and lack of knowledge, but a
willingness to try conversion among many of the small farmers exists.
Lack of Institutional Support
Many farmers said they feel positive towards conversion as such, but “we are
concerned about the economy in the first three years, after that we are of the view that the
yield would be similar.” One farmer said, “If there will be an income without urea and
pesticides, then we would prefer to convert to organic, of course, it will be good for our
soil. If we will be supported for those years then we will grow organic for sure.” Others
agreed, “If there were help available for converting to organic, then we would definitely
grow it, then everybody would start doing it.” They said that anybody, it could be the
government, or a NGO, should help the farmer economically, “then he will adopt it, and
he can change quickly; if the government will give us higher prices for organic crops, we
will go for it.”
Small and Inefficient Market
Marketing is the key to success in farming. It is the market where the output price
decision takes place and the fate of the farmer is decided. Lack of proper marketing

7
Even, the Haryana government has doubled the land acquisition rates in the state between 2005 and 2010.
64
infrastructure, practices, pricing, information and regulations like Agricultural Produce
Markets Act are the factors responsible for poor returns and economic harassment to the
farmers, especially so in case of perishable commodities. Marketing system should,
therefore, be more strong and efficient to serve the interest of farmers and consumers.
The mechanism of organic marketing is quite different from that of regular
marketing. Careful selection and development of target markets and distribution channels
are of utmost importance. Hence, another major difficulty arises from marketing, the size
of organic farm produces market in Haryana is tiny. It fails to serve the interest of
farmers and consumers. Marketing activities increase the cost of organic farming.
Such marketing requires not only additional costs, but also specialized skills,
knowhow and experience, all of which unorganized individual farmers would mostly be
incapable of developing. Moreover, reliable market information (on organic products,
trade, trends, quality requirements, and prices), very often outside the reach of the
farmers, would also be another obstacle.
Absence of Price Incentives for Organic Farm Produces
An important aspect of the profitability of organic farms is the opportunity of
receiving higher farm gate prices for organically produced goods than for conventionally
produced ones. What often makes life more difficult for an organic farmer is his inability
to sell his crop at a premium price, because during this transition period product cannot
be sold as “organic”. As we have already noted, the major crops grown in Haryana are
wheat and rice for which the government announces minimum support price and
undertakes procurement operations. However, there is a lack of a price incentive element
for organic farm produces in the government’s minimum support price system. In
Haryana, government’s minimum support prices and procurement operations have a
significant bearing on market prices of farm products. Consequently, farmers are not able
to sell their organic crops at higher prices. In other words, there is an absence of price
incentives for organic farm produces.
Stringent Organic Certification Process
Costs may also arise from information and knowledge gathering and in acquiring
certification and labelling from an established certification agency. The latter could be
prohibitive for small farmers unless there exist some alternatives like small farmers’
group certification and internal control systems of farmers. Another hassle in the
65
certification procedure is the enormous amount of mandatory documentation involved,
often too cumbersome especially for uneducated small farmers. It means a decrease in
income: crops may be less plentiful than with conventional fertilizers and pesticides, and
yet the higher price for organic products won’t yet be possible.
Declining Importance of Agriculture in GDP
Many farmers said significant progress in manufacturing and service sectors with
the increase in the level of education has diverted public, the government and policy
makers’ attention and priority from agriculture to non-agriculture sectors. Furthermore,
the importance of farming in socioeconomic wellbeing of the general masses has been
declining continuously. It has been adversely affecting the interest of the young
generation in pursuing agriculture as a profession. Nonetheless, composting is rarely
practiced, most of the animal wastes, an important source of organic matter is generally
dumped on the roadside. Such socioeconomic changes in Haryana make it difficult to
adopt organic farming, which result in low yield and less profit.
Shortage of Labour
Labour is an important input in the production process. Organic techniques often
turn out to be more labour intensive, wage costs may rise. In the focus group discussion
farmers reported the shortage of labour as an emerging problem hindering practicing
organic farming. Notwithstanding, the wage rate has grown faster than farm produces
prices which has been adversely affecting adoption of organic farming in the State.
Clearly, labour is a major impediment to the adoption of organic agriculture in Haryana.
Inputs Subsidies
In Haryana, most of the farmers are resource poor. In order to check the rising
market prices of food the government bans the exports of different farm products. To
compensate farmers, the government supplies the inputs such as fertilizer and
pesticides at subsidized rate, the financial returns on organic farms are not attractive.
Shortage of Organic Inputs
Adoption of organic farming at large scale requires the availability of organic raw
materials. A shortage of affordable organic fertilizer, pesticides, left organic producers
unable to adopt organic farming. In a focus group discussion, many farmers reported that
organic fertilizer is costly and not easily available.

66
Inputs Management
Decreasing the use of synthetic fertilizers and pesticides goes together with
increasing other inputs. These inputs can be bought or produced on the farm (such as
manure), others come in the form of knowledge about actions to be taken (e.g., timing of
planting or best rotational combinations). In addition, the change in the combination of
inputs may change the effectiveness of certain processes that influence farm output, such
as the cycles of water, nutrients, energy and knowledge (inter-generational). Farmers’
traditional practices are of the key impediments in the successful adoption of organic
agriculture.

5.3 QUANTITATIVE ANALYSIS OF ORGANIC FARMING CONSTRAINTS

In addition to the focus group discussion, constraints in adoption and continuing

with organic farming have also been identified by conducting the personal interview of
the farmers using the schedule. The data on constraints in production, organic inputs and
marketing of organic produces in Haryana are presented in Tables 5.1, 5.2 and 5.3,
respectively. Table 5.1 shows that the maximum number of farmers strongly reported that
they have hindrances in the cultivation of organic crop due to lack of production (88%),
while 50% of the sample farmers reported that organic farming is a slow process, lack of
knowledge of recommended package of practices (30%), lack of capital (40%) and the
unavailability of input materials at the time of cultivation (20%) of the total sample
respondents, respectively.
The problem regarding seed and sowing and the lack of improved seed was
reported by 68%, the high price of seed (30%) and knowledge about seed variety, seed
rate, seed treatment and right time of sowing (20%) of the total sample farmers,
respectively.
The human labour is also one of the important factors which is used in all the
operations during cultivation. The shortage and high wages of human labour was also
observed particularly during sowing and harvesting operations.
The sample respondents were also reported the constraints in irrigation facilities.
It was a costly and irregular supply of electricity (24%), need of more irrigation (30%)
and water supply and non-availability when needed (10%), respectively.

67
 Table 5.1
Production Constraints of Organic Farming in Haryana
S. Constraints and Strongly Agree Unsure Disagree Strongly Mean
No. Reason agree (%) (%) (%) disagree
(%) (%)
1 Predominance of 66 22 8 2 2 4.48
the inorganic
farmers in the
locality
2 Organic farming is 50 12 24 10 4 3.94
a slow process
3 Lack of 88 8 2 2 0 4.82
production
4 Lack of capital 40 28 10 20 2 3.84
5 Lack of 30 20 20 14 16 3.34
knowledge of
recommended
package of
practices
6 Unavailability of 20 36 10 30 4 3.38
input materials in
the time of
cultivation
7 Seed and sowing:
a)Lack of 68 16 10 4 2 4.44
improved seed
b) Costly in nature 30 10 10 30 20 3
c) Knowledge 20 10 16 40 14 2.82
about seed variety,
seed rate, seed
treatment & right
time of sowing
8 Irrigation:
a) Need of more 30 10 6 40 14 3.02
irrigation
b) Costly and 24 14 20 30 12 3.08
irregular supply of
electricity
c) Timely 10 12 60 10 8 3.06
monsoon water is
not available /
water supply not
available when
needed
9 Problem about
68
 human labour:
a) During inter- 62 22 4 10 2 4.32
culture operations
b) During sowing 40 38 10 10 2 4.04
time
c) During plant 68 18 4 6 4 4.4
protection
measures
d) During picking 20 34 6 30 10 3.24
and harvesting
time
e) Shortage and 74 20 2 2 2 4.62
high price of
labour
Note: Mean is calculated using the following weights: Strongly agree = 5, Agree = 4,
Unsure = 3, Disagree = 2, Strongly disagree = 1. Total number of the respondents = 220.
Source: Author’s Field Survey.
The manure, bio-fertilizer and plant protection constraints of sample respondents
toward organic cultivation are presented in Table 5.2. Owing to constraints regarding the
use of manure and bio-fertilizer, it revealed that about 62% of sample respondents
strongly reported having unavailability of desired manure and bio-fertilizer, 56% slow
process of organic manure preparation, 56% of supply agencies at long distance, 66%
more costly in nature, 18% un-utilization of by-product (many crops) and 30%
knowledge about types and recommended doses, of the total sample respondents,
respectively.
Table 5.2
Manures, Bio-Fertilizers and Plant Protection Constraints of Organic Farming in
Haryana
S. Constraints and Strongly Agree Unsure Disagree Strongly Mean
No. Reason agree (%) (%) (%) disagree
(%) (%)
Manures and Bio-
fertilizers:
Unavailability of 62 22 8 6 2 4.36
desired manures &
bio-fertilizers and
difficult method of
its preparation
Costly manures and 54 30 10 4 2 4.3
bio-fertilizers
Non use of by- 18 32 30 10 10 3.38
69
 product (many
crops)
Slow process of 56 30 8 2 4 4.32
organic manure
preparation
Knowledge about 30 20 40 8 2 3.68
type and
recommended
doses
Supply agencies at 56 36 4 2 2 4.42
long distance
2 Plant protection
constraints:
Inclination towards 40 28 20 10 2 3.94
use of chemical
pesticides
Difficult method 44 48 2 4 2 4.28
for preparation of
bio-insecticides
Unavailability of 38 34 20 6 2 4
bio-pesticides
Lack of supply 40 42 10 6 2 4.12
centre
Ineffectiveness of 72 18 4 4 2 4.54
bio-pesticides
Knowledge about 30 40 10 8 12 3.68
type, apply time,
method and proper
dose
Lack of skilled 62 18 4 8 8 4.18
labour
Not use are 44 24 10 14 8 3.82
physical equipment
and resistant
varieties
Note: Mean is calculated using the following weights: Strongly agree = 5, Agree = 4,
Unsure = 3, Disagree = 2, Strongly disagree = 1. Total number of the respondents = 220.
Source: Author’s Field Survey.
The different marketing and other constraints of organic paddy cultivation are
identified during the course of investigation and presented in Table 5.3. The major
marketing constraints noted from the respondents were lack of agencies for purchase of
organic products (82%), non-remunerative prices (76%), followed by lack of marketing
news (74%), purchase agencies at long distance (62%), dependence of middlemen for
70
disposal (54%), lack of storage facilities (32%) and high transportation charges (20%) of
total sample respondents, respectively.
Table 5.3
Marketing and other Major Constraints of Organic Farming in Haryana
S. Constraints and Strongly Agree Unsure Disagree Strongly Mean
No. Reason agree (%) (%) (%) disagree
(%) (%)
1 Marketing
constraints:
Lack of agencies to 82 12 2 2 2 4.7
purchase organic
products
Dependence on 54 26 12 4 4 4.22
middleman for
disposal
Purchase agencies at 62 26 4 6 2 4.4
long distance
More transportation 20 30 30 10 10 3.4
charges
Lack of marketing 74 16 4 4 2 4.56
news
Lack of storage 32 48 8 8 4 3.96
facilities
Price is not 76 14 6 2 2 4.6
remunerative
2 Other constraints:
Lack of proper 50 24 14 8 4 4.08
guidance and training
Irregular visit of 56 28 10 4 2 4.32
agriculture officers
Unavailability of 78 12 4 4 2 4.6
government facilities
Unavailability of loan 20 40 20 14 6 3.54
facilities
Lack of risk ability 42 26 16 10 6 3.88
Lack of testing 28 40 18 12 2 3.8
facilities (soil,
products etc.)
Note: Mean is calculated using the following weights: Strongly agree = 5, Agree = 4,
Unsure = 3, Disagree = 2, Strongly disagree = 1. Total number of the respondents = 220.
Source: Author’s Field Survey.

It was also observed other major constraints that the unavailability of government
facilities (50%), irregular visit of agriculture officers (56%), lack of proper guidance
71
(72%), lack of risk in organic production (42%), lack of testing facilities (28%) and non-
availability of loan facilities (20%) of the total all size farms, respectively. These results
indicating significance of various constraints are similar those obtained by Namdev et al.
(2011) for organic paddy production in Jabalpur District of Madhya Pradesh.

5.4 WAY FORWARD

The potential of organic farming in Haryana is largely untapped. Some of the
major obstacles to the growth of organic agriculture in this state have been described
above. Given these problems, a strong organizational support structure is a prerequisite
for further penetration of organic agriculture in Haryana. Some areas which warrant
appropriate institutional support are: (1) Systematic training in organic agriculture
management and an effective extension network capable of providing adequate technical
advice to the farmers; (2) A low cost and hassle free certification process and technical
assistance for record keeping; (3) An enabling scenario for small farmers' group
certification, internal control system, etc., wherever necessary; (4) Dissemination of
market information and the establishment of marketing channels, both domestic as well
as international; (5) Managing the contacts and transactions with processors, exporters,
and other intermediaries.
While some of these support systems may come from NGO initiatives or from
companies undertaking contract farming, the importance of government intervention in
some form cannot be over emphasized. The initial expenses of conversion, especially
from chemical intensive farming, may be easy to overcome if some financial support is
given to the small farmers. Hence, well-thought-out subsidy and other support schemes
need to be designed. Until now, government supported research initiatives and extension
services in Haryana have displayed blatant bias toward the green revolution technology.
This needs to change in order to create a level playing field for organics. Rigorous
scientific research should be promoted under the Indian Council for Agricultural
Research Institutions, State Universities and Haryana Kisan Ayog to develop better
management techniques and crop varieties suitable for organic farming in Haryana.
Special emphasis should be given to research in the context of dry land of the State,
where organic farming has a huge potential to increase agricultural productivity.

72
5.5 SUMMING UP

In this Chapter, we have analyzed the constraints faced by farmers in converting

their farm form conventional to organic. Overall, this Chapter confirms the importance of
factors influencing the development of the organic farming. These include low yield,
non-availability of higher prices, low profit, shrinking farm size, indebtedness in farmers,
escalating farm land prices, lack of knowledge, lack of institutional support, small market
size, absence of price incentives, stringent organic certification process, declining
importance of agriculture as a source of income, shortage of labour and availability of
input subsidies. Lack of reliable supplies of organic raw materials and the predominance
of conventional farmers are also the major factors that constrain adoption of organic
agriculture in Haryana.
In order to popularize organic farming in Haryana sincere efforts need to be made
by the extension personnel to motivate the farmers to adopt improved production
technology to minimize the yield gap. The district level farm science center such as
Krishi Vigyan Kendra should identify the problems of the farmers and feedback and
solution of constraints be provided in time to the farmers. Manure and bio-fertilizer and
other inputs must be made available through societies and other distribution centres at
village level and it should ensure for supply of quality inputs to farmers to enhance
productivity level. Government officers and other network should be established in each
village to produce organic products from farmers. In addition, the Government should
announce the separate support prices for the organic products.

73
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