The Hindu Business Line : `High costs hinder export of organic products'

THE country's natural advantages in the agriculture sector places it in an gainful position in the world organic market, but certain issues such as high costs, infrastructure constraints, absence of research and non-tariff barriers do pose as stumbling blocks, Export-Import Bank of India (Exim) has said in a paper on export of organic products from the country.

The Exim Bank paper has suggested the creation of a nodal agency for the promotion of organic cultivation exports. The best prospects for Indian organic industry exist in exports of tropical produce including crops such as coffee, tea, spices, basmati rice, oleoresins and fruits such as mango, banana, pineapple, grapes.

The country's organic industry is small in terms of production as well as exports. In 2002, exports stood at Rs 75-100 crore.

The industry is nascent and needs attention on some key issues, the report said. These include costs — an organic farmer incurs a high cost on inspection and certification by a foreign agency, irregular and inadequate supply of agricultural inputs and the absence of a good marketing and distribution network for organic inputs.

The farmer also suffers yield declines during the period of conversion from traditional farming methods to organic methods. "While price premiums for organic produce are known to compensate for the decline in yield, it is in the first three years the farmers face maximum difficulty,'' the paper said.

Indian exports of organic foods are impacted by inadequate transport and storage facilities. There is also lack of processing facilities, the paper added.

Research in the area of organic crop productivity and sustainability, integrated pest management and on bio-agri inputs is very limited. "At present, most of research is being limited to the crops that come directly under the various Commodity Boards,'' the paper said.

In terms of distribution of organic products, barring a few private and government organisations, lack of awareness in the domestic market does not encourage setting up a distribution network for this segment.

Among the recommendations put forward by the Exim Bank report include - focussing on niche varieties to maximise organic premiums at the farm level, processing at source and tying up directly with buyers.

The world organic market is estimated at $ 26 billion, on an area of 20 million ha, accounting for 1 per cent of the world's conventional agriculture production. The key characteristic of organic farming is the use of organic materials in the place of synthetic inputs including fertilisers and agro-chemicals.

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