It is inevitable that in very populous countries such as China and India — where the arable land and irrigation water necessary for agriculture are diminishing on a per capita basis — that more productive methods will be important, and that these land and water resources must be protected.
Thus, as Swami Nathan has noted, organic agriculture should be assessed in relation to the following:
1. Impact on productivity, profitability (including market demand) and income security – particularly for small farmers particularly in the context of the increasing feminization of agriculture.
2. Impact on the ecological foundations essential for sustainable advances in productivity, namely soil health, water (quantity and quality), biodiversity, forests, and personal health.
3. National food and nutrition security not just (physical access but also economic, ecological, and social access).
Organic agriculture is not a panacea that will satisfy all farmers nor is it a complete solution to the world’s food needs, no technology or farming system can do that. In certain situations, particularly very intensive, input-oriented agriculture, organic methods may present significant difficulties — at least initially — in terms of crop yields. There are however reasoned arguments that, at least for small farmers, it can provide more benefits — both direct and indirect — than conventional methods.
Equally compelling on the macro-scale is that organic agriculture can provide several public benefits that by most calculations should make it a very relevant multi-purpose tool for many Asian policy-makers for whom health, food security, and improved incomes are at the top of their priority list.
Food Security:
In China, India, and many Asian countries, food security is a primary concern. In the 1990s about 80% of all the malnourished children lived in countries that had a surplus of food. Even though the macro problem of enough food at a national level has been resolved in many places, the problem of food security persists within countries.
The rural poor can face malnutrition and food shortages for a number of reasons, and crop failure is one of the more likely. Organic agriculture directly addresses this problem by fostering methods that improve natural soil fertility and stability in order to better withstand natural calamities such as drought and more efficiently use of nutrients.
This could be increasingly valuable as arable land in the western provinces of China becomes relatively less productive and farmlands decline by 400 000 hectares per year in the eastern provinces (UN 2003). Another important feature of organic agriculture is crop diversity, and this aspect helps to provide more complete nutrition and reduces a farm community’s economic risk of dependence on one crop (Altieri). Improved nutrition is important for many countries including India where almost half of its children are under-nourished (IFAD 2004).
The International Fertilizer Industry Association (1996), and International Food Policy Research Institute (2002) among others, have noted that organic materials alone may be insufficient to replenish the soil nutrients removed by crop harvests. While this may be accurate for intensive and large scale agricultural systems, 13 of the 14 smallholder cases report that this is not a problem; Yunnan tea is the exception.
Although some of the cases are recent and have only a few years of production for most of the small farmers studied the functionality of organic inputs is adequate and, although some did purchase organic inputs rather than develop their own, these were usually readily available locally. Likewise, the Shandong Province case with 10,600 farmers and an output measured in the tens of thousands of tons, specifically noted that organic inputs were not a constraint for them.
Similarly, some researchers cite the necessity of synthetic pesticides to maintain crop yields, but this does not coincide with the majority of findings in the cases studied. The Shandong case noted difficulties in finding organic bio-pesticides while others noted occasional pesticide use, but always in situations where newly converted farmers lacked professional advice or extension support.
There is evidence of improved pest and disease control after organic control methods were established (rice in Yunnan). Another study in Pakistan, states that national pesticide consumption for cotton rose by 40% between 1987 and 1997, nevertheless, yields were lower than in 1987 for six of the ten years.
This pesticide tread-mill of increasing use with decreasing returns typifies the experience in several other sectors and countries, and Yudelman, Ratta, and Nygaard writing for IFPRI (1998) note that the “…near absence of investment in developing alternatives to pesticides for crop protection, especially in developing countries; and increased pest resistance in plants, (are) leading to ever more intensive use of pesticides to limit further losses.”
Health:
Negative health implications can take years or decades to emerge. While none of the case studies have maintained specific monitoring or health records of the effects of the shift to organics, there is certainly valid anecdotal evidence. For example, the Karnataka case study noted that none of the farmers and farm workers interviewed (30) have experienced any feelings of illness after working in the organic rice fields.
In contrast, more than half of the local farmers and farm workers (60%) had sometimes suffered from nausea and vomiting after working in conventionally managed rice fields that applied both chemical fertilizers and pesticides. In Kerala, a number of farmers were hospitalized after local ground-water was contaminated with pesticide runoff from neighbouring tea estates.
Consumers are also affected, and food contamination stories have made headlines in a number of countries including China “Food Sickened 5,000 People Last Year.” It has been noted that the “excessive use of pesticides and chemical fertilizers are having a detrimental impact on health and ecosystems” (UN 2003: 66).
According to the World Health Organisation (May 2001), at a minimum,- 40,000 people die annually from pesticides, and a further 3-4 million are severely poisoned in the developing world each year. More recent research (EJF 2003) notes that “99 per cent of deaths associated with agro-chemical exposure occur in developing countries – an annual toll of 220,000 people”. The estimation would be far greater if taking into account that many of the rural poor might not be treated in hospitals. Organic agriculture offers a significant part of the solution to these health-related problems.
There is increasing European evidence of the considerable costs and negative effects related to the agro- chemicals commonly used in conventional agriculture, and some studies have attempted to quantify the annual health costs of pesticide use, estimating these to be Euro 125 million in Germany and Euro 190 million in the UK.
The root cause of the problems in conventional farming is that the introduction of chemical fertilizers and pesticides has stimulated a production system that tries to be independent of natural regulating processes and local resources, and that is heavily dependent on nonrenewable resources.
It has stimulated mono-cropping…. This leads to more pests and increased problems with nutrient management, as natural cycles are broken. To fix the problems even more pesticides and more chemical fertilizers have to be used – a vicious circle is established.
Does Size Matter?
Perhaps even more than conventional agriculture, organic agriculture in Asia is very much a small holder- oriented endeavour. This report focuses more on the smaller- scale farming situations in poor rural areas, and only briefly covers issues in the conversion of larger-scale conventional (external-input-oriented) operations to organic agriculture.
Most types of agriculture benefit from scale economies, and although such benefits are somewhat less important for the more labour-oriented organic methods, they are still important in most other aspects. There are of course some organic plantations and extensive tracts of company-owned lands in Asia. Although these are often leased or manned by small farmers, their size and organisation help them to capture scale economies at least in the post-harvest steps of storage, transportation, processing, and marketing.
Some of the scale disadvantages inherent in highly productive small farming operations that use conventional methods can be exacerbated by organic conversion. In such cases, yield reductions, even if temporary, can be difficult to bear. The increased labour and the learning process can tax the small farmer’s time.
The difficulties are compounded by the challenges a small farmer can have to access organic markets, which tend to be abroad or at least in larger urban areas. Finally, if a farmer pays for his own certification, he will likely be doing so during the transition process, when lower yields may significantly reduce his income.
As the evaluation notes (Role of Farmers Associations), it is difficult for small farmers to achieve the maximum economic value from organic methods without achieving certain economies of scale, particularly in marketing their products. This can require negotiating with new and often foreign buyers, implementing control systems to ensure consistent quality levels, and programming the timing and volume of production to meet shifting demand at different times of year.
Even well-organised farmers associations can find it difficult to organise the marketing and managerial skills necessary to achieve this, only a few NGOs have the necessary business skills and long-term commitment, and partnering with companies — while potentially very effective — is also fraught with danger, unless the farmers are both well-organised and effective negotiators.
Although there is good evidence that small farms are generally more productive (per area unit) than large farms, in some of the areas studied the small size of farms present limitations that are difficult to surmount. Occasionally, the inadequate per capita land resources do not permit a basic livelihood for a family and force farmers to migrate to off-farm activities or to urban areas.
In other cases, farmers can provide their basic food security, but the surplus value of such small- scale agricultural production is rarely enough to support a lifestyle beyond the basic needs. In many cases, the small landholdings require only limited labour, leaving farm families with considerable under-utilised potential in labour.
During the most intensive work periods, particularly during harvest, labour is often supplemented with landless labourers if necessary and/or returning family members living in urban areas. The harvest season in small farm communities also provides valuable cultural and social interactions, which draw family members back.
In other cases, the loss or migration of labour is such that there is a greater emphasis on extensive rather than intensive use of land (CNPAP 1998). The resulting extensive form of rural land management can have negative consequences for farm output. Without adequate land management, seed selection, input application and other cultivation efforts, both quality and yields tend to suffer.
In some cases, land reform or political turmoil has resulted in fragmented ownership of farming plots. One result — especially in areas with poor transportation networks — is that farmers tend less to several scattered plots and put in as little labour and capital as possible (North India, Kerala).
The opportunity cost of more attention to their crops or even a more intensive operation — especially in remote areas — is considered too high given the limited income possibilities from their traditionally grown products, and so they use only the minimum labour necessary for harvesting and marketing.
Value to Producers and to Consumers:
Perhaps the most notable negative externality of organic agriculture is reduced consumer welfare as a result of higher prices. Such effects on total welfare would be minimal however, if organic prices reflect a higher level of quality and safety rather than merely poor efficiencies or lack of competition.
Organic production methods provide valuable additional benefits or externalities at the producer level in the field that go far beyond advantages such as higher prices.
Here are ten examples drawn from Giovannucci (2003) with adaptation:
1. Improved Natural Resource Management:
An intrinsic part of organic production is a practical understanding of the systemic or holistic nature of such farming that clearly implies a direct appreciation of the diverse forms of value, such as vital watersheds, sustainable logging, and non- timber forest products that exist in the surrounding landscapes.
2. Increased Resilience:
The structure and physical tilth of organic soils are well-documented to better withstand adverse weather and climatic hazards such as drought and torrential rain. This is directly evidenced in reduced erosion and run-off and also in soils with superior moisture uptake, filtration, and retention.
3. Increased Rural Self-Sufficiency:
Most natural production systems eschew monoculture favouring diversification that improves food security and the rotation and integration of on farm inputs like animal waste, compost and wood.
4. Community or Organisational Development:
These are stimulated by the inherently associative approaches to soil, technology, and crop management in what are knowledge intensive rather than capital intensive production methods. Relationships with neighbours, elders, and community are often important in organic systems for the purposes of sharing information, joint marketing and the need to manage resources like water and pests at the watershed or landscape level.
5. Reducing Financial Risk:
Natural production systems typically require fewer external inputs thereby reducing production costs and the necessity to borrow money in advance to pay for necessary inputs early in the production cycle. Methods of integrated pest management have been demonstrated in many cases to be effective, lower-cost and intrinsically more sustainable than conventional pesticide methods in the long run.
6. Reduced Price Risk for Producers:
These products typically receive higher selling prices without necessarily incurring higher costs. In some cases, the more direct linkages to buyers can add longevity to relationships. Caution is certainly warranted here since it is not clear if price volatility is different and there are risks associated with the thinness of organic markets.
7. More Direct Access to Markets and Market Information:
Although this is already changing in some cases, still many buyers of organic products do not work through procurement systems with various middleman that are typical of commodities but rather develop direct relationships with their suppliers and, in this manner, can facilitate higher remuneration to the producer as well as timely and targeted information that the producer needs to meet the buyer’s exact requirements.
8. Biodiversity Conservation:
These production methods recognise and reward the existence of biodiversity in everything from soil microbes to the pest-predator balance of larger life forms and, in turn, these stabilise the rural environment and reduce the risk of widespread plagues, wildlife eradication and other consequences of a mismanaged environment.
9. Increased Use of Rural Labour:
The modern advance of low-input production systems such as extensive livestock rearing or efficient industrial methods such as chemical herbicides and intensive avian production mean fewer rural labour opportunities. Organic methods can typically replace what are now capital investments with investment in human labour thereby providing income for the landless and small farmers who can sell their services.
Increased labour is an advantage so long as the value of the marginal product of labour is above the opportunity cost. The resulting opportunities can help to better stabilize rural communities and reduce urban migration.
10. Fewer Health and Environmental Risks Due to Misuse of Agro-Chemicals:
The pervasive and long-term environmental destruction now recognised to be directly associated with agrochemicals that were once considered safe but are now banned from most industrial countries – is being transferred to developing countries. The World Health Organisation estimates that in developing countries the more toxic materials continue to be widely used and easily available despite some official bans.
Macro-Trends in Established Consumer Markets:
Some of the most current opportunities in organic trade are the result of recent shifts in the nature of agricultural trade. Standards are increasingly becoming the new tools of product differentiation and niche definition, superseding their traditional role as market regulators and lubricants. This fundamental shift has been fueled by the General Agreement on Tariff and Trade (GATT) and the World Trade Organisation (WTO) achievements in reducing tariffs and quotas leaving standards to increasingly be a tool of choice for managing trade.
Increasing health and food safety concerns are driving a set of quality-oriented and process oriented changes that are occurring not only in the more developed economies but increasingly in many of Asia’s urban centers as well. These changes are stimulated by accelerating developments in the regulatory, business, and consumer environment and influencing global trade. Bovine Spongiform Encephalopathy [BSE, or “mad cow” disease], hoof and mouth disease, pesticide residues, cyclospora and mycotoxins, among others.
1. We face a new consumer environment with diet, health, and food safety as major and interrelated concerns. As consumers develop increasingly globalised tastes and ideals, they are demanding that social, ethical, and ecological requirements be met by agricultural production and trade. With some products, such as coffee and cacao, such concerns are already becoming the basis of buying practices in major food companies.
2. We face a new and much more severe regulatory environment that places greater demands for standards on all agricultural products. As government requirements become stricter, these are overlaid with regional trade agreements and international agreements such as those of the World Trade Organisation [i.e. Sanitary Phytosanitary Agreement (SPS) and Technical Barriers to Trade Agreement (TBT)].
3. We face a new business environment where companies are increasingly concerned about potential liabilities resulting from food related illnesses and reputational liabilities for not meeting social and environmental expectations. Retailers, often the dominant companies in agricultural trade chains, are increasingly adopting or creating their own standards [i.e. Ethical Trade Initiative, Utz Kapeh, and EUREP (Euro Retailer Produce Working Group)] and expecting even developing countries suppliers to meet them.
The prices for most agricultural commodities have declined in recent years. As competition is increasingly global, many producers are seeking alternatives, where they may have a better competitive advantage. There are a number of ways in which agricultural production can be differentiated, and organic standards are one of these.
Differentiated markets are naturally smaller and more difficult to access than the markets for conventional agricultural products. This could make differentiated markets, in some ways, riskier but most organic products can always be sold as conventional products. Compared to conventional products, there is less price competition among differentiated products.
Organic production for example differentiates itself on the basis of its unique processes. These processes add value and typically receive higher prices. For farmers and consumers alike, the market for organic products is underserved by most governments. Although both government interest and development projects have expanded considerably in recent years, the vast majority of resources (institutional and otherwise) still support conventional approaches such as trained extension services, research and development through various institutions, and even subsidies. As a result, farmers must undergo a longer and more difficult learning process that includes additional costs such as certification.
Natural Resource Conservation and Biodiversity:
A respected study undertaken by scientists of the International Union for Conservation of Nature and Natural Resources and Future Harvest (2001) notes that, agriculture is the number one threat to biodiversity on the planet. Organic agriculture can be a positive step toward reducing that threat, since its precepts dictate working in harmony with the biodiversity of the farm and the surrounding areas.
Organic farmers in China and India consistently expressed satisfaction at the noticeable increase in local fauna and their perception that more amphibians, reptiles, and birds were helping to control local pests. This coincides with a review of 33 published studies on the biodiversity differences between organic and conventional farming systems. As arable land declines, its quality becomes increasingly important.
Between 1985 and 2000 the erosion percentage in China rose more than 40% (U.N. 2003: 49). Organic methods are known to stem and even reduce the erosion of agricultural land. Although the opportunities are currently somewhat limited, there is an increasing interest in linking productive projects, particularly agricultural ones, with environmental services such as biodiversity conservation and carbon sequestration with entities like the Global Environment Facility (U.N. and World Bank) having already pioneered such projects since the late 1990s.
The rural poor in many parts of Asia depend on common-property resources that face heavy pressure and degradation (IFAD 2002). Projects participants in south and east China as well as those in western and southern India noted that organic principles help them to better understand their environment and as a consequence, there has been less pressure on local forest resources, an increase in the planting and conservation of useful species of both trees and ground cover, and reduced or at least better-terraced hillside farming.
There is reason to conclude that the principles of sustainability that are embedded in organic agriculture can facilitate better management of common property resources. Organic agriculture bundles both a product and an environmental service, and when organic products are sold at a premium, they create and pay for farmers to conserve natural resources and biodiversity.
Recapturing Local Nutrition through Organic Systems:
The cropping profile of Uttaranchal hilly lands—especially the 43% of the land that is not irrigated— is an assemblage of diverse coarse grains, many of which were grown together in the field at one time. This traditional 12 grains cropping or bara anajha was also common in other parts of India before the Green Revolution era.
These coarse grains —primarily millets— are nutritionally more valuable than rice or wheat as repositories of considerable micro-nutrients and vitamins, and yet they fell into disfavour.
The poorer dryland farmers often do not have the land for the market-oriented wheat-rice cropping patterns that are supported by government, which has had no plans for their millets. The coarse millet grains eventually acquired a social stigma, and gradually the men or guests of rural homes were preferably fed either rice or expensive wheat, while millet primarily secured, by default and poverty, only the health and nutrition of the women.
The seeds of these millet grains, through selective generational breeding, are mostly free of disease and pest problems, do not require fertilisation or water, and are able to sustain the severest of weather conditions. Despite such food security characteristics, the millets declined to have absolutely no market value.
Organic agriculture does have a market for such highly nutritious grains (including wheat free/gluten free foods), and so finger millet is now shifting from being a social disgrace to being a product that commands a higher price than both wheat and rice. The local community has accordingly resumed millet consumption as well.
Similarly, due to urban labour migration, livestock cultivation gradually declined and was replaced with more expensive purchased commercial dairy products for the family. Livestock cultivation is now re-emerging as part of organic practices, and among its benefits is that it is providing very low-cost milk products, even to the poorer families.