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The International Market
The export of organic products from the country amounts to 11,925 tons. These account for 8% of total production and had reached a sales of 21,525 tons during 2006-07. The major export markets are Australia, Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Singapore, South Africa, Saudi Arabia, UAE, the United Kingdom, and the USA. Tea is exported directly by the producers. Other organic products are produced mainly by small farmers and hence exported through exporters. Organic products produced by organized players are exported directly to various countries.
Products available for the export market are rice, wheat, tea, spices, coffee, pulses, fruits and vegetables, cashew nuts, cotton, oilseeds, and herbs. The channels adopted for the export of organic products, except for tea, are mainly through export companies. Organic tea is produced by organized tea estates and exported directly.
Japanese Organic Market
The largest Asian Market for organic products is Japan. The Japanese organic market has been characterized as a market with high demand and strong purchasing power, and with a low domestic supply of organic products. The annual growth of the organic market in Japan is about 20 percent. Organic products to Japan have to be labeled with the Japanese Organic State Logo [ JAS ] and also the imported organic products must meet Japanese National Standards.
Japan is considered to be a major importer of organic products, mainly supplied by Australia, New Zealand, the USA, and Canada. The most commonly imported organic products are Soybean, Organic Frozen Vegetables, Tea, and Bananas. Estimated retail sales of Japanese organic food and beverages are at about US$ 2.5-3.0 billion. In Japan, organic products are marketed through various channels such as large companies [ eg. Kirin ], family businesses, the Japanese Tei-Kei system, consumer co-operatives, etc. However, delivery services control the largest organic market share.
US Organic Market
The US is the world’s largest market for organic products. The retail sale of organic food and beverages was worth about US dollar 12.5 billion in 2004. The main factors in this positive growth are strong consumer awareness for health and environmental issues.
In the United States, organic food is sold to consumers through the following channels:
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- Natural food stores [48%].
- Conventional grocery stores [49%].
- Direct to consumer markets [3%].
Fresh organic produce remains the top-selling category, followed by non-dairy beverages, bread and grains, packaged foods [ frozen and dried prepared foods, baby food, soups, and desserts ], and dairy products. Organic dairy was the most rapidly growing organic food segment during the 1990s, followed closely by sales of juice, soymilk, and other non-dairy beverages. Organic meat sales accounted for 3 percent of total organic sales in 2000.
Normally, organic consumers in the U.S. may accept price premiums of 10-20% or a maximum of 25 percent. To be certain that organic products will be accepted in the US organic market, the producer/exporter should choose a certification body that provides access to the US market, for example, a certification body accredited by the National Organic Program [NOP] of USDA.
The European Organic Market
Since the beginning of the 1990s, organic farming has rapidly developed in almost all European countries. In 2005, about 6.9 million hectares in Europe were managed organically by about 190,000 farms. This constitutes 3.9 percent of the total agricultural area. The country with the highest number of farms and the largest organic area is Italy.
Organic land increased over 2004 survey by almost 510,000 hectares [+8 percent] in Europe as a whole and by 490,000 hectares [+ 8.5 percent] in the European Union. The increase in the EU is due to high growth rates in the new member states [ For instance Lithuania and Poland ] as well as substantial increases in Italy and Spain. Support for organic farming in the European Union includes grants under the European Union’s rural development programs, legal protection under the recently revised EU regulation on organic farming [ Since 1992 ], and the launch of the European Action Plan on Organic Food and Farming in June 2004. Countries that are not EU members also get similar support.
The European market is estimated to be between Euros 13 and 14 billion as estimated during 2005. The Biggest Market for organic products is Germany with an annual turnover of Euros 3.9 billion, followed by Italy [Euros 2.4 billion] and France [ Euros 2.2 billion ]. The highest market share of organic products in the total market is in Switzerland with 4.5 percent, and the highest per capita consumption is also in that country with more than 100 Euros spent on organic food per citizen in a years. The market in the United Kingdom is also growing strongly. Countries with mature organic markets like Austria and Denmark show poor growth rates. Switzerland and Denmark have the highest consumption per capita, whereas France, Holland, and Italy have low consumption per capita. Annual growth of the European market is around ten percent. Some countries are experiencing a shortage of organic products availability.
European consumers are used to buying their organic products from supermarket chains, natural food stores or direct from the organic producer. In the European Union, organic products are grown according to the EU Regulation 20921/91. In Switzerland, BIO SUISSE certification plays an important role in the marketing of organic products.
Price Premium For The Organic Products
Prices vary widely over time due to seasonal trends in production and market. Most of the consumers who are aware of the advantages of organic farming are willing to pay a certain premium for organic foods. In many countries, the premium is 20-25 percent. But there are instances where more than 100% price premium is obtained for certain products like spices.
- The Price Premium For Some Of The Organic Products Are Given Below:
Tea 47%.
Rice 44%.
Protein grain 44%.
Spices 30%.
Vanilla 43%.
Mango 25%.
Pineapple 28%.
Banana 31%.
Nuts 40%.
Future Development
India has a rich heritage of agricultural traditions that are suitable for designing organic production systems. Sophisticated crop rotation or mixed cropping patterns, for example, the famous agroforestry systems of the Western Ghats, facilitate the management of pests, diseases, and nutrient recycling. Botanical preparations, some of which originate from the ancient Veda scriptures, provide a rich source for locally adapted pest and disease management techniques. The widespread cultivation of legume crops facilitates the supply of biologically fixed nitrogen.
India is strong in the high-quality production of certain crops like tea, spices, rice specialties, ayurvedic herbs, etc. In several regions of India, agriculture is not very intensively supported by the use of agrochemicals. Especially in mountain areas and tribal areas, use of agrochemicals is rather low, which facilitates conversion to organic production. Labor is relatively cheap in India, thus favoring the conversion to less input-dependent, but more labor-intensive production systems, provided they achieve sufficient yields.
Many NGOs are engaged in the promotion of organic farming and provide training, extension services, information, and marketing services to farming communities. The Indian Government has realized the potential significance of organic agriculture for the country and has recently moved to support organic agriculture on large scale and on various levels. The Ministry of Agriculture announced that support for organic producers, processors, and traders would be included in the Eleventh Five-Year Plan.
