Policy support needed to leverage farmer-producer organisations & federations that operate in remote areas
FPOs should be provided better government support to enhance their capacity to provide better market access to farmers. Photo: iStock The current agricultural ecosystem is not favourable for small and marginal farmers, leave alone organic, and there is a lack of support services, flagged experts of market access for organic and natural produce.
The representatives of the industry were speaking during a panel discussion on a new report by the Centre for Science and Environment, a Delhi-based think tank held on June 21, 2023.
The report studied six organisations from three key stakeholder groups in the space – farmer-producer organisations (FPO), food retail corporations and state government programmes.
The case studies were delved into the procurement, processing and sale of organic and natural produce, with a keen focus on ensuring fair prices for farmers while meeting consumer demands.
Furthermore, the report Market Access in India for Organic and Natural Produce: Case Studies sheds light on the key challenges faced by these stakeholders, emphasising the need for effective solutions.
The featured case studies include Bhoomgaadi Farmers Producer Company Limited Dantewada, Chhattisgarh; Sahaja Aharam Producer Company Limited Hyderabad, Telangana; Sresta Bioproducts Limited (24 Mantra), Hyderabad; bigbasket; Odisha Millet Mission; and Prakritik Kheti Khushhal Kisan Yojana, of Himachal Pradesh, showcasing diverse perspectives from the organic and natural produce market ecosystem.
The panel of experts involved Akash Badave, chief executive officer, Bhoomgaadi Organic Farmers Produce Company; GV Ramanjaneyulu, expert director, Sahaja Aharam Producer Company; Rajashekar Reddy Seelam, managing director, Sresta Natural Bioproducts Pvt Ltd (24 Mantra); Dinesh Balam, state coordinator, Odisha Millet Mission; Manoj Gupta, principal scientist, state project implementing unit, Prakritik Kheti Khushhal Kisan Yojna.
Key points that emerged from the discussion to enhance market access for organic and natural farmers:
1. Provide government support for organic FPOs to enhance their capacity to provide better market access to farmers.
2. Increase the presence of FPOs to reduce aggregation and sales costs.
3. Develop accessible and affordable infrastructure for the segregated value chain of organic produce to ensure smooth operations and reduce costs for farmers.
4. Address concerns regarding high intermediary commissions to make organic produce more affordable for consumers.
5. Redesign state procurement and distribution programs to improve market access for organic farmers.
6. Foster trust and acceptability through coherent and simpler certification systems.
7. Prioritise farmer support services to help farmers effectively manage organic farming enterprises.
8. Create consumer awareness and demand to educate consumers about the multiple benefits of consuming organic food.
9. Ensure that the lack of market access does not hinder the transition towards non-chemical farming practices.
During the discussion, stakeholders indicated a need for policy support to leverage the federations of FPOs like Sahaja Aharam Producer Company Limited or FPO like Bhoomgaadi Farmers Producer Company Ltd that operate in remote locations of the country.
The FPO representatives in the discussion opined that the idea of FPOs in itself is a good idea for better market access as is shown by their efforts. FPOs can help address the challenges faced by small and marginal farmers, particularly in the last-mile delivery of support services and the aggregation of products.
Currently, aggregation costs are high because producers are very distributed. Sales cost is very high because consumers are also very distributed. These challenges result in high costs and value loss.
Increasing the presence of FPOs and facilitating direct sales can help address this issue by reducing aggregation and sales costs, bringing down prices and creating a more efficient market system.
However, to enable FPOs to provide better market access to farmers in every nook and corner of the country, government support for organic FPOs is needed in terms of working capital, dedicated infrastructure, human resources, certification and training. This is because expecting FPOs to manage the entire business and become self-sufficient is too much at this point due to limited individual investments by farmers.
Also, quality human resources should be made available to work with FPOs as expecting farmers to not only grow food but also have business acumen is not fair.
Fair payment, quality standards, certification costs, separate infrastructure for storage, non-chemical treatment to avoid infestation push up the cost of organic products, shared a representative of Sresta Bioproducts Limited (24 Mantra)
The current open market prices are depressed and are a result of the disparity between actual costs and the low prices farmers receive, according to stakeholders. The prices of organic food are the real price reflecting the true cost without subsidies, which farmers struggle to sell in the market. Thus, to manage pricing, accessible and affordable infrastructure for the segregated value chain of organic produce is crucial.
Experts also expressed concerns regarding exorbitant commissions on organic products and suggested that if normal margins are taken, the prices themselves will come down by 25-30 per cent or even lower. Unlocking consumer demand could be the key to stabilising the price.
Building trust with consumers is important. Experts shared that there is a lack of acceptability in the market for Participatory Guarantee System (PGS) organic certification, which requires alignment with other organic certification systems.
The proliferation of multiple certification systems in the market is another issue that causes lots of confusion and increases the cost of final products which ultimately may lead to expensive food for consumers and a lesser share of the price with the farmers.
For instance, in addition to PGS, National Program for Organic Production, there are ongoing discussions to bring a new certificate system for natural farming. Some states are also developing their own certification system. Prakritik Kheti Khushhal Kisan Yojana of Himachal Pradesh, for example, has developed a self-declared certification system for natural farming.
Policy efforts should focus on ensuring coherence between different certification regimes and making them easier for farmers.
State procurement and distribution through safety net programmes can greatly enhance market access for organic farmers, as is indicated through the efforts of the Odisha Millet Mission. It leveraged FPOs and women self help groups along the supply chain to facilitate the inclusion of millets in different safety net programmes.
However, to make this a widespread reality, a redesign of the system is necessary, said stakeholders. A comprehensive system was set up to ensure the success of the green revolution, and a similar approach is now required to transform organic/natural farming into a valuable endeavour for all stakeholders involved.
All stakeholders agreed that if there is a higher demand for organic products, farmers would be more motivated to produce them. Increased demand can lead to economies of scale, making organic production more cost-effective and accessible to a wider range of consumers.
However, achieving this requires an attitudinal shift among consumers. Something along the lines of ‘International Year of Millet’ should be done to spread awareness about the multiple benefits of consuming organic food.
The lack of market access should not be allowed to become a barrier in India’s journey towards non-chemical farming practices, which are good for the farmer, nature and human health.
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