Organics can provide a route out of poverty

Posted: 21 December 2005

Organic food production is booming in China and India - which together host more than half the world's farming households. Indeed, a global study says, organics can offer an effective route out of poverty for poor farmers, provided they can work together in farmers' associations and get adequate institutional support.

The study, by the International Fund for Agriculture and Development (IFAD), says farmers who switch from traditional farming, which uses few or no purchased inputs, to organics, are likely to boost their incomes significantly.

There are two main types opting for organic farming: smaller farmers - often poor - who could not afford intensive farming methods; and commercially-oriented farmers who see new market opportunities in certified organic products.

"Marginal and small farmers in China, India, Latin America and most probably in other developing countries, have a comparative advantage in shifting to organic agriculture, as the traditional technologies they use are often very close to organic practices" says Mr Paolo Silveri, senior evaluation officer at IFAD.

Double-digit growth

Currently more than 26 million hectares of farmland are under organic management worldwide. Global organic sales have achieved double-digit annual growth for more than a decade and in several European countries organic farms are approaching or even exceeding 10 per cent of total farmland. In 2005, the estimated market value of organic products worldwide will reach close to US$30 billion, with the largest share being marketed in North America and Europe.

In China and India, organic production is growing fast. The value of Chinese exports grew from less than US$1 million in the mid-1990s to about US$142 million in 2003 with estimates for 2004 of nearly US$200 million, and more than 1000 companies and farms certified.

"In China, organic farming offers the potential for sustainable poverty reduction. IFAD will be supporting pilot programmes in China to refine this approach for further up-scaling in the future, " says Thomas Rath, IFAD's Country Programme Manager in China.

In India, there has also been remarkable growth, but primarily in the domestic markets with, about 2.5 million hectares now under organic certification and 332 new certifications issued during 2004.

Creating new jobs

IFAD's recent study, Organic Agriculture and Poverty Reduction in Asia, draws on the work of numerous researchers and original case studies in China and India. A similar study was conducted between 2001-2 in six Latin American and Caribbean countries (Argentina, Costa Rica, Dominica Republic, El Salvador, Guatemala, and Mexico). IFAD is now supporting new programmes for the rural poor in the Pacific Islands and hopes to expand these activities.

The study shows that, nearly everyone involved in the organic supply chain - from farmer to retailer - earns more. In many cases, organic farming creates new jobs in rural areas and could even help to reduce urban migration.

Farmers surveyed voiced their opinion clearly: greater income was the most common reason for converting to organics but for many, switching to organic methods meant improved soils, fewer toxic chemicals and preserving their environment.

Mr Daniele Giovannucci, the report's primary author concludes: "Organic agriculture is a viable approach that can be suitable for smallholders. It can be particularly useful in the more difficult environments, where resources are scarce and cultivation is problematic. It also potentially serves to reduce risk by encouraging localised input production, fostering soil and water conservation and encouraging the diversification of production."

But many small farmers face obstacles to becoming certified organic producers, including lack of technical knowledge on production, inadequate market information, and complex certification processes, says the study.

It suggests the most efficient way to help farmers develop a stronger market orientation is by carefully integrating the private sector to provide marketing services. More importantly, farmer associations strengthen farmers' bargaining power, their economies of scale, and their learning potential.

Keys to success

For farmers to successfully move to organic production, IFAD says these conditions are key:

  • Farmers' organisations. Farmers' organizations will make or break the success of organic projects.
  • Farmer motivation. The feasibility of organic agriculture will be much greater if farmers are highly motivated, especially by personal health or environmental concerns, and not solely by economic advantages.
  • Previously applied production systems and technologies. Farmers using production systems approximating organic ones will find it easier to meet the requirements of organic certification.

  • Land tenure. Those who have more stable, secure land tenure will have much greater incentive to make investments in land-conservation measures.

  • Availability of family labour. Those who have more family labour available will find it easier to face the higher demand for labour associated with organic methods of production.

Related links:

Europe cultivates organic foods and organic farmers

Organic farms more fertile