Examining Organic Farming in India

In a series of articles on Slate.com, Mira Kamdar (of the World Policy Institute and author of Planet India) discusses the challenges and outlook for organic farming in India based on her visit to Punjab farms.  After an introduction to her visit and the history of the Green Revolution, Ms Kamdar delves into the reality of the matter, derived from the insights of farmers and academics.

In “The Organic Farmer,” Ms Kamdar focuses on why organic farming is beneficial, yet difficult. The involved labor itself presents employment opportunities, but government policies discourage the growth of organic farming:

Abundant cheap labor is one of the potential advantages India can bring to expanding organic agriculture. Picking off pests by hand, harvesting inter-cropped fields with a mix of plants ready at different times, eliminating weeds by frequent hoeing between tight rows, preparing soil with organic fertilizers, deploying micro-irrigation lines positioned to release water at the roots of each plant-these are all labor-intensive tasks.

But organic farming in India faces significant disincentives. Most government policies favor industrial agriculture, with heavy subsidies for India’s chemical-fertilizer and pesticide industries. The focus, understandable in a developing country, is on maximizing yields and boosting exports. The mindset of the Green Revolution is well-entrenched, despite the widely acknowledged social and environmental damage those practices have wrought and the knowledge that they are simply not sustainable.

According to a farmer in her article, seventy percent of Indian farmers are organic producers, since chemical farming is expensive. And although there is a huge export market, the fact that they aren’t certified (the articles point out that it takes three years to receive certification – a lengthy period for farmers) means that they are missing out on lucrative opportunities for profit. Continue reading

Advertisements

Organic farming company gets VC backing

From VC Circle:

This could be the first venture capital investment in an organic farming business. Mumbai-based venture capital firm Nexus India Capital has made an undisclosed investment in organic farming company Suminter India Organics Pvt. Ltd.

This is an interesting investment as one does not normally associate VC funding with farming. Suminter, however, attracted the investors due to its scalability. The company actually pays its contract farmers a surplus over market prices for their goods, centralizes it and then exports it to other parts of the world.

The company works on a buy-back arrangement, in which it pays farmers a premium, typically 10-15 per cent, over the market price. The harvest is processed and packaged at a central unit and then shipped overseas. It exports directly to the US and through a Netherlands-based subsidiary to Europe. The funding will be used to expand its reach to 10 Indian states.