How green is my bazaar?

It takes 20 minutes of hunting and asking around to get to the two shelves at Food Bazaar assigned to organic foods. The section is unidentified and the selection little more than cereals and pulses. There are only two brands on offer, both uncertified.

Customers walk past, seemingly unaware of the "green" offerings. Nina Goyal is one of the few who stops at the section. "I come here for a few specific items," she says, "if I were to change my entire monthly supplies to organic, the expenditure would be unjustifiable."

This one instance is as representative of the domestic market for organic produce as it gets "" inadequate retail presence, little to no certified branded produce, an incomplete range, uncompetitive price points, and government policies that are skewed towards exports.

Central strategy on organic foods has always slanted toward the global market, leaving the critical mass of domestic consumers out in the cold. Currently, about 70 per cent of organic agriculture items produced in India are being exported. Why, you ask? Big bucks, clearly. Organic products fetch a 20-30 per cent higher price than inorganic products in the world market.

According to the Indian Competence Centre for Organic Agriculture (ICCOA), the global market for organically produced foods is $26 billion and is estimated to increase to $102 billion by 2020.

As part of 10th Five Year Plan (2002-07), the government earmarked Rs 100 crore for the promotion of sustainable agriculture in the country, but the main components of this initiative have benefited exports, from the establishing of national organic standards under NPOP (National Programme for Organic Production), putting in place a system of certification for products, and establishing APEDA (Agricultural and Processed Food Export Development Authority) as the nodal agency to promote exports opportunities.

Domestic retail avenues for organic produce have traditionally been the odd cottage emporium, fruit mart, bakery and kirana store along with an upmarket provision store here and a delicatessen there.

Today, however, marginal growth is slowly becoming evident in the increase in organised producers, retailers and product offerings in the market, where before the movement had been driven entirely by the spirit of individual initiatives of the farmers, the odd entrepreneur and non-governmental organisations.

Dr Vandana Shiva, physicist and economist, spearheaded the cause of sustainable farming by establishing Navdanya two decades ago, a movement for biodiversity conservation and farmers' rights. One of its seminal contributions to fair trade practices has been the marketing of organic agricultural produce directly from farmers to consumers.

Mayaji, director, Navdanya, claims the sector has sustained itself through the marginal farmer. "They would tell us 'We are being compelled to adopt chemical-based farming because of government policies, but we will always keep a portion of the land organic for self-consumption' "" that is the kind of farmer we exist for," she says.

Besides marketing produce through their two outlets in New Delhi and one in Dehra Dun, Navdanya has just initiated an organic food awareness campaign among schoolchildren in Delhi, inviting them to learn to cook organically at its Slow Food cafe in Hauz Khas. "We teach them to make organic burgers with nine grain and whole wheat buns," laughs Mayaji.

Sustainability for one-off shops has always been an issue. Nikhil and Jigna Shah started Greenway in 1997 when there were no others retailing organic produce in Mumbai. They source directly from 20 marginal farmers, and processing is done in small quantities at home.

"Our lateral growth has been great in terms of more products and greater awareness, but vertical growth is stubborn and we've had to persevere to stay afloat." Nikhil is passionate about their work and claims that their customers are just as enthused; they rarely ask for certification evidence or question sources.

"There is no certification for inorganic products so why should there be for organic products? If you buy wheat from a store, you buy on the basis of the sheer fact that it is branded, you don't ask whether it has been blended with chemicals and in what quantities."

When organic farmers and traders are operating in an anonymous market, certification is developed to show and guarantee to consumers that a product has been produced in consistency with organic standards.

While certification has provided Indian-produced organic products with inroads into foreign markets, domestic bound produce is largely uncertified, owing to the fact that most producers are either small or marginal farmers, small cooperatives or fair trade companies.

Under current government policy, it takes approximately three years for a farm in conversion to be certified as organic, and costs are hefty for the small farmer.

While internationally, our exports cannot hold ground without certification, uncertified brands in India have had some success. Conscious Foods was born in 1999 from Kavita Mukhi's desire to feed her family with safe, pure food.

"The farmers I sourced from were all small farmers, there was no talk of certification in those days, and we just bought from whoever we believed to be true. I bought for self-consumption and tried to sell the excess. We still don't certify our products because our mission has been to support the small and marginal farmers."

There seem to be other attributes that inspire confidence among her buyers, such as the brightly colour-coded labelling "" green for spice, mustard for cereals and pulses, red for snacks "" the interesting play with bottle shapes and sizes, and stories about indigenous producers printed on the label.

"We never compromise on quality, we have a centralised sorting, cleaning and packing workshop, and the 10 women we employ wear masks, gloves and hair nets." Conscious Foods grows for the domestic market. Mukhi clarifies, "Why should the best produce be exported while we eat unhealthy pesticide laced food?" She continues, "We would love to start a stand-alone store but currently our volumes are not substantial enough." 

GLOBAL ORGANICS
Worldwide, almost 26 million hectares (M ha) are managed organically
Major players
Australia	(11.3 M ha)
Argentina	(3.2 M ha)
Italy	(1.2 M ha)
Total area in India under certified organic cultivation	0.076 M ha
Total quantity exported	6,792 tonnes
Total value of exports 2004-05	Rs 70 crore
Total value of world market	Rs 11,700 crore
Percentage of area under certified organic in India	0.054 per cent
Certified organic farms	1,426
Source: Indian Competence Centre for Organic Agriculture 2005

These sketchy patterns of retail are metamorphosing into more organised retail, albeit slowly. With an estimated 2-3 million potential consumers of organic agricultural products in India, the problem has always been the absence of organised marketing and retailing.

In developed countries, especially in Europe and the US, every supermarket has a green line where a complete range of certified organic products is available. India is just beginning to manage a toehold in some supermarkets.

Food Bazaar, the foods division of Pantaloon Retail, is based on a comprehensive food and grocery store format and has 32 outlets and 2 lakh sq ft of retail space across India. The organic range stocked is inadequate but Damodar Mall, head of the food division, says, "It's a beginning. The customer is moving in small steps and formats like ours will have to take the lead."

Mall claims the organic range is not complete because they are dependent on local, small brand initiatives; there just aren't enough big certified brands.

Fabindia is hoping to change that. The Rs 100 crore apparel and home furnishings retailer ventured into organic foods earlier this year when it test-marketed its organic range in New Delhi.

According to Jashwat Purohit, head of Fabindia's organic foods business, the organics segment will grow from 1 per cent of its annual turnover in the first year to 5 per cent in the third year.

"Our goal is to be able to offer customers a complete organic lifestyle. It doesn't seem enough for us to offer only select items; we are constantly adding to our range. We started with 75 products but now have around 200 certified products," he states.

However, the supply chain is still testy. Says Purohit, "This is a huge challenge; organic projects are scattered across the country and we are faced with many challenges "" quality, consistency, transport, storage, shelf life "" and so have had to partner with only very reliable suppliers who can consistently deliver the quality we want."

Fabindia's short-terms plans are to offer fresh fruit and vegetables, and long-term plans include bakery and dairy products. "We hope to be in all our stores by the end of this year, which are in every major city across the country," Purohit says.

Even large exporters are now looking homeward to fill the gaps. As export markets get saturated and oversupplied, especially in markets like tea, and premiums get squeezed, domestic markets are bound to be targeted.

Says R B Singh, chief executive officer, IITC Organic, a Rs 30 crore Lucknow-based producer and exporter of organic products, "In a year or two, we intend to be the leading domestic organic brand. We predict that five years down the line, India will be both a major organic foods producer as well as consumer. It is awareness and education in the Western countries that has brought about an unprecedented demand for organic foods. India will follow suit as public information and education grows."

Increased public health consciousness and increased visibility will help, but there has to also be a shift in mindset. Says Rehan Padamsee, a loyal customer of Conscious Foods, "Consumers have to understand that consistency, standardisation and all-year availability cannot be stringently observed with organic food. I learned from the Slow Food Movement (an international food movement that came into being in Paris in 1989 that preserves agricultural biodiversity, traditional foods and promotes seasonal consumption) to try and eat traditionally and seasonally."

Nikhil Shah agrees, "Customers need to undergo a paradigm shift; they cannot expect every tomato to look alike without chemical intervention. When I take rice from a farmer and see insects in it, I don't reject it, I just make sure I dry it in the sun and package it again."

It's not just consumer sensitivity that will affect the upshot; price parity is a big deterrent for potential consumers. Says Padamsee, "I believe that it is my right to eat healthy food and I shouldn't have to pay a premium for it. I think more people would convert if there was a better price parity."

Godrej AgroVet's retail product, Nature's Basket, is also looking into the possibility of test marketing certified organic produce through its outlets, but according to R S Vijan, executive vice president, when they test-marketed organic chikoos and coconuts, the sales response was slow as customers were not ready to pay the price differential of 15-20 per cent between organic and non-organic fruits. 

PRICE DISPARITIES
Product	Quantity	Organic	Inorganic
Moon dal	500 gms	Rs 49	Rs 20
Brown Rice	500 gms	Rs 36	Rs 28
Chana Atta	500 gms	Rs 45	Rs 13
Chilli Powder	100 gms	Rs 32	Rs 12.50
Honey	500 gms	Rs 197	Rs 108
Sesame Oil	400 gms	Rs 95	Rs 37
Ragi	500 gms	Rs 23	Rs 6
Source: Food Bazaar, Mumbai

Arguably, once a farmer converts from chemical-based farming to organic farming, costs should come down. Mayaji responds, "Organic products are more expensive now because farmers are still in the conversion period when yields are low, even though inputs are cheaper. Because inorganic farming is so heavily subsidised, when we started buying from farmers, we needed to ensure that the farmer didn't suffer, so we paid a premium and continue to do so."

Also, currently, the market is in its infancy and as such does not benefit from economies of scale. Mall agrees, "We believe the premium will come down as sales go up. Growers will improve their yields over time, and consumers' demand will grow. With critical demand, mass prices will drop. But as a retailer, we can only participate in the trend, not force it."

In all this however, small farmers still have no significant retail platforms unless picked up by cooperatives or NGOs. Attempts at marketing organically grown produce are still mostly by word of mouth, filling individual orders that were phoned in and home-delivered like the Alibag organic farmers' cooperative who use the home-delivery basket scheme "" but these are difficult, expensive and eventually quite ineffective methods of selling.

Trade fairs and fair price markets are few and far between, and usually too localised to have a large impact. For the first time, ICCOA, with the government of Karnataka and APEDA, is organising a pan-Indian trade fair in Bangalore this November. India Organic 2005 promises to be visited by large buyers; what is noteworthy is a section reserved for uncertified farmers.

Nikhil Shah is optimistic: "The farmers are waiting excitedly; they're ready for the boom." Edward Bastin, advisor to Fabindia's pilot project, Organic Fresh Direct, adds, "We promote factors that have fuelled demand in more mature markets "" public health consciousness, increased exposure to organic food, a reduction in the price premium and active marketing.

Although any one of these factors is likely to stimulate interest, it is the simultaneous occurrence of all of them that will really work." Until then, all the excitement will amount to a little more than a whisper.

Organically speaking...

Customers need to undergo a para-digm shift; they cannot expect every tomato to look alike without chemical intervention. When I take rice from a farmer and see insects in it, I don't reject reject it, I just make sure I dry it in the sun and package it again.

- Nikhil Shah, founder, Greenway

We exist for the marginal farmers who would keep a portion of the land organ ic for self-consumption, despite being compelled to adopt chemical-based farming because of government policies.

- Mayaji, director, Navdanya

It is awareness and education in Western countries that has brought about an unprecedented demand for organic foods. India will follow suit as public information and education grows.

- RB Singh, CEO, IITC Organic

Consumers have to understand that consistency, standardisation and all-year availability cannot be stringently observed with organic food. Also, it's my right to eat healthy food and I shouldn't have to pay a premium for it. I think more people would convert if there was a better price parity.

- Rehan Padamsee, Consumer