Organic produce growing in China, India

"China and India have a huge potential to tap domestically to begin with," said Mattia Prayer-Galletti, country program manager

for Asia with the International Fund for Agriculture and Development (IFAD). The Rome-based organization is a specialized agency of the United Nations dedicated to eradicating rural poverty in developing countries.

At the moment IFAD is trying to "increase the space for organic farming as much as possible", Prayer-Galletti said. Organic farming eliminates use of chemicals as fertilizers and pesticides. That means largely a return to natural and traditional methods of farming.

Given the rapidly growing demand for organic food in Western markets, organically grown food, which usually fetches a 20-40% premium over other produce, represents a new opportunity for small farmers for whom a lack of means to buy fertilizers and pesticides can be turned into an advantage. Difficulties arise, however, by way of certifying such produce and then marketing it, even within the domestic market in the developing countries. This is where IFAD is looking to promote organic produce.

One way to promote organic farming is by "carefully integrating the private sector to provide marketing services", an IFAD report on Asia says.

"Organic farming is running into technological, intellectual and cultural barriers," Prayer-Galletti said. "On the one hand you have biotechnology, and at the same time governments are committed to increasing production, neglecting the interests of small farmers," he said.

The primary IFAD objective in promoting organic farming is as a way of lifting multitudes of small farmers out of poverty, now that their limitations have the potential of becoming an opportunity.

"Many farming communities are producing organic food without being aware that they are," Prayer-Galletti said.

Organic farming could also create new jobs in rural areas and help reduce urban migration, IFAD says. Such farming is becoming more organized in India and China, "which together host more than half the world's farming households", an IFAD report says.

Apart from the smaller farmers, who cannot afford intensive farming methods, commercially oriented farmers are seeing new market opportunities in certified organic products. The value of Chinese organic produce exports grew from less than US$1 million in the mid-1990s to about $142 million in 2003 with estimates for 2004 of nearly $200 million, and more than 1,000 companies and farms certified, IFAD says.

"In China, organic farming offers the potential for sustainable poverty reduction," Thomas Rath, IFAD country program manager in China, said in a statement. "IFAD will be supporting pilot programs in China to refine this approach for further upscaling in the future."

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. Currently more than 26 million hectares of farmland are under organic management worldwide, but that is believed to be just 1-2% of all agricultural production.

It is a growing business. 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% of total farmland, IFAD says. In 2005, the estimated market value of organic products worldwide was close to $30 billion, with the largest share being marketed in North America and Europe.

Developing farmland communities will be vital to developing the organics market, IFAD experts say. This will help reduce the cost of certification, and improve prospects of marketing, they say. IFAD conducted a similar study between 2001 and 2002 in six Latin American and Caribbean countries (Argentina, Costa Rica, the Dominican Republic, El Salvador, Guatemala and Mexico). IFAD is supporting new programs for the rural poor in Pacific Islands states, and says it hopes to expand these activities.