Agri Business And Organic Farming

Organic farming systems rely on ecologically based practices, such as biological pest management and composting; virtually exclude the use of synthetic chemicals, antibiotics, and hormones in crop production; and prohibit the use of antibiotics and hormones in livestock production. Under organic farming systems, the fundamental components and natural processes of ecosystems—such as soil organism activities, nutrient cycling, and species distribution and competition— are used as farm management tools.

Organic agricultural methods are internationally regulated and legally enforced by many nations, based in large part on the standards set by the International Federation of Organic Agriculture Movements (IFOAM), an international umbrella organization for organic farming organizations established in 1972.

Over the last two decade, the market for organic food and other products has grown rapidly, reaching $63 billion worldwide in 2012.

This demand has driven a similar increase in organically managed farmland which has grown over the years 2001-2011 at a compounding rate of 8.9% per annum. As of 2011, approximately 37,000,000 hectares (91,000,000 acres) worldwide were farmed organically, representing approximately 0.9 percent of total world farmland.

Nexus between World’s food security and Organic Farming

In 2007 the United Nations Food and Agriculture Organization (FAO) said that organic agriculture often leads to higher prices and hence a better income for farmers, so it should be promoted.
Ironically FAO stated that organic farming could neither feed the current human population nor the future population.

Further to that NEPAD, development organization of African governments, announced that feeding Africans and preventing malnutrition requires fertilizers and enhanced seeds.

On the contrary expert analysis by many agribusiness executives, agricultural and ecological scientists, and international agriculture experts revealed the opinion that organic farming would not only increase the world’s food supply, but might be the only way to eradicate hunger.
According to a more recent study in ScienceDigest, organic best management practices shows an average yield only 13% less than conventional.

In Africa, where most of the world’s hungry live, and where conventional agriculture’s expensive inputs are not affordable by the majority of farmers, adopting organic management actually increases yields 93% on average, and could be an important part of increased food security

EVALUATING THE POTENTIAL OF ORGANIC AGRICULTURE
CHALLENGES IN EVALUATING THE FEASIBILITY OF ORGANIC AGRICULTURE

A few factors have to be considered when evaluating the feasibility of organic agriculture in a given environment. These factors include:

• parameters reflecting greater “sustainability” do not necessarily imply organic practices;
• in practice, it will often be difficult to differentiate between the effect of different factors on a farming system, as the introduction of organic management could be not the only change at the time e.g. change in weather pattern
• some parameters (such as yield) need to be averaged over a number of years, as factors other than the management system influence variability between years
• Benchmark figures, which indicate the conditions before a change occurs in a system, are not always available. In such cases, they must be obtained before organic management is adopted but this is not always possible (especially when resources are scarce);
• Many of the changes may be observable only in the long-term, such as changes in yield or soil;
• Because organic agriculture is such an under-researched area, conditions which initially seem difficult may be easy to cope with after some experience has been gained, and vice versa; and
• Those who have no experience in thinking within the context of organic agriculture are not likely to be able to judge possibilities in organic agriculture accurately.
Success in organic agriculture also depends greatly on local conditions. Organic agriculture is a production system which tries to create conditions such that problems with soil fertility and pest management are prevented, in order to optimize present and future output.
One of the main characteristics of organic agriculture is the use of local resources to achieve this aim (including on-farm biological processes such as availability of pest predators or soil fungi which make nutrients more accessible to the plant).

1- Agro-ecological considerations
• availability of natural resources: such as land, soil quality, vegetation, access to material which can be used in compost and mulch, availability of other materials such as rock dust;
• evaluation of other resources needed, such as machinery and tools;
• suitability of enterprises, that is, crops to be grown or livestock to be raised, given the availability of natural and other resources;
• Problems to be expected: which pests are common, what is the cause, what can be done to avoid them within available resources? For example, a primary pest may be avoided by planting at a time when the insect cannot complete its life cycle, even though that results in a certain decrease in yield due to non-optimal conditions in other aspects such as heat; a secondary pest could stop after abandoning the use of pesticides and natural predators return;
• Total production of all enterprises, not only of the main enterprise; yield difference in good and bad years (that is, yield variability).

2- Economic considerations
• labour requirements (quantity and timing of labour);
• total net return, that is, income (or use) from main crop and other crops and livestock, minus the cost of the inputs used for the production;
• long-term productivity: the effect of present production on the soil and implications for future yields;
• Marketing possibilities: in times when consumers are willing to pay a premium, improved marketing possibilities should be taken into account when production decisions are made.
Suitability of any system (such as organic agriculture) depends on its profitability, if that concept includes all aspects which affect the farmer’s welfare.
3- Social and institutional constraints
The most important institutional considerations include:
• Belief systems: possibly, the single biggest constraint to the development of organic agriculture is that most people in all kinds of areas, including scientists, researchers, extension officers and politicians strongly believe that organic agriculture is not a feasible option to improve food security. For this reason, very few farmers can obtain information about this management system, even when they inquire about it. If those who make policy decisions on the allocation of resources, such as for research and extension, are not aware of the possibilities of organic agriculture, no positive consideration towards this farming system can be expected;
• Land tenure: the land-tenure system is important in assuring farmers that the future benefits of current farm improvements can be achieved. If this is not so, long-term investments which improve sustainability will not be made;
• Vested interests: organic agriculture differs greatly in input use from conventional agricultural systems. Many of the inputs used in organic agriculture are public goods (which can be used without impeding use by others, such as knowledge about practices). Hence, there is little private interest in promoting particular inputs which are used in organic agriculture;
• Social obstacles: Many organic farmers are considered odd by their peers .
• Private investment: the advancement of organic agriculture to date has to a large extent been due to private investment. This has been in the form of consumers’ willingness to pay for organic commodities (price premiums) and farmers’ readiness to experiment and innovate, despite the risks involved with such on-farm research.

ISSUES REQUIRING SCRUTINY WHEN CONTEMPLATING A SHIFT TO ORGANIC AGRICULTURE
A shift to organic agriculture brings about significant change. First, the composition of the inputs changes.
Together with a reduction in the use of synthetic fertilizer and pesticides, an increase of other inputs can occur, such as organic material, labour and machinery.
At the same time, rotations change, affecting yields and yield variability, total production and income.
This, in turns, influences food security, and the environment. Those changes are often influenced by, and influence, social changes within the community. In all cases, farmers will want to evaluate five issues to determine their likelihood of success in organic agriculture.

1- Labour input
Labour costs are an important input in the production process. Many studies find that labour can be a major impediment to the adoption of organic agriculture. Lampkin and Padel (1994) noted that, in many European countries, labour costs on organic farms are high, although some of those costs cover marketing and processing activities. In Australia, in contrast, Wynen (1994) found that both in the cereal-livestock and dairy sectors, labour requirements on organic and non-organic establishments were not different.
If compared to large-scale mechanized agricultural systems, organic systems appear more labour-intensive. This is especially true in areas with low ecological potential. Many techniques used in organic farming require significant labour (e.g., Zai planting pits, strip farming, non-chemical weeding, composting).
In the developed world, labour scarcity and costs may deter farmers from adopting organic management systems. This is also true for cash-poor farmers and those supplementing their incomes with off-farm work.
However, where labour is not such a constraint, organic agriculture can provide employment opportunities in rural communities.
Furthermore, the diversification of crops typically found on organic farms, with their various planting and harvesting schedules, may result in more work opportunities for women and a more evenly distributed labour demand which helps stabilize employment.
The timing of labour requirement is an important aspect of labour in developing countries. The question whether organic agriculture, with its tendency for diversification of crops, brings with it a more evenly distributed time of labour requirement, is yet to be settled. However, as planting and harvesting dates are not similar for all crops, labour requirements are likely to be spread out over the year.
Another important issue to consider, however, is not the quantity of labour, but the quantity of output per unit of labour, or labour productivity. While organic agriculture is likely to generate good labour productivity, the issue of wage depends on a number of other factors.

2- Other inputs
Decreasing the use of synthetic fertilizers and pesticides goes together with increasing other inputs. These inputs can be bought or produced on the farm (such as manure), others come in the form of knowledge about actions to be taken (e.g., timing of planting or best rotational combinations,).
In addition, the change in the combination of inputs may change the effectiveness of certain processes which influence farm output, such as the cycles of water, nutrients, energy and knowledge (inter-generational). Farmers’ knowledge of local conditions and of traditional practices are of key importance in the success of organic agriculture.
Other inputs used are seed or animal breeds, water and energy. The emphasis of crop seeds and animal breeds used in organic agriculture is on local suitability with respect to disease resistance and adaptability to local climate.
Due to the change in soil structure and organic matter content under organic management, water efficiency is likely to be high on organic farms. Water scarcity and erosion of agro-biodiversity are indirectly addressed by organic agriculture since this form of agriculture relies mostly on endemic biodiversity that is resilient to local ecological stress (e.g., drought).
In general, non-renewable energy inputs are used on organic farms. Standards for organic agriculture include environmental degradation as a criterion for acceptance of certain practices. However, there are many conventional farms where environmental pollution is kept to a minimum.

3- Crop rotation
While not exclusively practiced by organic farmers, crop rotation is required under organic certification programmes and is considered to be the cornerstone of organic management.
Agricultural pests are often specific to the host (such as a particular crop), and will multiply as long as the crop is there.
Manipulation of crops between years (management by rotations) or within fields (strip-cropping) is therefore an important tool in the quest for management of pest problems, and also for maintaining soil fertility.
As the use of synthetic fertilizers and pesticides allows the farmer to grow the crop which is financially most rewarding, not using those inputs leads to restrictions in choice of crops. The loss in (present) income through a change in rotation is to some degree reflected in, and compensated by, the decrease in input costs.
The success of an organic farm depends on the identification of end-uses and/or markets for all the crops in the rotation, as few farmers can afford to leave fields fallow. This remains one of the most significant challenges in organic agriculture.

3- Yield
Research has shown contrary to popular belief, yields on organic farms say in the 1990s in the developed countries were significantly higher than those on farms before the 1950s, thus dispelling the notion that organic agriculture is “going back to the past”. Part of this progress can, presumably, be attributed to new plant varieties and better knowledge on how to manipulate biological processes within agricultural systems.
A factor which can also make a difference in yields is the time and length of the growth period of a crop. Due to slow mineralization of nitrogen under cool growing-conditions, crops on organic farms have a shortage of nitrogen early in the season. However, in countries where low soil temperature is not a limiting growth factor, as in many developing countries, this factor should not prove significant.
The variability of yield and financial returns has been a topic of study in developed countries.
A growing number of success stories are being recorded. Stable, high yields under organic management were also recorded in the Philippines, where Padilla (1991) found rice yields of 6.1 ton per hectare on Bontoc irrigated rice terraces, without the use of modern cultivars, synthetic fertilizers and pesticides.
Ten years earlier a similar yield (6.2 tons per hectare) was recorded by Omengan (1981; as reported in Padilla (1991)). This compares with 7.3 tons per hectare in IRRI’s long-term experiments, including new cultivars and fertilizer (N-P-K:140-30-30) grown in the dry season (no indication was given about yields under irrigation).
4- Total farm production
It is important to discuss not only yields, but also whole farm production. The total production on the farm is the yield times the area in the different crops or that used for livestock.
Usually it is measured per unit of land (hectare), but when other inputs are critical, such as labour or water, these could be judged as being more appropriate as indicators. When measuring production, one also needs to be aware of the concept of net production, especially relevant in developing countries.
This refers to the production net of specific inputs, such as the costs of nutrients. It is very easy, for example, to increase the yield of a cow by feeding her concentrates. The question is, however, whether it was worth the extra input. This can be determined by an assessment of the net returns to farming.
In situations where inputs are subsidized, as fertilizers and pesticides have been in a number of developing countries, the financial returns on organic farms may not be as attractive. Similarly, not counting the environmental and health costs of such inputs as is generally the case, means that organic agriculture is under-valued. It should be realized that, during the conversion process, yields may be lower and investments higher than at a later stage when the organic farm has been established. The net returns to farming can therefore be lower in such a period than later.

POTENTIAL IMPACTS
Long-term productivity
Protecting soils and enhancing their fertility or land stewardship implies ensuring productive capacity for future generations.
Deteriorating soil quality is often quoted by farmers as a major reason for adopting organic management. It can, therefore, be assumed that those farmers who adopted organic management practices found a way to improve the quality of their soil within the new management system, or at least stemmed the deterioration.
However, in the quest to improve soil quality for the future, probably the single most important factor to determine whether farmers are interested in the issue is whether they will benefit from the change. Security of land tenure is, therefore, an extremely important factor in this respect. If security is not guaranteed, there is little reason for farmers to invest in a method that will bring them income in the future rather than immediate rewards.

Food security and stability
In organic agriculture in general, a diversity of crops are grown and kinds of livestock kept.
This diversification means that the risk in variation in production is spread, as different crops react differently to climatic variation, or have different times of growing (both in the time of the year and in length of growing period).

This implies that, although there is less chance of a bumper year for all enterprises on organic farms (likely to coincide with relatively low prices), there is also less chance of low production for all crops and livestock simultaneously, thus contributing to food security and stability of food available for consumption. Decreases in the variation of yields has the same effect as a spreading of enterprises.

Food security is not necessarily achieved through food self-sufficiency. Consumers’ demand for organically-produced food and sometimes impressive premiums provide new export opportunities for farmers of the developing world, thus increasing their self-reliance. Although few studies have assessed the long-term potential of such market premiums, returns from organic agriculture have the potential, under the right circumstances, to contribute to local food security by increasing family incomes.

Organic agriculture can contribute to local food security in several ways. Organic farmers do not incur high initial expenses so less money is borrowed. Synthetic inputs, unaffordable to an increasing number of resource-poor farmers due to decreased subsidies and the need for foreign currency, are not used. Organic soil improvement may be the only economically sound system for resource-poor, small-scale farmers.

This characteristic of the production process on organic farms means that organic farmer-consumers are less dependent on a factor over which they may have little control, thereby increasing the food security situation.
Environmental impact
Organic farmers forego the use of synthetic fertilizers. Most certification programmes also restrict the use of mineral fertilizers, which can only be used to the extent necessary to supplement organic matter produced on the farm.

There are environmental advantages to this: non-renewable fossil energy needs and nitrogen leaching are often reduced. Instead, farmers enhance soil fertility through use of manure (although the kind and its handling has a great effect on nitrogen content and poor usage can create leaching problems), crop residues (e.g. corn stover, rice residues), legumes and green manures, and other natural fertilizers (e.g., rock phosphate, seaweed, guano, wood ash).

Disadvantages to discarding synthetic fertilizer must be considered as well: energy needs can escalate if thermal and mechanical weeding or intensive soil tillage is used and, in some cases, organic farmers burn to clear land which reduces fertility. Many resource-poor farmers do not have access to livestock manure, often an important fertility component. Sometimes sewage sludge is used, which may contain pathogens and other contaminants. Finally, some areas in tropical countries may have such low soil fertility that synthetic inputs are necessary.

Organic farmers rely on natural pest controls (e.g. insect pheromones, plants with pest control properties) rather than synthetic pesticides which are known to kill beneficial organisms (e.g., bees, earthworms), cause pest resistance (e.g., in Asia, cotton is sprayed 15-16 times a season versus 5-6 times ten years ago), and oftentimes pollute water and land.

Soil protection techniques used in organic agriculture (e.g., terracing in the humid tropics, cover crops) combat soil erosion, compaction, salinization, and degradation of soils, especially through the use of crop rotations and organic materials which improve soil fertility and structure (including beneficial microbial influence and soil particle evolution). Integrating trees and shrubs into the farm system also conserves soil and water and provides a defense against unfavourable weather conditions such as winds, droughts, and floods.

Techniques used in organic agriculture also reduce water pollution and help conserve water on the farm. A few developed countries subsidize or compel farmers to undertake organic production as a solution to water quality problems.

Organic agriculture requires a diversity of crops and livestock. Many indigenous food crops (e.g., yam, sorghum, millet, oil palm, cashew, mango) supplanted by monoproduction of cash crops, pseudocereals (e.g. amaranth, buckwheat, chenopods), grain legumes (e.g., adzuki, faba, hyacinth beans) and other under-utilized plants, many of great value, can be reintroduced through crop rotations. This contributes to whole farm health, provides conservation of important genotypes, and creates habitats for beneficial species.

Although inappropriate management of inputs used in organic agriculture may be detrimental to the environment (such as an excess of manure or compost affecting water quality), one of the aims of this management system is to “minimize all forms of pollution that may result from agricultural practices”. Standards are, therefore, expected to reflect local conditions so that pollution is minimized. For example, restrictions on the number of livestock or amount of manure to be used per unit of land are not exceptional.

Social impact
The social impact of a change towards organic agriculture is recognized as an important aspect as witnessed by its inclusion in IFOAM’s Principle Aims.
However, it has been argued that, at present, these are areas of peripheral attention, as compared to the scientific aspects of the management system. The following are some of the issues:
• The site-specific nature of organic agriculture also means that indigenous species and knowledge, so often discounted, are of great value. In many places, this knowledge has been eroded with the introduction of high external input agriculture, promotion of monocultures, and selection of “improved products.” Farmers may readily welcome a management system close to their own traditions and not driven solely by a production ethic;
• Organic management which relies on local knowledge of complex interactions and variations of conditions from place to place does not favour large production areas. Organic agriculture therefore carries an enhanced potential for more equitable distribution and access to productive resources, namely land;
• Engaging in organic production means experimenting new techniques, introducing different management of labour time, investing efforts in different management of space, adapting and refining solutions to change, comparing different options with farmers that have similar conditions, and making appropriate choices. This can only be achieved through farmer’s participation in research and its application. This on-farm research component can support rural communities, and generate new knowledge that will benefit all farmers;
• consistent labour needs, combined with the enhanced capacity of the land and protection of water associated with organic agriculture, may encourage people to permanently locate and thus reinvigorate rural communities;
• Within organic agriculture, the use of locally available inputs is encouraged, the effect on the local community of such a form of agriculture is, therefore, likely to be greater than when inputs are imported from outside the community;
• In those cases where synthetic fertilizers and pesticides are imported, adoption of organic agriculture techniques means a decrease in imports, decreasing the need for foreign currency. Although it is not clearly the case that labour needs on organic farms are higher, where value adding activities (such as processing and marketing) are developed, more labour input and a different distribution of labour can be required. The present market characteristics of organic agriculture make this more likely within this form of agriculture.