India: Lacking infrastructure is the greatest obstacle

Morarka Organic Foods Pvt. Ltd is one of the biggest players in the Indian organic market. The company covers a wide range of products and activities, from organizing a wide network of organic small farmers all over the country to manufacturing cereals, spices and herbs and to trading with textiles made out of organic cotton, silk and wool. A catering company together with a school for cooks and a joint venture with another company offering ecotourism are some further activities of Morarka Organic Foods. Market prospects are positive and visions for the future are ambitious. Organic Market.Info spoke with Mukesh Gupta, executive director of Morarka Foundation and president of the Indian Competence Center for Organic Agriculture ICCOA, about a sustainable way of developing the organic sector in India and his expectations for the next years.

Organic products could boom in the next years in India, but it´s important for such a niche market to be developed in a sensible way. As we now have to learn from the worldwide economic crisis, it is not useful to boost a market too much. There is always the risk of a breakdown. What do you think are the most important factors for a sustainable development of the organic sector in India?
 

I see three factors in key positions. One is on the production side where we have to assist producers to get them qualified in a good way and adapt organic practices so that they can get certified. Also, supply chain management needs to be improved and consumer awareness needs to be raised. In my opinion, supply chain management is the most important factor we have to improve, since we somehow lack that. In the conventional sector we have a huge infrastructure in agribusiness, but for organics this does not existent. So after establishing a supply chain, we will have great success. At the consumer end, I think, the only thing which is missing is a credible logo and credibility behind that logo. When we get that and when we succeed in building up confidence, the Indian market will start to grow quickly.
(picture: Morarka at the India Organic Tradefair in Delhi, November 2008)
 

When do you expect that the logo is established by legislation?
 

At this point of time, international logos are accepted in the domestic market. That is fine. But I believe and I´ve been promised that by the end of this summer, the Ministry of Agriculture is going to announce a new legislation and the logo based on this law. So then we will have a good standard available for the domestic market. After the implementation it might take about two years for consumers to recognize the logo.
 

Experience shows that it is not enough to have a logo and to have the legislation. You also have to communicate it to the consumers to create awareness - do you think that the government will do enough to promote this logo after introducing the legislation?
 
I believe as the organic sector is such a niche market. The government will not be able to afford logo promotion as such. But all private players, all companies which are certified under international laws must also be certified under the domestic standards. So they have to take the initiative to promote the domestic law and the logo. In this way we can reach reasonable results. Public authorities cannot massively invest in the promotion of the organic logo in the domestic market. If consumption is increased due to the promotion of the new logo, organic producers and suppliers will not be able to meet the growing demand immediately. So it does not even help to have a massive publicity campaign across the country. First we have to build the supply chain and a functioning infrastructure to serve a quickly growing demand. So going slow is the answer. (picture: Part of Morarka´s textile collection)  

What are the greatest obstacles and the challenges of the organic sector in India in your opinion?

Today in India international certification is definitly well organized, only the costs for small farmers are a serious problem. The solution will be a group certification on a low budget (2 $/ acre a year). We think this is a very very reasonable amount. Domestic legislation is in the pipeline, so nobody should say that certification is a handicap. In terms of understanding cerfication standards, laws and regulations, it is a little challenge to explain it to the large number of small farmers. But I think the standards as such are not too difficult so we have to point them out and tell the farmers that it is not really difficult to follow these rules. The thing I want to emphasize once again is the importance of the supply chain management, of distribution and of retailing. These three things are not implemented properly yet. So once these sectors are functioning properly, the Indian market should grow really large. 
 

Let´s talk about your ativities at the Morarka Foundation: What are your visions and your aims for the future - what have you already reached?

We already have 250.000 farmers across the country under enrolment programs of Morarka. I think today we are able to establish a market supply chain for 20 % of them. So one necessary goal we have for the near future is to increase this percentage. We are targeting to bring about 50 % of the farmers under supply chain management. The second task is to create a domestic consumer marketplace. On one side we have to achieve this with events and promotion. We want to arrange food courses, food fairs and so on. We have gathered a quite reasonable expertise on that in the last few years. We are also planning activities on the retail level and our first shop will be opened in Mumbai soon. We are continuously enlarging our product range. For example, we have been active in organic cotton production for seven years, and now we can present our first own organic cotton collection. I think we are on the right track.
 

Could you name the main articles and the trend items of Indian production for export? 
 
Basic groceries are cereals, spices, condiments, pulses and some herbs and oils as well as ghees. But organic cosmetics and organic textiles are coming into demand as lifestyle-products more and more. We will follow these international market trends.
 

What do you think about the development of the India Organic tradefair, especially when BioFach will start in Mumbai in April 2009 ?

In 2008, the India Organic tradefair has grown in comparison with 2007, and this growth has continuously been happening for four years. BioFach in India will complement with the trade fair which we do once a year. But having both fairs in the country would help to expand both markets – the domestic market as well as international markets. On the India Organic which is held in Delhi, we have a high number of participants from state governments and farmers groups, the fair is also frequented by government representatives. That helps us to lobby with the state governments and the national government. Holding a trade fair in Mumbai would attract the upper consumer class, which would help to create awareness in this group of people. So it would almost be essential for both events to take place in the same year. (picture: Organic cotton and silk collection)
 

Mr. Gupta, thank you very much. 
 

www.morarkaorganic.com
www.morarkango.com
www.shekhawatifestival.com