Nguyen Thi Lan Huong, PhD*

Income growth, changes in people’s dietary preferences, food safety requirements and market integration are driving increasing demand for organic vegetables in both domestic and export markets. Consumer awareness of the environmental costs of agriculture (such as the deteriorating quality of drinking water and soil, and the impact of agriculture on landscape and wildlife) is increasing, creating opportunities to sell organic products at premium prices, enabling organic farmers to continue and expand.

To ensure that smallholder farmers make use of these market opportunities and strengthen their competitiveness in organic production, governments should help them to overcome a range of constraints in production, marketing, export and in the overall value chain.

According to the Food and Agriculture Organisation of the United Nations (FAO)/World Health Organisation (WHO), organic agriculture is a holistic production management system which promotes and enhances agro-ecosystem health, including biodiversity, biological cycles, and soil biological activity. It emphasises the use of management practices in preference to the use of off-farm inputs, taking into account that regional conditions require locally adapted systems. This is accomplished by using, where possible, agronomic, biological, and mechanical methods, as opposed to using synthetic materials, to fulfill any specific function within the system.

Organic standards, in which the definition is set out for practical application, stipulate not only the prohibition of use of certain inputs but usually dictate a range of practices to be followed that will ensure a farm maintains its sustainable productive capacity. 

In other words, farms on which no synthetic fertilisers and pesticides are used but where no alternative measures are taken to cope with fertility and pest issues are not necessarily accepted as organic. The common description that organic agriculture is a method of agricultural production that does not make use of synthetic fertilisers and pesticides does not mention the essence of this form of agriculture, which is the management of farms in such a way that soil fertility and pest problems are prevented and natural resources are sustained.

Competitiveness and constraints

Although organic agriculture is an area in which smallholder farmers are often less competitive, some specific organic products, such as organic vegetables, can help smallholders cope with emerging risks of market volatility and climate change.   Vegetable production, in general, can be a source of nutritious food, as well as an alternative source of income. Vegetables have a relatively short growing period, thus providing a relatively fast way for vegetable producers to get the return from their investment, while organic vegetables in particular, can command a higher price. This is suitable for smallholders and the rural poor who have limited farm-size and working capital. Smallholder farmers also tend to use less synthetic fertilisers and chemicals as they cannot afford them. This makes it easier for them to grow organic vegetables.

However, smallholder farmers also face constraints, including: Technical production constraints refer to pesticide contamination,  poor soil with high acidity and low organic matter, extreme weather, unsuitable varieties and inferior  organic vegetable products due to limited understanding of post-harvest practices, processing technology and water management. Marketing and value chain related constraints include limited distribution channels for organic products, high post-harvest costs as charges for transportation and cold storage cut into farmers’ profits,  cumbersome procedures for organic product certification, the absence of traceability for organic products which lowers local consumer trust and stalled export processes. Export related constraints include being unable to connect with value chains linking domestic and export markets.

Inclusive policies

Improving the quality of extension services can provide training in better organic management practices. Improving soil management practices through soil testing services to manipulate crop rotations, strip-cropping with suitable varieties and application of organic fertiliser sources are crucial, as is local land zoning for organic production. Organic management which relies on local knowledge of complex interactions and variations of conditions from place to place does not favour large production areas. Indigenous climate-smart plant varieties and local biological control methods to encourage natural enemies of pests should be followed. In tropical countries, humidity and high temperatures pose problems of higher food losses and waste, which can be overcome by promoting traditional semi-processed foods such as pickled vegetables, juices and canned food.

Developing Producer Organisations (POs) that are membership-based, with experience of helping small producers expand agricultural production, can increase incomes through higher productivity combined with processing and marketing activities in a sustainable manner. These POs will also work with the private sector along the value-chain. The growing role of POs in providing services reflects a desire among small producers and small entrepreneurs to take matters into their own hands. However, POs may need financial assistance from governments.

Improving knowledge in sanitary and phytosanitary and other food safety requirements in export markets is important. The required quality and safety standards of organic products must be disseminated to farmers in the local language. The government should promote traceability and the application of good practices with direct support from local authorities and application of modern technologies.

Organic regulations require all certified operators to undergo at least one inspection a year, carried out by a third party inspection body. The costs for certification are often too high for smallholders to afford, especially in developing countries. Group certification systems based on internal control should be promoted as the key function of the POs. This form of certification requires POs to implement an internal control system (ICS) operated by a central body of the group. When an ICS is in place, a group is considered a single production unit. The third party certification body is able to inspect and certify the group as a whole, issuing one single certification for all individual producers as well as for the collective processing and handling activities operated by the group. Group certification is a powerful tool that helps smallholders to become organically certified and provides them with access to global organic markets. The concept of group certification has been recognised through inclusion in the guidance notes of, for example, the EU Organic Regulation and the US National Organic Programme.

A common problem is that commercial organic products are not easily distinguished from conventional ones, sometimes even with products containing genetically modified ingredients. Hence, specialised shops and market venues for organic products need to be developed with additional training on the nature of biological production for distributors, wholesalers and retailers. The government should also provide incentives to attract large international companies to invest in modern market distribution channels.

Supportive strategies reinforcing the above policy options can be implemented through various means, such as providing concessionary loans to smallholder farmers, providing technical support for certifying organic produce, improving rural infrastructure (roads, markets, storage, etc.), and offering incentives for organic vegetable-related agribusinesses to employ more vulnerable groups (tax incentives for employing the poor or investing in poor regions, etc.), and increasing customers’ awareness of  the difference between organic and conventional products. Last but not least, certification requirements and the benefits of organic production need to be made clearer for producers and consumers alike. This calls for further efforts for the promotion of inclusive smallholder farmers in organic agriculture. – VNS

* Nguyen Thi Lan Huong is an Economist at the Economic and Social Development Department, Food and Agriculture Organisation of the United Nations (FAO). The views expressed in this article are those of the author and do not necessarily reflect the views of FAO.