Marketing Research Proposal

A MARKETING RESEARCH PROPOSAL
Title:
Marketing of Bangladesi Organi! Prod"!ts:
A St"d# of Organi! Ri!e
S"$%itted $#:
Fahmida Haque
PhD Research Fellow
Registration No. 100406110175
S"$%itted to:
Dr. hando!er "ai#u$$aman
A!ade%i! &a!ilitator
%ourse& Marketing Resear!
Facult' o# (usiness "tudies
Banglades 'ni(ersit# of Professionals
)ir*ur %antonment+ )ir*ur+ Dha!a
Table of Contents
1. Background of the study 03
2. Statement of the problem 04
3. Just!caton of the study 04
4. "b#ect$es of the study 0%
%. &esearch 'uestons 0(
(. )terature re$e* 0(
+. &esearch methodology 1(
,. Tentat$e outlne of the thess ncorporatng the proposed research 1+
-. Tentat$e research schedule 20
10. &eferences 21
Introd"!tion ) $a!kgro"nd of te st"d#
Introd"!tion
,ith the demand and necessit' o# the changing world the needs o# *eo*le has changed. -i!e
other sectors a re.olution has made in agricultural sector. /s in earlier da's the agriculture o#
(angladesh li!e other *arts o# the world was de*endent on traditional #arming which was
0asicall' an organic #arming. (ut as the *o*ulation and demand increase1 the uses o# #ertili$er+
*esticides+ chemicals and h'0rid cro*s are 0ecoming the *rinci*al tools o# this re.olution.
2n the name o# green re.olution an attem*t was made in 1360s to increase #ood 4mainl' cereals5
*roduction through introducing modern technolog' and rice mono cro**ing and other
s*eciali$ed #arming s'stem which are de*endent on costl' e6ternal in*ut *articularl' #or rice
such as s'nthetic chemical #ertili$er+ *esticides+ #ungicides+ her0icides+ F1 and H78 seeds+
underground water and cash in.estment which is not a##orda0le 0' mass #arming communit'. 2t
leads #armers to go inde0tedness. 9.er the thirt' 'ears+ #ood 4cereal5 *roduction has increased
:3; in the cost o# #ollowing&
Reducing acreage o# local /us and other minor cro*s which are economicall' and
nutritionall' most im*ortant such as *ulse+ oil seeds+ s*ices + .egeta0les etc 1
Rice mono<cro**ing has e6tinct near a0out 6000 e.er tested local .arieties 1
Due to soil degradation+ the rice *roduction has 0een declined at the rate o# =.> ; *er
annum 4(RR2+ 13:5<13355 o.er a#ter using o# agrochemical at increasing doses.
?he *icture o# *roduction *er acre unit at #armers le.el is worst i.e. due to use o# in*uts in
increased dose and higher *rice 0ut less cost o# *roducts@out*ut+ #armers ha.e to
com*ensate their la0or cost and cash 4through de0tness5 to continue the rice *roduction
#or nation.
Natural 0alance is 0eing destro'ed among 0ene#icial insects@*redators and harm#ul
insects is 0eing destro'ed+ thus *est 0ecome resistant to *esticides and in#estation and
controlling measure 0ecome more costl'.
?he water run o## along with *esticides and chemical #ertili$ers has 0een *olluting water
0odies 4ditches+ wetlands+ la!es+ ri.ers+ stuarine and sea5 and ad.ersel' a##ecting aquatic
li.es *articularl' e6tinct some local #ish s*ecies. %ontamination o# ground water through
*ercolation+ downward o# the *esticides and #ertili$ers *oses a great health ris!s.
2ncreasing ailments due to contact o# *esticides+ consum*tion o# *olluted #ood *roducts+
suicide and other health ha$ards.
2t has a##ected socio<cultural and economic li#e o# *eo*le negati.el'. ?he dis*arit'
0etween rich and *oor section o# *eo*le has 0een widen u* #urther and 60; o# the rural
wor!#orce who were de*endent u*on agriculture has 0een Ao0less. 4"ar!er+ >00>5
Howe.er+ the agriculture *roduction s'stem is not suita0le and cost e##ecti.e. "o it is deemed
necessar' the *resent conce*t o# #ood *roduction and used technolog'+ *olic' and strategies o#
agricultural research+ education and e6tension o# #arming s'stems needs a closer loo! #or
sustaina0le alternati.es. 2n (angladesh organic agriculture is a new 0u$$word which is 'et to
!nown *o*ularl' though some NB9s li!e PR9"H2/+ C(2N2B ad.ocating and *romoting in
the name o# ecological agriculture in the root le.el since long. (ut this initiati.e in most cases
con#ined in .er' limited area o# agricultural *roduces li!e .egeta0le onl'. 8er' recentl'
go.ernment #ormulated new agriculture e6tension *olic' where one o# the o0Aecti.es o# its
*olic' is to ta!e necessar' ste*s to ensure en.ironmental *rotection as well as Den.ironment <
#riendl' sustaina0le agricultureD through increasing use o# organic manure and strengthening o#
the 2ntegrated Pest )anagement 42P)5 *rograms. 2n order to attain sel#<su##icienc' in #ood
s*eciall' rice (angladesh ado*ted green re.olution resulted H78 mono<cro**ing #or which
a0out 6000 o# its indigenous .ariet' has alread' 0een e6tinct.
/ recent research 42F9/)+ >00=5 has identi#ied that :>; o# the consumers in /sia are aware o#
the harm#ul e##ects o# *esticides or chemical #ertili$er on human 0od'. Due to the lac! o#
!nowledge a0out organic rice+ the' ha.e no o*tion to normal rice. 9nl' >:; o# the consumers
ha.e heard o# organic rice 42F9/)+ >00=5. 5:; o# the consumers+ the mean o# the distri0ution+
would 0e interested in 0u'ing organic rice were it widel' a.aila0le to them.
?his situation is .er' gra.e in (angladesh. ?hough there is no such data+ 0ut it is re.ealed #rom
e6*erts re.iew that most o# the *eo*le o# the *resent *o*ulation are aware o# the harm#ul e##ects
o# *esticides or chemical #ertili$er on human 0od'. /nd the awareness #or organic *roducts is
increasing. ?he *resent stud' will tr' to gain !nowledge o# the le.el o# awareness 0' #armers and
consumers regarding the status o# organic rice+ and !nowledge o# demand and mar!eting
o**ortunities and limitations #or organic rice in the countr'.
State%ent of Pro$le%
(angladesh now needs to than! its soil health+ en.ironment and human health #or the countr'
0eing almost sel#<su##icient in rice *roduction. ?he *resent stud' will tr' to gain !nowledge o#
the le.el o# awareness 0' #armers and consumers regarding the status o# organic rice+ and
!nowledge o# demand and mar!eting o**ortunities and limitations #or organic rice in the
countr'. ?he *resent stud' will highlighted the o.erall organic rice situation in (angladesh+
which is not 'et well documented. ?he *resent stud' ma' o*en a new window #or organic rice
research and mar!eting 40oth local and e6*ort5 #or all sta!eholders 4including *lanners5 and
could succeed in the ado*tion o# organic rice in (angladesh.

O$*e!ti(es of te st"d#
Board objective:
?he o0Aecti.e o# the *resent research is to detect and identi#' the status o# organic rice+ and
!nowledge o# demand and mar!eting o**ortunities and limitations #or organic rice in
(angladesh.
Specific objectives:
Hence+ the stud' will ha.e the #ollowing s*eci#ic o0Aecti.es&
1. ?he stud' would ascertain the e6isting organic rice *roduction techniques and the
identi#ication o# o**ortunities to increase the sustaina0ilit' o# (angladeshEs organic rice
*roduction s'stems.
>. ?he *resent stud' would tr' to highlight the o.erall organic rice situation in (angladesh+
which is not 'et well documented.
=. ?he research would tr' to e.aluate the current situation regarding the awareness le.el o#
#armers and consumers in (angladesh a0out organic rice.
4. ?he research would tr' to gain !nowledge o# demand and mar!eting o**ortunities and
limitations #or organic rice in the countr'.
5. ?he stud' would determine the limitations and *ossi0ilities o# e6*orting organic rice
#rom (angladesh.
Resear! +"estions
?he *rimar' #ocus o# the *resent stud' is to detect and identi#' the status o# organic rice1 and
!nowledge o# demand and mar!eting o**ortunities and limitations #or organic rice in (angladesh
?hus+ this stud' s*eci#icall' addresses the #ollowing research questions&
< ,hat are the e6isting organic rice *roduction techniques in (angladeshF
< ,hat are the o**ortunities to increase the sustaina0ilit' o# (angladeshEs organic rice
*roduction s'stemsF
< ,hat is the current situation regarding the awareness le.el o# #armers and consumers
in (angladesh a0out organic riceF
< ,hat is demand and mar!eting o**ortunities #or organic rice in the countr'F
< ,hat are the limitations #or organic rice in the countr'F
Literat"re re(ie,
Theoretical background
?he so!ietal %arketing !on!e-t is an enlightened mar!eting conce*t that holds that a com*an'
should ma!e good mar!eting decisions 0' considering consumersD wants+ the com*an'Ds
requirements+ and societ'Ds long<term interests. 2t is closel' lin!ed with the *rinci*les o#
!or-orate so!ial res-onsi$ilit# and o# s"staina$le de(elo-%ent. 4,i!i*edia5
?he so!ietal %arketing !on!e-t holds that the organi$ationEs tas! is to determine the needs+
wants+ and interests o# a target mar!et and to deli.er the desired satis#actions more e##ecti.el'
and e##icientl' than com*etitors in a wa' that *reser.es or enhances the consumerEs and the
societ'Es ,ell.$eing.
?here#ore+ mar!eters must endea.our to satis#' the needs and wants o# their target mar!ets in
wa's that *reser.e and enhance the well<0eing o# consumers and societ' as a whole. ?he conce*t
has an em*hasis on social res*onsi0ilit' and suggests that #or a com*an' to onl' #ocus on
e6change relationshi* with customers might not 0e suita0le in order to sustain long term success.
Rather+ %arketing strateg# should deli.er (al"e to !"sto%ers in a wa' that maintains or
im*ro.es 0oth the consumerEs and the societ'Ds well<0eing.
8arious attem*ts to de#ine the o0Aecti.es o# societal mar!eting ha.e 0een noted+ such as &
G"ocial res*onsi0ilit' im*lies that a 0usiness decision ma!er... is o0liged to ta!e actions
that also *rotect and enhance societ'Ds interests.
G(usiness has the res*onsi0ilit' to hel* Hthe consumerI .... 2t s the dut' o# 0usiness to
*romote *ro*er consum*tion .alues.
G(usiness leaders are mandated to ado*t roles o# leadershi* in the ad.ancement o# our
societ' to new le.els o# moral conduct.
Sustainable development through agriculture in Bangladesh
(angladesh is an agrarian countr' in "outh /sia with a *o*ulation o# around 150 million+ o#
which 5=; li.e 0elow the *o.ert' line 4,orld (an! >0055. ?he maAor source o# li.elihood is
agriculture. ?he Bo.ernment o# (angladesh 4B9(5 is committed to meeting the )illennium
De.elo*ment Boals 4)DBs5 0' hal.ing the le.el o# e6treme *o.ert'+ *rotecting the
en.ironment+ and *romoting a glo0al *artnershi* in de.elo*ment 0' >015. "*ecial e##ort is
needed to increase the *ro#ita0ilit' o# agriculture in (angladesh and there0' reduce rural *o.ert'+
which requires a 4; growth rate in the agricultural sector 4Po.ert' Reduction "trateg' Pa*er
4PR"P5 >0055.
?hus+ the agriculture sector in (angladesh is the most im*ortant sector in terms o# sustaining
growth and reducing *o.ert'. Howe.er+ a lac! o# adequate nutrient su**l'+ the de*letion o#
organic matter in soils+ and soil erosion are maAor o0stacles to sustaina0le im*ro.ements in
agricultural *roduction 4)inistr' o# /griculture >00:5.
?he total amount o# #ertili$er used in (angladesh has increased 0' a0out 1.55 million tons #rom
1334J35 to >006J07+ although the use o# urea #ertili$er has onl' increased 0' a0out 0.35 million
tons o.er this *eriod 4(angladesh Kconomic Re.iew >00:5. ?he use o# *esticides increased #rom
7+=50 metric tons in 1331 to 16+>00 metric tons in >001 4)inistr' o# /griculture >0055+ more
than dou0ling o.er the course o# a decade. /mong this huge amount o# *esticides+ insecticides
accounted #or a0out 30;+ and are generall' used #or .egeta0les and 0oro rice 4CNDP >0065.
?his huge consum*tion o# chemical #ertili$ers and *esticides a**lied to 7.=> million hectares o#
culti.ated land 4(angladesh (ureau o# "tatistics >00:5 re*resents an o.er<use o# agro<chemicals
and a waste o# #oreign currenc' reser.es+ as the countr' im*orts most o# the a**lied agro<
chemicals+ e6ce*t #or urea #ertili$ers.
)oreo.er+ the continuous and un0alanced use o# inorganic nutrients in an intensi.e cro**ing
s'stem has 0een considered to 0e the main cause #or stagnating or declining cro* *roducti.it'.
Cnless the use o# 0alanced #ertili$ers and organic matter in soils is seriousl' considered+
sustenance or an increase in *roducti.it' can hardl' 0e achie.ed.
Bi.en the challenges that arise #rom the o.er<use o# agro<chemicals+ a !e' *olic' inter.ention #or
sustaina0le agriculture is to encourage the ado*tion o# agricultural technologies that rel' to a
greater e6tent on local or renewa0le resources. 9rganic #arming 49F5 is one such technolog' that
can reduce the harm#ul im*acts o# agro<chemicals+ and is considered 0' man' scientists to 0e the
0est #orm o# agriculture in terms o# ma6imi$ing cost<e##ecti.eness and minimi$ing *ollution
4%hristian et al. >0055. 9F in (angladesh was #irst introduced 0' Proshi!a 4a renowned national<
le.el NB95 in the earl' 13:0s to #acilitate the growing o# .arieties o# seasonal .egeta0les in a
manner that is sustaina0le+ *roducti.e+ equita0le and conduci.e to 0iodi.ersit' 4Proshi!a >0045.
Km*owerment means that the *oor are united and organi$ed+ 0ecome aware o# the causes o# their
im*o.erishment+ de.elo* leadershi* among themsel.es+ mo0ili$e their material resources+
increase their le.els o# income and em*lo'ment+ de.elo* the ca*acit' to co*e with natural
disasters+ 0ecome #unctionall' literate+ ta!e 0etter care o# their health+ 0ecome engaged in
en.ironmental *rotection and regeneration+ 0ecome elected in local go.ernment 0odies and
communit' institutions+ and ha.e 0etter access to *u0lic and common *ro*ert' resources.
Progress in ado*ting 9F has 0een .er' slow in man' regions o# (angladesh+ e.en though the
countr' has great *otential in this regard 0ecause o# sur*lus la0our+ huge cro* di.ersit'+ and
considera0le in.estment 0' Proshi!a and other NB9" since the 13:0s 4"ar!er and 2tohara >00:5.
)an' studies ha.e 0een conducted in (angladesh to e6amine the determinants regarding the use
and resulting economic im*act o# chemical #ertili$er+ im*ro.ed seeds+ im*ro.ed agricultural
*ractices+ and 2ntegrated Pest )anagement 42P)5 technolog' 4e.g. Haider et al. >0011 Hoque and
)iah >0011 Hossain et al. >00=5. Howe.er+ .er' #ew stud' has e6amined the im*lementation o#
organic #arming.
Status of organic rice production in Bangladesh
2n terms o# total rice *roduction+ (angladesh occu*ies the 4th *osition in the world at *resent
4C"D/+ >0015. 2n the 'ear 1336+ a total o# L16 million 4C.".5 in *esticides and L6 million in
her0icides were sold in (angladesh+ and in 1333+ a total o# 1= million tons o# chemical #ertili$ers
were also used 42RR2+ >0075. ?he use o# chemicals is increasing e.er' 'ear in (angladesh.
(angladesh has Aust initiated some studies on organic rice+ 0ut .er' little or no research wor! has
0een done 4(RR2+ >0075. "ome studies ha.e 0een done on the e.aluation o# cow dung+ *oultr'
manure+ rice straw+ and #arm'ard manure as su**lemental nutrient sources #or growing rice that
would im*ro.e or maintain soil health. ?hese studies+ howe.er+ did not #ul#ill the desired conce*t
o# G9rganic Rice %ulti.ationM 0ecause in these cases weed and *est controls were not
considered. "ome technologies+ li!e integrated rice<duc! #arming+ are a.aila0le or !nown to
#armers as means o# growing organic rice. Rice<duc! *ractices is a .er' new organic rice
technolog' in (angladesh which ha.e 0ecome .er' *o*ular with resourceJ*oor #armers
4Hossain et al.+ >0055.
"aleque et.al.+ 4>0045 has stated that 2ntegrated Pest )anagement 42P)5 and the use o# cow dung
and ash is e##ecti.e on rice 'ield and soil #ertilit'. (hui'an 413:75 suggested that a ma6imum
return can 0e achie.ed 0' the addition o# cro* and animal residues to soil+ the 0alanced use o#
chemical #ertili$er+ the use o# 0io#ertili$er+ *racticing green manuring in cro* rotation+ and the
*ro*er utili$ation o# #arm manure+ night soil+ com*osts and nitrogenous organic materials+ all
wa's o# im*ro.ing soil #ertilit' in (angladesh. / num0er o# nongo.ernmental organi$ations+
namel'+ C(2N2B 4Polic' Research #or De.elo*ment /lternati.es5+ Proshi!a+ and %/RK
(angladesh+ ha.e launched initiati.es in di##erent *arts o# the countr' to *romote sustaina0le
agriculture and organic rice *roduction.
/mong the organic materials tested+ cow*ea 48igna unguileata5 was su*erior with res*ect to
mineral com*osition+ #ollowed 0' dhaincha 4"es0ania aculeata5 and a$olla. ?he grain 'ield
res*onse clearl' demonstrated that cow*ea was the 0est source o# organic material #or wetland
rice+ #ollowed 0' dhaincha 4(hui'an+ >0015. ?o increase soil organic matter+ some #armers are
using com*ost+ quic! com*ost+ cow dung+ and a$olla and growing grass *ea 4-ath'rus sati.us5 at
maturit' o# /man rice as a rela' cro* 4Hossain >0015. Rec'cled rice straw has a**eared to 0e a
good su**lementar' source o# #ertili$er in rice culti.ation and some nutrient<enriched organic
#ertili$er 4namel'+ )oni )u!ta+ /gro<sar+ Nai0o<sar+ "u*er Breen#ield+ %hoo!<%hoo! 1115 has
0een e.aluated #or wetland rice culti.ation and has 0een #ound e##ecti.e and could there#ore
reduce the use o# chemical #ertili$er 4(RR2+ >0075. 2ntegrated weed management is also widel'
*racticed in (angladesh 4/hmed et.al.+ >0065.
?he time has come to thin! a0out organic rice #arming #rom considerations o# rural de.elo*ment
and socio<economic and en.ironmental #actors. 9rganic agriculture is de.elo*ing ra*idl' and is
now *racticed in more than 1>0 countries o# the world 4,iller and 7usse#i+ >0075. 8er' recentl'+
the go.ernment o# (angladesh #ormulated a new agricultural e6tension *olic' in which one
o0Aecti.e is to ta!e the necessar' ste*s to ensure en.ironmental *rotection as well as
Gen.ironment<#riendl' sustaina0le agricultureM through an increasing use o# organic manure and
strengthening o# the 2P) *rograms 4)9/+ >0075. ?here are two streams o# organic agriculture
in /sia+ one as *art o# sustaina0le #arming and other as e6*ort<oriented organic *roducts. Now it
is im*ortant to .eri#' the o**ortunit' #or e6*orting organic rice that results #rom the countr'Es
low cost o# *roduction 4la0or and agricultural in*uts5.
"ome o# the main issues are listed 0elow&
%onsumer le.el&
O %onsumersD lac! o# in#ormation a0out organic *roducts.
O -ac! o# consumer awareness. ?here#ore+ much e##ort needed on consumersD education.
O 9rganic *roducts una0le to com*ete with con.entional *roducts+ as most consumers are
un!nown to organic *roducts and their 0ene#it to nature+ Aust com*are the *rices.
O %onstant communication to customers would 0e ideal+ 0ut is time consuming.
O %onsumersD *erce*tion& 9rganic P 2P) or Qsa#eQ.
O Num0er o# organic consumers is .er' small and o*erators are com*eting #or the same *eo*le.
)ar!et de.elo*ment&
O -imited e6*ertise in mar!eting.
O "u*ermar!et challenging < *ricing+ .ariet'+ glo0al trends.
O 9rganic su**liers 0eing smaller than con.entional ones+ wholesalers tend to discontinue slow
mo.ing items < continuous disru*ti.e su**l'.
O No la0elling laws e6ist in the countr'.
O 2n#lu6 o# *seudo<organic and Qorganic claimsQ 4and a lac! o# regulations #rom go.ernment
0odies5
O %om*etition is tough #rom unscru*ulous com*etitors. No coo*eration among o*erators.
Product 4qualit'5 de.elo*ment&
O -ac! o# con#idence in organic #arming on the *art o# the #armer.
O "u**l' growing #aster than the demand.
Howe.er+ it seems that the main *ro0lems encountered in the mar!et *lace are *rice com*etition
and logistic arrangements. %erti#ied organic *roducts ha.e to com*ete with sel#<claim and
h'gienic@sa#e *roducts on *rice+ *roduct .arieties and regularities. ,ith high cost and smaller
logistic in#rastructure+ it is di##icult #or man' local mar!eting organisations to o##er certi#ied
*roducts com*etiti.el' in mar!et *laces. )oreo.er+ man' organisations also #ail to *urchase all
#resh *roduce #rom the *roducers. ?his creates a 0urden #or the *roducers 0ecause the' then ha.e
to #ind their own mar!et channels. ?his means sometimes com*etition at the su**lier side as
well.
Prod"!tion and %arketing of organi! ri!e $# te NGOs
9rganic rice culti.ation is usuall' carried out 0' some NB9s in (angladesh li!e C(2N2B+
)eena(a$ar 4Remcon grou*5+ Proshi!a+ PR/N+ and others. )eena0a$ar culti.ates local .arieties
o# organic rice li!e Ninia+ Dhe!ichata+ Na$irshail and aromatic rice li!e atari0hog and (asmati
in the Ponchagor district. ?he' generall' use cow dung as nutrient sources. "ometimes+ green
manuring cro*s are also used #or this *ur*ose. C(2N2B acts as a #orm o# organic #arming
SNa'a!rishi /ndolonS 4new agricultural mo.ement5. /round one and hal# million #armers in
di##erent districts are engaged in this mo.ement. "anatani .illage+ /tia union in the ?angail
district+ has 0een declared as GFerili$er<Pesticide Free CnionM. ?he' use organic #ertili$ers+ neem
4/$adirachta indica5+ or .erti*ata in the rice #ields. C(2N2B has a selling center in Dha!a named
G"assaPro0ortonaM and are selling man' organic rice .arieties including (iroi+ atari.og+
(oilota+ "assori+ Pa!ri+ %hamara+ Digha+ (inni 4(andar0on5 and (irishiri 4Netro!ona5. Csuall'+
organic rice at mar!et sells at a *rice 10<15; higher *er !ilogram than con.entional rice
4*ersonal communication in selling center5. 9n the other hand+ some aromatic organic rice
.arieties such as iligira+ (egun0ichi+ and "hahi0 chi!on 4%o6Ss 0a$aar5 ha.e a mar!et *rice
almost the same as that o# non<organic rice. / salesman o# the center remar!ed 4*ersonal
communication5 that the u**er middle class to<rich *eo*le are the main customers #or organic
rice.
Feasibility study to export organic rice from Bangladesh
Rice is a #ood sta*le worldwide+ and %hina is the worldDs leading rice<*roducing countr'+
*roducing Aust o.er one<third 4==.3;5 o# the worldDs rice su**l'. ?hailand is the worldDs leading
rice e6*orter+ howe.er+ and it e6*orts >:.=; o# the worldDs rice e6*orts. 2ndia is the worldDs
second largest *roducer and e6*orter 42RR2+ >0075. /gain+ ?hailand is now worldEs leading
organic rice *roducer countr'+ #ollowed 0' Phili**ines 4,iller and 7usse#i+ >0075. ?he /sian
go.ernments ha.e 0ecome interested in organic #arming #or the last 5 'ears+ as the organic
mar!et #urther e6*ands and e6hi0its its *otential and signi#icant mar!et o**ortunities 4Pan'a!ul+
>00=5. 2n addition+ some *ri.ate com*anies in 2ndia+ Pa!istan and ?hailand are e6*orting organic
0asmati+ Aasmine+ long<grain white and ?hai rice to di##erent *arts in the world 4?rade!e'+ >0075.
"ome *ri.ate com*anies in (angladesh are e6*orting some aromatic and non<aromatic rice li!e
aligira+ %hini /to0+ athari0hog+ Naigarsail+ PaAam and )ini!it.
2t is o0ser.ed that #ine rice is a *ro#ita0le #arming .enture #or #armers and a good source o#
li.elihood 4Bio.annucci+ >0055. ?he income *otential is higher #or #ine rice culti.ation since it
does not require e6tra in*ut. 2n contrast+ the indiscriminate use o# #ertili$ers increases the
thic!ness o# the rice and reduces aroma 4"ar!er+ >0075. ?he use o# organic #ertili$ers in
traditional *ractices is 0elie.ed to enhance the aroma and *reser.e the #ineness+ as mentioned 0'
the #armers. 2n this regard+ #ine aromatic rice could 0e a *otential choice #or organic rice
culti.ation.
Discussion with the exporters
Cntil now+ there ha.e 0een no organic rice e6*orts #rom (angladesh. )ostl'+ there ha.e 0een
aromatic and #ine rice e6*orts to the C"/+ C+ the )iddle Kast+ and some KC countries li!e
France+ Berman'+ "*ain+ and 2tal'. From 133>+ rice 0egan to 0e e6*orted and has graduall'
increased e.er' 'ear. ?here is a great *ossi0ilit' and o**ortunit' to e6*ort organic rice #rom
(angladesh due to its com*arati.el' low cost o# *roduction and suita0le en.ironment and as well
as the qualit' o# rice. 4(RK/5
Benefits of te st"d#
Resear! /esign
Ste- 0: Sele!tion of -arti!i-ating far%ers
?hrough a *ur*osi.e random sam*ling technique+ 100 #arm households were selected. 2n
addition+ #arm si$e and e6isting resources+ num0er and area o# inter.entions+ awareness o# the
#armers+ resource 0ase and management ca*a0ilit' o# the #armers+ eas' accessi0ilit' to the
households in all seasons+ and other as*ects were considered in selecting the *artici*ating #arm
households. ?he results o# this questionnaire *roduced a .iew o# each #armerEs awareness and
understanding regarding organic rice *roduction. / descri*ti.e cum e6*lorator' research
instrument was created+ the data were anal'$ed+ and relationshi*s 0etween the .aria0les were
e6amined.
Cons"%er +"estionnaire
9ur o0Aecti.es were to disco.er the awareness<le.el o# rice consumers a0out organic rice. ,e
collected data #rom 50 rice consumers in the ca*ital+ Dha!a %it'. %onsumers were randoml'
selected 4inter.iewed the consumers in the o*en *laces as random 0asis5 #or this stud'. ,e
classi#ied those who res*onded into three grou*s 0ased on monthl' income& *oor 4income less
than 5000 ?a!a5+ middle class 45000 ta!a to 15000 ?a!a5 and rich 415000 ?a!a to more5. 9# the
50 consumers+ >0 were males and =0 were #emales.
Fig. 1. Distri0ution o# the sam*les among the social status o# the consumersS.
Statisti!al Anal#sis
Data were anal'$ed with statistical techniques li!e #requenc' distri0ution+ cross<ta0ulations and
chi square testing using the "P"" *ac!age+ .. 10.0.
&ar%er data anal#sis
?he #requenc' distri0ution in Figure > shows that #armers ha.e a signi#icant interest in
culti.ating organic rice. 37; o# the #armers e6*ressed such an interest. ?his interest in organic
rice ma' lin! with a rising awareness o# the harm#ul e##ects o# *esticides on the soil and
en.ironment. 67; o# the #armers+ agreed with the *ro*osition that SS %hemical #ertili$ers and
*esticides ha.e harm#ul e##ect on soil+ human and en.ironmentS. ?he cross ta0ulation anal'sis in
?a0le 1 su**orts this conclusion. 2t can 0e o0ser.ed that 66; o# the #armers were aware o#
chemical #ertili$ers and *esticides harm#ul e##ect on soil+ human and en.ironment and showed
their interest to !now and culti.ate such a technolog' where agro<chemicals are need not to
a**l' 4?a0le 15.
?he anal'sis in Figure 4a and ?a0le > strengthens the a0o.e conclusion. 2t is o0ser.ed that 70;
o# the #armers are uses organic material to im*ro.e soil #ertilit'. /gain+ >: #armers 4who are not
currentl' a**l'ing an' organic materials to the #ield5 also showed interest to !now and culti.ate
rice culti.ation technolog' 4where agro<chemicals are needed not to a**l'5 i# the technolog'
were to 0e made a.aila0le to them 4?a0le >5.
%urrentl'+ .er' #ew com*lete organic rice technologies are a.aila0le to the #armers. "ome are
culti.ating rice on *artial or semi<organic 0asis 4some *art o# culti.ation #ollowed organic wa'5.
For e6am*le+ some #armers controlled their insects 0' 0iological method+ 0ut #or *lant nutrients
the' a**lied chemical #ertili$er. Figure 5 shows that 4: #armers !now a0out organic or semi<
organic *ractices. 9# these+ 40; !now a0out integrated rice<duc! #arming+ >1; !now a0out cow
dung and *oultr' manure+ >1; !now a0out 2P)+ and .er' #ew !now a0out waste material and
green manure.
Cons"%er data anal#sis
2t is o0ser.ed that :>; o# the consumers were aware o# the Sharm#ul e##ects o# *esticides or
chemical #ertili$er on human 0od' human 0od' and en.ironmentS 4Figure 65. Due to the lac! o#
!nowledge a0out organic rice+ the' ha.e no o*tion to normal rice. 9nl' >:; o# the consumers
ha.e heard o# organic rice 4Figure 75. 5:; o# the consumers+ the mean o# the distri0ution+ would
0e interested in 0u'ing organic rice were it widel' a.aila0le to them 4?a0le =5.
%erti#ied organic *roducts are generall' more e6*ensi.e than their con.entional counter*arts 4#or
which *rices ha.e 0een declining5 #or a num0er o# reasons. 9rganic #ood su**l' is limited
com*ared with demand. 2n addition+ *roduction costs #or organic #oods are t'*icall' higher
0ecause o# greater la0or in*ut *er unit o# out*ut and 0ecause the greater di.ersit' in enter*rises
means economies o# scale cannot 0e achie.ed 42F9/)+ >0055. Post<har.est handling o#
relati.el' small quantities o# organic #oods results in higher costs 0ecause o# the mandator'
segregation o# organic and con.entional *roduce+ es*eciall' in *rocessing and trans*ortation.
Finall'+ the mar!eting and distri0ution chain #or organic *roducts is relati.el' ine##icient+ and
costs are higher 0ecause o# relati.el' small .olumes 42F9/)+ >0055. Regarding this issue+ the
res*onse 0' the consumers was highl' encouraging.
%ross ta0ulation anal'ses o# the consumers show some interesting results. 2t is o0ser.ed that
social status has a signi#icant 0earing on the *urchase o# organic rice. %onsumers #rom the high
income grou* ha.e a signi#icant interest in 0u'ing organic rice e.en though the *rice is higher
than #or normal rice. /round =4; o# the consumers 0elonging to the high income grou* were
interested in 0u'ing organic rice+ 0ut due to una.aila0ilit' the' cannot do so. 2n addition+
consumers #rom the middle income grou* are moderatel' interested in 0u'ing organic rice.
%onsumers #rom the low income grou*+ on the other hand+ are not interested at all in 0u'ing
organic rice due to its high *rice. ?he results o# the anal'ses are gi.en in ?a0le = and 4. ?he
interest o# the consumers in 0u'ing organic rice ma' 0e lin!ed with their awareness o# the
harm#ul e##ect o# *esticides in the soil+ human 0od' and en.ironment. 2t can 0e o0ser.ed that
50; o# the consumers+ who were interested in 0u'ing organic rice+ were also aware o# these
harm#ul e##ects o# *esticides 4?a0le 55.
?he res*onding #armers were #rom mostl' small land units o# 0.41<1.0 ha and marginal #armers
#rom 0.40 ha or less 4(("+ >0045. Households were selected through a s'stematic random
sam*ling technique+ and male heads o# household were inter.iewed. / questionnaire was set in
the (engali 4nati.e5 language in accordance with the question<setting criteria suggested 0'
erlinger 4137=5. ?he #ollowing data were collected inde*endent .aria0les #or the indi.idual
4age+ se6+ education5 and #amil' 4si$e and landholding5 with de*endent .aria0les 4awareness+
a.aila0le technolog'+ o**ortunities and constraints5. 2n contrast+ a consumer questionnaire was
created 0ased on inde*endent .aria0les #or indi.iduals 4age+ se6+ education+ social status5 with
de*endent .aria0les 4awareness and intention to 0u' organic rice5. )ar!eting 4local and e6*ort5
o**ortunities and limitations were also assessed #rom discussion with #armers and rice
0usinessmen.
Type of study
?he research is a 0asic one. 2t aims to 0roaden the hori$on o# !nowledge which most o# us
alread' *ossess. ?he stud' will 0e a descri*ti.e stud' and not a causal one. / causal research was
not selected 0ecause it is not aimed at #inding out the cause and e##ect relationshi* amongst the
relate .aria0les. ?he qualitati.e stud' has alread' 0een carried out and research o0Aecti.es ha.e
0een #ormed 0asing on that.

Basic esearch !ethod
?he 0asic research method in this stud' will 0e sur.e' method.
"am*ling Plan #or ?he Research
?arget Po*ulation For this research+ the target *o*ulation that has 0een chosen is the 2?
related *ersonnel+ which include 2? e6*erts+ )anagers o# 2? institutions+ )anagement o# 2?
0usinesses and 2? students.
"am*ling Procedure ?he target *o*ulation has 0een di.ided into #our strata+ 0asing on their
!nowledge and t'*e o# in.ol.ement in the #ield. ?he strata and their res*ecti.e sam*ling
*rocedure are gi.en 0elow&
"am*ling Frame+ "am*le ?'*e and "am*le "i$e /re descri0ed 0elow&
Data %ollection
"econdar' Data "ince 2? is a .er' widel' discussed to*ic in (angladesh+ there are lots o#
essa's and research *a*ers a.aila0le in the 0oo!s+ *u0lications and internet. / thorough sur.e'
o# all the literature was done to #ind out the use#ul in#ormation. Further stud' will also 0e
conducted on secondar' material.
Primar' Data /lthough man' essa's ha.e 0een written on 2? education+ there is lac! o# in de*th
stud' a0out the su0Aect. /s such+ *rimar' data will 0e the 0uilding 0loc! o# the research wor!.
"ur.e' / coordinated sur.e' will 0e carried out using 0oth door<to<door and mall interce*t
techniques. )anagers and #acult' o# 2? institutions and managers o# 2? #irms will 0e inter.iewed
using door<to<door technique. "tudents o# 2? institutions will 0e inter.iewed using mall interce*t
technique.
De*th inter.iew For the sur.e' o# the e6*erts and scholars+ who *ossess unquestiona0le
!nowledge and e6*ertise in this #ield+ this method will 0e #ollowed.
Data /nal'sis
5.1 ?est o# Relia0ilit' and 8alidit'
Relia0ilit' ?est Data will 0e tested #or relia0ilit' 0' equi.alent #orm relia0ilit' test.
8alidit' ?est Face .alidit'+ %ontent 8alidit' and construct .alidit' will 0e tested to
con#irm the .alidit' o# the data o0tained.
5.> "u0Aecti.e /nal'sis Tualitati.e data will 0e anal'$ed criticall' using Audgment and
*re.ious !nowledge.
5.= "tatistical /nal'sis ?he sur.e' will mostl' generate nominal+ ordinal inter.al
and ratio data. ?hese data will 0e anal'$ed using a**ro*riate statistical tools. "P"" so#tware will
0e used to anal'$e the data. Following tests will 0e considered&

%hi<"quare ?est ,ill 0e used to #ind out 0iasness o# the data.
UREE and UtE ?est ,ill 0e used to test h'*othesis 0etween sam*le means+ sam*le *ro*ortions
and di##erence in sam*le means.
/N98/ ,ill 0e used to #ind out the .ariance among the means o0tained #rom the inter.al
data o# the sur.e'.
%orrelation /nal'sis %orrelation among di##erent .aria0les will 0e anal'$ed 0' this tool.
Regression /nal'sis Regression anal'sis will 0e done among a**ro*riate .aria0les li!e
studentsE income and selection o# *ri.ate uni.ersit'.
Factor /nal'sis ,ill 0e done in a**ro*riate case.
%luster /nal'sis ,ill 0e done in a**ro*riate case.
Discriminant /nal'sis ,ill 0e done in a**ro*riate case.
6.0 Nature and Forms o# Result
/#ter the research+ a detailed re*ort o# the research will 0e #urnished and *ro.ided. ?he *a*er
will *ro.ide an a**ro*riate mar!eting strateg' #or the *ri.ate 2? institutions stating the *resent
demand 0oth in domestic and international mar!et and to ado*t the required *olic' to 0e
#ollowed in terms o# *roduct+ *rice+ *lacement and *romotional as*ect. ?he re*ort will also
include an a**ro*riate action *lan 0asing on the strateg' suggested.
7.0 Tuali#ication o# the Researcher
/ grou* o# #our researchers will 0e wor!ing #or the research. ?he grou* consists o# #our )(/
students 4Final semester5 o# )2"?. ?he' are 'oung+ energetic and willing to underta!e
challenging 0usiness tas!s ha.ing the *ast e6*erience o# conducting the other 0usiness studies
and writing re*orts.
(udget.

(udget 2tem Rate ?otal
Da's %harges
Tuestionnaire "ur.e' 5+000
Focus Brou* Discussion 5+000
?ra.el %ost 4+000
?ele*hone 1+000
Pu0lication and "torage %ost >+000
9thers 1+000
?otal 1:+000
3.0 "chedule
?he research to*ic o# this stud' is a com*le6 and large in nature. ?here#ore+ #or eas' conduct o#
this research a critical *ath method 4%P)5 o# scheduling has 0een de.elo*ed. "u0sequentl' #or
more smooth conduct o# the stud'+ the maAor acti.ities considered in %P) model ha.e 0een
*roAected in a Bantt chart with s*eci#ic date #or each o# the acti.ities. 2n %P) model #ollowing
acti.ities ha.e 0een considered as milestones o# the stud'&
K6*lorator' research
Pro*osal a**ro.al
Data collection
%om*letion o# the #inal re*ort
?o com*lete the a0o.e mile stone acti.ities+ other acti.ities that ha.e 0een considered along with
the time schedule are shown in the #ollowing model&
)terature
re$e*
.dentfy
sources
Conduct
e/ploratory
nter$e*s
0e$elop
proposal
Complete
'uestonnare for .T
e/pert and scholars
Complete
'uestonnare for .T
students
Complete
'uestonnare for .T
nsttutes
.nter$e*s .T e/perts
and scholars
1rrange
appontments
2eld nter$e*ng
"tart 11
0ata
analyss
3rte
report
6
1
>
10
1>
:
=
7
5
4
6
:
5
3
5
6
5
>
5
:
10
10
16
.nter$e*s .T
nsttutes
1rrange
appontments
=

)ile stones&
K6*lorator' research
= Pro*osal a**ro.al
3 Data collection
Final re*ort com*leted
%ritical *ath& "<1<4<3<10<11
?ime to com*lete& 5: da's
%onsidering all the acti.ities as shown in the %P) a Bantt chart is *re*ared+ which is as
a**endi6 / to this *a*er.
10.0 Facilities and "*ecial Resources
?he *roAect will require #acilities li!e o##ice room+ tele*hone+ com*uter+ *rinting #acilities+
trans*ortation etc. which will 0e managed within the resources o# )2"?. No additional or s*ecial
resources will 0e required.
11.0 ProAect )anagement
11.> )ode o# %onduct ?he researchers will *re*are questionnaire 0e#ore going to the
#ield. 2n the da' time+ the' will mostl' sta' in the #ield contacting the target *o*ulation. /t night
the' will gather #or discussing the *rogress and anal'$ing the data.
11.= C*dating a0out Research Progress ?he ?eam leader+ -t %dr )amun will 0rie# the
s*onsor on e.er' ?hursda' a0out the *rogress o# the research *roAect. 2n addition+ he will
maintain close liaison with the s*onsor #or an' quer' and clari#ication.
11.4 Data Rights Rights o# the data will remain e6clusi.el' with the research team. ?his
right will 0e trans#erred to the s*onsor when demanded.
11.5 /uthorit' -etter /uthorit' letter+ i# demanded 0' an' organi$ation+ will need to 0e
#urnished. ?he team will *ut u* necessar' letter to the s*onsor #or !ind *erusal.

%onclusion
?he current stud'+ although the le.el o# awareness a0out organic rice was low+ did re.eal that
0oth #armers and consumers are aware o# the to6ic e##ect o# chemical #ertili$ers and *esticides.
,ith the introduction o# organic rice culti.ation technolog' and the assurance o# some rele.ant
#actors 4li!e *rice and qualit'5+ we e6*ect an increase in the mar!eting o# organic rice in 0oth
domestic and o.erseas mar!et. -i!e some *ri.ate com*anies in /sian countries that are
e6*orting organic rice+ (angladeshi *rimate com*anies also ha.e the sco*e o# e6*anding this
e6*ort in the international area.
Finall'+ we would li!e to ma!e some recommendations #or enhancing the ado*tion o# organic
rice in (angladesh.
1. Csuall' 0' wind and irrigation+ chemical com*ounds are 0rought to organic *lots #rom
neigh0oring #ields. Hence+ the #ormation o# grou*s 0' organic rice #armers or communit'
#armersS grou* is .er' im*ortant.
>. Knsure the mar!et *rice and organic rice #armers *roduction cost.
=. From a discussion and consideration o# other social #actors+ we recommend that rich and 0ig
#arms rather than small households initiate organic rice #arming 0ecause o# the latterEs *resent
#ood insecurit'. /#ter the s'stem is strengthened+ small #armers ma' 0ecome in.ol.ed in it. 9#
course+ in %hina+ mostl' *oor and #rom small #arms has contri0uted the #oundation o# organic
agriculture 4Paull+ >0075 and go.ernment and in.estors chose remote and underde.elo*ed areas
in the mountainous region 4%hen+ >0065. (ut+ the situation o# %hina is quite di##erent o#
(angladesh in conte6t o# land re#orm+ agriculture *olic'+ mar!eting and *olitical+ which is one o#
the im*ortant #actor to #armers #or con.ersion to organics 4Rahmann V Nie0erg+ >0055.
4. 9n<#arm trials+ #ield da's+ and #armersE *artici*ator' research and e6tensions could *la' a .ital
role in enhancing a 0uild<u* in #armersS ca*acities.
5. Primaril'+ organic rice culti.ation and e6*orts can em*hasi$e traditional #ine and aromatic
rice.
6. / research institute should *a' attention to #inding new technolog' such as an alternate
organic #ertili$er source 4as cow dung needs a large .olume5+ *ost<har.est and storage methods
o# an organic wa' and green manure seed *roduction.
7. /n organic certi#ication authorit' needs to 0e esta0lished on the 0asis o# international
standards. 9# course+ #or local mar!eting certi#ication is not mandator'.
:. )edia 40oth electronic<tele.ision and radio and *rint<news*a*ers5 can *la' im*ortant roles in
increasing awareness o# #armers and consumers.
?he *resented data are 0oth interesting and in#ormati.e #or a #uture *lan o# wor! regarding
organic rice in (angladesh. ?he' o##er not onl' academic .alue 0ut also raise serious concern #or
en.ironmentalist and *lanners.
)ethods
/ata !olle!tion
?he em*irical data anal'$ed in this stud' were collected 0' *ersonal inter.iews conducted with
the res*ondent smallholder #armers #rom 10th Decem0er >007 to 1>th Nanuar' >00:. ?he
authors and three trained data collectors conducted the inter.iews.
"tatistical anal'sis
/n unequal indi.idual sam*le t<test was used to test #or di##erences 0etween the socio<economic
*ro#iles o# the ado*ter and non<ado*ter organic #armers. -ogistic regression anal'sis was used
to identi#' the signi#icant determinants that in#luence the decision to ado*t 9F.
)easurement o# de*endent and e6*lanator' .aria0les
?he de*endent .aria0le was dichotomi$ed with a .alue o# 1 i# a #armer was an ado*ter o# 9F
and 0 i# otherwise. ?he e6*lanator' .aria0les o# the stud' were classi#ied into three grou*s&
indi.idual<le.el+ household<le.el+ and *erce*tion<related .aria0les.
2ndi.idual<le.el e6*lanator' .aria0les were the gender+ age+ education le.el+ and #arming
e6*erience o# the household head. Household<le.el .aria0les were the num0er o# acti.e #amil'
mem0ers+ num0er o# de*endent #amil' mem0ers+ num0er o# #amil' la0ourers+ #arm si$e+
household income+ householdsE access to credit+ householdsE access to mar!et+ householdsE
access to *u0lic e6tension ser.ices+ and householdsE access to Proshi!a e6tension ser.ices. ?he
sole *erce*tion<related .aria0le was the #armerEs *erce*tion o# 9F. ?a0le > lists de#initions o#
the .aria0les and measurement methods.
"%9PK /ND "?RC%?CRK 9F ?HK 9PKR/?29N
2n general+ a local organic mar!eting initiati.eDs set u* and o*erating strateg' should match its
sco*e. ?he
ado*ted choice will de*end on the countr'+ the location+ nature and a.aila0ilit' o# *roduct range+
scale o#
intended o*eration and *re.ailing mar!et@sector conditions. 49ng ung ,ai+ >0005
9#ten 0eing the idea o# one or a #ew indi.iduals it was di##icult #or man' organisations to recruit
*eo*le with the
same mindset during and a#ter the esta0lishment o# the organisation. 2n addition+ #or man' it was
4an is5 not
*ossi0le to o##er com*etiti.e salaries to attract and retain sta##. (ecause o# that+ sta## turno.er is
in some
com*anies quite high. Ks*eciall' at the start u*+ #inancial constraints o#ten result in sta## ta!ing
on multi*le
tas!s and roles. /lthough this could 0e *ositi.e as one learns the organisation #rom di##erent
*ers*ecti.es+ it
can also result in the ina0ilit' to #ocus and to gi.e total dedication to s*eci#ic tas!s.
2nitial #unding a.aila0le seems the !e' #actor in the decision what le.el the organisation will
decide to get
in.ol.ed in rather then other #actors. )ost initiati.es start with a 0asic ca*ital contri0uted 0' a
#ew indi.iduals.
(ecause o# the lac! o# a local organic mar!et+ securing e6ternal #unding #rom commercial
sources is o#ten
im*ossi0le. 2# it 0ecomes a.aila0le+ it ma' onl' a#ter a long *eriod+ sometime two 'ears or more.
Few *ioneering local mar!eting organisations start with large #unding a.aila0le and man' loo!
#or wa's to
match the le.el o# in.estment with an a**ro*riate scale o# o*eration. "ome o*t to start with
direct mar!eting+
#or e6am*le home deli.er'+ mo0ile mar!ets or Qorganic 0a$aarsQ 4see (o6 >5 which would not
require much in
terms o# equi*ment+ sta##+ o.erhead costs+ etc. 2n terms o# *romotion+ direct *romotion 4Qword o#
mouthQ+
targeting s*eci#ic e.ents5 is o#ten selected. ,hen enough initial #unding is a.aila0le+ distri0ution
o# organic
#ood through s*ecialt' sho*s is also a common choice at the initial de.elo*ment stage o# the
domestic organic
#ood mar!et. Howe.er+ at whate.er scale an organisation o*erates it is crucial to ha.e su##icient
#unding@in.estment #or *roduction+ mar!eting+ logistics and the management team.
)ost local mar!eting initiati.es #a.our a sco*e o# o*eration+ which can cut o## some
intermediar' lin!s and
lower the cost o# organic #ood+ thus arousing the interest o# *otential organic #ood 0u'ers and
im*ro.ing the
income o# the *roducers.
/nother im*ortant lesson is that in cases where the o*eration could 0e Qscaled u*Q through non<
commercial
outside #unding+ #or e6am*le NB9 su**ort+ this outside #unding should 0e accom*anied with an
increase in
the com*an'Ds own in.estment ca*ital. ,ith the o*eration at a higher le.el also o#ten come all
!ind o#
4une6*ected5 #inancial demands and once the outside #unding sto*s+ the #unds should 0e matched
#rom the
com*an'Ds own sources+ es*eciall' when the com*an'Ds income does not 'et match the higher
e6*enditures.
/gain+ 0ecause o# #inancial constraints+ some com*anies do not ha.e a *ro*er o##ice set<u* at the
0eginning.
?he' o*erate #rom the #arm or home or Qsit inQ with another organisation+ such as an NB9.
/lthough this has
some #inancial ad.antages it is not ad.isa0le in the long run 0ecause o# its limitations when the
organisation
e6*ands and needs to house more sta##+ equi*ment+ stoc!s+ etc. 9*erating #rom home or a #arm
ma' also
ha.e the ris! that man' *eo*le do not ha.e a high im*ression a0out the *ro#essionalism o# the
organisation.
-ocal )ar!eting o# 9rganic Products < / Buide #or ")Ks
< 10 <
2t is also im*ortant to determine the range o# *roducts to trade in. 2t ma' seem im*ortant to o##er
consumers a
.ariet' o# organic *roducts which is as large as *ossi0le+ 0ut in man' cases organisations ha.e
#ound that a
relia0le su**l' o# e.en a #ew+ high<qualit' items is su##icient to attract consumers. )an' local
initiati.es start
with #resh *roduce+ *articularl' .egeta0les+ and then later add other item. ?he success o# one
item+ such as
.egeta0les+ could lead to other initiati.e de.elo*ing other *roducts.
"ome organisations also decide to sell Q2P)Q or Qsa#eQ qualit' o# items+ which are not a.aila0le
as organic 'et.
Howe.er+ this has the disad.antage that consumers are o#ten con#used when the di##erences
0etween these
*roducts are not clearl' e6*lained to them.
Finall'+ *rice setting is im*ortant. )an' organisations ha.e ta!en the decision to use a
di##erential *ricing
s'stem. / *olic' o# one *rice across all areas and di##erent t'*es o# customers would not 0e #air
to customers+
es*eciall' to the local mar!et where the' are tr'ing to 0uild the customer 0ase.
Tuite a #ew o# the initiati.es were set u* with the intent to #orm a Q0ridgeQ 0etween *roducers
and consumers
rather then Aust 0eing a QnormalQ trader. 2n case this *lan is not *ro*erl' discussed with the
*roducers it could
(o6 >& %hallenges and considerations in setting u* organic 0a$aars+ 22RD+ 2ndia.
2nitiall' 22RDEs wor! relating to local mar!eting was con#ined to the de.elo*ment o# mar!et
outlet #or women organic
#armer. 9.er time+ 22RD has 0een a0le to address larger issues concerning local mar!eting
through organising
organic 0a$aars. ,hile o*erating the s'stem o# organic 0a$aars+ the #ollowing are the maAor
o0Aecti.es and
challenges o# the organisation&
O ?he marginal and small #armers should gain sel#<con#idence #or ma!ing their small units
.ia0le using organic
in*uts and *ractices. ?his requires intensi.e education+ training and moti.ational acti.ities.
?raining o# women
#armers and ena0ling them to 0e resource *ersons is the strateg' ado*ted 0' the 22RD #or hel*ing
#armers to
ado*t organic agriculture and achie.e .ia0ilit'.
O ?he initial mar!eting e##orts consisting o# mar!et outlets and direct distri0ution s'stems #or
organic mar!eting
lac!ed e##ecti.eness in the local conte6t. ?he 0a$aar s'stem was later #ound not onl' to 0e
success#ul+ 0ut also
consistent with the local culture.
O K6*ansion o# local domestic mar!eting o# organic *roduce de*ends u*on the a.aila0ilit' o#
in#rastructure such
as warehouses and storage #acilities+ mar!et 'ards and other #acilities *ro.ided 0' the state
go.ernment.
-o00'ing #or such #acilities 0' .oluntar' organisations and #armer grou*s is signi#icant to
gaining access to such
#acilities.
O ?rade li0eralisation has also o*ened u* .ast o**ortunities in the e6*ort sector through small
rural de.elo*ment
schemes and their lin!ages to distant mar!ets. K6*ort mar!eting in.ol.es .er' high le.el o#
documentation on
the side o# #armers #or ins*ection and certi#ication *ur*oses. ?his *resents a signi#icant challenge
#or the
organisers o# #armers. K6*ort<led agricultural *roduction also creates distortions in the .illage
econom' 0ecause
o# the .olatilit' o# glo0al *rices+ the em*hasis on cash cro*s and the loss o# organic *roducts to
#oreign mar!ets.
/n organisation+ which *romotes the organic 0a$aar&
O Knsures the #low o# *roducts through a su**l' chain which res*ects acce*ta0le standards and
accounta0le.
O 9rganises en.ironmentall' conscious consumers 0' creating awareness a0out local mar!eting
and #acilitates
their meeting with *roducers #rom whom the' could 0u' *roducts and ser.ices or *urchases eco<
#riendl'
*roducts.
O De.elo*s a su**l' chain and hel*s #armers sell to consumers in a *u0lic *lace.
O Cnderta!es the regulation o# *rices o# *roducts in such a manner that it is #air #or the *roducer
and consumer.
O %onducts consumer education and *u0licit' *rogrammes with the coo*eration o# media
managers o# the
localit'.
O Recei.es ser.ice charges #or the ser.ices rendered 0' it #rom the *roducers and consumers or
ma!es *ro#it in
the sale o# *roducts and ser.ices in order to maintain its o*erations in a sustaina0le manner.
/le6ander Daniel+ 22RD+ 2ndia
< 11 <
lead to much unnecessar' #rustration among 0oth #armers and the organisationDs management and
sta##. For
e6am*le+ as in the case o# Hanoi 9rganics in 8ietnam the *roducers had a com*letel' di##erent
outloo! on
who would 0e res*onsi0le #or the mar!eting o# *roducts then the organisationDs management.
/#ter a series o#
disa**ointing 4#rom the organisationDs *ers*ecti.e5 meetings with the *roducers+ the organisation
had to
change its mode o# o*eration soon a#ter it 0egan 0u'ing the *roduce #rom the #armers. 2nstead+ it
decided to
ta!e on the res*onsi0ilit' o# 0u'ing directl' #rom the #armers and then selling the *roduce
without an'
res*onsi0ilit' in the sale to consumers #or the #armers.
9ther organisations stated that+ in retros*ect+ the' would ha.e started directl' with their own
#arm instead o#
0u'ing #rom 4contracted5 *roducers. ?his would ha.e gi.en them more control o.er *roduction
issues+ such as
qualit'+ quantit' and .ariet'. (eing sel#<reliant on the *roduction as*ect the' #ound to 0e !e' to
de.elo*ing a
relia0le trade relation with consumers and other 0u'ers. Howe.er+ this issue is o#ten hotl'
de0ated 0' *ersons
in the organisation with an NB9 0ac!ground and the more 0usiness<oriented *eo*le.
2t is *ositi.e is that some NB9s across the /sian region are ma!ing e##orts to 0e in.ol.ed in the
mar!eting o#
organic and indigenous *roducts which hel*s in the o.erall de.elo*ment o# the organic mar!et.
Howe.er+ the
idea o# a NB9 mo.ing into commercial areas does o#ten not sit well in the NB9 en.ironment
and man'
*eo*le #eel that the commercial as*ects are 0est le#t to entre*reneurs and that NB9s should
address Qsociall'
rele.ant issuesQ onl'.
"ome NB9s+ howe.er+ ha.e made serious attem*ts to go into 0usiness themsel.es 0ut e.entuall'
the' all
encountered con#licts 0etween their commercial and their social and de.elo*ment o*erations. 2t
seems that
the two sim*l' do not go well together since the' require .er' di##erent wor!ing attitudes and
organisational
cultures. %ases in which the NB9 has set u* a com*letel' se*arate 0usiness unit a**ear to 0e
more
success#ul.
-essons -earned 1& "co*e and structure in relation to mar!et en.ironment
O "i$e o# o*eration& !ee* sco*e realistic to minimise o.erhead costs.
O %rucial to ha.e su##icient own #unding@in.estment+ e.en i# outside non<commercial #inancial
su**ort is
a.aila0le.
O Ksta0lish direct contact with *roducers and reduce the intermediaries.
O Decide on a**ro*riate 0usiness set u*.
O (uild the initiati.e around one 4or #ew5 !e' *roducts
O 4/t start5 #ocus on organic onl' or sell natural and@or QcleanQ@2P) *roducts as wellF
O Di##erential *ricing s'stem.
O /gree on 0eing a #acilitator o# trade 4#or a #ee5 or o*erate as Q0usinessQ.
O ,or! with *roducers or set u* own #armF 4(etter control o# qualit'+ quantit'+ .ariet' control5
O Di##icult #or NB9 to decide to go into 0usiness 4the' should do Qsocial thingsQ5
O For NB9& set u* se*arate 0usiness entit'F
)/RK?2NB "?R/?KB7
)an' organisations decided to re#rain #rom large ad.ertising cam*aigns to announce their
o*erations. ?his is
again 0ecause o# #inancial reasons 0ut also 0ecause it was o#ten #elt that when there is onl' .er'
little
consumer awareness direct communication and e6*osure is much more e##ecti.e in transmitting
the com*le6
message o# the *rinci*les and 0ene#its o# organic agriculture.
2nstead+ the organisations rel' on word o# mouth sales and mar!eting+ acti.el' conducted
lunchtime tal!s at
com*anies and cor*orations to *romote awareness or di##erent other wa's to wor! at grassroots
le.el+ #or
e6am*le with associations+ communit' clu0s and schools #or #arm .isits. Direct contact with the
customers
also hel*s in getting immediate #eed0ac! on *roducts+ which in turn hel*s in de.elo*ing the
*roducts #urther. 2t
could also 0e use#ul when the sho* manager has !nowledge and the a0ilit' to coo! and use the
ingredients
sold in the sho* and e.en monthl' coo!ing demonstrations could 0e organised. 2n countries+ such
as
)ala'sia+ where man' *eo*le 0u' organic *roducts #or health reasons it is im*ortant #or the
*ro*rietor to
u*date him@hersel# on the latest alternati.e medical !nowledge and general medical !nowledge.
2t is also worthwhile to esta0lish lin!ages with the mass media and man' Aournalists are willing
to *u0lish
a0out organic agriculture 0ecause it is a no.elt' or 0ecause it lin!s well with health or
en.ironmental issues. /
good article 0' a Aournalist can do more than a *aid ad.ertisement and comes at no costW 4(ut not
in all
countriesW5
2n terms o# mar!eting strateg' it is im*ortant to !now the culture and some 0asic Qha0itsQ o# the
target
consumers+ #or e6am*le where the' do their sho**ing and at what times o# the da' and also how
the' get
their in#ormation a0out #ood+ health issues+ etc. ?his !nowledge is not onl' im*ortant in order to
identi#' the
< 1= <
main channels to *ro.ide in#ormation to 4*otential5 customers 0ut also to decide on where to sell
the organic
*roducts+ what to sell+ at what time o# the da' to sell+ etc. ?his in turn has consequences #or the
*urchase and
deli.er' o# the organic *roduce #rom the *roducers.
)an' organic mar!eting initiati.es ha.e de.elo*ed their own logo at a .er' earl' stage and ha.e
#ound that
the use o# a logo im*ro.es the communication a0out the *roducts and the com*an'. 2n some
countries+ the
com*an'Ds logo has 0ecome almost s'non'mous #or organic *roducts.
Finall'+ it could 0e said that+ i# o**ortunities e6ist+ it could 0e worthwhile to #ocus on 0oth the
domestic mar!et
and the e6*ort mar!et. ?he success#ul e6*ort o# one organic item could ser.e as an im*ortant
mone'
generator #or the de.elo*ment o# the domestic mar!et+ #or e6am*le the e6*ort o# organic Aasmine
rice in the
case o# Breen Net in ?hailand.
-essons -earned =& )ar!eting strateg'
O 4/t start5 *u0licit' through word o# mouth.
O 2nter*ersonal contacts are im*ortant+ also to get #eed0ac! on *roducts.
O ,or! with grassroots 4associations+ communit' clu0s+ schools5 #or #arm .isits.
O Cse interest o# mass media to *u0lish on new and trend' issues.
O (ase mar!eting strateg' on !nowledge o# culture and ha0its o# consumers.
O Cse 4strong5 logo #or communicating the *roducts and the com*an'.
O Focus on 0oth local and e6*ort mar!et 4e6*ort mar!et as mone' generator #or local mar!et
de.elo*ment5.
PR9DC%? /8/2-/(2-2?7 /ND TC/-2?7& "CPP-2KR P9-2%2K"+ PR9%CRK)KN? /ND
PR2%2NB
2n terms o# *ricing+ se.eral o# the mar!eting organisations too! the *rice *ro*osed 0' the #armers
as starting
*oint and then added their margin. )argins could 0e di##erent #or di##erent consumer grou*s+
lowest #or
schools+ highest #or home deli.er'. Following the *rinci*les o# #air trade+ *ricing is 0est done in
.er' o*en wa'+
in.ol.ing all #armers within a grou* and 0oth *roducers and mar!eting organisation 0eing clear
a0out their
margins.
?he mar!eting organisations use their margin #or their o*erational e6*enses+ such as salaries and
o##ice
running costs+ and in some cases also to generate a s*ecial #und #or their e6tension acti.ities and
#or #uture
mar!et e6*ansion.
"ome organisations a**l' di##erent *remium *rices #or organic and in<con.ersion *roducts to
encourage
#armers to con.ert to organic agriculture. Hanoi 9rganics+ #or e6am*le+ has set the *rice #or
organic *roducts
10 J 15 ; higher than that o# the in<con.ersion *roducts and 0oth are much higher than the
con.entional
*rices. /nother strateg' #ollowed is to a**l' a lower margin 4in *ercentage5 on the lower<.alue
*roducts
com*ared to the more high<.alue ones.
2n most cases+ the mar!eting organisation 0u's directl' #rom the *roducers+ o#ten 0ased on long<
term
contracts. "ome organisations+ such as e'stone+ ha.e a s*eci#ic *olic' not to 0u' through
intermediaries
< 16 <
unless their credentials can 0e .eri#ied. ?his has allowed the *rocurement to e6*and into new
areas where
*eo*le are hearing a0out the organisation and its 0asic *rinci*les and *hiloso*h'.
"ome organisations ha.e set u* more than one *roducer grou* within one categor' o# *roducts+
#or e6am*le
tea or .egeta0les+ so that there is more relia0le a.aila0ilit'+ a 0it o# com*etition among the
grou*s to stimulate
an increase in *roduct qualit' and to reduce the ris! in case o# natural disasters+ *est@disease
out0rea!s and
other calamities. Howe.er+ it seems that this strateg' is not that e##ecti.e in creating Q#riendl'Q
com*etition
among *roducer grou*s so that the' will Qnaturall'Q im*ro.e their qualit'.
%CRRKN? PR9DC%? -2NK"
/s mentioned in the #irst *art o# this cha*ter+ most mar!et organisations contri0uting to the case
studies deal
with #resh .egeta0les. "ome+ such as ?hai 9rganic Food+ ha.e an assortment o# more than 100
.arieties o#
.egeta0les. 9ther organisations deal with a wider range o# *roducts+ also including rice+ cereals
and 0eans.
"ome organisations also sell in*uts #or organic #arming+ such as K)+ 0io#ertilisers and
0io*esticides.
9rganicone*al is also *lanning to *roduce organic .egeta0le seeds #rom ne6t 'ear #or domestic
use and
e6*ort.
e'stone is s*ecialised in hone' and hone' 0'<*roducts. ?he' ha.e *ure hone' #rom /*is cerana
and /*is
dorsata as well as s*iced and #la.oured hone's 4ginger+ cardamom+ *e**er+ sa##ron+ lemon+ rose+
*inea**le
and orange5. (eesD wa6 is made into candles and 0alms.
/ s*ecial case to 0e mentioned is #or the organic 0a$aars 422RD+ 2ndia5. ?he selection o# the
*roduct range #or
the organic 0a$aars de*ends u*on consumer *re#erence and a.aila0le o# local *roduction.
)ar!eting
strategies should 0e a**lied to the selection o# *roducts 0e#ore the' are *lanted. /lthough cro*s
should 0e
*lanted according to local conditions+ consumer demand must also 0e ta!en into consideration.
FC?CRK PR9DC%? DK8K-9P)KN? P-/N" /ND -K""9N" -K/RNKD
)an' o# the organisations remar!ed that the' would not ma!e an' change in their *roduct lines.
Howe.er+
within each *roduct line there could 0e a readAustment in the num0er o# items within each line.
?a0le =
*resents the *lan #or >004 #rom ?hai 9rganic Food to reduce their num0er o# .arieties.
?a0le =& %urrent and *lanned *roduction o# .egeta0les 4?hai 9rganic Food5
Product categor' ; o# *roduction 4>00=5 ; o# *roduction 4>0045 Reason #or change
"alad -ettuces =5; 55; High margin and demand
-ea#' Breen 8egeta0les 50; >0; High demand
Fruit<t'*e 8egeta0les 15; >5; High demand and low maintenance cost
)ain issues mentioned that would need more attention are initial *roduct qualit' and *ricing and
*ossi0ilities
to e6*and to other *roducts. /nother issue is that initial *roducts should ha.e a good enough
qualit' to start
with and that there should 0e enough ca*acit' and *ossi0ilities o# the #armer to con.ert the whole
#arm to
organic.
FC?CRK 2)PR98K)KN?"
"e.eral organisations *lan a num0er o# #uture changes. ?hese changes relate to im*ro.ements in
the
distri0ution 4setting u* own cold room+ *urchasing air<conditioned truc! #or trans*ortation5 and
the *ac!aging
4*ac!aging done #ull' 0' com*an' sta##+ setting u* s*eci#ic *ac!aging centre5. /nother main
issue is to ha.e
0etter control o.er qualit' and a.aila0ilit'+ #or e6am*le 0' esta0lishing qualit' control at each
*oint in the
su**l' chain.
(ecause o# di##iculties to source and manage contracted #arms+ com*anies such as /gri<(io
4"inga*ore5 and
?hai 9rganic Food *lan to increase the *roduction #rom their own #arm. 9ne com*an'+
9rganicone*al+ is
*lanning to create a se*arate 0usiness entit' #or #arming and su**l' o# organic *roducts+ which
will wor!
closel' with #armers and su**ort the mar!eting 0usiness. ?his entit' will ha.e the #acilities to
#orecast the
mar!et demand+ *roduction lines+ com*uting cost o# *roductions+ su**l' management+ *ro*er
documentation
li!e *urchase and@or su**l' orders+ accounting etc. /t the 0eginning+ this s'stem will 0e
introduced to the
non<*erisha0le *roducts li!e+ cereals and her0als onl'.
-essons -earned 4& "u**l' chain management
O Follow Dcon.entionalQ su**l' chain 40ut di##icult in case o# organic 0usiness5.
O Direct 0usiness relation.
Tualit' is !e' 4O qualit' assurance scheme+ ?T)5. ((((((((((((((
O Plan sales in line with *roduction.
O Di##icult to meet #armersD e6*ectations o# sales .olumes at desired *rice.
O De.elo* ad.ance *urchasing scheme 4assurance to *roducers5.
O Pro.ided training to *roducers.
?echnological de.elo*ment im*ortant to im*ro.e e##icienc' O lower cost o#
*roduction.
7. )/RK?2NB 4PR9)9?29N5 /ND "/-K" )/N/BK)KN?
?his cha*ter descri0es current 0usiness and mar!eting models 4e.g. direct+ retail+ wholesaling5+
mar!et
communications 4include co*ies o# la0els+ *romotional material5 and customer ser.ice *olicies.
e'
su**orting management aids+ e.g. documentation+ so#tware and *rocedures are highlighted.
-essons learned
and ideas #or #uture im*ro.ements are indicated.
%CRRKN? (C"2NK"" /ND )/RK?2NB )9DK-"
/mong the mar!eting organisations contri0uting to the case studies #our di##erent 0usiness and
mar!eting
categories could 0e distinguished&
O Direct "ales@Farmers )ar!ets+ #or e6am*le the organic 0a$aars organised 0' 22RD.
O Retail
O ,holesale@Retail@K6*ort&
?he 9rganic (a$aars organised 0' 22RD 42ndia5 are re*resentati.e o# the #irst categor'.
Breen Net 4?hailand5 is .er' de.elo*ed into the third categor'. /t *resent+ it sells through #our
channels&
O 2ts own sho* in (ang!o!.
O ,holesale to Breen Health sho*s in (ang!o! and other *ro.inces. ?hese sho*s can 0e
s*ecialt' sho*s
selling mainl' organic *roducts or con.enience sho*s ha.ing organic *roducts in one shel#.
O K6*ort o# rice to Kuro*ean #air<trade grou*s.
O Direct sale+ 0ut onl' o# small quantities o# *roduct.
)ost organisations #all into the second categor'+ 0ut some organisations also do wholesale or
low .olume
e6*orts. P/R% 4Palestine5 has organised and equi**ed three sho*s #or organic #arming o# a0out
>00 m>.
NanAing Planc! 4%hina5 and 9rganic Health 4)ala'sia5 ha.e their own sho*s. 9rganicone*al
4Ne*al5 and
Hanoi 9rganics 48ietnam5 also o*erate their own sho*4s5 and o*erate a home deli.er' ser.ice on
a
mem0ershi* 0asis. 2n addition+ Hanoi 9rganics e6*orts small amounts o# organic tea. e'stone
42ndia5 sells
its *roducts directl' or through dealers and it has o*ened two own sho*s.
?hai 9rganic Food sells to su*ermar!ets and *roduces .egeta0les #or its own restaurant. /gro<
(io
4"inga*ore5 sells wholesale to organic s*ecialit' sho*s and distri0utors+ 0ut also sells direct
through home
deli.er'.
)/RK? %9))CN2%/?29N"
9rganic mar!et de.elo*ment can 0e com*ared with a *u0lic education cam*aign. %on.incing
consumers o#
their interest to su**ort additional *roduction and social requirements is a long<term a##air. 9#ten
consumers
are initiall' mostl' attracted to organic 0ecause o# *ersonal reasons+ 0ut the challenge is in
communicating
and culti.ating the consumersD *rimar' enthusiasm to get their su**ort #or the non<direct
consumer 0ene#its.
"ome assurance o# com*liance with organic standards will 0e necessar'. 49ng ung ,ai+ >0005
Benerall'+ the di##erent mar!eting organisations em*hasi$e #irstl' the direct 0ene#its o# organic
agriculture to
consumers. "ometimes+ the' add an e6*lanation o# the di##erences 0etween organic *roducts and
other Qsa#eQ
*roducts+ such as 2P)+ in order to con.ince the consumers that organic *roducts are 0etter.
"econdl'+ the
0ene#its to the *roducers are em*hasi$ed+ o#ten *ainting the *icture o# Qthe *erson 0ehind the
*roductQ. ?o
that end+ organisations such as Breen Net 4?hailand5+ ha.e esta0lished an in#ormation data0ase
on their
*roducer grou*s to su**ort Breen NetDs *u0licit' acti.ities
Breen Net *re.iousD mar!et *romotion strateg' was to encourage Q*roduct trialQ so that
consumer were
introduced to organic *roduct and could tr' some *roducts as a trial.
< >4 <
?here is no s*ecial means or #ormula #or success+ 0ut #orm the 0eginning the organisation should
0e clear on
the message and the e6*ectations #or the s*eci#ic acti.it'. ?he di##erent mar!eting initiati.es
a**l' a wide
range o# methods to communicate their *roducts and organisations to consumers. ?he #ollowing
is a list o# the
most common methods a**lied&
O %onsumers meetings. 22RD+ #or e6am*le+ organises consumers meetings in association with
womenDs
grou*s and social clu0s li!e the -ions+ Rotarians+ etc. to discuss the im*ortance o# organic
agriculture+
#ood securit' and health. ,hile *ro.iding in#ormation a0out u*coming organic 0a$aars+ the 22RD
also
discusses strategies on how citi$ens ma' decrease en.ironmental *ollution.
O 2n.itations letters to directl' in.ite indi.iduals or organisations to acti.ities and s*ecial e.ents.
O Printing and distri0ution o# lea#lets. Promotional materials are *rinted in mass quantities and
distri0uted+
*ro.iding in#ormation a0out the organisation+ *roducts+ and sometimes acti.ities. ?he #ormat is
generall'
a one to two *ages lea#let.
O )ass media. /rticles are *u0lished in the *rinted media such as news*a*ers and maga$ines+
descri0ing
the 0ene#its o# organic agriculture. )an' organisations maintain relationshi*s with Aournalists
who are
interested in the issue and su**ort the organic mo.ement. Press con#erences are sometimes held
and
*ress releases are another wa' to #urther the local organic mo.ement.
O /d.ertisements. "e.eral organisations regularl' ad.ertise in local news*a*ers that ha.e wide
circulation.
Placing 0anners in strategic locations within the cit' ma' also 0e attem*ted. 2n addition+ stills or
mo.ing
ads ma' 0e 0roadcasted through local ?8 networ!. ?his is+ howe.er+ a relati.el' e6*ensi.e
strateg' and
ma' not alwa's 0ring the antici*ated results. Howe.er+ Breen Net continues to ado*t a *olic' o#
noad.ertisement.
O Direct mar!eting. ?he 0a$aar+ mar!et or sho* itsel# *resents a #orum #or *erson<to<*erson
mar!eting o#
organic *roducts. ?his #orum allows consumers to inquire a0out organic *roducts or agriculture
directl'
#rom the *roducer or sta## o# the mar!eting organisation. Direct mar!eting ma' also 0e
underta!en
through door<to<door cam*aigns or o.er the *hone. Howe.er+ the latter methods are time
consuming and
la0our<intensi.e.
O ,ord o# mouth& Pu0licit' ma' also 0e generated through *ersonal interactions among
consumers. 2#
consumers are satis#ied with the organic 0a$aar+ mar!et or sho* and their *urchases+ the' ma'
recommend it to their #riends and colleagues. ?his would also hel* to s*read in#ormation a0out
organic
agriculture and the organic mo.ement in general. )an' organisations ha.e 0ene#ited #rom this
!ind o#
Qad.ertisementQ in their start u* *hase.
O Field .isits. )an' organisations organise regular meetings 0etween consumers and organic
*roducers.
(' sharing e6*eriences and o##ering suggestions+ these meetings ha.e 0een #ound to 0e use#ul to
0oth
*arties.
O %onsumer newsletter. "ome organisations send regular newsletter to their mem0ers or regular
customers. ?hese newsletters include in#ormation a0out u*coming e.ents+ articles a0out organic
agriculture or health issues+ reci*es+ etc. ?o this end+ these organisations ha.e *re*ared a
consumer
register with the names o# regular consumers and mem0ers.
O Dis*la' in#ormation and *hotogra*hs. e'stone+ #or e6am*le+ *roduced a .ideo on hone'
collection+
which is shown in their sho*s to sensitise the customers a0out the *eo*le 0ehind the *roduct.
O Partici*ation in trade and #ood #airs. 9rganic *roducers could dis*la' and sell their *roducts at
these
e.ents+ which are regularl' organised in most countries at 0oth the national and local le.el.
,hile some
countries ha.e s*ecialised #airs #or Qsa#eQ agricultural *roducts+ onl' the Phili**ines has an
annual e.ent+
which showcases organic and Her0al *roducts 4(iosearch5.
/nother im*ortant means o# communication is the organisationDs *ac!aging and logo. Pac!aging
should 0e
attracti.e and 0e in line with the organic identit' o# the *roducts. ,hen *ossi0le+ rec'cle
materials+ such as
*a*er+ should 0e used+ 0ut in some countries+ such materials ma' 0e e6*ensi.e and not alwa's 0e
readil'
a.aila0le. "ome commonl' used *ac!aging materials are *lastic 0ags 4trans*arent5+ *a*er+ carton
and locall'
made containers li!e 0am0oo crates.
< >5 <
/ strong logo is also im*ortant. / good logo is attracti.e+ eas' to recognise and con#irming the
organic identit'
o# 0oth com*an' and *roducts. )an' organic mar!eting initiati.es ha.e de.elo*ed their own
logo at a .er'
earl' stage and ha.e #ound that the use o# a logo im*ro.es the communication a0out the *roducts
and the
com*an'. 2n some countries+ the com*an'Ds logo has 0ecome almost s'non'mous #or organic
*roducts.
%C"?9)KR "KR82%K" P9-2%2K"
9rganic #ood s*ecialt' sho*s o# .arious t'*es 4including other t'*es o# distri0utors o# organic
#ood5 should 0e
sta##ed with managers and sales*ersons that ha.e !nowledge a0out organic #arming and organic
#ood and
can e6*lain to customers and ma!e *u0licit' o# organic #arming and organic #ood. /s organic
#ood is a
new0orn 0a0'+ not until the consumers get to !now the characters and #unctions o# organic #ood
will the'
s*end mone' on it.
"ome organisations+ such as 22RD+ ha.e a #ormal s'stem to document customer #eed0ac! through
the
a.aila0ilit' o# a suggestion 0o6 or a note0oo! !e*t 0' the #armers.
e'stone 42ndia5 has a *olic' to immediatel' re*lace an' *roduct with a de#ect or com*laint.
?his is noted
down in their sho*s where the customer can write down his@her *ro0lems. ?his is then rela'ed to
the
*rocessing centre where the *ro0lem is identi#ied and i# *ossi0le+ remedial measures ta!en.
/n interesting e6*erience o# some mar!eting organisations is that although the households
ordering organic
*roducts are o#ten the relati.el' wealth' and educated ones+ it is not these *eo*le 0ut their
house!ee*ers
who 0u' the *roduct. ?here#ore+ a mar!eting strateg' onl' #ocussing on the wealthier #amilies
ma' attract
man' customers+ 0ut would #ail to !ee* them i# the *erson 0u'ing the *roducts is not ser.iced in
a satis#actor'
wa'.
-K""9N" -K/RNKD
)ar!eting organic *roducts is an educational *rocess and it ta!es man' 'ears to educate *eo*le.
)ar!eting
e##orts are related to 0oth the social and ecological as*ects o# the *roduct. 2n doing so+ a lot o#
e##ort has to go
into ca*acit' 0uilding+ *roduction related issues+ qualit' *arameters and the logistics o#
*rocuring *roducts
#rom sometimes remote and inaccessi0le areas. Howe.er+ in most cases the *roducts sell more
0ecause o#
their qualit' and com*etiti.e *ricing+ rather than the social mar!eting. ?he !e' is qualit' o#
*roduce1 it is the
#undamental criteria to secure the mar!et *osition and *roduct 0randing
?here are man' mar!eting constraints+ which ma!e the tas! #or a small organic mar!eting
initiati.e e.en more
challenging+ #or e6am*le&
O -ac! o# su**orti.e *olicies #rom the go.ernment to encourage organic *roduction.
O Bo.ernments su**orting domestic mar!et de.elo*ment #or semi<organic *roducts such as
Qsa#eQ or
Q2P)Q.
O -ac! o# in#rastructure@equi*ment to *roduce high qualit' *roducts.
O High certi#ication costs.
O -ac! o# mar!et in#ormation.
O Producers are not organised and@or do not ha.e a central handling #acilit'.
O No su##icient econom' o# scale to reach the mar!et.
9rganic certi#ication is also 0ecoming increasingl' im*ortant in relation to mar!eting+ as there
are man' sel#claimed
green *roducts on the mar!et. %onsumer con#usion and loss o# con#idence o# organic *roduct can
create long<term im*lications #or #uture mar!et. ?his is es*eciall' true #or new consumers who
ha.e little
!nowledge a0out organic *roducts. Howe.er+ certi#ication is an e6*ensi.e e6ercise+ 0ut it is
essential to gain
consumersD trust+ es*eciall' i# the *roduce is not sold directl' 0' a #arm 0ut through third *arties+
such as retail
sho*s
< >6 <
?he organisation needs to 0e creati.e and inno.ati.e in communicating its message. Betting
together with
similar initiati.es or NB9 ad.ocac' grou*s #or generic *romotions ma' sa.e costs as well as
reach a wider
audience. BN& )ore coo*eration with other organic trading organisation is necessar' in order to
*romote
organic consum*tion. ?he Aoint *u0licit' cam*aign in which di##erent traders contri0ute can
create more
im*acts among consumers com*ared with indi.idual e##orts.
"u*ermar!ets are *otentiall' attracti.e channels #or the sale o# organic *roducts. Howe.er+ the'
are o#ten
.er' demanding in terms o# *roduct qualit'+ a.aila0ilit' and *rice. Csuall'+ su*ermar!ets+ dictate
the t'*e o#
*ac!aging material #or the *roducts the' will *urchase+ which creates additional e6*enses #or the
mar!eting
organisation or the *roducers.
-essons -earned 6& )ar!et communication
O (e *ro<acti.e with certi#ication 4e6*ensi.e+ 0ut essential to 0uild consumer trust5.
O Bood *ac!aging with clear 4cor*orate5 identit'.
O Product de.elo*ment 4in maturing mar!et consumers as! #or more *roducts5.
"trateg' 40ene#its organic agriculture O *roduct 0ene#its5.
O %olla0oration with other in organic sector #or generic *romotion acti.ities.
O Cse the media 4organic ?8 and Radio5.
O )essage& qualit'+ organic is 0etter wa'+ health+ #airtrade+ hel* indigenous *eo*le+ direct #rom
*roducer
40ut ma' change o.er time as mar!et de.elo*s5.
-essons -earned 7& %ustomer ser.icing
O Bet constant #eed0ac! o# customers on *roduct and ser.ice.
O Pro.ide in#ormation a0out *roduct+ sales 4location+ timing5.
O "ta## in contact with customers should ha.e !nowledge on organic #arming and 0e a0le to
e6*lain
*hiloso*h' o# the o*eration.
O Find wa's to 0uild trust+ not alwa's need 4*articularl' at start5 #or certi#ication.
O Ne.er ta!e the customer #or granted 4continuous education@#eed0ac!5.
O C**er class *eo*le ma' ha.e the mone' 0ut the house!ee*er 0u's the *roduct.
O "u*ermar!ets& interesting mar!et 0ut .er' demanding 4read' #or itF5.
O "ta## in contact with dealers should ha.e !nowledge on organic #arming and 0e a0le to e6*lain
*hiloso*h'
o# the o*eration.
FC?CRK 2)PR98K)KN?"
For the ne6t mar!eting de.elo*ment+ Breen Net will #ocus on new *ac!age design with
cor*orate identit'.
?his will create good im*ression #or the Breen NetDs *roducts and organisation. Howe.er+
*ro#essional
*ac!age design requires su0stantial in.estment and *riorit' is gi.en to *roducts #rom certi#ied
organic
sources. Future mar!et *romotion should include Q*roduct 0ene#itsQ. ?his is lin!ed with a sales
strateg' in
which the target grou* is the non<user consumer. ?o ha.e access to this new consumer grou*+
creati.e
*u0licit' acti.ities are needed. /gain+ *roduct qualit' 0ecomes a critical issue as *roduct 0ene#its
also include
*roduct qualit'. Tualit' de.elo*ment is there#ore a !e' to mar!et success.
9ther organisations also *lan to set sales target #or each maAor *roducts as *art o# their #uture
strateg'. ?his
in#ormation will 0e communicated to *roducers so that the' can also *lan their *roduction
accordingl'. Breen
Net is also de.elo*ing an ad.ance *urchase scheme in order to gi.e *roducers an assurance o#
*roduct
quantit' trade with the organisation.
< >7 <
)an' consumers e6*ress that the taste o# organic .egeta0le is clearl' 0etter than that o#
con.entional one+
which is an encouragement to organic *roducers and traders. 2t is suggested that more research
0e carried
out on this issue to #ind out its theoretic 0asis to rein#orce the *ur*ose#ulness o# the *roduction o#
organic
.egeta0le. )oreo.er+ the im*ro.ement in the taste o# the organic .egeta0le can also 0e used as a
meaning#ul
re#erence #or other organic #ood. 9ther organic #ood should also ha.e a 0etter taste li!e organic
.egeta0le as
long as o*erators master the rationale and !ee* on *racticing.
< >: <
:. %9"?+ )/RB2N"+ PR2%K "K??2NB /ND 8/-CK /DD2?29N
?his cha*ter gi.es in#ormation on cost structures and *rice *olicies. e' management
instruments #or cost
control and *ricing are highlighted+ gi.ing a #ew t'*ical e6am*les o# *roduct cost calculation and
mar!et
margins. -essons learned and ideas #or #uture im*ro.ements are indicated.
BKNKR/- PR2%K P9-2%2K" /N %9"? "?RC%?CRK"
2n general+ an organic mar!eting initiati.e is e6*ected to 0uild in or carr' more costs in contrast
to
con.entional mar!eting. ?his is largel' 0ecause o# the QadditionalQ en.ironment management
and social
res*onsi0ilit' it wants to carr'. 9rganic mar!eting initiati.es there#ore ha.e a distinct cost
disad.antage
against con.entional 0usinesses+ which do not internalise equi.alent en.ironmental and social
costs+ in the
mar!et #or similar *roducts categories. 49ng ung ,ai+ >0005
)an' organic mar!eting organisations im*lement #air trade *rinci*les in their *rice setting
*olicies. 9ne o#
these *rinci*les is that the *rice at which the *roducers sell their *roducts should at least co.er
their cost o#
*roduction. Howe.er+ there are onl' #ew situations were #armers and@or traders ha.e calculated
actual
*roduction costs. 2n addition+ no e6ternal studies on organic *roduction costs ha.e 0een done so
#ar+ which
could 0e used as #ramewor! #or *rice setting. Hence+ organisations+ such as Breen Net and Hanoi
9rganics+
ha.e decided to #ollow a *rice setting *olic' in which the *roducer grou*s are allowed to
determine the *rices
#or their organic *roducts. Howe.er+ *roducers rarel' ma!e a com*arison with con.entional
*roducts+ ma!ing
the organic *rices o#ten su0stantiall' higher than chemical *roducts.
/lternati.el'+ 9rganicone*al #ollows a s'stem+ in which it ensures the #armersD in.estment costs+
including
land rent+ #arm in*uts+ la0our costs+ *ac!aging+ o*erational costs+ deli.er' costs etc. /ccording to
this *olic'+
consumers or their re*resentati.es are in.ol.ed while com*uting the cost o# *roduction.
)asi*ag 4Phili**ines5 a**lies the strateg' that 0e#ore a *rice is negotiated+ *roduct qualit' is
e.aluated 0ased
on organic standards and *ost<har.est qualit'. Prices #or di##erent *roducts are calculated as
#ollows&
O Padd'& ?he sum o# the highest *re.ailing *rice@contract *rice+ multi*lied 0' the *ost har.est
qualit' rating.
O )illed rice& ?he *rice is 0ased on *roduction costs+ current mar!et *rice and desired cost
0ene#it ratio.
"tudies showed that *esticides<#ree white rice is more e6*ensi.e to *roduce 0ecause o# the 1=;
lower
milling reco.er' com*ared to 0rown rice. ?his di##erence is caused 0' the #act that 0rown rice is
*olished
and is signi#icant enough to ma!e 0rown rice more *ro#ita0le than white rice.
For the organic 0a$aars+ di##erent o*tions are a.aila0le #or the *urchase and storage o# organic
*roducts&
O Direct *urchase #rom the #armers 0' the 0a$aar o*erators and sale to customers. Purchases
could 0e
made at a *remium *rice com*ared with the *rices o##ered 0' intermediaries and traders. ?he
0a$aar
o*erator is required to maintain the stoc!s. ?he #armer re*resentati.es are *resent during the
0a$aars
and incenti.e return is additionall' *ro.ided to the #armers 0ased on sales o# their *roducts.
O Non<*urchase strateg'. ?he 0a$aar o*erator #acilitates the su**l' o# organic *roducts through
the
*artici*ation o# #armers in the 0a$aars+ ensures the organic integrit' o# *roducts and *ro.ides the
required e6tension su**ort and mar!et de.elo*ment acti.ities. ?he o*erator recei.es ser.ice
charges to
co.er his costs.
O %om0ination o# *urchase and non<*urchase s'stem. ?he 0a$aar o*erator can com0ine the
direct
*urchase and non<*urchase s'stems in order to ma6imise ad.antages and tide o.er constraints. 2n
this
method+ the o*erator could decide #or direct *urchase #or a limited range o# *roducts de*ending
u*on the
ad.antages and a.aila0ilit' o# #unds.
Kach o*tion has its s*eci#ic ad.antages and disad.antages1 mainl' related to #inancing+ *ro#it
le.els+ stoc!
management+ *ac!ing@grading+ su**l' chain management+ and interaction with consumers.
< >3 <
-K""9N" -K/RNKD /ND FC?CRK 2)PR98K)KN?"
From its 10<'ear e6*erience in organic mar!eting in ?hailand+ Breen Net 0elie.es that
consumers could
acce*t u* to 10 < 15; *rice di##erentiation. ?his assessment is .er' much in line with the
de.elo*ment seen in
more mature organic mar!ets+ such as in some Kuro*ean countries+ where sur.e's show mar!et
rece*ti.it'
#or an a.erage o# >0 < =0; higher *rice #or organic *roducts. 49ng ung ,ai+ >0005 Howe.er+
most local
mar!eting organisations in /sia o*erate at much higher *rices then the con.entional *rices+ some
times as
high as 150; 4see ?a0le 45. / *rice restructuring in relation to the *rices o# con.entional *roduct
is there#ore
una.oida0le+ in which 0oth traders and *roducer grou*s must together #ind an acce*ta0le
agreement.
?he *rice o# an organic *roduct has a direct im*act on sale. %urrentl'+ organic *roducts are
*urchased mostl'
0' 4u**er5 middle<class consumers whose decision to *urchase is not so much in#luenced 0'
*rice. Howe.er+
man' local mar!eting organisations ha.e the aim to e6*and to other consumer grou*s and the
*rice would
then de#initel' 0ecome a critical #actor #or mar!et success. ?his is illustrated 0' the results #rom
a sur.e'
among organic .egeta0les 0u'ers in NanAing+ %hina 4(o6 45.
?he #ailure to ma!e a *rice com*arison with con.entional *roducts in the *ast created mar!eting
*ro0lems #or
se.eral organisations. ?he need to re.iew the *rice o# organic *roducts is e.en greater when the
local
econom' is in recession and more *roducers turn to organic *roduction+ as ha**ened in the last
#ew 'ears in
man' countries in /sia. ?he #aster an organisation can restructure its organic *rices+ the 0etter its
chance is to
ca*ture more mar!et share #rom other com*etitors.
/lthough consumers *re#erring to 0u' organic *roducts are willing to *a' the additional cost+
the' o#ten want
some reassurance o# the organic status o# the *roducts. ?here#ore+ mar!eting organic *roducts
with standard
*ac!aging and a logo or statement con#irming the organic status adds to the .alue o# the *roducts
in terms o#
qualit' and social 0ene#its+ etc. (uilding consumer trust in other wa's is also essential.
9rganic #armers largel' assume that the *roduce #rom an organic #arm will command a *remium
*rice. ?he
in#lated *rices o#ten re#lect the usuall' small scale o# *roduction and the underde.elo*ment o#
the mar!et.
9ne wa' to lower organic *rices is to increase *roduction 'ields. Higher 'ield can stem #rom
either increased
*roducti.it' or *roduction that is more e##icient. 2n this res*ect+ technological de.elo*ment is an
im*ortant
(o6 4& Findings on consumer income and *rice o# organic .egeta0les < NanAing Planc!+ %hina
?he sur.e' showed that 40; o# the res*ondents held that the sho* o##ered a reasona0le *rice #or
its organic
.egeta0les. ?his *ro*ortion is quite close to the *ercentage o# the res*ondents whose income was
o.er 400 C"D
*er month. ?he other 60; thought the *rice was too high or a 0it too high. ?his *ercentage
coincided with that o# the
res*ondents with an income 0elow 400 C"D. /0out hal# o# the grou* #elt that it was *ro*er to
ha.e organic #ood sold
at a *rice o# a0out >0 J =0; higher than con.entional one and one quarter held that 40 J 70;
more was acce*ta0le.
?he sur.e' #urther showed that :0; o# the consumers could acce*t a *rice *remium o# 10 J =0;
while the rest
mentioned a *rice *remium o# 40 J 30;.
(ased on the stud' it is thought that initiall' consumers can acce*t a *rice *remium o# 50J60;.
Howe.er+ under
conditions o# undersu**l'+ a *rice di##erence o# 100; or more could initiall' 0e acce*ta0le in
cities with a medium
consum*tion le.el+ such as NanAing. (ut #rom a long<term *oint o# .iew+ with the organic
*roducers graduall'
im*ro.ing their culti.ation technolog' and hence 'ield+ and with the su**l' o# organic .egeta0le
in the mar!et
im*ro.ing in quantit' and di.ersit'+ it is reasona0le and realistic to e.entuall' set the *rice o#
organic .egeta0le 50J
60; higher than that o# con.entional one. 9# course+ di##erences in .ariet' will ine.ita0le lead to
di##erence in the
magnitude o# *rice *remium. 2n short+ we hold that it is more ad.isa0le #or the organic *roducers
and traders in
NanAing to readAust their long<term e6*ectation o# the *rice o# organic .egeta0le to 50 J 60;
higher than
con.entional one.
Rhou ReAiang+ 9FD%+ %hina
< =1 <
#actor #or #uture organic growth. 2n addition+ it is im*ortant to start #ield research to stud'
organic *roduction
costs in order to *ro.ide guideline #or *rice setting and *roduction su**orts.
9ther cost cutting measures could also 0e im*lemented+ such as minimising the num0er o#
intermediaries.
)an' organisations integrate the *roduction and sales o# organic *roducts and are there#ore a0le
to o*erate
with no or onl' #ew intermediar' lin!s as com*ared to con.entional *roduction.
/dditionall'+ man' organisations initiall' o*erate onl' small .olumes+ ma!ing #or e6am*le
trans*ortation and
e6tension ser.ices relati.el' e6*ensi.e. 2ncreasing .olumes would there#ore also 0ring down
these costs on a
*er !ilo 0asis. 2t is .er' im*ortant #or starting organisations to relati.el' soon reach the econom'
o# scale to
o*erate on a sustaina0le 0asis.
)a!ing mone' is not the sole o0Aecti.e o# de.otion o# the organic o*erators to the industr' o#
organic #ood.
9rganic #ood *roducers+ es*eciall' the traders+ should handle *ro*erl' the relationshi* 0etween
*roduction+
consum*tion and *rice and o##er a reasona0le *rice 0' ta!ing into account the actual
consum*tion le.el o# the
consumers and cost o# the *roduction and o*eration. )oreo.er+ the' should also ha.e a right
*rediction o#
and get #ull' *re*ared in mentalit' #or the long<term de.elo*mental trend and #inal *ositioning o#
the organic
#ood *rice so as to ensure dura0le+ sta0le and health' de.elo*ment o# the organic #ood mar!et
and create
e##ects 0ene#icial to 0oth the o*erators and consumers.
-essons -earned :& %ost+ margins+ *rice setting and .alue adding
O 2nitiall'+ 0asic *rice determined 0' *roducer+ 0ut in #uture should do more s*eci#ic cost<0ene#it
calculations #or organic *roduction.
O "et *rice organic in relation to con.entional 4need ma!e that com*arison5.
O ,hat *remium #or organic is acce*ta0le in mature mar!et 410<>0; onl' is *ossi0leF5.
O Reaching econom' o# scale is im*ortant #or sustaina0le de.elo*ment.
< => < P/BK
P/R? =.
"K%?9R DK8K-9P)KN?
< == <
3. )/RK? /""CR/N%K /ND %KR?2F2%/?29N
?his cha*ter gi.es an o.er.iew o# the *re.alent mar!et assurance s'stems 4#ormal V in#ormal5 in
the di##erent
mar!et situations+ in general. "ome !e' issues are discussed in more detail #or di##erent countr'
mar!et
situations+ such as how organic *roducts are di##erentiated in general+ the mar!et assurance
schemes
a.aila0le #or organic la0elled *roducts and s'stems ado*ted 0' the di##erent organisations. 2deas
are also
*resented #or de.elo*ment o# the di##erent organisations internall' as well as #or the organic
sector in their
countries in general.
PRK8/-KN? )/RK? /""CR/N%K "7"?K)"
%on#idence and trust are crucial elements to address #or mar!et success. / mar!eting
organisation has to
assure the consumers that the claims it is ma!ing are true. Ksta0lishing credi0ilit' is *articularl'
crucial when
*romoting alternati.e qualities in a com*etiti.e mar!et en.ironment. 49ng ung ,ai+ >0005
Des*ite the #act that se.eral /sian countries+ such as %hina+ 2ndia+ ?hailand and )ala'sia+ ha.e
de.elo*ed
national regulations #or organic agriculture+ there is no e##ecti.e regulation 'et controlling the
use o# the terms
QorganicQ in these mar!ets. ?his also a**lies to all countries where organic regulations are not
'et in *lace.
"ome local certi#iers+ 0oth *ri.ate and go.ernmental+ are o*erating in these countries 0ut the use
o# their
ser.ices is still mostl' on a .oluntar' 0asis.
Bo.ernments in %hina+ ?hailand and 8ietnam ha.e esta0lished mar!et assurance s'stems #or
other t'*es o#
QcleanQ agricultural *roduce+ such as the Breen Food scheme in %hina+ the Pesticide "a#e and
H'gienic
8egeta0lesD schemes in ?hailand and the "a#e 8egeta0les scheme in 8ietnam. 2n the *resence o#
such
schemes+ the a0sence o# clear regulations on the use o# the term QorganicQ ma' ha.e the e##ect
that there is
no di##erentiation in 0eing organic in the mar!et.
2n "inga*ore+ the local authorit' does not distinguish organic *roduce #rom con.entional ones.
Food can 0e
im*orted and sold into "inga*ore as long as it satis#ies Q"a#e FoodQ requirements as sti*ulated.
?he local
authorit' uses the %ode6 /limentarius as the re#erence guideline #or Food "tandards.
9rganic certi#ication is also 0ecoming increasingl' im*ortant+ as there are man' sel#<claimed
green *roducts
on the mar!et. %onsumer con#usion and loss o# con#idence in the organic *roduct can create
long<term
im*lications #or the organic mar!et. ?his is es*eciall' true #or new consumers who ha.e little
!nowledge a0out
organic *roducts.
?rust and in#ormation e6change can 0e 0uilt through di##erent wa's de*ending on the o*erating
en.ironment
where the organisation is situated as well as is sco*e o# acti.ities and set u*. K6am*les o# direct
relations+
internal control s'stems and inde*endent third *art' certi#ication will 0e gi.en 0elow 0ased on
the case
studies *re*ared 0' the di##erent local organic mar!eting organisations. 49ng ung ,ai+ >0005
Direct in.ol.ement and *ersonal relations
2n a ?ei!ei or %ommunit' "u**orted /griculture 4%"/5 scheme+ understanding and trust
de.elo*s #rom a high
le.el o# interaction 0etween consumers and *roducers. %onsumers in man' o# such schemes are
directl'
in.ol.ed in *roduction matters as well as *rice setting. Direct in.ol.ement and *ersonal relations
o##er the
strongest means o# 0uilding understanding and trust. 49ng ung ,ai+ >0005
9rganicone*al has introduced a mem0er 0ased 0usiness scheme in Ne*al 0ased on the Na*anese
?ei!ei
s'stem. ?his scheme is #unctioning 0ased on trust de.elo*ed 0etween the *roducers and
consumers. Hanoi
9rganics used #arm .isits and other e6change acti.ities to 0uild understanding and trust 0etween
*roducers
< =4 <
and consumers. /lthough it has now esta0lished a #ormal internal control s'stem and it has
o0tained e6ternal
certi#ication 4see 0elow5+ it remains committed to de.elo*ing the direct *roducer<consumer
relationshi*s.
2n the current 2ndian mar!et situation+ .er' #ew la0elled organic *roducts are a.aila0le in the
mar!et. ?he
2ndian *roducers are .er' much oriented towards the e6*ort mar!et. ?he *roducts that are
a.aila0le in the
2ndian mar!et are *rimaril' 0ased on a s'stem o# local guarantee+ which o*erates through a
networ! o#
organisation and indi.iduals.
?he *resent s'stem #ollowed 0' e'stone is there#ore *rimaril' 0ased on a local guarantee
s'stem+ 0ut it is
slowl' mo.ing towards certi#ication o# .illage #arms. -ate >00=+ it has 0egun an e6*eriment with
one .illage.
2nternal control s'stem would 0e more a**ro*riate and cost e##ecti.e as tri0al #arms are
scattered+ remote and
not so mar!et oriented.
?he s'stem o# organic 0a$aars is also an e6cellent means o# de.elo*ing *ersonal relationshi*s
0etween
*roducers and consumers. Howe.er+ 22RD has now also de.elo*ed its own internal qualit'
assurance scheme
4see 0elow5.
?hird *art' certi#ication
2n an o*en mar!et situation+ there will generall' 0e the need #or inde*endent third *art' organic
certi#ication.
,hilst the need ma' not arise initiall'+ the sce*tical and com*etiti.e nature o# the mar!et will
e.entuall' raise
such a need. (esides consumers+ mar!et *artners such as wholesale distri0utors and retailers and
o.erseas
0u'ers+ will also need inde*endent qualit' assurance to carr' the *roducts. 49ng ung ,ai+
>0005
/s mentioned in %ha*ter 1+ there are onl' #ew local certi#ication organisations in /sia and #ew
/sian countries
ha.e regulated the use o# the term QorganicQ #or the local mar!et. Howe.er+ se.eral mar!eting
organisations
ha.e .oluntaril' o*ted to demand #or certi#ication #rom a national or international certi#ication
0od' to *ro.ide
qualit' assurance to the local mar!et. Breen Net and ?hai 9rganic Food are 0oth certi#ied 0'
/%? 4?hailand5+
NanAing Planc! is certi#ied 0' 9F%D 4%hina5 and Hanoi 9rganics is also certi#ied 0' /%?. 4"ee
also /nne6 >.5
2n the case o# Hanoi 9rganics the main reason #or certi#ication was #or the e6*ort o# their tea+ 0ut
it demanded
/%? #or certi#ication o# its .egeta0les as well to ha.e 0etter *osition selling these on the local
mar!et where a
large num0er o# consumers are #amiliar with the go.ernmentDs Qsa#eQ .egeta0les scheme 0ut not
with organic
.egeta0les.
"ome o# the local mar!eting organisations are also acti.e themsel.es in the esta0lishment o#
local certi#ication
0odies. Breen Net is a #ounding mem0er o# /%?+ while )asi*ag is a #ounding mem0er o# 9%%P
4the 9rganic
%erti#ication %entre o# the Phili**ines5. / team o# P/R% 4Palestine5 team was trained in >00= in
the %entre o#
9rganic /griculture in Kg'*t 4%9/K5+ and P/R% got the o##icial use o# the logo o# this %entre
until P/R% will
esta0lish the %entre o# organic agriculture in Palestine ne6t 'ear
2nternal %ontrol "'stems 42%"5
"ome local mar!eting organisations ha.e installed an 2nternal %ontrol "'stem 42%"5 to assure
organic qualit'
o# their *roducts. ?he 2%" are either set u* to Qstand aloneQ or are lin!ed to the certi#ication 0' a
third *art
certi#ier+ 0ut are in all cases com*ati0le with internationall' acce*ted *rinci*les o# smallholder
grou* schemes.
?he di##erent 2%" o*erated 0' the mar!eting organisations ha.e the #ollowing common
com*onents&
O /n 2%" o*eration manual+ including 2%" internal organic standards and 2%" regulations.
O Forms #or #armer 2%" registration and to maintain #arm documentation.
O Regular ins*ection .isits 0' trained 2%" ins*ectors@monitors.
O Re.iew o# ins*ection@monitoring re*orts.
< =5 <
Names and other rele.ant details o# registered #armers are normall' !e*t in a data0ase and are
annuall' 4or
more #requentl' 0ased on the num0er o# 2%" monitoring .isits5 u*dated.
/ num0er o# organisations also organise e6tension acti.ities as *art o# their 2%". ?hese acti.ities
include
technical ad.ice as well as 4assistance with5 the *ro.ision o# organic in*uts+ such as seeds and
materials to
ma!e com*ost.
-K""9N" -K/RNKD /ND FC?CRK DK8K-9P)KN?
)an' organisations sa'+ with hindsight+ that the' should ha.e 0een more *ro<acti.e in o0taining
certi#ication.
/lthough it is an e6*ensi.e e6ercise+ it is essential to gain consumersD trust+ es*eciall' i# *roduce
is not sold
directl' #rom the #arm+ 0ut through third *art' such as retail sho*s. /lternati.el'+ #armer<
consumer relationshi*
is essential.
"el#<ins*ection s'stems+ which in.ol.e 0oth *roducers and consumers+ should 0e recognised.
9rganic
consumers o#ten ha.e good !nowledge o# organic agriculture. ?o carr' out ins*ections
themsel.es with an
ins*ection chart is not di##icult and it will dee*en their interest #or organic agriculture. "el#<
ins*ection ma' o*en
the new *ossi0ilit' o# organic mo.ement.
"ome organisations+ such as e'stone 42ndia5 who mar!et+ which are either har.ested in a
sustaina0le
manner #rom #orests or #rom small #orest<gardens 4homesteads5+ #ind that an organic 4or chemical
#ree5 la0el is
not enough. 2t is necessar' to understand the ecological signi#icance o# these har.esting methods
and the
num0er o# s*ecies that the' conser.e@gi.e a ha0itat #or. ?hese #actors are not well understood 0'
an'
certi#ication 0od' 'et+ who are mostl' wor!ing on the model #or large #arms as those #ound in
,estern
countries.
< =6 <
10. "K%?9R %99PKR/?29N /ND )/RK? N9R) (C2-D2NB
?his cha*ter *resents the *re.alent s'stems 4#ormal V in#ormal5 #or coo*eration 0etween mar!et
actors in the
di##erent local mar!et situations. K6am*les are gi.en how organic mar!et o*erators coo*erate
with each other
in di##erent countries+ including critical areas #or coo*eration and mar!et@trade norms in the
organic sector
4also in com*arison with con.entional o*erators5. 2deas are also *ut #orward #or de.elo*ment o#
the di##erent
organisations internall' as well as #or the organic sector in their countries in general.
PRK8/-KN? "7"?K)" F9R "K%?9R %99PKR/?29N
/lthough an organic mar!eting initiati.e is generall' su**osed to #ocus on sales+ ensuring
constant su**l' is
Aust as im*ortant. For an organic mar!eting sector to de.elo* and grow+ initiati.es and the sector
as a whole+
ha.e to consider securing a #ull arra' o# ser.ices #or *roduction su**ort as well as #or the #ull
chain o# custod'+
#rom #arm to ta0le. 49ng ung ,ai+ >0005
?he de.elo*ment o# the organic mo.ement in man' *arts o# the world+ as also in the case o#
/sia+ has 0een
that o# a grassroots mo.ement. ?here#ore+ man' norms o# the mo.ement are similar to the norms
o# NB9s
and *eo*leDs organisations. ?oda'+ as organic agriculture gains wider scienti#ic and mar!et
acce*tance+ those
that had earlier o**osed it+ are now eager to Aoin. ?he inclusion o# new *la'ers 0rings in di##erent
interests+
*riorities and challenges. /s the mainstream now mo.e closer to em0race ecological and social
.alues+
go.ernments and other .ested interests will increasingl' see! to in#luence and direct the related
mo.ement.
49ng ung ,ai+ >0005
2n a num0er o# countries+ di##erent actors ha.e de.elo*ed mechanisms #or colla0oration. 2n the
Phili**ines+ #or
e6am*le+ )asi*ag has *ooled di##erent actors in the organic communit' together to 0e an
e##ecti.e mar!eting
#orce+ in the #orm o# *roducer grou*s and trade associations. Kach mem0er can now sell the
*roduct o# other
mem0ers *ro.ided the' are o# a di##erent *roduct line. )asi*agDs mem0er organisations ha.e
identi#ied areas
o# coo*eration in terms o# mar!eting. Formerl' there are crosso.ers in the mar!eting schemes
due to the
un*o*ularit' o# organic *roducts. 2# one o# the mem0er organisations cannot #ul#il the mar!et
needs in their
area+ other organisations can 0ring their sur*lus *roducts to them. Pricing is one area o#
coo*eration+ where
#ormerl' there are 0ig di##erences in *rices o# organic *roducts.
2n other countries+ howe.er+ the num0er o# *la'ers in the organic mar!et it is so small+ that there
is not much
*ossi0ilit' #or colla0oration. "ome o# the e6*orting com*anies are also not that interested in
colla0orating with
organisations #ocussing on the domestic mar!et. "ometimes+ where there are a #ew *ioneering
organisations
in a countr'+ the' also are not eager to colla0orate 0ecause o# distrust or tr'ing to !ee* their
unique image as
*ioneer. 2n larger countries+ it is also logisticall' di##icult #or small local organisations and
indi.iduals+ with
#ewer #unds and geogra*hicall' distant #rom each other+ to wor! together.
-K""9N" -K/RNKD /ND FC?CRK DK8K-9P)KN?
)ore coo*eration with other organic trading organisations is necessar' in order to *romote
organic
consum*tion. Noint *u0licit' cam*aigns in which di##erent traders contri0ute can create more
im*acts among
consumers com*ared to indi.idual e##orts.
,ith stead' de.elo*ment o# the /sian national economies+ the demand #or organic #ood is rising
u* with each
*assing da' in the countr'. /s long as the *roducers+ *rocessors+ traders+ consumers+ com*etent
go.ernment
de*artments and e.er' sector o# the societ' will Aoin their hands and gi.e #ull su**ort+ the cause
o# organic
#ood will surel' de.elo* ra*idl' and healthil'.
< =7 <

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