Wednesday, October 26, 2011

Challenges in Marketing of pesticide free / organic produce

Aggregation of low volumes:  
 Most of the organic farmers are small holders and few farmers are available in a village. This requires aggregation of produce from all organic farmers. This needs huge logistics and dedicated efforts. This is the first challenge in marketing of organic produce.  We need to pool at least 3-4 quintals for breakeven.

Continuous supply:

 Consumers require variety of organic products throughout the year. Any break in this supply affects the business. Assured irrigation throughout the year makes it possible.


 Consumers require authenticity of the products. Third party certification is the best proof for organic products. Certification involves considerable cost on part of the farmers. The alternative method to third party is Participatory Guarantee System (PGS) it involves zero costs but this system provides group certification only. One more issue is farmer has to wait for three years to get organic certification.  

 Accessing space in shopping malls:

 Costs can be reduced, if we can get space in shopping malls, but all their focus is not on selling vegetables. They will keep very small space for vegetables just to create impression that everything is available in the mall.

 Fixing base price:

 Fixing base price is critical. One has to finalize which market will be considered as base line market, as there are considerable variations in prices and marketing charges.

 Accessing premiums by farmers:

 Farmers expect premium prices over the base price for their organic products. Meeting their expectations is not easy as marketing of organic products require different market channels. Most of the existing organic marketing channels are directly reaching consumers by home delivery, which is leading to escalation of costs by 9-10 times of the regular prices. This means farmer can get minimal premiums. We have to create a marketing channel which minimizes the expenditure on logistics; reduced expenditure can be paid as premium to farmers.

 Providing fair price to consumers:

 Providing organic products at reasonable prices is a big challenge and it is must for sustainability. It requires reducing costs, reducing profits etc. This is the ultimate challenge in marketing of organic/pesticide free produce.

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