Economics of Organic Farming Vis-'-Vis Conventional Farming in India

Organic farming systems have attracted increasing attention over the last one decade because they are perceived to offer some solutions to the problems currently besetting the agricultural sector. Organic farming has the potential to provide benefits in terms of environmental protection, conservation of non-renewable resources and improved food quality (Worthington, 2001; Haas et al., 2005). Countries like Europe have recognized and responded to these potential benefits by encouraging farmers to adopt organic farming practices, either directly through financial incentives or indirectly through support for research, extension and marketing initiatives. As a consequence, the organic sector throughout Europe is expanded rapidly (24% of world's organic land). But, in the developing countries like India, the share is around 2 per cent only (included certified and wildlife). However, there is considerable latent interest among farmers in conversion to organic farming in India. But, some farmers are reluctant to convert because of the perceived high costs and risks involved (Shirsagar, 2008). Those who have converted earn equal incomes to their conventional counterparts, if premium markets exist for organic produce (Mac Donald, 2004). Government of India has also initiated programs like National Program for Organic Production (NPOP) and National Project on Organic Farming (NPOF) for systematic promotion of organic farming in the country in project mode in specified areas (NCOF, 2007). Despite the attention which has been paid to organic farming over the last few years, very little accessible information actually exists on the costs and returns of organic farming in India. Similarly, there are only a few attempts of comparing economics between organic and conventional production systems in different states. Therefore, the present paper focuses mainly on economics of organic farming vis-'- vis conventional farming in India