Framing Organic Policy in India
Lessons from Global Best Practices
Souvik Dutta is an Assistant Professor
in Economics at Indian Institute
of Management Bangalore (IIMB).
He is therecipient ofthe Young
Faculty Research Chair at IIMB. He
specializes in the fields of Applied
Microeconomics and Development
Economics. Dr. Dutta holds a PhD in
Economics from the Pennsylvania State
University, USA.
Arpita Mukherjee is a Professor
at ICRIER. She has several years of
experience in policy-oriented research,
working closely with the government
in India and policymakers in the EU,
US, ASEAN, and East Asian countries.
Dr. Mukherjee has a PhD in Economics
from the University of Portsmouth, UK.
Business Expert Press 978-1-94744-171-2 (2017)
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Souvik Dutta and Arpita Mukherjee
Abstract: Prior to the 1960s, the cultivation and harvesting
of crops in India was done in an environmentally sus-
tainable manner; the method by default being organic.
The growing concerns about feeding a large population
and achieving self-sufficiency in food grain production
led India to embark upon the Green Revolution in the
1960s with increased usage of chemical inputs such as
fertilizers and pesticides. Given the concerns related to
deterioration of the soil quality, adverse impact of ex-
cessive chemical use on health of consumers, focus of
the key markets on reducing the maximum residue lev-
els for chemicals in food products, and the demand for
organic and sustainable food from key export markets
and the premium price for organic produce, India again
started to shift toward organic agriculture to first cater to
the foreign market, and then, to the growing domestic
demand for such produce in recent years. To facilitate
exports of organic products, the Ministry of Commerce
and Industry came up with the National Programme for
Organic Production (NPOP). This is third-party certifica-
tion process and this type of certification is highly regu-
lated with proper norms and an accreditation program.
However, NPOP certification is expensive, and hence, to
attract more farmers to organic practices, the self-certifi-
cation system for organic agriculture, known as the Par-
ticipatory Guarantee Scheme for India (PGS-India), was
introduced by the Ministry of Agriculture and Farmers
Welfare. A major drawback is that PGS is not recognized
in the export market. However, the nodal authority re-
sponsible for regulating the food safety and health stan-
dards for the domestic market and imports is the Food
Safety and Standards Authority of India (FSSAI), which
is under the Ministry of Health and Family Welfare.
However, the FSSAI cannot regulate exports and does
not have any jurisdiction over farmers. The FSSAI is in
the process of coming up with guidelines for organic
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 Framing Organic Policy in India
products. As a result of this multiplicity of
regulatory bodies, there are no guidelines
for certified organic products in the domes-
tic marketwhich poses a big challenge for
consumers, who do not know if they are
actually consuming an organic product or
not. Lack of standards implies that there is
scope for malpractices such as mixing or-
ganic products with nonorganic ones and
the risk of importing products of substan-
dard quality. This article will try to exam-
ine the global best practices in the area of
organic farming that can help in designing
a comprehensive policy for India.
With the growing popularity of organic food
products in India and abroad, be it in retail
stores, manufacturing, processing, exports
and imports, and even in online formats,
this article will be very helpful for working
professionals in this field and students in
India and across the globe who wish to know
more about the existing and future policies
that might shape trade and the growth of the
market for organic food products. This would
also help them to understand how policies
should be designed for a more holistic growth
of the industry.
Globally, there is growing awareness of
environmental protection and sustainable
agricultural practices, which has prompted
a shift toward organic farming and organic
food. India, with a variety of agro-climatic
conditions, can produce a wide range of or-
ganic crops. Prior to the 1960s, the cultivation
and harvesting of crops in India was done
in an environmentally sustainable manner,
the method by default being organic. The
growing concerns about feeding a large
population and achieving self-sufficiency in
food grain production led India to embark
upon the Green Revolution in the 1960s
with increased usage of chemical inputs
such as fertilizers and pesticides. With the
use of chemical inputs, modern technology,
and high-yielding varieties of seeds, crop
productivity improved and this enabled the
country to become self-sufficient in cereal
production (Dhanagare 1987; Singh 2000).
The downside of the Green Revolution has
2 Business Expert Press 978-1-94744-171-2 (2017)
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been the excessive use of chemical inputs
that led to deterioration in the soil quality
(see Hema and Ilavarsan 2016; Srivastava
etal. 2016). Increased exposure to chemical
pesticides and fertilizers has led to an increase
in the incidence of diseases such as cancer
in states such as Punjab (see Blaurock-Busch
etal. 2010).
A number of studies have shown that
organic farming as an alternative to conven-
tional farming can help improve soil quality,
and if properly practiced, organic farming
can provide the same or even higher yields
than conventional agriculture (see Rupela
etal. 2006; Singh etal. 2007). Studies have
also shown that organic food products fetch
a higher price vis--vis conventional food
products (see Ramesh etal. 2010) in the
domestic as well as export markets, which
can, in turn, help to increase farm incomes.
In the 1970s, when consumers in developed
countries started shifting toward organic food
products, Indian exporters of commercial
crops such as tea were quick to realize that
organic food products earn a premium price
in export markets.
Overall, given the concerns related to
the deterioration of the soil quality, adverse
impacts of excessive chemical use on the
health of consumers, focus of the importing
countries such as the United States (US) and
the European Union (EU) on reducing the
maximum residue levels for chemicals in
food products, the demand for organic and
sustainable food from developed country
markets, and the premium price for organic
produce, India has again started to shift toward
organic agriculture to first cater to the foreign
markets, and then, to the growing domestic
demand for such produce in recent years.
The Indian government has taken several
policy initiatives to support organic food
production and exports. Since organic trade
is dependent on the recognition of standards
and processes by importing countries, the
Agricultural and Processed Food Products
Export Development Authority (APEDA),
under the Department of Commerce, Min-
istry of Commerce and Industry, took the
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 Framing Organic Policy in India
initiative to develop an organic regulation
for exports, largely based on the EU organic
policy/regulation, but customizing it to
meet Indian requirements. The National
Programme for Organic Production (NPOP)1
developed by APEDA in early 20002 laid down
certain standards, labeling process, logo, and
mandatory third-party certification require-
ments, which helped India get recognition
of its standards from its trading partners and
sign unilateral equivalence arrangements3
with key export markets such as the EU. In
this context, it is important to note that a
product exported to key markets, especially
developed countries, can only be labeled as
organic when it is certified by a third-party
certification agency.4
Subsequent to the development of export
regulation under the NPOP, the Ministry of
Agriculture and Farmers Welfare came up
with a Participatory Guarantee Scheme for
India (PGS-India) with the National Centre
of Organic Farming (NCOF) as the nodal
agency, which aims to encourage small and
mid-sized farmers to take up organic farming
and promote organic farming in the domes-
tic market on a large scale. This scheme is
based on self-certification and is considered
an alternative to the third-party certification
system. It aims to address the concerns of
the small and mid-sized farmers related to
the complicated procedures and high cost of
third-party certification. The NCOF promotes
organic farming through schemes such as the
Paramparagat Krishi Vikas Yojana (PKVY),5
which is in partnership with state govern-
ments. Under PKVY, subsidies are given to
promote organic farming in Indian states
through a cluster-based approach. Until
December 2016, state governments had cre-
ated 7,186 organic clusters under the PKVY.6
In January 2016, the prime minister of
India declared the state of Sikkim as Indias
first fully organic state. In March 2017, the
Cabinet Committee on Economic Affairs,
chaired by the prime minister, gave its ap-
proval to remove quantitative ceilings on
exports of organic products (except pulses and
lentils), thus allowing unrestricted exports of
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organic agricultural and organic processed
products, irrespective of any existing or fu-
ture restriction/prohibition on the export of
conventional (nonorganic) products.7
A number of state governments have also
taken initiatives to develop organic farming
and products. States such as Karnataka, Sik-
kim, and Gujarat have set up state third-party
certification bodies to reduce the cost of
certification and states such as Gujarat,
Kerala, Karnataka, Andhra Pradesh, Sikkim,
Mizoram, Nagaland, Himachal Pradesh, and
Madhya Pradesh have come up with their
state-specific policy for organic products.
In spite of these initiatives, there are several
factors that are adversely affecting the growth
of the organic food industry and exports. For
example, India lost its unilateral equivalence
arrangement with the EU for processed food
in the year 2013.8 In addition, a number of
consumer surveys in India showed that al-
though consumers prefer organic food, they
remain skeptical about the quality of organic
products, and are concerned about adultera-
tion and fraudulent practices (see Ramesh and
Divya 2015; Sharma etal. 2016). The lack of
a comprehensive policy on organic products
for the domestic market and imports is a
matter of concern for the businesses operat-
ing in this sector. Lack of standards implies
that there is scope for ma-practices, such as
mixing organic products with conventional
ones and the risk of importing products of
substandard quality. It is also difficult to
identify and punish fraudulent practices in
absence of a domestic regulation.
Unlike India, which only regulates exports
of organic products, most countries, including
EU-28, the US, Canada, Chile, China, Brazil,
Mexico, and Thailand have comprehensive
regulation for organic products encompass-
ing the domestic market and trade. Some
of these countries are keen to sign bilateral
equivalence arrangements with India, but are
unable to do so in the absence of a compre-
hensive policy. To address these concerns,
the Food Safety and Standards Authority of
India (FSSAI) under the Ministry of Health &
Family Welfare is trying to come up with
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