Organic Agriculture and Poverty Reduction in Asia: China and India Focus


Table of Contents

  Currencies, Measurements and Weights
  Basic definitions for the report
  Methodology and Case Study Selection
  Agreement at Completion Point - People's Republic of China
  Agreement at Completion Point - Republic of India
  Executive Summary
I. Introduction
II. Overview of Markets and Marketing
III. The Characteristics of Organic Production and Markets
IV. The impacts of organic agriculture and the pros and cons of adoption
V. workable solutions: Public sector roles
VI. Conclusions and recommendations
VIII. Appendices

Case Studies1

Inner Mongolia livestock-lamb
Anhui tea
Jianxi ginger, soybeans and rice
Yunnan ancient tea grovers
Yunnan kidney beans and fruit
Anhui kiwi and wild rice
Shandong Food Company a broad variety of vegetables and beans
Hubei mushrooms and tea
Himachal Pradesh, Punjap and Uttaranchal Integrated Watershed Development Project ginger, peas, capsicum, wheat, rice and seasonal vegetables
Maharashtra sorghum wheat and cotton
Kerala spices and banana
Uttaranchal mixed crops, millet, rice and kidney beans
Karnataka high-value crops vanilla, pepper, banana, rice and sugar
Madhya Pradesh cotton

1/ The case studies are available upon request from IFAD's Office of Evaluation


The lead consultant and primary author of this report was Daniele Giovannucci; the lead evaluator for this evaluation was Paolo Silveri in collaboration with Lea Joensen.

The Office of Evaluation (OE) of the International Fund for Agricultural Development (IFAD) is grateful to the select group of eminent scientists and experts, members of the Scientific Committee, that have thoroughly reviewed the methodology and the work: Jikun Huang, Professor, Chinese Academy of Sciences; Alain de Janvry, Professor, University of California at Berkeley; Gunnar Rundgren, President, International Federation of Organic Agriculture Movements (IFOAM); M. S. Swaminathan, Chairman, M. S. Swaminathan Research Foundation; Raffaele Zanoli, Professor, Polytechnic University of Marche.

The design and oversight of the thematic evaluation owes much to the ongoing efforts of the members of the Core Learning Partnership: Jean-Philippe Audinet, Policy Coordinator, Policy Division, IFAD; Ranjit Banerjee, Joint Secretary, Ministry of Finance, Republic of India; Wang Bing, Director, International Financial Institution Division IV, Department of International Affairs, Ministry of Finance, People’s Republic of China; Nadia El-Hage Scialabba, Senior Officer, Environment and Natural Resources Service, Food and Agriculture Organization of the United Nations (FAO); Fabrizio Felloni, Evaluation Officer, OE/IFAD; Vincenzo Galastro, Programme Manager, External Affairs Department, IFAD; Cristina Grandi, Representative, IFOAM; Edward Heinemann, Regional Economist, Eastern and Southern Africa Division, IFAD; Raúl Hopkins, Regional Economist, Latin America and the Caribbean Division, IFAD; Shyam Khadka, former Country Programme Manager, Asia and the Pacific Division, IFAD; Mylene Kherallah, Regional Economist, Near East and North Africa Division, IFAD; Thomas Rath, Country Programme Manager, Asia and the Pacific Division, IFAD; Cristiana Sparacino, Programme Manager (Gender), West and Central Africa Division, IFAD; Ganesh Thapa, Regional Economist, Asia and the Pacific Division, IFAD; Douglas Wholey, Technical Adviser, Technical Advisory Division, IFAD.

The members of the International Advisory Panel offered guidance or support for the process and, in some cases, reviewed the output. Their support is duly recognized: Brian Belcher, Center for International Forestry Research; Kevin Cleaver, World Bank; Bob Dobias, Asian Development Bank; Katherine Dimatteo, Organic Trade Association; Urs Niggli, Forschungsinstitut für Biologischen Landbau (FiBL); Niels Halberg, Danish Agricultural Research Center for Organic Farming; David Hallam, FAO; Shalini Kala, Knowledge Networking for Rural Development in Asia/Pacific Region; Kenji Matsumoto, Japan Organic and Natural Foods Association; Kathleen Merrigan, Tufts University; Ulrich Mohr, Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ); John Pender, International Food Policy Research Institute (IFPRI); Vandana Shiva, Research Foundation for Science, Technology and Ecology; Gajendra Singh, Asian Institute of Technology; Alessandro Triantafyllidis, Associazione Italiana per l’Agricoltura Biologica (AIAB); Jonathan Wong, Hong Kong Organic Resource Centre.

In both China and India, a notable group of distinguished luminaries in the field offered their support and guidance.

China Advisory Panel

Horst Betz, GTZ; Li Chunguang, Cheng Fang, Wang Maohua and Shi Xiaowei, Department for Registration, Certification and Accreditation Administration of the People's Republic of China; Guo Chunmin, China Organic Food Certification Center; Chen Conghong, Beijing Organic Food Co. Ltd.; Liu Jinping and Sun Shulan, Central Agricultural Cadres Education of Tranining Center; Sun Yin Hong, FAO Representation in China; Angus Lam and Sze Pangcheung, Greenpeace; Han Peixin, China Green Food Development Center, Ministry of Agriculture (MoA); Liu Qingdong, Sunshine Harvest Organic Food Co. Ltd.; Wu Wen-liang, Research Institute of Agro-ecology, China Agriculture University; Du Xiangge, College of Plant Protection, China Agriculture University; Dong Hong Yan, Department of Market and Economic Information, MoA; Liu Yan, Beijing Vitale Organic; Song Yiching, Center for Chinese Agricultural Policy; Chen Yunhua, China National Accreditation Board for Certifiers; Niu Zhiming, Asian Development Bank.

India Advisory Panel

P. Bhattacharya, National Centre for Bio Fertiliser Control; Satish Chandar, (Joint Secretary) Fertiliser and Organic Farming, MoA; M. L. Choudary, (Horticulture Commissioner), MoA; C. D. Mayee, Scientist Recruitment Board, MoA; A. K. Singh, (Additional Secretary and Agriculture Commissioner), MoA; Radha Singh, (Secretary), MoA; N. Tripati, (Additional Commissioner for Nutrient Management), MoA; D. K. Das, Indian Agricultural Research Institute; K. S. Gopal, Centre for Environment Concerns; Daniel Gustaffson, FAO/India; L. P. Jena, Centre for International Trade in Agriculture; G. Kalloo, Horticulture and Crop Sciences, Indian Council of Agricultural Research (ICAR); P. D. Sharma, Directorate for Soils, ICAR; S. K. Sharma, Project Director, Directorate for Cropping Systems Research, ICAR; Gurbachan Singh, Directorate for Agronomy, ICAR; Madhav Karki, Medicinal and Aromatic Plants Program in Asia, International Development Research Centre; Tej Partap, International Competence Centre for Organic Agriculture; R. K. Pathak, Central Institute for Subtropical Horticulture; Gokul Patnaik, Global Agrisystem; R. A. Ram, Central Institute for Subtropical Horticulture; Noves Sabir, National Centre for Integrated Pest Management; Vijay Sardana, Centre for International Trade in Agriculture; Santosh Satya, Centre for Rural Development, Indian Institute of Technology; Shri Sompal, National Commission for Farmers.

Principal Researchers

The case studies were conducted by experienced researchers that, in their field, rank among the leading professionals in each country. In many cases they have been important contributors in their countries to the existing domestic rules and policies for organic and eco-friendly agriculture. Their diverse backgrounds and in-depth knowledge provided useful insights beyond their case study analyses. The principal researchers were: Daniele Giovannucci, Frank Eyhorn, Zheng Han, Lea Joensen, Mathew John, Subhash Mehta, Fanqiao Meng, K. Ramakrishnappa, S.T. Somashekhara Reddy, A. Thimmaiah, Yunguan Xi, and Huilai Zong.

Several people served as key resource persons for the research. In India: Frank Eyehorn (FiBL) and Pravesh Sharma, World Food Programme (WFP). In China: Johanna Pennarz and Yan Zhang, WFP. Thanks also to Octavio Damiani and Nadia El-Hage Scialabba for their useful input.

We extend our sincere appreciation to each of the case study projects that graciously shared their time and experience. The studies are available from the Office of Evaluation (

Huoshan Organic Tea Association
Yuexi Organic Kiwi Farmers’ Association
Jiangxi Jiaohu’s Township
Lijiang Ecological Planting
Shian Wudang Wild Products and Hubei Longwangya
Caoyuan Xingfa Co Ltd.
Langcang Antique Tea Company
Tai’an Asia Food Company
The Eco-Agri Research Foundation (EARF)
Uttranchal Organic Commodity Board
Shiwalik Hills Integrated Watershed Development Programme
Institute for Integrated Rural Development (IIRD)
Maikaal Cotton Research Project
Peermade Development Society Exports

The reports on Asian countries other than China and India provided useful further insight into the current situation of organics in the region. These were provided by:

Thailand - Gajendra Singh, Dean, Asian Institute of Technology - Extension
Philippines - Magsasaka at Siyentipiko Para sa Pag-unlad Ng Agrikultura consortium.
Japan - Kenji Matsumoto, Director, Japan and Organic and Natural Foods Association
Indonesia – Riza V. Tjahjadi, Executive Director, BioTani Indonesia Foundation

Several agencies collaborated with the evaluation in the field or in the research and dissemination of the work: FAO, The World Bank, Asian Development Bank, WFP, IFOAM, and GTZ. Individuals meriting recognition for their contributions include: Francesca Ambrosini, Graeme Smith, Pilar Santacoloma, Binita Shah, Carlos da Silva and Laura De Tomasi.


ACT Organic Agriculture Certification Thailand
APEDA Agricultural and Processed Food Products Export Development Authority
BAFS Bureau of Agriculture, Fisheries and Product Standards
CGFDC China Green Food Development Center
CIMS Sustainable Markets Intelligence Center
CITEM International Trade and Exposition Mission
CNAB China National Accreditation Board
CNCA Committee for National Certification and Accreditation
CNPAP China Netherlands Poverty Alleviation Project
CNGFDC China National Green Food Development Center
DA Department of Agriculture
EARF Eco-Agri Research Foundation
ECOCERT Organic Control and Certification Organization (Organisme de contrôle et de certification)
EU European Union
FAO Food and Agriculture Organization
FIBL Research Institute of Organic Agriculture (Forschungsinstitut für Biologischen Landbau)
GATT General Agreement on Tariffs and Trade
GMO Genetically Modified Organism
HACCP Hazards Analysis at Critical Control Points
ICS Internal Control Systems
IFAD International Fund for Agricultural Development
IFOAM International Federation of Organic Agriculture Movements
IFPRI International Food Policy Research Institute
IIRD Institute for Integrated Rural Development
IPGRI International Plant Genetic Resources Institute
IPM Integrated Pest Management
IQCS Internal Quality Control Systems
IMO Institute for Marketecology
ISO International Standards Organization
IWDP Integrated Watershed Development Project
JAS Japanese Agricultural Standard
JONA Japan Organic and Natural Food Association
MAFF Ministry for Agriculture Forests and Fisheries
MASIPAG Farmers-Scientists Partnership for Development (Magsasaka at Siyentipiko Para sa Pag-unlad Ng Agrikultura)
NGO Non-Governmental Organization
OCCP Organic Certification Center of the Philippines
OCIA Organic Crop Improvement Association
OECD Organization for Economic Cooperation and Development
OFDC Organic Food Development Center China
OTRDC Organic Tea Research and Development Center China
OFCC Organic Food Certification Center (Huaxia)
PDS Peermade Development Society
SASA Social Accountability and Sustainable Agriculture
SEPA State Environment Protection Administration China
SME Small and Medium Enterprise
SOEL Foundation of Ecology and Agriculture (Stiftung Oekologie und Landbau)
SPS Sanitary Phytosanitary Agreement (WTO)
TBT Technical Barriers to Trade Agreement (WTO)
UNESCAP United Nations Economic and Social Commission for Asia and Pacific
UOCB Uttaranchal Organic Commodity Board
WTO World Trade Organization

Currencies, Measurements and Weights

1 USD = 8.3 RMB for China in mid 2004
1 USD = 45.8 Rupee for India in mid 2004

1ha = 15 mu Traditional “mu” is used in some tables when discussing small landholdings that are fractions of a hectare.

Weights are metric kg or ton



The emerging and increasing market opportunities for organics are conducive for the adoption of organic agriculture among small scale farmers in India and China. However, some studies suggest that major constraints exist for small scale farmers to reach these markets and at the same time secure a price premium (Janz et al., 2003; Kotschi, 2003), while other evidence suggests that it is possible to support farmers to access organic markets and benefit, especially in terms of increased premiums (UNESCAP 2003, IFOAM 2003). For the International Fund for Agricultural Development (IFAD) to consider including organic farming in the projects it supports in these countries, it is essential to understand the factors that allow small farmers to resolve the most common problems related to the production and marketing of organic agricultural products.

The primary goal of this evaluation is to enable a better understanding of organic agriculture in Asia, where two-thirds of the world's poor live (IFAD 2002 p.3). In particular this evaluation aims to understand the potential value of organics to farmers — especially small or poor ones — and the role of organics as an option in development programs. It is organized into six chapters.

The first chapter provides an introduction to the characteristics of the farmers, products, and situations studied. It includes a brief synopsis of the 14 cases and offers an overview of the current situation in India and China.

Chapter II offers an overview of key market-related issues with an update on the regional and international situation of organic agriculture and its trade statistics.

Chapter III evaluates the key characteristics of organic production and marketing. It begins with a critical look at the conversion process, issues of fertility and plant protection. The organizational aspects are reviewed to better understand the value of different kinds (farmer-led, company-led, and government or non-governmental organization-led) in smallholder projects. Cost of production and yields under organic systems are compared to the costs and yields of both traditional or rustic systems and those using conventional methods with synthetic fertilizers and agrochemicals. To go beyond the snapshot view of a complex multi-year process, this section offers a view of the temporal impact of conversion from both conventional systems and traditional systems to organic methods. The second part of this chapter looks at the post harvest issues. This covers both domestic and export markets and the market channels available for small farmers. It also looks at China's Green Foods, one of the most important success stories in Asian agriculture. Finally, the chapter closes with a view of pricing and the premiums received for organic produce.

Chapter IV reviews the key impacts — both positive and negative — that are associated with the adoption of organic methods. These include: food security, health issues, direct value to producers, externalities that affect both local communities and government and natural resource conservation. Because such impacts have universal relevance, they are discussed at both the macro and micro levels.

Chapter V covers the public sector roles and how these are affecting organic agriculture. It explores how institutions, both public and private, serve as a component of organic adoption.
Chapter VI closes with a series of concise conclusions to highlight the most important lessons of the case studies and to identify the factors that are most important to facilitate the adoption of organic agriculture. This section wraps up with the key success factors extracted from project experience and the criteria for selecting or designing suitable organic projects. This includes some best practice approaches for developing public-private sector partnerships around organics.

A series of appendices deepen some of the lessons gathered from the projects and from international experience.

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Basic Definitions for the Report

Organic agriculture is defined in a number of documents, two of which are recognized here.

… the term ‘ organic’ is best thought of as referring not to the type of inputs used, but to the concept of the farm as an organism, in which all the components — the soil minerals, organic matter, microorganisms, insects, plants, animals and humans — interact to create a coherent, self-regulating and stable whole. Reliance on external inputs, whether chemical or organic, is reduced as far as possible. (Lampkin et al. 1999).

Organic agriculture includes all agricultural systems that promote the environmentally, socially and economically sound production of food and fibers. These systems take local soil fertility as a key to successful production. By respecting the natural capacity of plants, animals and the landscape, it aims to optimize quality in all aspects of agriculture and the environment. Organic agriculture dramatically reduces external inputs by refraining from the use of chemo-synthetic fertilizers, pesticides, and pharmaceuticals. Instead it allows the powerful laws of nature to increase both agricultural yields and disease resistance. Organic agriculture adheres to globally accepted principles, which are implemented within local social-economic, climatic and cultural settings. As a logical consequence, the International Federation of Organic Agriculture Movements (IFOAM) stresses and supports the development of self-supporting systems on local and regional levels. (IFOAM 2000).

There is no single definition for organic farming. Although the Codex Alimentarius and IFOAM definitions are widely accepted, countries and projects tend to have their own, albeit usually minor, variations. While a single definition is important in terms of harmonized standards to facilitate international trade and consumer acceptance, organics also — by their very definition — lend themselves to the inherent variations of a particular place and set of conditions. This is certainly the case with the countries examined for this evaluation. For this reason and in order to avoid burdening the on-farm research with cumbersome definitions, we have adopted an admittedly simple definition of organic agriculture that is both in keeping with the spirit of more complete ones and also practicable for clear distinctions at the research level. We use the term “certifiable” to indicate farming systems that meet many of the criteria for certification, especially an internal control system, or that meet local systems of certification but have not applied for internationally recognized certification.

Important parts of the farming systems in China and India have similarities to organics. Certified Green Foods (China) are produced in volumes that are more than ten times greater than organics and India's Jaivic Krishi (or Vedic Krishi) systems are similarly far more widespread. If the interests of farmers are a foremost priority, these related systems cannot be disregarded. Consequently, the research for this evaluation acknowledges these farming systems and accordingly defines them below.

  • Organic Farming — internationally certifiable (with controls and traceability) farm management system that is in harmony with local environment using land husbandry techniques such as soil-conservation measures, crop rotation and the application of agronomic, biological and manual methods instead of synthetic inputs.

  • Green Foods — are domestically certified and labeled to be safe from chemical contamination and whose production and processing use environmentally friendly processes with reduced use of synthetic inputs.

  • Jaivic Krishi — traditional holistic farming system based on ancient techniques for soil and animal management that eschew synthetic inputs and are in harmony with natural on-farm inputs and cycles. This system is not certified and is sometimes referred to as Vedic Krishi.

  • Traditional Farming — this natural farming tends to be subsistence oriented using few or no purchased inputs.

  • Conventional or Intensive (external input) Farming – Green revolution methods designed to maximize profit often by extracting maximum output using external purchased inputs, especially mineral fertilizers and synthetic agro-chemicals (pesticides, herbicides, veterinary, etc.) and irrigation to support production.

Methodology and Case Study Selection

The primary goal of this report is to enable a better understanding of organic agriculture in Asia. In particular, its potential value for farmers — especially small or poor ones — and the role of organics as an option in development programs.

Consistent with international evaluation practice, three main criteria were assessed in general terms: impact on rural poverty; performance of the projects; and roles of the partners. The evaluation criteria were designed to clarify what happened in the projects studied and to answer questions, such as: “What works and what doesn’t?” and “What are the main ingredients responsible for the success or failures?” Most of the cases focused on those poor that earn less than USD 1 per day. Since the evaluation considers a very diverse set of case studies that mostly lack adequate baseline data for the purposes of evaluation, the intent is not to determine precise differences in measures of poverty or performance but rather to generate lessons and insights about whether organics should be a part of future projects. And, if so, under what circumstances or conditions it should be fostered so as to optimize benefits and avoid problems.

The document investigates the main factors (agro-ecological, socio-economic, and institutional) that hinder or contribute to the development of organic farming. It explores the realistic pros and cons of organic adoption in terms of poverty reduction (as measured by improved income, reduced risk, and food security), food safety, and trade. Taking a market-oriented value-chain focus, it also addresses key project investment issues and the organizational forms of organic agriculture such as adoption of standards, certification, civil organizations and marketing channels.

The findings presented in this evaluation come primarily from the extensive fieldwork conducted between May and July of 2004 in Asia’s two largest agricultural producers: China and India. Both countries have a considerable amount of organic or ecologically friendly agriculture. However, both are distinct in their history, approaches, and impact. A series of case studies, at varying levels of success, were selected to be representative of a broad variety of situations. The selection parameters, therefore, included diversity in: agro-ecological zones, product types, organizational structures, geographic areas and market orientation.

Table A. General case study selection parameters

Agro-ecological zone Size of farm Organizational structure Crops Value adding operations Number of farmers involved Market orientation
Temperate, tropical, arid, mountainous, flat land Mostly < 1 hectare, some much larger Farmer group, NGO, company, government agency Diverse representation of the most important Post harvest storage and processing Average thousands range from
70 - 10 000
Local or subsistence, domestic, export

These selections align in broad terms with the IFAD strategies in India and China as noted in recent strategy documents and in staff discussions. Cases were selected from recognized poverty areas including some of the most vulnerable segments of society: ethnic minorities, tribal people and women. In India, for example, many of the cases included tribal populations since these comprise only 8% of the total population, but account for 40% of the internally displaced, a major characteristic of poverty (IFAD 2004). Most of the counties where the case studies are situated are ranked among the lowest poverty areas by several measures (UN 2003 p. 26-27). In China, for example, many of the cases are in relatively remote mountainous areas where almost all of the 65 million officially recognized income-poor live (IFAD 2002 p. 4). They are located where ecological issues such as soil erosion, water shortage and even desertification are prevalent. They concentrate on both staple foods as well as new high-value options. The cases address a variety of institutional structures and the relative merits of each.

The case studies were a vital element to fill the information gap about the measurable detriments or benefits of organic agriculture. Some data, such as that for yields, results from a combination of interviews with farmers, middlemen, non-governmental organizations (NGOs), government extension agents. Although the case studies provide primary evidence, this is supplemented with information from a number of recent reports (published and referenced). Some anecdotal evidence is also considered when it is consistently reported and credible – this is necessary due to the lack of existing baseline studies and sound measurement techniques. In order to provide a broader context in which to frame this evaluation, a more cursory research was also conducted in a handful of other Asian countries. These countries have a history in organics (i.e. Japan and Thailand), provide important regional markets for Asian organics (Korea and Japan), or have substantial agricultural sectors where future organic approaches could be significant. In addition to this primary data, the evaluation has made use of more than 100 relevant publications that have been released in recent years and unpublished information from researchers in several Asian countries as well as from institutions such as FAO.

The initial approach paper, the methodology and the planned output were formulated at OE and individually reviewed by an international team that comprises the Core Learning Partnership (CLP) and the Team Leader. The final evaluation was vetted by the five-member Scientific Committee and commented on by the CLP and an International Advisory Panel of experts that include representation from the private sector. Conferences in New Delhi and Beijing, under the guidance of Advisory Panels of eminent agricultural experts and farmer representatives in each country, reviewed and discussed the findings. Further dissemination workshops and meetings were held in Italy and in the USA to share the findings of this thematic evaluation.