Organic Agriculture: A Way Out of Poverty for Small Farmers, According to New Research

WASHINGTON, February 23, 2005 – Farmers in developing countries who switch to organic agriculture achieve higher earnings and a better standard of living, according to a series of studies conducted in China, India and six Latin American countries by the International Fund for Agricultural Development (IFAD). The findings were presented today during a workshop held at the World Bank’s headquarters in Washington, DC.

The research, partially financed by the Italian Government, concluded that organic food production could provide a way out of poverty for many small farmers in developing countries and recommended ways of integrating organic agriculture into development programs.

Increased incomes are one key incentive for small farmers to start producing organic products. In Costa Rica, for example, organic cacao producers received 150 percent more for their product than conventional producers in 2001.

But better prices are not the only reason for changing production methods. According to the research conducted by IFAD, organic farming reduces the health risks posed by costly chemical pesticides and fertilizers, and benefits the environment with improved soil management.

Organic farming also offers more employment opportunities precisely because it is more labor intensive. In Karnataka, India, for example, the demand for female labor for crops such as tea and spices has increased by percent. In 2003, India’s organic exports stood at US$15.5 million and had about 2.5 million hectares under organic farming. Creating more jobs in areas with high un- employment can increase revenues in rural areas and reduce migration. The value of Chinese exports grew from less than US$1 million in the mid-1990s to about US$142 million in 2003, with more than 1,000 companies and farms certified organic.

“Marginal and small farmers in China, India, Latin America and most probably in other developing countries, have a comparative advantage in shifting to organic agriculture, as the technologies they use are often very close to organic practices” said Paolo Silveri, Evaluation Officer, Office of Evaluation, IFAD. “Still, many will face a number of obstacles to becoming certified organic producers, including lack of technical knowledge, inadequate market information, limited storage and processing facilities and complex certification processes. This is where IFAD, the World Bank and other donors can step in to help.”

Shifting to organic production has been relatively easy for many small farmers in developing countries because they tend to already use few or no chemical inputs and frequently grow crops in areas where plants naturally mix with other species. In poverty-stricken Hubei province (China), where 9 percent of the land is arable, small farmers have traditionally cultivated tea, mushroom, medicinal and aromatic plants.

“Diversification and value addition of agricultural products are part of the poverty reduction agenda,” said Ejia Pehu, Rural Development Adviser, World Bank. “Organic agriculture is one of the options to increase rural incomes, improve natural resource management and generate rural employment.” However, she added, “studies show, it is important to provide access to technical and market information on organic production and strengthen producer organizations.”

The presentation of the new research findings brought together representatives from the World Bank, US Agency for International Development (USAID), US Department of Agriculture (USDA), Inter-American Development Bank (IDB), the International Food Policy Research Institute (IFPRI), organic trade associations, certification agencies and business community.

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