With an Industry that has been always vitally operating with trading in Conventional products. Most recently, the demand for Organic products in First world countries is radically increasing.
The terrains are a bit challenging when it comes to offering entirely Organic Certified products due to several practicalities being attached with it as the Exporter's facilities are thoroughly inspected by the relevant authorities before certifying them as Organic providers, which is a comprehensive process and 90% of the applicants get disqualified that doesn’t match the standards.
On the other hand, on the Agricultural side, it is tough to integrate Organic Farming, which is an expensive proposition also executing the same with the traditional farming practices, they lose an edge over the prices.
Buyers are offering the premium prices for NOP/EOS Certified products but the difference between the Conventional Prices & Organic Prices is not that huge and setting the right parity for Suppliers become a challenge in the face of buyer’s always expecting competitive price.
It does have a limitation when it comes to Bulk Commodities since, it is next to impossible to entirely produce Organic Rice, Wheat, and other Huskey Grains. Hence, the supplies for the same are restricted to certain products in Herbs & Spice and Nuts & Dried Fruits. But emerging demand for Organics even in the other volume-driven commodities is witnessed. We need to make Buyers aware of the situation that it is highly cumbersome to offer Organic Produce in every commodity since the entire process & operation has to slowly transition towards Organic which requires a change in the entire economic structure & supply chain in Agriculture.
Keeping the Economic Structure in perspective, Sri Lanka, whose economy is completely dependent on Agriculture has faced a huge economic decline due to a decision by the President Mr. Rajapaksa that prohibited Conventional farming shifting the entire Agriculture towards an Organic framework. The complete ban on Chemical Fertilizers Import was imposed in order to make Sri Lanka, An Organic-only Agriculture nation.
The decision had a humungous impact on the local food prices in Sri Lanka, also reducing the overall output of the products out of which, most are exported as well. The Exports in Sri Lanka got a huge hit impacting the foreign exchange reserve while facing challenges due to dipping tourism during COVID times.
Tea Exports has been the biggest contributor to the economy but Organic Tea costs much more than the Conventional and its market is limited too. This entire situation has led to a huge economic downturn affecting the internal food security of the country.
In the longer term, Sri Lanka may have an upper edge on the International markets with its Produce being Tea, Cinnamon, Nutmeg, Pepper, and other crucial crops highly preferred in the Global markets. But in the due course, it was damaging the entire structure and an adverse effect on the entire vitality of the nation’s economy as a whole was felt. Srilanka got severely hit by an economic crisis with Food price inflation, dwindling foreign exchange reserves & sinking local currency rate.
The Government eventually had to call off their decision & the restrictions on the Chemical fertilizers were lifted back and Sri Lanka’s ambitious plan to become an Organic only nation came to a halt until it produces enough Organic Fertilizers that meet the overall Agricultural requirement.
Although Bhutan has been successfully practicing Organic farming for ages here, we need to understand two things:
A) Bhutan has a small landmass & a landlocked country.
B) Bhutan’s culture and ethnic background has ever been traditional, which makes them much close to nature & environment
C) Bhutan is a peaceful Kingdom with a controlled Society, where controls mechanisms can be easily deployed and practiced.
D) Bhutan’s Economic structure is not Cumbersome at all.
E) Bhutan is the simplest country in the World in terms of lifestyle & various associated domains.
F) Bhutan is not exposed to the world in a manner, other countries are who have reserved their society for ages.
G) Bhutan is totally inactive in the International Agricultural trading circuit.