India produces organic rice for both the domestic and export markets.
Photo: J. Boethling

24.08.2012

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Fostering organic supply chains is becoming of increasing interest to developing countries, since the demand for organic products is growing, providing market opportunities and premium prices for producers who comply with organic certification standards. To succeed, smallholders must be fully integrated into supply chains able to offer inputs, business and technical services via market linkages.

Organic production is particularly well-suited for smallholders as it makes them less dependent on external resources and able to rely on their traditional knowledge. Smallholders who have shifted to organic production and marketing enjoy higher and more stable yields and income, thus enhancing their food security. However, their products have to be certified by specialised agencies in order to be sold under the “organic” label and thereby obtain premium prices. This is usually costly and cumbersome for smallholders in the developing world.

An FAO study (Santacoloma, 2007) showed that alternative organic certification schemes are embedded in particular market relationships that determine specific business and technical services, inputs and post-harvest needs for the actors in the chain. Building upon these findings, FAO further investigated marketing strategies and sources of financing of support organisations for the future fostering of the organic sector in developing countries. It studied organic ventures in rice in Thailand and India, coffee and fruits from African countries and horticulture products in Hungary and Brazil.

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