In my journey of sustainability spanning almost a decade, one question that kept coming back from the people was “Why is organic food SO expensive?” There were multiple theories floating around this, ranging from low yields in organic farming, to stores making huge profits.
In the initial days i used to answer this question by educating the customer on the health benefits and how good things in life cost and that we give our farmers a fair share. However this was never a complete answer. As I delved deep into farming myself and interacted with many farmers both conventional and organic, I started realizing the bigger picture and the intricacies involved in the supply chain. So here are three perspectives that could solve this puzzle.
1. Firstly we are asking the wrong question. The right question is “Why is conventional produce so cheap?” Today we have services that pick up old news paper from our home at 8 rupees a kilo. So how can a kilo of anything be possibly cheaper than this?
We all know of instances where vegetables are sold at rythu bazaar (farmers market) at less than 10 rupees a kilo. The answer to this is very simple. Some one in the supply chain is getting exploited. And yes you guessed it right the poor helpless farmer. A tomato crop takes 70 days from seed to fruit, with capital investments from day one (seedling, fertilizer, ploughing, labour etc) and continuous monitoring throughout out the crop tenure. However when the harvest happens, the market price does not take into account any of these factors. The farmer has absolutely no say at the market and is exploited. So the larger question is to decide, if we would want to be a part of this exploitative system?
On the other hand, in fair share organic stores there are metrics that prevent this exploitation. One such metric is “percentage of consumer rupee”. At Sage Sustainable Living where I am the Chief Farmer and CEO, our rule of thumb is 50 paise of the consumer rupee to the farmer whereas the equivalent in conventional systems is as low as 20 paise sometimes.
2. There are some aspects in which the conventional system that are extremely efficient, like post harvest logistics. For example if I am a tomato farmer in the outskirts of Hyderabad, all I have to do after harvest is fill it in a crate (20 kilo) and keep it at the entrance of my farm. A local driver in a typical vehicle like Tata Ace collects all these crates from all farmers in the village, drives to the market, sells the produce, brings back money and hands it over to the me.
The transaction charge for this activity is 16 rupees. Now this gives three very important inputs:
a. My transportation cost per kilo is 0.8 paisa per kilo. (16/20)
b. Manpower cost post harvest is zero
c. Wastage is zero as all produce is bought at the market!
Now let’s look at the scenario of an organic farmer growing tomatoes. Because there is no community logistics support, I have to drive to the farm in my personal vehicle (100 km to and fro costing 500 rupees in fuel). Even if I manage to ship 100 kilos of vegetables accounting my own time @350 (minimal labour wages), my logistics cost per kilo is 8.5 rupees per kilo as against the 0.8 rupees in conventional systems. This cost is obviously transferred to the customer.
Further, most often organic stores can only accept a portion of the farmers produce and this results in unsold stock which has to be factored into the pricing.
3. There is hope. I remember when cell phones were first launched, incoming calls were charged at a whopping 8 rupees a minute. Two decades later we are now in a situation where both outgoing and incoming are literally free of cost. As any industry evolves economies of scale kick in. But it took early adopters, before the critical mass could enjoy today’s benefits. I am grateful to all the early adopters in the field of organic food because they helped us bring in economies of scale as we grew. Over the last decade from being a fair trader of organic produce, we evolved to a place where we are farming around 300 acres around Hyderabad sustainably. Never in the history of our store we sold any fruit at a price less than 60 rupees a kilo. This year we have had a bumper harvest of chikoo clocking almost 10000 kilos. So we are now in a position to sell the fruit to our customer at a mere Rs.20 (pick up from the store at Jubilee Hills), which is cheaper than the price of a push cart vendor. This was made possible thanks to our early adopters who held our hand and stuck to us during thick and thin. It also takes our commitment to make good food affordable.
So on the whole good food is a lifestyle which promotes ethical trade, culture and local livelihoods without causing harm to the ecosystem. So these are the reasons why good food is expensive and the ball is in your court!!