End Term Assignment

Submitted to
Instructor: Prof. Anil Gupta

In partial fulfillment of the requirements of the course

Agribusiness Leadership (AbL)

Sikkim organic mission: How it influences local Agribusiness

A case study on Ms. Tshering

By

Aakash Kumar

2017001

INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD

Acknowledgment

I would like to express my deepest gratitude to the individuals involved in the successful
completion of this report on how “Sikkim organic mission: How it influences local
Agribusiness - A case study on Ms. Tshering” as a part and requirement for the successful
completion of the course Agribusiness Leadership (AbL).

I am grateful to our course instructor, Prof. Anil Gupta for providing us the guidelines
throughout the course and to motivate us to reach out to the real change makers (farmers) for
understanding how these farmers are leading the challenging agribusiness sector.

I am also grateful to Ms. Tshering from Rabong, South Sikkim (Phone number: +91-
8016227184), who is a part of Sangam self-help group and runs a small retail store within the
designated space provided in Sikkim organic market in west Sikkim. Ms. Tshering helped me
understand the farmer’s and retailer’s prospective on organic mission.
Sikkim Organic Mission
Conceptualized back in 2003 as an indigenous project by government of Sikkim that aimed to
make the state 100% organic producing state by 2015. The increased usage of pesticides and
chemical has created a situation of concern and to fight this Sikkim took the initiative to make its
74,133 ha land of total geographical land of 7,09,600 ha as fertilizer and chemical free
and attained organic certification. (Government of Sikkim, Krishi Bhawan)
The main crops that grows in Sikkim are maize, rice, buckwheat among cereals, urd & rice bean
among pulses, soybean and mustard among oilseeds. Under horticultural crops it produces
orange & pears, ginger, cardamom, turmeric and cherry pepper, cole crops, peas & bean, tomato,
potato. (Government of Sikkim, Krishi Bhawan)

To launch the program effectively, Sikkim organic mission was launched on 10th August 2010
with the following details:

The Sikkim organic mission was set up as the executive body under the chairmanship of the
hon’ble Chief Minister. The primary responsibility was to implement the program but
introducing appropriate technology in crop protection, processing, packaging and marketing. The
committee also created a market presence to promote organic as one of the alternatives to the
people of Sikkim. Efforts were also made in the direction of keeping the selling price comitative
with non-organic produce.

Why Sikkim has the edge over other states

The natural resources in the area helps in the conservation process as the entire state has rich
biodiversity which makes it easier for a farmer to get the basic organic manure. The Agriculture
activities are confined to only 10% of the total area and the rest has potential to grow more
produce if managed properly. More than 15000 Ha is used to grow cardamom which typically
grows in forest where no fertilizers have been used till date. With this it can be inferred that the
land has been naturally conserved. (Government of Sikkim, Krishi Bhawan)

The crucial element is going all organic is the initial investment where the centre agreed to pay
INR 8500 per Ha for the first 3 years, as it takes 3 years to get the third party organic
certification. There are 14 institutions which has a few government bodies as well to help the
farmers on know-how and paper work including technical support. Since this program as been
passed as a law hence there is a strong penalty for keeping any kind of pesticide or fertilisers
which are not recommended under the Sikkim organic mission, that particular farmer will be
penalized Rs.1 lacks or imprisoned for 3 months. The farmer will have to be let the designated
institution know what he/she is going to grow and what kind of inputs the farmer is going to use.

Market linkages

Launching such a program isn’t enough as these is an average drop of yield by 20% - 40% when
someone shifts to organic. Even if there is an increase of value but there has to be a place to sell
it. Awareness about organic is gradually increasing because of reliable ways of traceability.
Objectives of the policy

The primary objectives of the policy are as follows:

- To increase natural soil productivity

- To ensure food security and natural diversity
- To increase the income potential of the local farmers
- To reduce the use of agro-chemical
- To transfer the knowledge of traditional way of doing organic farming
- To provide an exclusive market platform where farmers, SHGs, SMEs can sell the
organic produce

Till date, “more than 60000 farmers have registered themselves as organic farmers in the state,
where the majority of the farmers belong to south Sikkim. (Government of Sikkim, Krishi Bhawan)

Technical Advisory committee

Technical Advisory Committee was set up in 2012 on the recommendation of Principal director
of agriculture to discourage the import of organic manure from outside the state as this
completely goes against the principal of organic farming. The suggestion came as there should
be a largescale setup for producing vermicompost with the help of SHGs. For this all kinds of
infrastructure like pits, training, was provided by the government. In this process building up of
microbes in the soil fertility was also considered. To enhance this a bio fertilizer plan was set up
in Majhitar.

Under the control system there is a details plan of action to supervise the field before
certifications. For this the authority uses TraceNET which is an internet service offered by
APEDA to felicitate export of organic products from India as per NOP standards. It collects all
the backward and forward data for the certification process. (APEDA)

Under the control system, the farm producer is motivated to use home grown derivatives of bio
fertilizers and manures. This is done through providing adequate subsidies for the infrastructure
of vermicompost units.

The control system also encourages the processing of organic produce and value addition to it.
As the location of filed is not very transport friendly, the government support the processing of
products to fetch higher value to the farmers. The high value products in Sikkim are ginger,
turmeric, cardamom, herbal plants. These products are then marketed under the Organic Sikkim
brand and each product has a logo on it.

Marketing of these organic products through proper tie-up with retail outlets and setting up of a
exclusive market. The committee also recommended the usage of temporary cold storages which
are not very expensive.
The Sikkim Organic Market

Image 1: I am at the Sikkim organic market in the eastern Sikkim main Lal bazar area

The market for exclusive organic produce which includes pulses, vegitables, fruits and even
fresh flowers is right in front of the Denzong cinema in Gangtok’s lal bazar. The area comprises
of two sets of farmers, one who sells fruits and vegetables sourced daily from Siliguri area which
is around 115 kms from the city and the other set of people are those who have a dedicated
organic market in the top floor and they sells all kinds of products that are produced chemical
free. While Sikkim has APMC but it does not implement. Currently the entire supply chain is
driven by farmers, SMEs and SHGs.

This market has over 24 small retail counters owned by different set of organizations, SHGs and
sometimes farmers. There is a dedicated space with name tags assigned in the market (A lane in
particular) where any representative of that stall comes and sell the produce. Each stall sell
varied products ranging from pulses, fresh fruits and vegetables, Dry vegetables, packaged food
like pickles, dairy product like Ghee etc.
Ms. Tshering (Member of Sangam Self Help Group)

Image 2: With Ms. Tshering at Sikkim organic market Lal Bazar

Ms. Tshering, is a member of Sangam self-help group which comprises of 12 such women who
are either sellers or farmers themselves. Tshering was born in Rabong, south Sikkim, the area
which has maximum agricultural land. Before joining this group she ran a beauty parlour. The
SHG took this stall 2 years back on lease and the lease gets renewed every year. As can be seen
in the picture, they sell organic products like Eggs, Kidney Beans, Black eyed beans, Peas,
Tomato, Ginger, Banana, Ghee, dried vegetables and turmeric. The platform has given her an
opportunity to sell packaged and processed products like pickles as well.

Tshering says that the location of the market is a big

advantage for people involved in such organic products
selling as the concept is new and the awareness has to be
there. The organic market is right in the main market of
famous Lal Bazar also adjacent to the traditional non
organic market. As per Tshering, the pricing difference is
not much and is almost same in a few commodities. On an
average she is able to sell inventory worth Rs. 4000 which
as per her is quite satisfactory. The maximum benefit that
she makes is in packaged and processed products like
powdered turmeric, and pickle. She sells 150 grams of
organic garlic pickle for Rs. 200

Image 3: Pickle processed by Ms. Tshering with her number

Another farmer, from Mayal group Sangdong, North of Sikkim confidently said that he has no
major concerns from the inventory that comes in from Siliguri as there is always a chance of
delay in the transportation because of the difficult terrain. Also, he argues that these organic
markets are very popular among tourists and surprisingly the yearly footfall of tourists in Sikkim
is more than the population of the entire state.

Following are the few other stalls which were present in the organic market:

- Laligurash Farmers Club, Lower Phongla, South Sikkim

- Saptarangee Farmers Club, Simkharkha, South Sikkim
- Maneybong Dentam Marketing Women’s cooperative, West Sikkim

Since APMC is not operational in the state, the supply side is drastically different. Every
morning a contracted truck of farmer comes to such market and give the vegetables to these
sellers/traders at a pre-defined rate. Since the category is new therefore there is not set
benchmark to compare the prices. Generally the organic food prices are compared with the non-
organic products and are kept at around 20% higher.

Recently the state has also emphasized on bringing organic milk to these designated markets. A
few farmers have already started with the value added dairy products like ghee and milk.

Prevailing issues

Things are not rosy everywhere as there are few concerns which needs to be addressed. To
support the 100% organic mission, the state government has plans to completely ban the non-
organic vegetables and fruits that comes from adjacent states particularly from Siliguri. A few
months back, almost 80 MT of non-organic fruits and vegetables were seized from lal market
and dumped near the Sikkim – WB boarder. This sudden action has pushed the price for organic
multi-fold, for example the cauliflower under organic was selling for Rs. 100 per kg which is
way too high as compared to the non-organic which is at max Rs. 30 per kg,

While the state efforts are good and appreciable but more efforts needs to be made to avoid any
distress among the trader community as for most of the traders this is being perceived as a
forcible act which is being done in a hurry.

Organic farming no-doubts requires extra efforts and work. Like the non-organic agricultural
commodities, the farmers should have some incentives to produce and sell organic in terms of
minimum support price.
References:

The study is based on my visit to Sikkim organic market and a couple of interviews with the SHGs,
farmers and traders. Over and above I have read a few articles and policy documents by Sikkim
government to come up with a detailed study of how policy changes are bringing new agribusiness
entrepreneurs.
Online references are as follows:
1. http://www.rvskvv.net/TaskForce/Organic_farming_policy_sikkim.pdf
2. https://economictimes.indiatimes.com/news/economy/agriculture/how-sikkim-could-offer-lessons-to-other-
states-in-organic-farming/articleshow/50883232.cms
3. https://www.ifp.co.in/page/items/46459/organic-farming-lessons-to-learn-from-sikkim-organic-mission/

Annexures (Site images)

Pricing board at the market Organic pulses