Factors Influencing Organic Farmers’ Criteria for Selecting a Supply Chain Network

Factors Influencing Organic Farmers’
Criteria for Selecting a Supply Chain
Network
Mahendra Bommasandra Nagaraj
Newcastle University
2017/18

Factors Influencing Organic Farmers
Criteria for Selecting a Supply Chain
Network
Dissertation submitted in partial fulfillment for an
MSc International Marketing
Academic Year 2017/2018
Supervisor:
Matthew Gorton
[e-mail]

Acknowledgment
I confirm that this report is my own work and that all sources are
fully referenced and acknowledged.
I give permission for this dissertation to be made available for
viewing by future students via Blackboard.
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Abstract
The domain of organic farming is facing tremendous challenges within India. The rapidly
growing and emerging industry within India has enormous prospects of success. The scope of

the current study focuses of several supply chain challenges faced by the farmers within Organic
farming industry and ways to overcome the same.
An extensive literature search was undertaken, which took into consideration the various aspects
of organic farming, analysing their supply chains along with the several challenges facing them.
Though organic industry was understood to be a booming industry, however there is a barrier
from products in reaching markets. Such barriers needs to be overcome so that flow of organic
materials can take place from one place to the other.
The study was conducted by gathering data from interviews. Indian farmers operating in the
domain of organic farming was interacted with to understand challenges faced in establishing a
supply chain for their products. 10 telephonic interviews was held with various farmers to
understand their viewpoint regarding the challenges facing supply chain of organic farming.
Interview findings from the study reveals that supply chain barriers in organic farming was
mostly related to presence of middle men in large numbers. Moreover, absence of knowledge of
technology imposed barriers on famers in directly reaching the market. The government local
and central was not taking steps in order to enhance supply chain effectiveness of the organic
farming chain. Therefore, supply chain visibility and transparency has to be established.
Moreover, there has to be presence of certification programs that allows products produced by
farmers in organic farming to easily sell them in markets. Technological education has to be
enhanced amongst farmers such that they can reach the markets in an easy fashion. there are
certain recommendations that Indian farmers can apply, which might help them in overcoming
their current barriers and establish a market for the future.
Table of Contents
Acknowledgment.......................................................................................................................2

Abstract......................................................................................................................................3
1.0 Introduction..........................................................................................................................5
1.1 Background of the Study..................................................................................................5
1.2 Research Aim, Objectives and Questions............................................................................8
1.3 Rationale for the Study.....................................................................................................8
2.0 Literature Review...............................................................................................................10
2.1 Introduction....................................................................................................................10
2.2 Background Information on the Organic Farming and Market for Organic Products in
India......................................................................................................................................10
2.3 Attributes Influencing in the supply chain.....................................................................13
3.0 Methodology......................................................................................................................21
3.1 Introduction....................................................................................................................21
3.2 Research Philosophy......................................................................................................21
3.3 Research Design.............................................................................................................22
3.3 Data Collection Procedure.............................................................................................23
3.4 Data Analysis.................................................................................................................24
3.5 Ethical Consideration.....................................................................................................24
4.0 Research Findings and Analysis........................................................................................25
4.1 Introduction....................................................................................................................25
4.2 Findings..........................................................................................................................25
4.3 Discussion......................................................................................................................32
6.0 Conclusions........................................................................................................................36
6.1 Recommendation............................................................................................................37
6.2 Suggestions for Future Research....................................................................................39
7.0 References..........................................................................................................................40
8.0 Appendices.........................................................................................................................46
8.1 Appendix A (Interview consent form)...........................................................................46

8.2 Appendix B (Interview Transcription)...........................................................................46
8.2.1 INTERVIEWEE 1 Azlan........................................................................................46
8.2.2 INTERVIEWEE 2 NATURAL AND.....................................................................60
8.2.3 INTERVIEWEE 3 ammo........................................................................................70
8.2.4 INTERVIEW 4 TWO BROTHERS ORGANIC FARM............................................85
8.2.5 Interview 5 organictoyou............................................................................................93
8.2.6 Interview 6 Bharat...................................................................................................99
8.2.7 Interview 7 hanuman.............................................................................................123
8.2.8 Interview 8 raja....................................................................................................128
8.2.9 Interview 9 shaja organic......................................................................................134
8.2.10 Interview 10 baby earth.......................................................................................139
8.3 Appendix C (Coding table)..........................................................................................141
8.4 Appendix D (Ethical Approval Form).........................................................................141
8.5 Appendix E (Gantt Template)..........................................................................................3
8.6 Appendix F (Participants Information Sheet)..................................................................4

1.0 Introduction
Worldwide consumers are becoming more conscious about what they eat and what impact the
food they eat has on themselves and the environment (Beske, Land & Seuring, 2014). Hence,
health conscious consumers, today prefer to consume organic produce, which is pest-free and
more eco-friendly. Meaning only a small proportion of consumers today prefers consuming
organic food. Producers from the past few decades have also converted from conventional
inorganic technics to organic farming. The Indian organic foods supply chain has become more
complex than ever and is the area of concern as the industry is growing rapidly at a staggering
growth rate of 25% per annum. This industry has transformed into a “demand-driven value
chain” with remarkable increases in the demand and market potentials for the organic market
(Vatsyayan, n.d.). The current scope of the study aims analyzing barriers to supply chain in the
Indian organic food industry.
1.1 Background of the Study
Farmers around India coordinate and work with a range supply chain channels. Yet their produce
often remains unaccepted therefore they remain with complaints and dissatisfaction (Roy,
Orikasa, Okadome, Nakamura & Shiina, 2009). This is due to reasons of difficulty of grading or
high certification costs, low economies of scale and scope due smaller volumes they produce,
weakly established payment mechanism, farmers lack of financial resources, lack of access to
the market information resulting in tighter control by chain leaders all of the above factors
restrains farmers to follow the chain leaders in the absence of local market outlets for the organic
producers that is access to guaranteed market (Singh 2009). Organic market in India is still in an
elementary stage only concentrated in the hearts of Indian major city.

Figure 1: Global Organic Industry
Source:
https://www.slideshare.net/daedal/httpdaedalresearchcomindexphpindianorganicfoodbeveragesm
arkettrendsopportunities20122017
Farmers are able to roll out only small quantities of produce leading to high costs from
production, marketing, and distribution leading to a lack of organic supply chain infrastructure
which can be acutely felt in the Indian system (Sakthirama). With the industries revenues
growing over US$ 556.01 million the complexity of the supply chain operation increases with
the ever-single transaction and so it is essential to establish a stage to build an efficient supply
chain model while solving the existing problems. The consumer is gaining awareness and
adopting a healthier lifestyle having a positive impact on the demand for the organic produce but
it’s important to integrate the smallholder farmers with the organic supply chain which will
greatly impact the benefit the development of the domestic and export market (Challenges in
Maintaining Organic Food Supply Chains, 2017). To achieve this development both farmer and
supply chain should share responsibilities and profits equally. To achieve an Integration of
supply chain and farmers major goals like access to a guaranteed market with frequent