Changes in vulnerability and dependencies

The livelihood outcomes of adopting organic farming also impact the relation of farm households to their context. Firstly, they change their ability to cope with risks and thus change their vulnerability, but also bring along new uncertainty. Secondly, they influence the household's relation to institutions and organisations, reducing some dependencies but at the same time creating new ones. The main changes in vulnerability and dependencies are summarized in Figure 36; the detailed findings and their sources are given Annex 4.7.

Figure 36: Changes in vulnerability and dependencies due to adopting organic farming as perceived by the farmers.

Changes in vulnerability

Obviously, organic farms are exposed to the same climatic conditions, and water shortage is an important theme in organic cotton farming, too. However, many organic farmers claimed that due to improved soil fertility their crops are better equipped to withstand short periods of drought and are also less prone to water logging. While the soil analysis data has not shown increased water retention capacity of soils in organic cotton fields, it could be that the soil structure has improved due to organic farming (see section 4.2.1). One might expect pest problems being aggravated in organic farming, as no synthetic pesticides can be used for control. However, as per the assessment of the interviewed organic farmers quite the opposite seems to be the case. They claimed that pest problems in cotton have reduced due to more diverse cropping patterns (with improved crop rotation, trap crops, and intercrops) and that populations of beneficial insects and birds have increased after they stopped using synthetic pesticides, effectively helping them in keeping pest infestation within a tolerable scale. Some farmers claimed that yields in organic farming are therefore more stable. To verify these statements, further research would be needed.

Changes in vulnerability

• Crops are less prone to drought and water logging.

• Improved ecological balance helps to keep pest populations low.

• Yields in organic farming are more stable.

• Less financial loss in case of crop failure or drop in cotton prices

• Less impact of increasing prices of off-farm inputs.

• Still a high vulnerability to market price fluctuations.

• OF can sustain years with low profits better, as they have some reserves.

• Financial condition allows diversifying income sources.

• Uncertainty of organic markets and of the access to them.

Changes in dependencies

• No dependency on traders for inputs, loans and sales anymore.

• Less indebtedness; less new debts.

• The association with the project eliminates the risk of getting cheated when selling the cotton.

• Farmers depend on the project for organic inputs and sales of cotton at a premium price.

• Farmers receive training and advice on farming practices from the project.

• Access to organic markets depends on whether the project can achieve organic certification.

• The project provides a platform for farmers to form self-help groups.

• The government promotes and supports organic farming.

As the risk of crop failure cannot be eliminated completely, neither in conventional nor in organic farming, we also need to consider the extent of loss that a farmer incurs in case the cotton crop fails. Costs for seeds, fertilizers and to some extent pest management items incur regardless whether the crop succeeds or not, while harvesting costs reduce when yields are low. Organic farmers argued that the financial loss in case of crop failure is lower in organic cotton farming because input costs are lower. In addition, they are less affected by a hike in fertilizer prices that may occur when oil prices go up or governments decide to reduce subsidies. Although the dependency on off-farm inputs is less in organic farming compared to the conventional system, prices for inputs such as oilcakes and rock phosphate may also go up with increasing demand.

Organic farmers are equally affected by price declines as their conventional colleagues. As long as prices and premiums for organic cotton are fixed based on market rates of conventional cotton, and cotton remains the single main cash crop, the vulnerability of farm households to drops in cotton prices will persist. In cotton projects operating under a Fair Trade agreement, the buyers of the organic cotton fibre guarantee a minimum price at which they purchase the harvest of their contracted farms, and fix the price premiums in absolute amounts instead of a percentage of the market price84_{. These pricing}

arrangements can buffer the effect of market price fluctuations to some extent. Even with the present pricing system, some organic farmers stated that they would be in a position to bear up with some years of low returns due to the money they could save through organic farming over the last few years. The additional income gained from organic cotton farming has enabled them to diversify their income base, e.g. by starting a shop, a tailoring business or a workshop. Others used it for starting or intensifying dairy activities. “Organic farming bought me this herd of milk buffaloes!” explained one organic farmer with observable pride. The improved economic situation allowed them to educate their children, thus opening up off-farm income opportunities for the next generation. Altogether, the statements indicate that the improved economic condition has helped them to strengthen their livelihood base and to reduce the overall vulnerability of their household.

While the shift to organic farming apparently increases the coping capacity of farm households to some extent and opens up new opportunities, it also involves new risks. On the production side, organic farmers have less quick-acting means to control pests or to stimulate growth, which in some situations may limit their capacity to prevent crop damage. On the market side, the availability of a price premium for organic cotton depends on the global demand and supply situation, and on the price policy of the project. In India, the domestic market for organic cotton textiles is presently almost negligible, and the potential to develop it in the near future seems rather small. Some farmers expressed that even if they had to sell their cotton in the local market at prevailing rates they would be better off with organic farming, as production costs are lower and the soil is more fertile.

Changes in dependencies

As we have seen in section 5.2.2, many conventional cotton farmers in the case study region are at the mercy of input traders and money lenders. Due to outstanding loans they often need to sell their harvest to their creditors, and also will take up new loans at the start of the next season from the same person. Organic farmers usually do not need to take up loans for purchasing inputs for cotton farming, as they can get the organic off-farm inputs from the company and pay for them when selling the harvest. Thus they not only avoid

paying the high interest rates that are common in the region, but also do not get into a dependency relation with input traders and money lenders. Most of the interviewed organic farmers stated that they managed to reduce their debt burden since they converted to organic farming, and that they have not taken up new loans for agricultural inputs since then.

Another reported advantage of being associated with Maikaal bioRe is related to the selling of the cotton harvest. Some farmers claimed that they occasionally got cheated by local intermediary traders who buy the cotton from the farmers in the villages and who sell it in a regional cotton market (the so-called ‘mandi’), or by the money lender to whom they had to sell their cotton. According to the farmers, some traders took advantage of their limited access to up-to-date information on prevailing market rates. Organic farmers, on the other hand, mentioned that Maikaal bioRe pays them a fair price. In addition, they appreciate that the cotton is picked up directly from their house. Thus they do not need to transport the cotton to the ‘mandi’, and face less risk of being robbed on the way back. However, the association with the company has led to new dependencies. Organic farmers largely rely on the extension services and farm inputs provided by the company. Without being associated with a group or project, it is presently almost impossible for individual farmers in India to access the global organic cotton market and thus to get a premium price for organic cotton. Addressed on their dependency on Maikaal bioRe, most farmers claimed that they would continue organic farming irrespective of being associated with the company and of getting a price premium, because they cherish the lower costs and the beneficial impact on soil fertility of the organic production system.

One reason why organic farms depend on a project for selling their harvest with an organic premium is that individual certification of small farms would be too expensive. In the group certification schemes implemented by most organic cotton initiatives, not the individual farmer but the group as a whole is certified organic. The success of the organic farming system therefore not only depends on whether an individual farmer adheres to the standards, but also whether the other group members comply. In this sense, organic farmers are depending on each other. This new group coherence also provides opportunities for more collaboration among farmers. In some organic cotton initiatives, self- help groups have been formed based on the project's organisational structure.

With the plans of the Indian government to support organic farming being implemented, the farmers' relations to institutions and organisations could change to some extent. Agricultural extension services could provide inputs and technical advice for organic farming, or at least complement the activities of organic projects. It is, however, unlikely that government agencies will play a more active role in trading organic cotton.