Transition Economics of Conventional to Organic Farming: A Case Study of Basmati Paddy Farming in Haryana

The study has quantified the differentials among yield behaviour and associated costs and returns structure entailing from conventional paddy farming to organic farming, including in-conversion period. The secondary and longitudinal data of contract and conventional farmers were collected from the respondents in villages of Kaithal district of Haryana for the period 2002–03 to 2006–07. The participation of farmers in contract scheme has been found highly skewed in favour of large farmers. The conversion process provided more yield reduction in the second year, followed by first year, but later the yield gap reduced. Organic basmati paddy reached 89 per cent yield level compared to the conventional paddy in the fourth year (full conversion). It is difficult for a farmer to manage the transition process without economic support, especially on small and medium farms. This necessitates the introduction of insurance mechanism in the transition period. Contract farming for organic product is driven more by market and less by technology. The high premium price improves farmers’ income in the short-term but in the long-term, they need to improve their productivity and quality to combat the shortcomings of certification concepts.