Organic Food

Another Green Revolution in Making

Sector

October 12, 2016

/ By

Biz@India

September-October 2016

mig9

Increasing health consciousness and significance of sustainability is changing the way people have their food, which in turn has put the organic products at forefront both internationally as well as domestically. One of the largest food producers, India is now trying to establish leadership in organic farming as well.

India continues to be an agrarian country, with nearly two-thirds of the population depending directly upon agriculture for their livelihood. Yet, one can find, since about a decade, a flood of food products imported from the four corners of the world. These mass grown products with a liberal use of chemical fertilisers and pesticides now form an integral part of the life of the famous Indian middle class which seems to have eyes only for new brands, with attractive and colourful packaging and of course the ready-to-eat foods.

At the other end of the world, in the United States and in Europe as well, the societies are beginning to learn again about healthy eating habits. A reverse movement based on organic food has become so strong and pervasive that it has forced several big global brands to focus on increasing the share of organic food products in their bouquet of products, with packaging that is increasingly turning environment-friendly.

Organic farming is based on production standards, which are believed to be socially, economically and ecologically sustainable and to play a pertinent role in safeguarding the biodiversity.

As demand for organic food is high in the first world and India has been trying to make their presence in export markets and has doubled its export figures from INR 11.6 billion (EUR 160 million) in 2012-13 to INR 21 billion in 2014-15; however the vast domestic organic market remains largely untapped.

Over the time, India has emerged as a leader in exports of organic tea, basmati rice and cotton. Its main export markets for these organic products are the US, EU, Canada, Switzerland, Australia, New Zealand with the South-East Asian countries, West Asia, South Africa also emerging as important markets.

However, India’s market share in the global organic market remains at 0.6 pc. But experts believe that with its huge soil, agro-climatic diversity and large areas with low fertiliser and pesticide usage, India has a huge potential for organic farming.

Some states, like Sikkim and Arunachal Pradesh in the North East,have declared themselves to be completely organic and free of chemical fertilisers or pesticides in farming, thus making every farm in the state an organic farm. This trend has since been adopted by a number of other smaller states, Nagaland and Meghalaya in the North East and Uttarakhand in the central Himalayas, on the western border of Nepal.

India in the global market of organic food

According to a report by Yes Bank, a private Indian bank, India’s organic food sector is estimated at INR 27 billion (about EUR 370 million), less than one percent of the global organic food market estimated at about EUR 82 billion in 2015. The bank goes on to say that by the year 2025, Indian organic food business could reach INR 750 billion (EUR 10 billion), a manifold growth from the current level.

As per available statistics, India’s ranks 15th in terms of world’s organic agricultural land as per 2013 data (Source: FIBL and IFOAM Year Book 2015). The total area under organic certification is 5.71 million hectares, which includes 26 pc cultivable area with 1.49 million hectares and the remaining 74 pc (4.22 million hectares) is forest and wild area for collection of minor forest produce.

According to Yes Bank, amongst the large states, the ones with the largest acreage under organic farming, including the forests, are Madhya Pradesh (1.93 million hectares), Himachal Pradesh (1.37 million), Rajasthan (480,000), Maharashtra (220,000) and Uttar Pradesh (110,000). Among the crops, cotton is the single largest crop accounting for nearly 40 pc of total area followed by rice, pulses, oilseeds and spices. India is the largest organic cotton grower in the world and accounts for 50 pc share of total world organic cotton production. (See map)

India produced around 1.35 million tonnes (2015-16) of certified organic products which includes all varieties of food as well as non-food products. The total volume of export during 2015-16 was 263687 tonnes. The organic food exports were worth around EUR 270 million.

Government boost to organic farming

To regulate the organic farming and to bring its organic food standards at par with the international norms, India has set up a certification process for export, import and domestic markets, which is regulated by National Programme on Organic Production. Currently it has 18 accredited certification agencies, which are responsible for the certification process.

Besides certification, the government has also launched various initiatives to promote organic cultivation across the nation.

Growing momentum

In many ways, organic food is still a niche concept in India. Current domestic organic food sales are estimated at around EUR 180 million annually, but it is a rapidly booming segment, with an annual growth rate of almost 40 pc.

With growth, the sector is also becoming organised, with several cooperatives such as Navdanya in Uttarakhand taking the lead in convincing farmers to go organic and then helping them in selling their produce at a relatively good price in markets all over the country. There are several other Self Help Groups (SHGs) and farmers’ cooperatives that are actively involved in this initiative. Of course, the food producing companies have, too, turned to tapping this lucrative segment.

The report by Yes Bank says that the Indian organic foods industry presently is metro-based, with about 95 pc of the brands existing in top 10 metros like Delhi, Kolkata, Mumbai, Pune, Chennai and Bengaluru. But the potential exists around the nation.

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1 COMMENTS

  1. Avatar Nextech Solutions says:

    Organic Food maybe a niche concept for now but counting the increasing knowledge among the people regarding health and fitness is influencing them to shift to consuming organic food. Organic or generic medicines are already in demand. So expectedly, the focus on eating organic over fertilized veggies will grow more.

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