Although it has the potential and traditional know-how, low awareness and exhaustive certification processes mean that Indian organic food industry contributes even less than one pc of the USD 90 billion world market.
When Sunil Gupta, at 29, left his career at a European GIS (Geographic Information System) manufacturing to pursue organic farming on his 14 hectare farmland in Sirsa, Haryana in 2001, it appeared no less than a bohemian idea. “The first year I failed miserably. I sought help from the Haryana Agriculture Department. But they had no clue what I was trying to do,” says Gupta. However, he continued through his research on agricultural practices in the Indian states such as Punjab, Haryana and Rajasthan before the green revolution that supported generous usage of chemical fertilisers and pesticides. Discarding this, Gupta farmed using manures and composts and employed biodynamics, i.e., sowing and planting as per astronomical calendar. While the yield dropped, soil was regenerated and the food produced was healthier and safer.
Gupta further tied up with other local farmers to form Dharani Suphalam, a primary producers’ society that now has nearly 1000 farmers cultivating on 3000 ha of land. The society collaborated with organic stores in Gurgaon, Jalandhar and Ludhiana for its surplus of over 500 tonnes of wheat, 200 tonnes of Basmati and 100 tonnes of mangoes, apart from three tonnes of other fruits and vegetables daily. While it aims to tap the export market, startups such as ‘I say Organic’ provide a good alternative outlet. Launched in 2012 by Ashmeet Kapoor who left his engineering job in the US to return to India, ‘I Say Organic’ is an online portal that connects organic food procured directly from the farmers in Uttar Pradesh, Haryana and from Haryana to households in Delhi. Within a year of its foundation, the company clocked the revenue of INR 1 million per month and has been growing at 10-15 pc monthly ever since.
Such stories are not uncommon for the organic farm and food sector that survives on collaboration between the farmers and entrepreneurs. “It is difficult to convince the consumers directly about the organic food,” says Gupta. A Rajasthan-based organisation, Morarka Foundation,brought over 100,000 farmers spread across 19 states under one umbrella Morarka Organic. Having an expertise over different agro-climatic conditions, the organisation handles over 130 crops/products, both farm grade and processed.
Organic farming for organic food
Thanks to the global organic movement, awareness about the healthy diet, high disposable income and the consumer confidence through a standardised certification system, the global organic market was estimated at USD 90 billion in 2015. Of this, India being at nascent stage only shares 0.6 pc. However, given the huge soil and agro-climatic diversity and large areas with low fertilisers and pesticides usage, the potential for organic farming and industry is immense, says a joint report by APEDA (Agriculture & Processed Food Products Export Development Authority) and Yes Bank ‘Indian Organic Sector: Vision 2025’, released in January this year.
For organic food, organic farming naturally decides the discourse. According to APEDA, the total land area under organic cultivation including the wild or the uncertified areas was 4.9 million ha in 2014-15 as against 42,000 ha in 2003-04. Of this, the certified land only formed for 24 pc or 1.18 million ha while the wild land occupied the rest 3.7 million ha. Notably, India holds the maximum number of organic cultivators at around 650,000, 90 pc of whom come from states such as Madhya Pradesh, Karnataka, Maharashtra, Gujarat, Rajasthan, Uttar Pradesh and Odisha. The organic production in 2014-15 was 1.1 million tonnes, slightly lower than the previous year production of 1.24 million tonnes of which the top products include sugar, oil seed crops, fiber crops and millets and seeds that together form 85 pc of the total yield.
However, organic farming is no piece of cake under the strict regulation and legal procedures to be followed for certification. “In addition to 300 pages form to be filled by the farmers who desire to practice organic farming, the farmers have to pay a toll annually,” says Gupta who formed Dharani Suphalam. For a group of farmers between 25-30, the annual tariff to the government costs around USD 1,474, while for an individual farmer it is USD 590. Additionally, the routine inspections mean additional expenses. “This is applicable despite we save the country from investing in foreign currencies through non-usage of pesticides,” adds Gupta who feels the government and media should work towards creating awareness and easing the procedure to register for organic farming.
Unavailability of varieties of seeds, lack of R&D, plant protection, stateof- art labs for testing, dedicated warehouse and transportation, storage logistics and infrastructure and technology are a few of the other challenges that prevent India from realising its potential in the space. Additionally, the report also quotes that the inadequate budgetary allocation for capacity building in organic farming is limiting the outreach and quality of capacity building.
Market and its potential
In 2015, India’s organic food sector was estimated to be INR 27 billion (approximately USD 415 million). While the domestic market largely remains untapped due to reasons such as unawareness and high cost, the Indian organic food market is primarily driven by exports to developed nations. Notably, the export doubled from USD 170 a Winner in Quality the countries that import most from India are the USA and the EU,” says Dr Saswati Bose, deputy general manager, standards and equivalence, APEDA. In terms of export value, USA, European Union, Canada, Switzerland, and Japan have a combined share of 97 pc. Besides, countries such as Israel, Japan, Turkey, UAE, Singapore and Thailand form the key markets. Around 3000 tonnes of organic produce worth the value of around USD 8.1 million was exported to different Asian markets in 2014-15. The major Asian markets volume wise were Israel, Turkey and China with Japan leading at USD 4 million.
One of the major drawbacks, however, is that the 300-400 products, which India exports, are non-value added commodities at the bottom of the value chain. Of these the major share are low value bulk commodities such as oilseeds, cereals and millets. These are sold to the companies who further process them, adding value and selling them further to the companies that brand and market them to consumers.
The report predicts that by 2025 the Indian organic food business is likely to be USD 11 billion, a manifold growth from the current level. However, for such exponential growth both export and domestic markets are crucial. This would mean an additional USD 2 billion income per annum for farmers, impacting about 5 million farming families on about 6 million ha.
As the future of the sector is visibly dependent on development of organic farming, the industry expects an enhanced intervention of the government. While the Narendra Modi led government, through flagging programmes such as Paramparagat Krishi Vikas Yojna (organic farming), has taken a step towards this, more needs to be done for the small industry that has both economic and environmental potentials.