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India's organic food market to treble in four years

Business Standard:  May 16, 2016

Mumbai: Organic food market in India is likely to treble in four years despite several challenges faced by farmers to bring additional area under natural farming.

Currently estimated at $0.50 billion, the organic food market in India is estimated to jump to $1.36 billion by 2020, a study jointly conducted by industry body Assocham and private research firm TechSci Research shows. The study projects organic food market in India at $0.36 billion in 2014. Pulses and foodgrains took a lion’s share in the entire market size of organic food.

Despite an estimate of 25-30% growth, Indian agronomists are skeptical about sustainability of growth in the future due to lack of awareness about organic farming, branding and promotion for higher realization. While the Centre has of late paid some focus on organic farming in India, it requires huge impetus from the state governments to encourage farmers to focus on organic farming.

“The fate of organic farming in India hangs in balance due to the lack of government support, farmers’ courage to convert inorganic land into organic land and absence of globally recognized consultancy for timely guidance to farmers. Thus, huge support from the state and the Centre is required for higher realization of farmers’ produce,” said DS Rawat, Secretary General, Assocham.

Interestingly, attempts by many state governments to promote organic farming have not yielded the desired result. Sikkim first adopted 100% organic farming policy in early nineties. But, in less than a decade, the state reported a decline in agriculture production. From the level of 134,000 tonnes in 1995-96, foodgrains production declined to 102,000 tonnes by 2013-14 and further to less than 100,000 tonnes thereafter.

The current certified area under organic farming in Punjab is estimated at a negligible 2000 acres, less than its target of 3000 acres announced by the state government about a year ago. Organic food items overall have the potential to fetch 10 times more value than chemical and fertilized used food items. But, organic food may not prove sufficient to feed every mouth especially when the population continues to grow.

India adopted a green revolution with better use of fertilizer and chemicals to increase foodgrains production and now is self sufficient.

“Organic agriculture has become obsolete and irrelevant since mid nineties when the population started surging. India was indeed practicing organic agriculture till 1960s, but we faced acute shortage of food and had to depend on imported foodgrains. Thanks to intensive agriculture adopted since 1970s, Indian agriculture has steadily grown to make the country the second largest in agricultural production in the world now. It is rather amusing that chronically food deficient states like Sikkim and Kerala brag about organic agriculture; foodgrains produced in Punjab and Haryana actually feed the people of these two states," said Rajju Shroff, Chairman, Crop Care Federation of India.

The government, meanwhile, has set a target to bring 0.5 million acres under organic farming, with an allocation support of Rs 412 crore in three years. Experts, however, believe that a structured policy framework for the utilization of this fund is also needed for the betterment of the industry.

Indian farmers face huge challenge to bring area under organic farming. Rawat believes it takes three years to covert farm land from inorganic to organic. Therefore, farmers are required to be adequately compensated for full and half crop losses in the first and second year, respectively. Third year onwards, farmers don’t require any support as they would make adequate profits.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.