How is India Fast Becoming a Global Leader of Organic Food
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In India, where agriculture is the biggest industry, organic farming has always been the most natural method of growing crops using natural fertilizers and manures.
Following the green revolution in the early 1960s, the Indian agriculture sector gradually witnessed a shift to synthetic fertilizers. Though this ensured faster and bountiful production, the crops became highly contaminated posing threat to general well-being.
In a reverse shift, the country started adopting organic farming during the late 90s’ and in 2004 and India introduced the National Project on Organic Farming. Within 10 years the amount of certified organic land (land free of chemical residue) increased from 42,000 hectares to 4.72 million hectares. In 2005, as per Government of India figures, approximately 190,000 acres (77,000 hectares) were under organic cultivation.
Organic India is now one of the biggest players in the business and has seen its revenue rise from INR 25 crore in 2008 to INR 175 crore in 2013.
The practice is on the rise in India with health-conscious people demanding safer food options, prompting state and central governments to go all out for supporting organic farming. According to recent reports by Assocham and TechSci Research, the organic food market in India is estimated to be over US$0.50 billion. It is further projected to treble, reaching up to US$1.36 billion within the next four years. Overall, the organic foods segment in the country has witnessed an estimated 25 per cent to 30 per cent growth.
While once consuming organic food was perceived to be a trend, now it has become essential, considering its medicinal benefits.
This shift has happened only recently as consumers are becoming increasingly aware of what they are consuming and how it impacts their health in the long term. They are relying on organic food as the 21st century medicine to beat lifestyle diseases like cancer, diabetes and obesity.
To explore the market of organic food in India and its contribution towards promoting a healthy living, Entrepreneur India got in touch with N. Balasubramanian, CEO, Sresta Natural Bio Products, one of the leading organic processors and suppliers.
In the backdrop of excessive and harmful usage of pesticides began the story of Sresta. In 1992, Founder Raj Seelam realized how investment in pesticides and synthetic fertilizers were affecting the sustainability of farmers’ lives and standard of living. With a group of inspired colleagues, he set out on the journey to set up the firm in 2004. Today over 50,000 farmers cultivate 2,50,000 acres across 15 states in India, covering varied agro-climatic zones. The company aims to reach 500,000 acres under organic farming by 2020.
Health Above Wealth
Nielsen’s 2015 Global Health & Wellness Survey revealed that consumers’ mindset about healthy food has shifted and they are ready to pay more for fresh, natural and organic products that claim to boost health and fitness.
According to Balasubramanian, urban India is plagued by anxious concerns of consuming adulterated food, laced with even pesticides.
“Organic by definition ensure production of pure food — no chemical pesticides, no GMOs etc. It is appealing to a growing section of the urban populace,” he illustrated.
“Indian consumers have become very savvy. Though economic concerns remain in the forefront, health and wellness concerns continue to rise. Consumers now try to measure any edible product’s nutritional value (in helping to lower blood pressure, for example), as well as overall health risk. Reports have also revealed that consumers are ready to pay more for healthy varieties, including those that are GMO-free, have no artificial colouring/flavours and are deemed all natural,” he shared.
The Burgeoning Market
Across the world the figures are 50.9 million hectares of organic agricultural land – and an organic market of more than $80 billion. India, however, is a nascent organic food market and its size is about INR 400 crore, which is growing at about 50% year on year.
It is being said that India's organic food market has potential to grow by more than 25 per cent annually to touch $1.36 billion by 2020, provided there is more awareness about these products and the government incentivises region-specific organic farming to ensure consistent growth in future.
“Growing awareness, swelling income levels and shift in consumer behaviour have helped the country’s nascent organic food market develop into the world’s fastest growing organic food market. In addition, increasing export market coupled with government’s support has driven the market that will further boost the demand for organic food products in the country,” shared Balasubramanian.
As per the government data, organic farming is practised in 12 states in about 4.72 million hectares. In 2013-14, organic food production was 1.24 million tonnes. Balasubramanian maintained that the major organic food projects in India are located in Maharashtra, Rajasthan, Karnataka, and Andhra Pradesh.
Apart from chronic diseases like cancer, we suffer, on daily basis, from allergies, respiratory diseases due to contaminants in food. According to Balasubramanian, many of his customers suffering from such allergies get relief with sustained use of organic food. “Simply because it is pure and contamination-free, consuming organic food over a period of time reduces exposure to carcinogens (Pesticides), improves immunity,” he asserted.
Balasubramanian does not agree that organic is expensive. “If a family switches to fully organic options, the grocery bill will come around INR 1,000 to 1500 more per month. This can be brought down to reasonable levels as the volume of organic products increase due to economies of scale and lesser margins to supermarkets, which currently charge 10% to 15% more for organic products,” he clarified.
Challenges are Aplenty
In spite of the awareness and demand, lack of government support, inherent reservation farmers have to convert inorganic land into organic land, absence of globally recognized advice continue to put up challenges for entrepreneurs in organic farming.
Balasubramanian cited the prevalence of brands that pass themselves off as organic without implementing the due diligence and compliance standards, as another crucial challenge.