India’s Organic Food Market on a Rising Curve

Organic farming is a sustainable agriculture system that excludes the use of synthetic inputs in farming and relies on on-farm inputs such as crop residues, farmyard manure, enriched composts, vermi-compost, oil cakes, bio-fertilizers etc for nutrient management of crops.

Similarly, pests and diseases are managed by eco-friendly farming practices of crop rotation, trap crops, bio-pesticides like neem-based formulations, bio control agents, mechanical traps, stale seed bed etc. adoption of organic farming practices produces safe food, reduces cost of production, improves soil health and health in mitigating the climate change and global warming by reducing dependence on chemical fertilizers

Government of India has been promoting Organic farming in the country through dedicated schemes like Paramparagat Krishi Vikas Yojana (PKVY) and Mission Organic Value Chain Development for North Eastern Region (MOVCDNER) since 2015-16 to cater to the needs of domestic and export markets respectively.

These schemes stress on end to end support to organic farmers i.e. from production to certification and marketing. Post harvest management support including processing, packing, marketing is made integral part of these schemes to encourage organic farmers including in the State of Rajasthan and Assam.

Under PKVY farmers are provided financial assistance of Rs 50,000 per hectare/ 3 years is given, out of which Rs. 31,000 (61%) is provided directly through DBT for inputs bio fertilisers, bio-pesticides, organic manure, compost, vermi-compost, botanical extracts etc.

In Rajasthan, since 2015-16, a total of Rs 97.60 crore has been released for 6150 clusters for 1.23 lakh ha area and 3.07 lakh farmers have been benefited.

An amount of total Rs 23.81 crore has been released to Assam for 220 clusters benefitting 11000 farmers for 4400 ha area taken up in 2015-16 under this scheme.

As of now North Eastern Region is not part of PKVY, since a dedicated scheme, Mission Organic Value Chain Development for North Eastern Region (MOVCDNER), was launched. Farmers are given assistance of Rs 25000/ha/3 years for, organic inputs including organic manure and bio-fertilizers etc. for NE States including the State of Assam.

In Assam, since 2015-16, a total amount of Rs 56.12 crore has been released. Total 6,926 ha area has been covered benefiting 10,165 farmers and 18 FPC has been formed against the target of 10,000 ha area and 20 Farmers Producers Company (FPC).

The demand of organic farming has increased in domestic market during last few years. According to the joint study of ASSOCHAM –EY, the domestic organic market is growing @ 17% and the projected demand of organic food market is likely to cross 87.1 crore by 2021 from the Rs. 53.3 crore in 2016. The demand in international market has also increased in last 3 years.

It may be noted that cultivable land area under organic farming has increased from 11.83 lakh hectare in 2014 to 29.17 lakh hectare in 2020 due to the focused efforts of the government.

That explains why over the years, the organic promotion activities led to development of state specific organic brands, increased domestic supply and exports of organic produce from north eastern region.

Taking cue from the success of the organic initiatives, a target of 20 lakh hectare additional area coverage by 2024 is envisaged by the central government’s vision document.

Awareness programmes, availability of adequate post- harvest infrastructure, marketing facilities, premium price for the organic produce among others would certainly motivate farmers towards organic farming thereby increasing organic coverage in the country.

To recap, the Government of India provides assistance for promoting organic farming across the country though the following schemes:

1. Paramparagat Krishi Vikas Yojana (PKVY)

Paramparagat Krishi Vikas Yojana promotes cluster based organic farming with PGS (Participatory Guarantee System) certification. Cluster formation, training, certification and marketing are supported under the scheme. Assistance of Rs. 50,000 per ha /3 years is provided out of which 62 percent (Rs. 31,000) is given as incentive to a farmer towards organic inputs.

2. Mission Organic Value Chain Development for North Eastern Region (MOVCDNER)

The scheme promotes third party certified organic farming of niche crops of north east region through Farmer Producer Organisations (FPOs) with focus on exports. Farmers are given assistance of Rs 25,000 per hectare for three years for organic inputs including organic manure and bio-fertilisers among other inputs. Support for formation of FPOs, capacity building, post-harvest infrastructure up to Rs 2 crore are also provided in the scheme.

3. Capital Investment Subsidy Scheme (CISS) under Soil Health Management Scheme

Under this scheme, 100 percent assistance is provided to state government, government agencies for setting up of mechanised fruit and vegetable market waste, agro waste compost production unit up to a maximum limit of Rs 190 lakh per unit (3000 Total Per Annum TPA capacity). Similarly, for individuals and private agencies assistance up to 33 percent of cost limit to Rs 63 lakh per unit as capital investment is provided.

4. National Mission on Oilseeds and Oil Palm (NMOOP)

Under the Mission, financial assistance at 50 percent subsidy to the tune of Rs. 300 per hectare is being provided for different components including bio-fertilisers, supply of Rhizobium culture, Phosphate Solubilising Bacteria (PSB), Zinc Solubilising Bacteria (ZSB), Azatobacter, Mycorrhiza and vermi compost.

5. National Food Security Mission (NFSM)

Under NFSM, financial assistance is provided for promotion of bio-fertiliser (Rhizobium/PSB) at 50 percent of the cost limited to Rs 300 per hectare.

As per international resource data from Research Institute of Organic Agriculture (FiBL) and the International Federation of Organic Agriculture Movements (IFOAM) Statistics 2020, India stands at 9th position in terms of certified agricultural land with 1.94 million hectare (2018-19).

Promotion of natural farming under Bharatiya Prakritik Krishi Padhati (BPKP) of PKVY has been initiated to encourage use of natural on-farm inputs for chemical free farming. Andhra Pradesh and Kerala have taken up one lakh hectare and 0.8 lakh hectare area respectively for promotion of natural farming under BPKP. Similarly, continuous area certification and support for individual farmers for certification have also been initiated during 2020-21 to bring in default organic areas and willing individual farmers under the fold of organic farming.

State agencies, Primary Agricultural Credit Societies (PACS), Farmer Producer Organisations (FPOs), entrepreneurs among others can avail loans for setting up of post-harvest infrastructure for value addition to organic produce under 1 lakh crore Agriculture Infrastructure Fund (AIF) of Aatmanirbhar Bharat.