A recent study said organic farming in India faces huge challenges in terms of cost of certification, lengthy procedures, international validity, and more
The government is planning to make the certification and labeling process of organic agricultural products simpler and cost effective to narrow the price difference between conventional and hybrid products.
“The government is considering reducing the overall cost of agriculture products, including organic ones, to help farmers double their income by 2022,” Union Agriculture Minister Parshottam Rupala said on the sidelines of the New India Startup Conclave in Mumbai.
“Organic agricultural products have huge potential to increase their domestic consumption and exports. Hence, the government is looking to reduce the overall cost in certification and labeling of organic products also.”
The conclave was organised by Rambhau Mhalgi Prabodhini and Atal Incubation Centre.
In the financial year 2017-18 (FY18) India produced around 1.7 million tonnes of certified organic products including oilseeds, sugarcane, cereals, millets, spices, dry fruits, vegetables, coffee etc, with Madhya Pradesh emerging as the largest producer.
Data compiled by the Agricultural and Processed Food Products Export Development Authority (Apeda) showed India’s organic agriculture exports in FY18 at 458,000 tonnes worth $515.44 million (Rs 3,453 crore) were primarily to the United States, the European Union, Canada, Switzerland, Australia and Israel among others.
“There has been a record agricultural production last year which opens room for a new business area… organic could be one such opportunity. Ancillaries such as animal husbandry, fisheries, and animal rearing for milk could be another area for business entrepreneurship. Organic agricultural products like fruits and vegetables fetch nearly 20 per cent premium over conventional and hybrid products. Therefore, the youth should consider entrepreneurship in organic food business which has a huge demand,” said the minister.
A recent study by global consultancy firm Ernst & Young said organic farming in India faces huge challenges in terms of cost of certification, lengthy procedures, international validity, inadequate certifying agencies and a lack of supporting infrastructure.
Thus, the cost of certification goes up to Rs 50–500 per farmer per year, with additional cost of Rs 2,500 per farmer for internal audit.
“Although, the cost of certification has reduced, it is expensive for many small groups of farmers or individual farmers,” said the study.Apart from that the transition from conventional to organic farming is accompanied by high input costs and low yields in the initial years. The cost of going completely organic is quite high, because of the high price of organic manure. The commercially available bio-manure products may not be completely organic, and therefore the products sometimes get disqualified at the certification stage.
“The government is willing to create a parallel market of organic agricultural products with low-cost certification and help consumers build confidence on supply. It will be a good move. Rising cost of production in the name of certification, compliance and regulatory issues will discourage expansion in organic products,” said Vijay Sardana, an agriculture expert.
“The biggest impediment in the growth of organic market is the difficulties faced by consumers in differentiating its taste from conventional products. A number of conventional agriculture products are currently sold in the market with organic labels… this needs to be curbed,” said Sardana. The E&Y study forecast India’s organic agriculture market to treble in two years to Rs 12,000 crore by 2020, from Rs 4,000 crore in 2018.