Indian Organic Sector: Present

and Future
India is an agrarian economy with more than 60% of the population depending
directly or indirectly on agriculture. Although such significant population is working in
the primary sector, their contribution to GDP is close to 14% only. Primary sector's
contribution to India's GDP has been decreasing gradually over the years due to
overall growth in other sectors. But it is still the most important sector because of
deep connection to a majority and because it plays a significant role in determining
socio-economic fabric of India.

Lack of adequate infrastructure and systems in this place have harangued this sector
for long leading to low productivity and low profitability. There are a lot of
opportunities which are yet to be tapped. Innovation and identification of potential is
need of the hour. One such opportunity is Organic Agriculture.

India has always had an inherent advantage and strength in Organic agriculture.
Before the emergence of the green revolution, traditional Indian farmers across
various climatic zones throughout the country followed practices supporting organic
farming which bestowed agricultural products with nutrition, quality and taste. Due to
lack of awareness about various new technologies in agriculture such as chemical
fertilisers and pesticides, a significant chunk of the agricultural population is still
involved in organic farming only. With the recent shift in global consumption patterns,
increasing health awareness among the consumers and focus on sustainable growth
has put organic product market in the forefront, both in international and domestic
level. Organic farming is based on production principles which are environmentally
friendly and are socially, economically and ecologically sustainable. It also plays an
important role in improving soil health, preserve biodiversity, prevent water
contamination and encourages natural balance.

Global organic food market was estimated to be USD 90 Billion in 2015 which has
been growing at a CAGR of around 12% for last 14 years. The global area under
organic cultivation indicating market supply has been increasing rapidly at a CAGR
of 10% from 15.2 mil ha in 1999 to 43.1 mil ha in 2013-14 (Organic World 2015).
Presently, the Indian organic food market is largely driven by exports to developed
countries with exports doubling from INR 1,155 Crores in 2012-13 to INR 2,100
Crores in 2014-15 which is hardly 0.5% of the entire global market. Further, organic
produce, in general, are 25-35% more profitable due to lower costs attributed to
disuse of chemicals. With the possibility of charging a premium for healthier produce,
it becomes even more lucrative. India with its huge percentage of land under
agriculture and human labour it employs, it has potential to be the market leader in
organic farming. However, the vast organic sector remains largely unutilised.

However, to reach that stage, multiple challenges have to be met and dealt with.
Indian certification system for the global market does not have much credibility and
acceptance in Europe and North America. The system of organic categorization
should be developed in lines of internationally accepted practices, else it will
undermine consumer confidence and will affect our budding organic sector since
most of the market is in US and Europe at present (Over 90%). Indian certification
systems are also quite long and cumbersome. This combined with excessive
paperwork and rigid controls discourages new players to enter into this sector. More
farmer friendly and efficient system needs to be developed to tackle this systemic
factors. An efficient supply chain also needs to be developed to ensure both
agricultural inputs and outputs do not face any resource bottlenecks. One of the
biggest problems Indian farmers are facing is the lack of organic seeds variety. The
supply of certified organic seeds is limited and erratic, causing many to switch. Due
to lack of research and awareness, organic plant protection techniques are unknown
to many, and they are susceptible to use of conventional pesticides, herbicides, etc.
Dedicated warehousing and transporting facilities are required to be established to
prevent contamination at conventional warehouses since they are not fumigated with
chemicals against pests.

Apart from the export market, development of the domestic market is extremely
critical in the long run for overall sustainability of Organic Sector. Government
support in promoting the sector, creating awareness among consumers is required
for expansion in the domestic market. It is imperative to strengthen the organic
agriculture supply chain and promote consumption. In addition to it, a market-driven
approach, led by the industry and supported by policy makers, with systems to
ensure appropriate interventions at the farm end, will enable India's organic sector to
take a quantum leap. Organic agriculture market is ginormous and is growing at
rapid rate, thanks to increasing preference for health and wellness food. The world
organic market is expected to grow to USD 230-280 Billion by 2025. If India could
position itself to take charge of this market, it will lead to economic prosperity for both
our farmers and our nation.