Organic market may touch ₹12,000 cr by 2020

The organic products market in India has been growing at a CAGR of 25 per cent and it is expected to touch ₹10,000-₹12,000 crore by 2020 from the current market size of ₹ 4,000 crore, according to a report produced jointly by Assocham and Ernst & Young.

Even though India has the highest number of farmers currently engaged in organic farming at 8,35,000, the country accounts for less than 1 per cent the global organic market pie which is valued at $90 billion in 2016, the report said. In terms of total area under organic cultivation, India ranks at 9th position with 1.49 million hectares. Australia, which tops the list, has more than 27 million hectares under organic farming, it said.

Inaugurating a national conference on organic farming organised by Assocham along with others, Union Agriculture Minister Radha Mohan Singh said organic farming should be promoted with the same spirit as Green Revolution as India was the country with maximum number of organic farmers.

Certification process

The minister said there was a limit what the government can do to promote organic farming. “The government cannot promote organic farming alone. There are many NGOs and organisations that have a crucial role to play,” he said, adding that data needs to be systematically collected through scientific methods in order to improve certification process.

However, many experts who spoke at the event subsequently stressed upon challenges faced by the organic farming sector.

“One of the major challenges faced by consumers who buy organic products by paying so much premium is that whether they can trust the product to be authentic or not,” said Amit Bajaj of Ernst & Young.

At the farmer level, getting certification and auditing done was still a cumbersome process, which takes up to 3-4 years. A farmer who is switching from conventional farming to organic farming has to bear a huge cost in the initial years and there is very little support available to him to make that switch, Bajaj said.

Talking in the similar vein, Pankaj Agarwal, Managing Director of Tetra Agro Private Limited, said organic products are currently sold in the country completely on the basis of trust and consumer has almost no way to check the authenticity of the claim.

Packaged food market

“Currently, Indian organic market is retailer-driven and aggregator-powered and there is a need to make it consumer-driven and farmer-powered,” Agarwal said.

The Assocham-EY joint study also estimated that the market size for Indian organic packaged food is expected to cross ₹ 87.1 crore by 2021 from ₹ 53.3 crore in 2016, growing at a rate of 17 per cent.

“The substantial growth of this sector is attributed to an expanding urban population base, rising health concerns, growing consumer spending on food products and deterioration of food quality,” it said.

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