+ Growing Organic Food Market in India – CII Blog

An increasing number of Indians are waking up to the fact that their health and lifestyles are being severely affected by impure air, polluted water and toxic food.

Greater international exposure and access to multiple channels of communication has raised concerns regarding lifestyle diseases in urban areas. Urban India should thank social media for bringing health consciousness to the front burner. It has made us much more aware of the harmful effects of chemicals used in farming. It has also created a definite awareness that most lifestyle diseases are avoidable. Celebrities too have been sensitising people about issues of preventive health and food safety. This general awareness has been instrumental in more people gravitating towards organic foods.

Organic products are grown without chemicals fertilisers and pesticides with a socially and environmentally-sensitive approach.  Organic food gives us a choice for a healthy life. It assures that toxic pesticides, synthetic fertilizers or genetically modified organisms (GMOs) are not used in the production of organic foods, and antibiotics or growth hormones are not given to livestock. In effect, it assures consumers that stringent cultivation standards have been met while preserving the reproductive and regenerative capacity of the soil.

In India, currently organic food consumption has mostly been restricted to the metropolitan cities and their neighbouring regions. Rural India is still not quite aware of the benefits of organic food. However, their historical knowledge of traditional farming methods has mostly sheltered them from the acute urban food contaminations.

Lead in fruits and vegetables and its side effect on children first drew the attention of parents to organic food. Today, it has been left to the consumers to decide, since most food categories have both the normal and organic versions available for consumption.

However, the organic food market in India faces several challenges:
  • Farm production remains limited because farmers are apprehensive about reducing/not using chemical pesticides and fertilisers which could negatively impact yield, and hence their earnings.
  • Storage and transportation costs are higher since no chemical preservatives are used for organic produce.
  • Prices of organic produce are therefore higher, which often deters large swathes of population from buying organic produce even if they are convinced of the benefits.
  • There continues to be lack of clarity among many on what constitutes organic and limited certification adds to the grey area of information in many consumer minds.
  • The demand-supply mismatch is very pronounced, leading to wastage in some cases, and insufficient supply in others.

To encourage organic food production, the Government of India implemented the National Programme for Organic Production (NPOP).  Under the NPOP, the area under organic certification has already crossed 3.56 million hectares. Amongst states, Madhya Pradesh, Rajasthan, Uttar Pradesh and Maharashtra have large tracts of land under organic certification. Because of the stringent standards that have been implemented in the country, it is heartening to note that global demand for Indian organic products is on the rise having registered exports of over USD 515 million.

Agricultural and Processed Food Products Export Development Authority (APEDA) has already reported a 39% increase in the volumes of organic food exports – oil seeds, tea, sugar, cereals, spices, pulses – which are being well received not only in USA and Europe but also other countries too. This has mainly been possible due to the equivalency granted by the European Commission and Switzerland for unprocessed plant products and the conformity assessment granted by USDA.

Consumers have been protected through the legal process of organic food certification. Certification is growing at a CAGR of 20% and presently is worth nearly Rs 2,500 crores. The organic food movement however will require more awareness and trust building, besides certification, to firmly establish itself in the country. 

Customers will have to become more insistent in their demands for the traceability of food, as it travels through various production processes from the farm to the fork. It is their right to know what they are consuming.

Ultimately it will have to be Governmental intervention that will firmly establish organic products, which for starters could be accorded industry status for long term survival.

The good news for India is that nearly half of its produce is organic by default given its small land holdings and dry land farming. Most of its food chain is still protected. However, as changes sweep across farms and the way consumers consume products, it is imperative to educate both, so as to make organic food more mass market and profitable for the producers, while also saving the environment.