Organic Farming Business – Big Investment Opportunity in Agriculture Sector
Sir Albert Howard, F.H. King, Rudolf Steiner, and others introduced the concept of organic farming in the early 1900s. In relative to conventional farming methods, organic farming uses few pesticides/insecticides, minimizes erosion of soil, reduces leaching of nitrate in the underground water, and recycles animal manure into compost. The benefits for the same include higher food costs for customers and usually lower yields. In the year 1960, the demand for organic food was facilitated by the Silent Spring publication, which demonstrated the impact of environmental damage caused due to pesticides/insecticides. The factors such as increased environmental awareness along with rising health concerns due to pesticide residues and the use of GMO (Genetically Modified) crops have induced the growth of the organic sector.
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Government Regulations
Organic farming is officially defined by the respective national governments. Farmers are required to certify their products to be titled as Organic, and there are certain organic standards to adhere to for the same. For instance, organic standards in the EU (European Union) and the United States (US) restrict the use of synthetic insecticides/fertilizers/pesticides. Although the majority of countries have their policies to be certified organic. The certifier in the US or EU can examine and certify farmers and processors for other nations.
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GLOBAL MARKET TRENDS FOR ORGANIC FARMING
In the year 2017, organic farming across the globe accounted for 53.6 million dollars. It is estimated to reach 129.97 million dollars by the year 2026 at a compounded annual growth rate (CAGR) of 10.4%. The key market drivers for organic farming include growing demand for organic food, increasing awareness of natural and novel food safety health standards, and well-being associated with customers to pay for organic food. Approximately, 178 nations are linked to organic farming across the globe. Around 578 million hectares of land is consumed for organic agriculture in the world.
According to IFOAM (International Federation of Organic Agriculture Moment), the majority of area occupying the organic agricultural land is Oceania (45%) followed by Europe (25%), South America (13%), Asia (8%), North America (6%), and Africa (3%) as illustrated below:
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A total area of 71.5 million hectares accounted for organic farming, which increased from 2.9 percent in relative to the year 2017. As demonstrated below, Australia has the largest organic cultivation (35.7 million hectares) preceded by Argentina (3.6 million hectares), and China (3.1 million hectares). India is in the 8th position with total organic cultivation amounting to 1.78 million hectares.
Due to the large occupation of organically cultivated areas in Australia, half of the global organic land is in Oceania followed by Europe and South America. The major brands in the organic farming market are Akzo Nobel N.V., BASF SE, Amalgamated Plantations Pvt.Ltd., Indian Organic Farmers Producer Company, Nalco Holding Company, Bayer AG, Camson Biotechnology Limited, Dow Chemical Company, Picks Organic Farm, Organic Farmers Co, ZUWA Organic Farms Pvt. Ltd., and Solvay SA.
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Indian Market for Organic Farming
Organic Farming is in the developing stage in India. The World of Agriculture Report (2018) points out that India accounts for 30% of the total organic production across the globe. But contributes to just 2.59% (1.5 million hectares) of the total area under organic cultivation with 57.8 million hectares. The challenges before the organic farmers in India are poor governmental policies, increasing input expenditures, and market restrictions. Only a few Indian states have been at the forefront of Organic farming. Madhya Pradesh tops the list with 0.76 million hectares of land with organic cultivation, which is almost 27% of the total organically cultivated area in India.
The leading 3 states in India are Madhya Pradesh (4.9%), Rajasthan (2%), and Maharashtra (1.6%) holding almost half of the organically cultivated area. And the remaining top 10 states contribute to 80% of the area under organic cultivation. The following table illustrates the organic coverage in various Indian states and union territories:
The GOI (Government of India) has been promoting organic farming by introducing various schemes. Prime Minister Narendra Modi introduced PKVY (Paramparagat Krishi Vikas Yojna), thus giving an impetus to organic farming in India. As illustrated below, India is one of the largest organic manufacturers in the world. Although India owns a small area of organic cultivation, in regards to organic farmers it is listed first.
Accelerating organic agriculture in the nation can lead to the vision of sustainability and ‘Organic India’.
NPCS is one of the renowned brands in the industrial world offering integrated technical consultations. Having explored the market for ‘Organic Farming’, the execution of the same would be an environmentally and economically prospective business.
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