Organic .The buzz is Around and gaining momentum. Indian organic domestic market is currently at 350-400 crores and poised to touch 8000 crores by 2020.
Similarly market for exports of Indian organic products is poised to touch 12000 crores by 2020 from present size of 2100 CRs.
So that shows tremendous growth potential and demand. However, as it happens with every sunrise sector, organic industry in India is too grappled with many challenges-
- Problem of High prices
- Problem of dubious organic
- Problem of credibility
- How to make out whether organic or not.
- Irregular supplies.
- Small size of mkt.
- Too niche market to invest.
- Multiple agencies that are regulating organic such as APEDA/NCOF/ Consumer affairs Ministry .
- India’s share very low in overall organic exports basket- just 0.3% etc
But even if with these challenges the INDIAN ORGA NIC MKT is poised for growth. Reasons-
- Ever increasing diseases- Half of India population is DIABETIC
- Every tenth person in India has fear of cancer exposure.
- Rising incomes.
- Rising urbanisation.
- Rising population of working couples.
- Strong e commerce growth @ 38 % P.A poised to touch about $50 billion by 2020.
- Govt focus on ORGANIC FARMING- Budget allocations have touched above 1000 crs.
- Expansion of organised trade.
- ‘Health is new mantra.
- Organic industry worldwide growing at CAGR @20% PLUS as compare to FMCG which grows at 8%.
- Soli degradation etc due to excessive chemicals use.
- Introduction of PGS
One of the major landmarks in Indian organic food industry will be introduction of PGS Norms by April 2017. PGS means Participatory Guarantee system which encourages COPPERATIVE ORGANIC FARMING Model. Under this system one has to form a group of minimum 5 farmers and max 50 farmers and then apply for Regional council license to NCOF-National centre of organic farming.
Upon granting of RC license, the group gets PGS Green/PGS orange LOGO. This means there is no need for third party certification for DOMESTIC MARKET and All fake/dubious organic will be automatically thrown out. FASSI is going to announce regulation for PGS soon.
In Addition to this PGS is acceptable in 123 countries for exports and also benefits farmers as well as Industry. Reason in earlier norms only after 3rd year of conversion of farm a company could get NPOP/NOP Logo and could sell the product. However here was the Loophole. This NPOP/NOP logo was only meant for exports but misused for DOEMSTIC Market. But with PGS any company/farm can sell there produce in domestic mkt as PGS orange- which means in Process organic. So farmers and companies will be able to recover part of their investments FROM BEGINNING ITSELF and there will be steep decline in certification costs.
So best time for FOOD ENTERPRENUERS to look at this sunrise sector.