Monthly Archive April 28, 2020

Scope of Growth in Organic Farming in India

As per industry reports, India organic food market, which currently sized at 6000 crores is anticipated to grow at a CAGR of over 25% during 2016-2021.

The last couple of years have seen a massive growth of demand in the organic food industry, especially in the urban and fast-growing markets of India. The organic food industry in India which is currently in its initial stages of evolution is growing at a rapid rate of 25% – 30% Y-o-Y. High disposable income and increased health awareness are the key factors which have resulted in this augmented demand.
With this scenario the domestic organic food market is projected to touch $1.36 billion mark by 2020.
How different is organic farming from regular farming?
The differences between organic farming methods and conventional farming are the methods used during food production. Organic farming works towards increasing sustainability and biodiversity and needs good soil and air quality. This must then be maintained by using natural growing practices, avoiding harmful chemicals and continued practice of crop rotation along with other natural farming methods.
Organic agriculture is typically more profitable – upto 35% more than conventional farming. It also provides more rural employment opportunities because organic management is more labour intensive than conventional practices. For workers, though, the biggest advantage is that organic decreases their exposure to toxic agrochemicals.
The demand vs supply analysis of organic food brands in India
The organic food market in India is still at a nascent stage wherein we are noticing an increasing demand from end buyers but due to limited availability the supply remains slow. The major problem faced currently is that organic products are priced at a high rate which makes market penetration challenging. The limited availability of organic foods coupled with the fact that majority of sales is concentrated in larger cities shows that supply chains of organic food from farms to domestic consumers are not very well established. There is a lack of knowledge about organic products leading to a low penetration amongst potential customers.
Role of accelerator programs like Agri-Udaan
Agri-Udaan is a brilliant initiative by the Government of India to attract youth from rural India and train them so that they can add value to farmers produce. This indirectly brings more land under organic cultivation. With the Indian Government committed to the goal of doubling farmers income by 2022 several Indian agri-tech start-ups and ecosystem enablers have come forward to help India regain its status of being the “Golden Bird” using technologies such as AI, BIG Data, ML and more.
Upcoming trends which make organic farming a viable business model
There are of technologies being developed like refrigeration system powered by farm waste, AI Based deep tech solution for crop inspection and agricultural products grading, supply chain optimisation platforms, tech platform for rural entrepreneurs for demand led agriculture, a wearable plant phenomics device for pre-detection of pests diseases and deficiencies prior to any physical damage to plant. With such innovations organic farmers can merge nature and human creation to improve efficiency and protect produce.
The trend of organic and healthy eating is catching up again where an increasing number of Indian citizens have chosen a complete chemical free lifestyle and have turned towards eating natural and organic. We are seeing newer organic brands coming up which have traditional processing techniques, and all this is made possible due to the awareness spread by a lot of change makers, NGOs and organic food marketing companies.
As per industry reports, India organic food market, which currently sized at 6000 crores is anticipated to grow at a CAGR of over 25% during 2016-2021. Rising popularity and awareness within the younger generation and millennials is the reason behind the growth. In a country having 1.25 billion citizens, there is immense scope and opportunity for new brands to enter and work mutually for the growth of the industry, thus making it a rewarding opportunity for the investors to enter this space.

Model Agriculture Land Leasing Act 2016

The fear of losing right, title and ownership over one’s own land by leasing out, discourages the land owners even when they are themselves unable to cultivate to lease out their parcels of land. This is the cause behind substantive extent of land remaining fallow. The State Revenue laws provide for right to ownership by proving adverse possession for a certain period as prescribed by the actual tiller. The census 2011 reveals, that the extent of lease in the country is around 6 per cent. In the absence of a legal provision back-stopping such leasing, most of it is oral and therefore does not entitle the lessee to claim the status of a farmer and access various benefits available fro m the government and credit institutions.
It is further known, that a lot of land remains fallow for many do not opt to offer their piece of land on oral lease. It is, therefore, necessary that lease is legally recognised by enacting a suitable law. However, it should explicitly and emphatically protect the interests of the land owner, in supersession of any other provision of law that may be in force.
The Model Land Lease Act, 2016 prepared and approved by the NITI Aayog offers an appropriate template for the states and UTs to draft their own piece of legislations, in consonance with the local requirements and adopt an enabling Act.
Statement of Objects and Reasons
An Act to permit and facilitate leasing of agricultural land, to improve agricultural efficiency and equity, access to land by the landless and semi – landless poor, occupational diversity and for accelerated rural growth and transformation; provide recognition to farmers cultivating agricultural land on lease for enabling them to access loans through credit institutions, insurance, disaster relief and other support services provided by Government, while protecting fully the land rights of the owners; and matters connected therewith or incidental thereto.
Whereas, the prohibitions and restrictions under existing state laws governing agricultural land leasing forced the landowners and lessee cultivators to have informal agreements only for cultivating the land and thereby depriving the lessee cultivators of the benefits which are normally due to them, the existing laws also create insecurity among landowners to lease – out agricultural land which reduces the access to land by the landless poor, small and marginal farmers and others by way of leasing.
Main Features of Act

  1. Legalise land leasing to promote agricultural efficiency, equity and power reduction. This will also help in much needed productivity improvement in agriculture as well as occupational mobility of the people and rapid rural change.
  2. This is very important step for land reforms through which needs of landlord as well as lease holder have been taken care.
  3. Through this act, the landlord can legally lease the land with mutual consent for agriculture and allied activities. In this act, it has been taken care that in any circumstances the leased holders’ claim on land will not be valid.
  4. Lease holder may receive institutional loan, insurance and disaster relief so that he may invest more and more in agriculture.
  5. Allow automatic resumption of land after the agreed lease period without requiring any minimum area of land to be left with the tenant even after termination of tenancy, as laws of some states require.
  6. Incentivise tenants to make investment in land improvement and also entitle them to get back the unused value of investment at the time of termination of tenancy.
  7. In order to resolve the dispute between the landlord and lease holder, the provision of “Special Land Tribunal” has been made in the Civil Court.

To access the complete Act, click here.
Source: Department of Agriculture, Cooperation and Farmers Welfare