India to treble export of organic products by 2020
India’s exports of organic products (both food and non-food) are likely to treble by 2020 following relaxations in quota restrictions, thereby, allowing farmers to compete in global markets.
According to the Agricultural & Processed Food Products Export Development Authority (Apeda), Indian farmers produced around 1.35 million tonnes of certified organic products in the financial year 2015-16. This includes food products such as sugarcane, oilseeds, cereals, millets, cotton, pulses, medicinal plants, tea, fruits, spices, vegetables and coffee, among others. However, exports remained low primarily due to quantitative restrictions. Food exports, for example, stood at 2,63,687 tonnes, which was worth $298 million.
The Directorate General of Foreign Trade (DGFT), had through a notification in April, liberalised the quantitative restrictions on the export of organic products from India -- a move that experts believe would boost India’s production and exports significantly in future.
“Despite having an immense potential, Indian organic farmers failed to explore opportunities in the global marketsdue to the quantitative ceiling. Perhaps, the government had imposed such restrictions to ensure food security for domestic consumers. But, quantitative restrictions were only discouraging farmers to intensify their work on organic products. Hence, such restrictions were no longer needed. We, therefore, urged the government to liberalise the restrictions,” said Manoj Menon, Executive Director of Indian Competence Centre for Organic Agriculture (ICCOA), a Bengaluru–based networking organisation of organic value chains.
Thus, the overall market of Rs 4,000 crore is estimated to grow and range between Rs 10,000 and Rs 12,000 crore by 2020 with a concomitant increase in exports, Menon added.
While exports of organic wheat, non-basmati rice, edible oil and sugar have been exempted from all annual quantitative ceilings, the ceiling for pulses and lentils has been increased from 10,000 tonnes to 50,000 tonnes.
Indian farmers exported organic products largely to the European Union (EU), United States of America (US), Canada, Switzerland, the Middle East, among others. Oilseeds contributed half of India’s overall organic exports, followed by processed food products that account for 25 per cent of the total export.
“The growth of organic farming was limited due to the lack of incentives offered by the government to encourage farmers. In fact, farmers tend to see low productivity and, thereby, low income for at least three years in case they switch to organic from conventional or hybrid farming. Since organic farming does not use chemicals and fertilisers, the only way farmers can be compensated is through premiums for their produce. In fact, Indian organic products like tea, vegetables and pulses fetch much higher premiums from overseas markets than conventional and hybrid products. The liberalisation in the quantitative ceilings, however, would encourage farmers to fetch premiums in the international markets,” said a senior industry official.
With around 50 per cent of the market share, the US continues to be the biggest market for organic produce worth $80 billion followed by the EU and others.
At present, the total area available for organic cultivation in India stands at 5.71 million hectares. Out of this, 26 per cent or 1.49 million hectares of land comes under cultivable area, while the remaining 4.11 million hectares fall under forest cover that is used to collect minor forest produce.
Date: 26-Apr-2017
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