Indian Organic Foods Market

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Indian Organic Foods Market

TITLE

Indian Organic Foods Market

YEAR

August 2012

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Foreword The traditional farming practices in India; handed down from generations is considered as 'organic' agriculture; but this was not enough to feed the ballooning population of the 20th century. Enter Green Revolution of the 1960s and from a food importing country, we soon became an exporter of food commodities. However, this came at a collateral damage to ecology, environment and the health of farmers.

Foreword

Enhanced environmental activism has led to belief that higher yield of crops cannot come at a cost to society. Reports of organochlorines (from pesticides) found in mother's milk raise serious concern. Similarly, tests carried out across the country on water samples show high degree than permitted residues of organophosphorus and other chemicals.

The ill effects of modern chemical-intensive farming has manifested into lowering productivity, shrinking water table; pest- resistance over the last six decades; with many farming communities now shifting back to the traditional organic farming and promoting organic and health foods.

Organic farming could well possibly be the panacea for all these problems. Besides the obvious immediate and positive effects organic or natural farming has on the environment and quality of food, it also helps the farmer to become self-sufficient in his requirements for agro-inputs and reduction in input costs; thus ameliorating the reduced yield from organic farming.

Organic foods, being free from toxins and harmful chemicals are much tastier and palatable. Given a choice any consumer would definitely like to eat pure, chemical free food.

The current Indian market for organic foods & organic food services is estimated at INR 1000 crores growing at a CAGR of 20%; and would do well in future with individual state governments providing regulatory support for organic farming. Thus affordable cost of organic foods at consumer level will lead to higher penetration at the retail level; which we believe is the bottleneck.

I wish the conference on organic & natural products a grand success; and hope that the deliberations focus on promoting and sustaining the growth and development of organic farming. At YES BANK, it is our endeavor and passion to champion the organic value chain; which is the need of the hour for both the producer as well as the consumer.

Dr. Rana Kapoor Founder, MD & CEO YES BANK Ltd.

Contents

Contents

1

Introduction

05

2

Executive Summary

06

3

Global Organic Market

09

4

Organic Market in India

16

5

Roadmap to Organic farming

28

6

Glossary

31

Indian Organic Foods Market

1. Introduction India suffers a huge dichotomy as far as organic foods are concerned. On one hand, it is increasingly becoming a major organic player in the global market, especially in Europe while on the other; the domestic market for organic foods is at an infant stage.

India started exporting mainly tea to Europe in the early 90s and also set up the first partnerships with German organic food companies. Today a large selection of approx. 300 products is available in some 20 product categories: from tea, spices, fruit, rice, corn and vegetables to finished products and organic cotton. More than 40% of the products are exported to Europe, and other trading partners are Canada, the USA, Australia, New Zealand, Japan, Switzerland, Korea and countries in the Middle East and Southeast Asia. Export is a mainstay of organic marketing and is expected to reach a volume of USD 1 billion by 2015.

There is also a great deal happening at the organic agriculture production level. The area currently farmed by organic methods is about 1.2 million hectares, plus several hundred thousand hectares in the conversion phase. The organic farming area has to increase to five million hectares in the coming years according to the ambitious plans, for which both the national government and many federal states will provide funds. The states of Bihar and Sikkim are expected to provide USD 20 million and Karnataka as much as USD 50 million. In India, the total acreage under certified organic cultivation was 1.18 million hectares for 2009-10. At the same time, the total number of farmers registered with certification agencies has also increased to cross the half-million mark. The total value of organic products at farm level now stands at USD 889 million. Currently, India ranks 33rd in terms of total land under organic cultivation and 88th for agricultural land devoted to organic crops compared to total farming area.

With the increasing domestic demand for organic food, a number of organic food stores are springing up in the country. India produced around 396,997 MT of certified organic products, including all varieties of food products from basmati rice, pulses, honey, tea, spices, coffee, oilseeds, fruits, processed food, and cereals, to herbal medicines and their value-added products. Organic production is not limited to the foods sector, but also produces significant amounts of organic cotton fibre, garments, cosmetics, functional food products, and body care products.

Of late, organic food is on everybody's lips in India. As consumers are becoming aware of the dangers of chemical farming and the harm it causes to ecosystem, farmers & health; the demand for organically grown, safe produce is shooting up. These are the triggers for the proliferation of organic focused stores in the cities.

05

Indian Organic Foods Market

2. Executive Summary Organic farming has thrived in India since ancient times and provided for the domestic needs of the households. However, soaring population in the decades of independence necessitated food imports. To overcome excess dependence on food imports our scientists introducing high yielding varieties which were heavily dependent on chemical fertilisers and pesticides.

The ill effects of modern chemical-intensive farming has manifested into lowering productivity, shrinking water table; pest- resistance over the last six decades; with many farming communities now shifting back to the traditional organic farming and promoting organic and health foods. Recognizing this, Government of India has initiated norms for organic production and farming known as National Programme for Organic Production (NPOP) whose norms are now accepted worldwide.

What is organic agriculture / food? According to Codex Alimentarius (FAO/WHO) organic agriculture is a holistic production management system which promotes and enhances agro ecosystem health, including biodiversity, biological cycles and soil biological activity. The word "organic" refers to the way farmers grow and process agricultural products, such as fruits, vegetables, grains, dairy products and meat. Organic farming practices are designed to encourage soil and water conservation and reduce pollution. Farmers who grow organic produce and meat don't use conventional methods to fertilize, control weeds or prevent livestock disease. For example, rather than using chemical herbicides, organic farmers may conduct more sophisticated crop rotations and Principle of health spread mulch or manure to keep weeds at bay. Organic Agriculture should sustain and International Federation of Organic Agriculture Movements (IFOAM) is the worldwide umbrella organization for the organic movement. The Principles of Organic Agriculture serve to inspire the organic movement in its full diversity.

Organic agriculture is based on the principle of health, ecology, fairness and care. In particular, organic agriculture is intended to produce high quality, nutritious food that contributes to preventive health care and well-being. In view of this the farmers should avoid the use of fertilizers, pesticides, animal drugs and food additives that may have adverse health effects.

06

enhance the health of soil, plant, animal, human and planet as one and indivisible. This principle points out that the health of individuals and communities cannot be separated from the health of ecosystems healthy soils produce healthy crops that foster the health of animals and people. Health is the wholeness and integrity of living systems. It is not simply the absence of illness, but the maintenance of physical, mental, social and ecological well-being. Immunity, resilience and regeneration are key characteristics of health

Indian Organic Foods Market Global organic market The growth in global organic food and beverages market is driven by increasing awareness about health benefits of organic foods which has led to increased organic farming in the world. The global organic food and beverages market is expected to grow from USD 57.2 billion in 2010 to USD 104.5 billion in 2015 at an estimated CAGR of 12.8%. In 2010, Europe had the largest share in the global organic food and beverages market with revenue of USD 27.8 billion. Germany is the biggest consumer in Europe with a share of 32% of organic food and beverages in the region. Asian organic food market is expected to grow at an estimated CAGR of 20.6% from 2010 to 2015. Japan leads the Asian countries in terms of organic food consumption with nearly 54% of the share in 2010.

Fresh produces (fruits and vegetables) are the highest selling organic food categories with 37% of the organic foods segment in terms of revenue. In 2014, the global organic food market is forecast to have a value of USD 100 billion, an increase of 60% since 2009.

Indian organic market It is estimated that 65% of India’s cropped area is organic by default, as the small & medium farmers cannot afford the costly chemical inputs.

According to ICCOA (International Competence Centre for Organic Agriculture) estimates approx 1.5% of all agricultural acreage in India is expected to be organic certified by 2012 and through its strong organic export programme, India will hold 2.5% of the global market. The off-shore demand for organic food market is one of the major drivers of organic agriculture in India, due to relatively increased returns with lesser input costs.

The current size of the market for organic foods in India is pegged at about INR 1,000 crores, with a huge untapped potential, as per a recent article in the ‘Down to Earth’ magazine. Besides, there is also a growing organic-themed food services/ restaurants; and organic catering/‘dabbas’ that is not accounted in above.

Organic foods for health Organic products, which until now were mainly being exported, are now finding more consumers in the domestic market. Awareness of the nutritional benefit of these products has resulted in more land coming under organic farming. Although health is the key reason for growing demand, other incidental benefits such as better taste and better environment are also driving growth. There is also a growing awareness of the dangers of consumable food grown with the aid of chemicals.

07

Indian Organic Foods Market Notwithstanding the fact that high yielding varieties of seeds will need chemical fertilisers for increasing farm output; and agrochemicals will be needed in abundant quantities to protect the crop output; thus helping in food security and providing food to the growing million across the globe; naysayers of organic farming would also collude to the fact that given a choice any consumer would definitely like to eat pure, chemical free food.

Similarly, prolonged and continuous use of organic products will result in the human body developing a natural immune system to fight disease. Some of this is given in the famous agriculture treatise by Sir Albert Howard at www.journeytoforever.org. A recent episode of the serial “Satyamev Jayate” aptly raked up the issue of harmful effects of agrochemicals usage and emphasized the use of organic foods and its healthy effects on human body

Organic farming is the need of the hour; and the organic foods segment will slowly but surely find increasing use amongst aware users and converts for whom health is wealth.

08

Indian Organic Foods Market

3. Global Organic Market World organic agriculture farming/production Global turnover in organic food was almost USD 55 billion or approximately EUR 40 billion in 2009 (Sahota 2011). About one quarter of the world’s organic agricultural land (37.2 million hectares in total) is in Europe (which accounts for 9.2 million hectares) Exhibit 1: Map - Organic agriculture spread

Source: IFOAM

The size of the countries represented in the map above is proportionally, certified organic area with overall 37 million hectares worldwide. The total organic certified land is 80 million hectares.

09

Indian Organic Foods Market Some indicators of organic farming across the world are as follows: Exhibit 2: Indicators of Organic Agriculture Indicator

Global Totals

Leading Countries

Countries with data on certified Organic Agriculture

160 currently (In 2008: 154; while in 2000: 86)

Up to INR 860 to 1450 per unit per hectare.

Organic agricultural land

37 mill Ha (2009: 37.1; 2008: 35.2, 1999: 11)

Australia (12 mil. ha), Argentina (4.2), US (1.9)

Countries with > 5% organic agricultural land

25 (2009: 24; 2008: 22)

Falklands (35.9%), Liechtenstein (27.3%), Austria (19.7%)

non-agricultural organic areas

43 mill Ha (2009: 41; 2008: 31)

Finland (7.8 mil. ha), Brazil (6.2), Cameroon (6)

Producers

1.6 mill (2009: 1.8; 2008: 1.4)

India (677,257), Uganda (187,893), Mexico (128,826)

Organic market size

USD 59.1 bn. (2009: 54.9; 2008: 50.9; 1999: 15.2)

US (USD 26.7 bn.), Germany (8.4), France (4.7)

Organic per capita consumption per year

USD 8.6 (2009: 8)

Switzerland (USD 213), Denmark (198), Luxemburg (177)

Countries with organic regulations

84 (2009: 74; 2008: 73)

Organic certifiers

549 (2011) (2010: 523; 2009: 489)

Japan (59), US (57), South Korea (33)

Number of IFOAM Affiliates (as of 31.12.2011)

870 affiliates (2010: 757; 2008: 734; 2000: 606)

Germany (105), India (50), China (41), S. Korea (39), US (39)

Source: FiBL, YES BANK analysis

Global agriculture production trends - region wise Since the beginning of the 1990s, organic farming has rapidly developed in almost all European countries (European Commission 2010). In Europe, currently more than nine million hectares are managed organically by more than 260,000 producers (2009). In the European Union, in 2009, there were 8.3 million hectares dedicated to organic farming, constituting 4.7 percent of the European whole agricultural land. They were managed organically by almost 220, 000 producers (Willer & Kilcher 2011).

Between 2008 and 2009, the organic agricultural land in Europe increased by 1 million hectares. The increase is due to high growth rates in Turkey, Spain, Italy and France. In recent years, growth rates were higher in the new member states compared to those in the EU 15.

The country with the largest organic agricultural land area in 2009 was Spain with 1.3 million hectares, followed by Italy with 1.1 million hectares, with Germany in the third place (with more than 1 million hectares in 2010). The country with the highest number of producers is Italy (more than 43,000 producers).

10

Indian Organic Foods Market Exhibit 3: Continent-wise trend of organic farming - 2008 & 2009 (in mill ha)

Agricultural land Other areas (Wild collection, bee keeping, aquaculture, forests, grazed non agricultural land)

Source: SOEL, FiBL - 2010

Summary of the organic farming land •

35 million hectares of agricultural land are managed organically by almost 1.4 million producers.

•

The regions with the largest areas of organically managed agricultural land are Oceania (12.1 million hectares), Europe (8.2 million hectares) and Latin America (8.1 million hectares). The countries with the most organic agricultural land are Australia, Argentina and China.

•

The highest shares of organically managed agricultural land are in the Falkland Islands (36.9%), Liechtenstein (29.8%) and Austria (15.9%).

•

The countries with the highest numbers of producers are India (340,000 producers), Uganda (180,000) and Mexico (130,000). More than one third of organic producers are in Africa. On a global level, the organic agricultural land area increased in all regions, in total by almost three million hectares, or nine%, compared to the data from 2007.

•

Twenty-six% (or 1.65 million hectares) more agricultural land under organic management was reported for Latin America, mainly due to strong growth in Argentina. In Europe the organic agricultural land increased by more than half a million hectares, in Asia by 0.4 million.

•

About one-third of the world’s organically managed agricultural land – 12 million hectares – is located in

11

Indian Organic Foods Market developing countries. Most of this land is in Latin America, with Asia and Africa in second and third place. •

The countries with the largest area under organic agricultural management are Argentina, China and Brazil.

•

31 million hectares are organic wild collection areas and land for bee keeping. The majority of this land is in developing countries – in stark contrast to agricultural land, of which two-thirds is in developed countries. Further organic areas include aquaculture areas (0.43 million hectares), forest (0.01 million hectares) and grazed non-agricultural land (0.32 million hectares).

•

Almost two-thirds of the agricultural land under organic management is grassland (22 million hectares). The cropped area (arable land and permanent crops) constitutes 8.2 million hectares, which represents a quarter of the organic agricultural land. Exhibit 4: Continent wise growth of land under organic farming trend (in mill ha)

Million hectares

40 35 30 25 20 15 10 5 0 1999

2000 Africa

2001

2002

2003

2004

Asia

Europe

Latin America

2005

2006

Northern America

2007

2008

Oceania

Source: SOEL, FiBL - 2010

Global market for organic food The global organic food market had total revenue of USD 58.9 billion in 2010, representing a compound annual growth rate (CAGR) of 10.9% between 2006 and 2010. The performance of the market is forecast to decelerate mainly due to global recession especially effecting Europe – a major consumer of organic foods, with an anticipated CAGR of 8.5% for the five-year period 2010 - 2015, which is expected to drive the market to a value of USD 88.6 billion by the end of 2015.

12

Indian Organic Foods Market Fruit & vegetables is the largest segment of the global organic food market, accounting for 33% of the market's total value total revenue of USD 19.5 billion. The prepared food segment accounts for a further 20.3% of the market Exhibit 5: Food basket- Share of organic foods (in %age) Category

% Share

Fruit & Vegetables

33.0%

Fruit & Vegetables

20.3%

Dairy

17.6%

Bread & grains

11.6%

Beverages

11.5%

Meat, fish & poultry

6.0%

Total

100%

Source: YES BANK analysis

In terms of geographical segmentation, America; followed by Europe are the major markets for organic products as given in table below: Exhibit 6: Penetration of organic foods- continent wise (in %age) Category

% Share

Americas

52.1%

Europe

41.9%

Asia-Pacific

5.9%

Total

100%

Source: YES BANK analysis

The European market for organic food and drink In 2009, the organic food and drink market (general retails sales, specialised shops, farm gates sales etc.) was estimated to value approximately EUR 18,400 million. The largest market is Germany with approximately EUR 5.9 billion (2010), followed by France (approx. EUR 3.3 billion in 2010), and the UK (approx. EUR 2 billion in 2010). Denmark, Austria, and Switzerland account for the highest market shares with more than five percent of the total food and drink market. While land area under organic management has expanded rapidly in many new EU member states as well as in candidate and potential EU candidate countries, consumption levels have remained low in these countries (less than 1%).

Whereas 2009 was characterized by slower growth than the previous years, with stagnation in some countries, the situation has changed in 2010 with organic products showing notable increases in sales again, which can be related to the improvement of economic conditions in general. In 2010 prices rose considerably in the second half

13

Indian Organic Foods Market of the year after a lower harvest of many crops, so it is likely that the limiting factor for market growth could again be supply.

Overall it is estimated that market development in 2010 across Europe resulted in single digit growth rate for sales values and a bigger growth rate for the sales volumes. For 2011 market actors expect ongoing mainly single-digit growth of the organic market in many countries.

EU regulation on organic farming Organic farming is defined by EU law since the beginning of the 1990s with Council Regulation (EEC) No 2092/91. On July 20, 2007, the new organic regulation was published, ‘Council Regulation (EC) No 834/2007 of June 28, 2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91’, which came into force on January 1, 2009. The regulation guarantees that terms such as “organic”, “bio” and “eco” are only used on food products that are produced according to the standards laid down in the regulation.

One of the key developments of the European organic sector in 2010 was the launch of the new EU logo for organic products. Since July 1, 2010, the organic logo of the EU has been obligatory on all pre-packaged organic products that have been produced in all EU member states and meet the standards. Exhibit 7: European countries- Area under organic farming (in Ha)

Spain

1’129’844 1’002’414

Italy Germany UK

907’786 737’631 580’956

France 382’949

Austria

341’632

Czech Rep. Sweden

336’439

Greece

317’824

Poland

313’944

Ukraine

269’984 0

Source: SOEL, FiBL - 2009

14

300’000

600’000 Hectares

900’000

1’200’000

Indian Organic Foods Market The Asia Pacific market for organic foods and drinks The Asia-Pacific organic food market had total revenue of USD 3.5 billion in 2010, representing a compound annual growth rate (CAGR) of 16.2% between 2006 and 2010.

The Asia-Pacific organic food market has been enjoying a robust growth, with the annual rate reaching 18.6% in 2010. In the forecast period, some deceleration is expected, with the annual rate largely remaining below 10%.

The Asia-Pacific organic food market had total revenue of USD 3.5 billion in 2010, representing a compound annual growth rate (CAGR) of 16.2% between 2006 and 2010. In comparison, the Chinese and South Korean markets grew with CAGRs of 25.8% and 18.4% respectively, over the same period, to reach respective values of USD 198.9 million and USD 456.6 million in 2010.

The fruit & vegetables segment was the market's most lucrative in 2010, with total revenue of USD 1.3 billion, equivalent to 35.8% of the market's overall value. The prepared food segment contributed revenue of USD 592.5 billion in 2010, equating to 17% of the market's aggregate value.

The performance of the market is forecast to decelerate, with an anticipated CAGR of 8.9% for the five-year period 2010 - 2015, which is expected to drive the market to a value of USD 5.3 billion by the end of 2015. Comparatively, the Chinese and South Korean markets will grow with CAGRs of 12.8% and 8.7% respectively, over the same period, to reach respective values of USD 363.5 billion and USD 692 billion in 2015.

15

Indian Organic Foods Market

4. Organic Market in India Organic farming – pre-independence era Organic farming, which was initiated, by a group of people in India is slowly occupying main stream agriculture and there has been exponential growth in area, production. Also, it has now convinced the policy makers that organic farming is an option for sustainable agriculture in the country. At present certified area under organic cultivation has spread over 8.65 hectares either certified (4.01 lakh hectares) or under conversion (4.64 lakh hectares) in recent years. It is estimated by 2012, certified organic area would be more than 2 million hectares.

Regulations in organic production in India NPOP- the National Program of Organic Production lays out the rules for organic production and certification for organic produce in India. It also gives the details of certificates, their formats and proper guidance to famers, processors as well as importers.

The organic standards generally prohibit products of genetic engineering and animal cloning, synthetic pesticides, synthetic fertilizers, sewage sludge, synthetic drugs, synthetic food processing aids and ingredients, and ionizing radiation. Prohibited products and practices must not be used on certified organic farms for at least three years prior to harvest of the certified organic products. It takes two years for annual crops and three years for perennial crops to be certified as organic. Livestock must be raised organically and fed 100 per cent organic feed ingredients.

Some of the states have promulgated organic farming standards as follows: •

The Karnataka state Government has launched an organic farming scheme named ‘Amrut Bhoomi’ worth INR 200 crores, which is likely to benefit around 5.28 lakh farmers and is expected to be implemented in an area of 4 lakh hectares. There is a “Karnataka State Policy on Organic Farming” under the Commisionerate of Agriculture, Karnataka for promotion of organic farming.

•

The Government of Sikkim took a decision to adopt organic system of farming in the entire state and probably the first state in India to bring resolution in the State Assembly. The state has taken a lead to convert the entire state into Organic by 2015.

•

Bihar has recently started a certification standard whereby products adhering to the state organic standard levels of farming and processing will be accredited with “JaiB” (Jai Bihar) organic brand.

16

Indian Organic Foods Market •

Madhya Pradesh (M.P.) has promulgated a “Jaivik neeti” – standards for organic farming. As it is M.P. has the maximum acreage under organic farming; and State Organic Farming Policy is the statement of intent to create, facilitate, and strengthen the enabling environment for developing integrated value chains of the organic farm produce encompassing end-to-end solutions for both primary producers and consumers. The policy entails on “farm – to – fork” approach reassuring abundant supply of “healthy food for all”. The state has an organic policy document titled “State Policy on Organic Farming in Madhya Pradesh”.

India produced around 3.88 million MT of certified organic products which includes all varieties of food products namely basmati rice, pulses, honey, tea, spices, coffee, oil seeds, fruits, processed food, cereals, herbal medicines and the value added products. The production is not limited to the edible sector but also produces organic cotton fiber, garments, cosmetics, functional food products, body care products.

The area under organic farming is on the upbound year-after-year; and given below are some of the states having largest covergae under organic farming.

Exhibit 8: Statewise area under organic farming States/UTs

Area in Ha

Madhya Pradesh

2866572

Himachal Pradesh

631902

Rajasthan

217712

Maharashtra

177345

Uttar Pradesh

111645

Uttarakhand

105466

Karnataka

88729

Gujarat

48519

Tamil Nadu

34878

Orissa

24418

Jharkhand

24300

Haryana

14764

Andhra Pradesh

14351

Goa

13304

Mizoram

12544

Chhattisgarh

8449

Kerala

6598

West Bengal

6126

Total

4427519

Source: Indiastats, YES BANK analysis

17

Indian Organic Foods Market With the increasing domestic demand for organic food, a number of organic food stores are springing up in the country. India produces all varieties of food products from basmati rice, pulses, honey, tea, spices, coffee, oilseeds, fruits, processed food, and cereals, to herbal medicines and their value-added products. Organic production is not limited to the foods sector, but also produces significant amounts of organic cotton fiber, garments, cosmetics, functional food products, and body care products. The domestic market in India is also growing.

Exports of organic products from India The following table gives a glimpse of the exports of organic products from India: Exhibit 9: Category-wise exports in MT Product Category

Export Volume (MT)

% Share

Oil Crops (except Sesame)

17966

25.73

Cotton & Textiles

17363

24.86

Processed Food

8752

12.53

Basmati Rice

5243

7.51

Tea

2928

4.19

Sesame

2409

3.45

Honey

2409

3.45

Rice

1634

2.34

Dry Fruits

1472

2.11

Cereals

1348

1.93

Spices-Condiments

1174

1.68

Medicinal & Herbal Plants/Products

627

0.9

Coffee

320

0.46

Vegetables

167

0.24

Aromatic Oil

39

0.06

Source: APEDA, YES BANK analysis

In terms of the geographies of exports, the table below gives the continents where most of the exports have taken place. The traditional markets of EU are the biggest contributor and are the largest consumer of organic tea, textiles and processed food from India.

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Indian Organic Foods Market Exhibit 10: Major continents – India Organic Exports Quantity (in MT)

Continent

Value (Crores)

EU

30814

365

Canada

15061

100

USA

13392

115

Asia

8867

108

Australia

910

8.3

New Zealand

609

1.9

Africa

185

0.9

Total

69837

699

Source: APEDA, YES BANK analysis

As an authentication mechanism for various organic products for boosting export, a logo “India Organic” has been launched for authentication of certified organic products from India to various countries. The standards for such logo are available in NPOP. Exhibit 11: Logo “India Organic”

Organic foods industry currently is predominantly metro-based. At least 95% of the brands market exists in the Top 10 metros viz Delhi (NCR), Kolkata, Mumbai, Pune, Chennai, Bengaluru and the other Tier II cities – e.g. Indore, Nasik, and Nagpur etc.

In terms of brands, leading brands of organic products are: •

Conscious Foods

•

Eco farms

•

24 letter Mantra

•

Down to earth

•

Organic India

In terms of organic products, the biggest categories are: •

Beverages – Tea

19

Indian Organic Foods Market •

Organic rice

•

Organic Wheat Flour

•

Organic Millets/Flours

•

Organic Pulses

•

Organic Ghee

•

Organic, Cold Pressed Edible Oils

In terms of farm production, the following organic produce occupies largest area:

•

Organic cotton – goes into organic clothing and exports predominantly

•

Organic rice

•

Organic wheat

•

Organic pulses

•

Organic millets

Recent private research studies suggest that domestic sales of organic products are barely 10% of the organic production. A breakdown of organic sales by product is given below: Exhibit 12: India – Domestic Market - Organic Segment Sales (Tons/ Kl)

Product

Total Size in Cr

Tea

1500

150.00

Coffee

750

45.00

Spices

500

22.50

Rice

5000

42.50

Jaggery, sugar

6000

45.00

Wheat & flour

3000

12.00

Pulses

2500

21.25

Fruits and vegetables

5000

20.00

2000

8.00

Millets flour Source: APEDA, YES BANK analysis Oils & ghee

2000

50.00

Squashes, Jams

500

5.00

Snacks

500

2.50

Honey

2000

25.00

Others (essential seeds, etc)

5000

100.00

Total

36250

548.75

Source: YES BANK analysis

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Indian Organic Foods Market According to Agricultural and Processed Food Products Export Development Authority (APEDA), India exported 86 items of organic products in 2010-11 with the total volume of 69837 MT. The export realization was around USD 157.22 million registering a 33% growth over the previous year. Organic products were mainly exported to EU, US, Australia, Canada, Japan, Switzerland, South Africa and Middle East. Oil Crops (except sesame) leads among the products exported at 17966 MT

Turnovers (includes exports) of leading organic products companies are as follows: Exhibit 13: Leading Organic Companies - Turnover Company

Turnover in Crores

Conscious Foods

120

24 letter mantra

65

Ecofarms

85

Morarka “Down To Earth”

75

Pristine Foods

15

Navdanya

25

Suminter organics

15

Fab india

20

Organic India

175

Total

1000

Source: YES BANK analysis

Roughly organic market in main metros is divided as follows: Exhibit 14: Zone wise sales - Organic Sector Turnover in Crores

State Mumbai

120

Chennai

55

Delhi/NCR

75

Bengaluru

45

Pune

15

Source: Private Research, YES BANK analysis Gurgaon Total

20 1000 ( includes other cities- minor & major and exports as well as organic food services)

Source: YES BANK analysis

Some people believe that organic food is only a “concept” popular in the developed countries. They think that when it comes to organic food, India only exports organic food and very little is consumed. However, this is not true. Though 50% of the organic food production in India is targeted towards exports, there are many who look towards organic food for domestic consumption.

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Indian Organic Foods Market A leading market research firm recently surveyed about 21,000 regular Internet users in 38 countries to find their preference for functional foods – foods that have additional health benefits. The survey revealed that India was among the top ten countries where health food, including organic food, was demanded by the consumers. The most important reason for buying organic food was the concern for the health of children, with over 66 percent parents preferring organic food to non-organic food. Though organic food is priced over 25 percent more than conventional food in India, many parents are willing to pay this higher premium due to the perceived health benefits of organic food.

The increase in organic food consumption in India is evident from the fact that many organic food stores are spurring up in India. Today every supermarket has an organic food store and every large city in India has numerous organic food stores and restaurants. This is a huge change considering that the first organic food store in Mumbai was started in 1997.

The pattern of organic food consumption in India is much different than in the developed countries. In India, consumers prefer organic marmalade, organic strawberry, organic tea, organic honey, organic cashew butter and various organic flours. However, the Indian organic food consumer needs education. There are many consumers who are unaware of the difference between natural and organic food. Many people purchase products labelled as Natural thinking that they are Organic. Further, consumers are not aware of the certification system. Since certification is not compulsory for domestic retail in India, many fake organic products are available in the market.

Considering the increase in organic farming activity in India, organic chain stakeholders viz. NGO’s, consolidators, major organic brands were asked to estimate the overall growth in the market for organic products as per recent private research studies in 2011. The findings are summarized below. The major organic products for which a growing demand is anticipated would be tea, spices and bananas. Exhibit 15: Major segments - Growth Trends Product Growth in 5 years (%) Spices (all )

14

Pepper

5

Turmeric

4.5

Tea

14

Rice

11

Fruits (all)

8

Banana

15

Mango

5

Orange

5

Pineapple

5

Herbal extracts

8

Cotton

8

Source: YES BANK analysis

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Indian Organic Foods Market Product Growth in 5 years (%) Coffee

6

Oil seeds

6

Honey

6

groundnut

6

Baby food

6

Coconut

6

Source: YES BANK analysis

According to the survey – the interviewed audience was of the opinion that growth in the domestic market for organic products would be driven by: •

Health consciousness

•

Awareness about organic products

•

Marketing techniques adopted

•

Availability throughout the year

Some organic focused product companies are as follows: •

Govind Organic Milk: Govind has an organic farm at Manchar; Pune where it has open cattle sheds. It is growing green fodder in organic conditions since the last two seasons; and is selling the milk output as “Organic Milk - in conversion” at INR 50 per liter. Its current turnover in only five months of operation is 750 liters per day. The milk from Manchar is sent to leading retailers - Reliance, Godrej Nature Basket and sold across Mumbai.

•

Farmer’s Market @ Bandra which operates from October – March every year sells fresh fruits/vegetables. Farmer groups from Nasik come over to Mumbai every Sunday and sell the produce every Sunday.

•

Organic Garden - currently operating 12 stores. They started with first store in October 2011 spread over Mumbai and shortly will be going national.

•

Organic Farmers Market at Gurgaon - This is a Sunday market at Rajiv Gandhi Renewable Energy Park Sector 29, Gurgaon.

•

Hari Bhari Tokri (HBT) - This is an organic fresh produce movement for Direct-to-home delivery of fresh fruits & vegetables. Consumers are allotted one “share” worth INR 3600 per share for supply of organic fruits & vegetables for sixteen weeks at frequency of one HBT per week. The HBT concept is in operations since 2010fall; and is open to only 250 consumers per season (two seasons in a year).

•

Gramin Foods, Madhya Pradesh/ R.D.M.Care, Delhi - The cosmetics group (Ayur) has now entered into organic foods space by associating with GRAMEEN GRAHINI MAHILA UTHAN SAWAYAT SAHKARITA MARYADIT, which is an Indian women’s cooperative involved in manufacturing of various hand-made food products prepared at home. It’s a one of its kind joint venture by a local self-help group (SHG) cooperative and a

23

Indian Organic Foods Market private company. Branded Gramin, the joint venture will also launch hand -made or hand-processed food products like chakki dalia, dal, achar, badi, papad, amla candy and honey. RDM Care India Pvt. Ltd. will market and brand these products across India. The JV will give direct benefit to as many as 12,000 women members in tribal-dominated districts of Mandla, Dindori, Balaghat, Seoni and Chhindwara of Madhya Pradesh. •

ASAL, Ahmedabad - Asal owes its philosophy to the traditional Indian science of Ayurveda. Even the Asal store is built in tune with the Asal philosophy. The building materials and mechanisms are inspired from traditional practices to create an energy-conscious and stimulating environment. The store has its own rainwater harvesting tank that helps conserve water. Asal procures cereals, flours, pulses, spices, edible oils directly from farmers and sells in from their store. It also sells many organic non-foods range e.g. utensils, garments etc.

•

Conscious Foods - It was set up in 1990, is India’s pioneering company in natural and organic food. The company sources most of its products from small organic farms and farming communities all over the country. Products are certified by ECOCERT. It is promoted by Titu Ahluwalia (ex-advertising man) and a clutch of investors. The organic company initially started by Kavita Mukhi in 1999; and she later has moved on to promote fresh produce market.

•

Eco Farms, Jalgaon - Was founded in 1995 with a goal to develop and promote organic methods of sustainable farming. The project over the years spread to the neighbouring districts of Amravati, Jalgaon and Wardha. In 2004 the government of Orissa invited the company to start a similar project in Orissa. Today the project has spread across the districts of Kalahandi, Bolangir and Ganjam. Ecofarms today has 20,000 growers who in addition to cotton raise 40 different crops in 60,000 hectares and are rated as No. 1 for organic cotton

•

Organic Food Services: “Sahi Tiffin”: Based out of Borivili; they supply organic food dabbas

Online Stores www.jiyoorganic.com www.naturalmantra.com www.naturalkart.com

Some associations of relevance in organic sector- India www.ofai.org http://www.biodynamics.in www.iccoa.org

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Indian Organic Foods Market India- Certification for Organic Standards Exhibit 16: INDOCERT Logo

INDOCERT is an independent, nationally operating, non-profit trust, whose primary aim is conducting inspections and granting certification for organic production methods. The mission of INDOCERT is to render reliable and affordable organic inspection and certification services to farmers, processors, input suppliers and traders all over India. INDOCERT certifies the following areas of organic production: •

Organic agricultural production, organic animal husbandry (including bee keeping)

•

Processing and trade of organic products

•

Collections of organic products from wild areas and inputs for organic agriculture.

INDOCERT provides certification for national as well as export markets. Inspection and certification are based on organic standards. INDOCERT has strong technical collaborations with two well reputed Swiss Organic Agriculture Institutions: FiBL (Research Institute of Organic Agriculture), Switzerland and bio.inspecta (Swiss organic certification body).

The Indian National Standards for Organic Products: In 2000, the Government of India released the National Standards for Organic Production (NSOP) under the National Programme for Organic Production (NPOP). Products sold or labeled as 'organic' need to be inspected and certified by a nationally accredited certification body.

Profile of INDOCERT Services: Inspection and Certification - The Indian National Standards: 1. Inspection of individual farmers and farmer groups, tailored to the customer's needs 2. Inspection of production, processing and trade 3. Certification for the domestic market as per the Indian National Organic standards 4. Group Certification.

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Indian Organic Foods Market Conversion to organic agriculture: The farm needs to complete a conversion period before products can be sold as "organic". The conversion period starts with the date of signing the contract with INDOCERT. After signing the contract, all the organic standards must be followed strictly.

After 12 months, products can be sold with a label "in conversion to organic agriculture". Annual crops can be sold as "organic" after 24 months and perennial crops after 36 months.

The full farm (all fields and all crops) must comply with the organic standards. This includes crops which are not to be sold as "organic" or which are produced for own consumption. Organic and non-organic production of the same crop (parallel production) is not allowed.

Crop production: General: Seeds and plant material should preferably be from own production or certified organic. If these are not available, non-organic seeds can be used. Chemically treated seeds and plant materials are not allowed. Exceptions for treated seeds and plant material are only possible with written permission from the Certification Committee of INDOCERT. In annual crops, farmers must either practice crop rotation or mixed cropping. Per acre of farm land, at least 3 trees must be grown. Clearing of primary forests is not allowed. The farmer shall ensure to prevent soil erosion, soil salinity and water pollution or depletion. The use of genetically modified organisms (GMOs) and products thereof are not allowed. Farmers shall make sure that seeds and plant material, organic fertilizers and pesticides, feedstuff and veterinary medicines are free of GMOs. Farmers shall avoid overgrazing and over manuring of land by keeping an appropriate number of animals per farm land. The maximum number of animals per acre of farm land is: 1 milk cow or buffalo/acre, or 6 calves, or 5 sheep or goats, or 4 pigs, or 80 chickens. In case of doubt on how to calculate this, ask the INDOCERT office.

Fertilization: Chemical fertilizers (including urea) are not allowed in any case. Manures and natural fertilizers brought from outside the farm shall not contain any chemical fertilizers and shall not come from intensive animal husbandry.

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Indian Organic Foods Market The maximum amount of manures brought from outside is equivalent to 68 kg nitrogen per acre and year. Natural mineral fertilizers (rock phosphate, lime, dolomite etc.) can only be used supplementary to organic manures (compost, green manures etc.) and if there is an obvious deficiency in the soil. A detailed list of allowed mineral fertilizers is given in operating standards. Microbial fertilizers (Rhizobium, Acetobacter, mycorrhiza etc.), bio-dynamic preparations and botanical preparations are allowed.

Crop protection: The use of chemical pesticides (including herbicides, growth regulators etc.) is not allowed in any case. Farmers' own preparations of botanical pesticides from local plants are allowed. Brand name products of natural pesticides must be checked whether they do not contain prohibited chemicals. A detailed list of allowed organic pesticides is given in operating organic standards. Allowed products are (for example): bio-pesticides (Bt, Trichoderma sp., NPV, Pseudomonas sp.etc.), bordeaux mixture, sulphur, soft soap, and most plant based products (neem, rotenone, pyrethrum, tobacco etc.). If equipment from non-organic neighbours is used, these must be cleaned from any residues of chemicals. Farmers must make sure to avoid spray drift from neighbouring fields. In case of risk, buffer zones or border crops must be established.

Animal husbandry (if products are to be sold as "organic"): Farm animals must get sufficient free move (grazing), resting area, feed and fresh water. Permanent cage keeping and landless animal husbandry are not allowed. Mutilation of farm animals is not allowed. Castration, dehorning and ringing of animals are allowed as long as suffering is reduced to the minimum. Farm animals must be fed organically grown feed. A minimum of half of the required feed needs to be grown on the farm itself or on neighbouring organic farms. No chemicals (including urea) or artificial vitamins shall be added to the feed. If certified organic feed is not available, a maximum of 20% of non-organic feed can be fed (max. 15% for ruminants), provided it does not contain prohibited chemical additives or genetically modified products. Exceptions are only possible in extreme weather conditions or other severe events. For treating animals, natural remedies and methods shall be preferred. The use of conventional veterinary medicines (e.g. antibiotics) is allowed when alternative treatment is not sufficient. Synthetic growth promoters and hormones are not allowed. Embryo transfer techniques, hormonal heat treatment and genetically engineered animals are not allowed. Artificial insemination is allowed.

27

Indian Organic Foods Market

4. Roadmap to Organic farming A roadmap to organic farming in India would need to take into consideration the fact that the farm production in the sector is under small farmer holding; hence making the farmer aware of the organic sector, educating him of the pros; and more importantly – ensuring that he gets a premium pricing for his organic output compared to conventional crop produce is very important. Otherwise, farmers will slowly drift back to their standard practises of chemical farming. The following are some recommendations whereby the some of the current guidelines can be tweaked for use in organic sector: 1. Vegetable Initiatives for Urban Clusters - (http://agricoop.nic.in/Vifuc31311.pdf) – This is being championed by Department of Agriculture & Cooperation under Ministry of Agriculture. Farmers must be encouraged to grow organic produce and enhanced funding provided to them. 2. Study tours to organic farming groups for learning organic standards to EU and other organic focussed countries - State governments should set up a corpus fund and sponsor producer groups. 3. State governments to take lead for subsidising group certification of organic products – So as to reduce the overheads for farmers wishing to take up organic farming 4. Encourage setting up “Community Based Organisations” (CBO) for organic farming in villages. State government to provide subsidy schemes for capacity building to such groups by organising subsidised training programs in organic farming through NABARD. 5. State government support to Organic farming producer groups by forming “Organic farmer markets” in urban centres for direct sales to consumers by producer groups. 6. Enhancement of organic foods exports by special duty drawback scheme under VKUY (Vishesh Krishi Upaj Yojana ) scheme Brief account of organic systems which can be inculcated amongst farmer groups for promoting organic farming in India:

1. Biodynamic system This system appears to be one of the sound alternatives. It is based on systematic and synergistic harnessing energies from Cosmos; Mother Earth, Plants and Cow. For harnessing cosmic energies, an agriculture calendar based on planetary configuration is used. By adopting calendar 12 – 18 percent increase in yield and 12-15 percent reduction in disease incidence have been obtained. It is interesting to record that few of the preparation are used in minute quantities viz. BD-500 to 508, Cow Pat Pit (CPP) and show remarkable effects on growth, metabolism, crop yield and quality. Efforts are made to restore soil fertility in form of humus, increase the living system of soil by skillful application of crop rotation. Nutrient requirement is managed by application of Biodynamic compost, duly enriched with Cow pat pit, BD-500; need base use of BD –liquid manures. Pests are managed by promoting locally adopted varieties, cultural, mechanical measures including use of trap crops, spray of BD-501 and need base spray of BDliquid pesticides prepared from cow dung, cow urine and locally available herbs along with BD-sets.

28

Indian Organic Foods Market 2. Rishi Krishi The technology is being promoted by large number of farmers in Maharashtra and Madhya Pradesh. In this, rhizosphere soils beneath Banyan tree (Ficus bengalensis) is spread over the area and Amritpani, special bio inoculants prepared from cow dung, cow ghee, and honey is utilized for seed / seedling treatment, enrichment of soil by over head sprinkling and through irrigation water and mulching with locally available organic wastes. It invigorates the living soil and converts a dead soil into living one. The system has been demonstrated successful on a wide range of crops.

3. Panchagvya Krishi It is a special bio enhancer prepared from five products obtained from cow, dung, urine, milk, curd and ghee. When suitably mixed, incubated and used, these have miraculous effects. The preparation is rich in nutrients, auxins, gibberellins, and microbial fauna and acts as tonic to enrich the soil, induce plant vigour with quality production. Its remarkable effects have been demonstrated in fruits like mango, guava, acid lime, banana, spice turmeric, flowerjasmine and vegetables such as cucumber spinach etc

4. Natural Farming It consists of use of Bijamrut (cow dung, urine, lime, virgin soil) for seed/set/seedling treatment, followed by regular use of Jivamrut (cow dung, urine, jaggery, pulse flour, virgin soil) at 15 to 30 days interval through irrigation water, coupled with mulching (green/ dry, monocot + di-cot) and proper soil aeration. Jivamrut is a rich bio-formulation contains consortia of microbes. This formulation is used within 3-7 days of preparation.

5. Nateuco Farming It follows the principles of eco-system networking in farming system approach. Knowing nature more closely, through critical scientific inquiries and experiments does farming. It is an ever growing, novel, unique, participatory trust between man and nature. It has a new vision of infinite resource potentials in nature and sunlight promises plenty for all through harvesting all these resources. This depends on critical understanding of greening and recycling of biomass within the neighborhood to enrich the structure and fertility of soil in a calculated way. The three relevant aspects of Nateuco farming are: •

Soil: Enrichment of soil by recycling the biomass and establishing a proper energy chain. The basic component of this technology is “Amrit Mati” a special bio-formulation rich in microbial consortia.

•

Roots: Development and maintenance of white root zones for efficient absorption of nutrients

•

Canopy: Harnessing solar energy through proper canopy management for efficient photosynthesis and encouraging multistoried farming system.

29

Indian Organic Foods Market 6. Homa Organic Farming It is totally a revealed science. It comes from Vedas, the most ancient body of knowledge known to mankind. It is a super technology, which simultaneously negates the effects of polluting factors while increasing per unit area of quality production. The knowledge can be used beneficially to grow crops without chemicals and pesticides. It is known as Homa Organic farming. The process of “Agnihotra Pyramid Fire” is the basic Homa Agnihotra is a must to sustain life now on this planet. In fact, it is gift to humanity from ancient most Vedic sciences of bio energy, medicine, agriculture and climate engineering. Agnihotra is the basic fire in Homa Therapy. It is process of purification of the atmosphere through the agency of fire, prepared in a copper pyramid tuned to the biorhythm of sunrise/sunset. This neutralizes the negative energies and reinforces positive energies in the atmosphere. A special bio-formulation developed by Gloria and named, as “Gloria Biosol” from Peru is prepared after a series of operations and processes that lead to the biodegradation of organic matter along with Agnihotra ash. It is powerful bio-food for the plants that are rich in macro, micronutrients and rich in microbial population.

7. Jaivik Krishi This system pertains with integration of few compatible techniques from different systems, which can be created in the villages by providing some basic infrastructure facilities and few days’ hands on skill up gradation training. An understanding agricultural calendar from Biodynamic, Bijamrut for seed/seedling treatment, Jivamrut for enrichment of Rhizosphere enrichment coupled with tree pasting and mulching with organic waste can meet the nutrient requirement in case Homa Farming can be integrated then quality and sustainable production can be ensured.

30

Indian Organic Foods Market

5. Glossary Noun

Definition

Organic Farming

Organic agriculture is a production system that sustains the health of soils, ecosystems and people. It relies on ecological processes, biodiversity and cycles adapted to local conditions, rather than the use of inputs with adverse effects. Organic agriculture combines tradition, innovation and science to benefit the shared environment and promote fair relationships and a good quality of life for all involved It’s a form of agriculture that relies on techniques such as crop rotation, green manure, compost and biological pest control. Organic farming uses fertilizers and pesticides but excludes or strictly limits the use of manufactured (synthetic) fertilizers, pesticides (which include herbicides, insecticides and fungicides), plant growth regulators such as hormones, livestock antibiotics, food additives, genetically modified organisms, human sewage sludge, and nanomaterials.. Any vegetable and livestock production using natural sources of nutrients (such as compost, crop residues, and manure) and natural methods of crop and weed control, instead of using synthetic or inorganic agrochemicals. Also called low input farming In general, most consider organic farming a specific production system which aims to avoid the use of synthetic and harmful pesticides, fertilizers, growth regulators and livestock feed additives. Almost all organic farming systems rely on what some call, "Alternative farming methods" such as crop rotation, mechanical cultivation, animal manures, green manure and integrated pest management to maintain healthy soil, grow healthy plants and to control pests and weeds.

Organic Certification

A certification process for producers of organic food and other organic agricultural products. In general, any business directly involved in food production can be certified, including seed suppliers, farmers, food processors, retailers and restaurants. Requirements vary from country to country, and generally involve a set of production standards for growing, storage, processing, packaging and shipping that include: No human sewage sludge fertilizer used in cultivation of plants or feed of animals avoidance of synthetic chemical inputs not on the National List of Allowed and

31

Indian Organic Foods Market

Prohibited Substances (e.g. fertilizer, pesticides, antibiotics, food additives, etc.), genetically modified organisms, irradiation, and the use of bio solids; Use of farmland that has been free from prohibited synthetic chemicals for a number of years (often, three or more); Keeping detailed written production and sales records (audit trail); Maintaining strict physical separation of organic products from non-certified products; Undergoing periodic on-site inspections. Organic inspection and Certifying Agencies/Bodies

An accredited certifying agent is an individual or other entity accredited by the Organic Program of the country who is allowed to certify producers and handlers of agricultural products. NOP accredits private businesses, organizations and state agencies that follow guidelines and regulations set forth by the organic program of the country. An accredited certifying agent can be state-based, nationally based and some function as foreign agents. Agents performs various tasks such as certifying businesses, farms and individuals wishing to go certified organic, evaluating qualifications for certification, conducting annual reviews of the parties they certify and offer guidance in correcting any deficiencies with the parties they serve. Certifying agents make decisions based directly on organic regulations.

Organic standards

Organic standards are the rules and regulations that define how an organic product must be made. Organic standards are laid down in laws of most countries. Anything labelled 'organic' that is for human consumption must meet these standards as a minimum. The standards cover all aspects of food production, for example, animal welfare and wildlife conservation, and banning unnecessary and harmful food additives in organic processed foods.

Natural Certification

Although organic foods are natural by definition, the term "natural” applies broadly to foods that are minimally processed and free of synthetic preservatives; artificial sweeteners, colours, flavours and other artificial additives; grow hormones; antibiotics; hydrogenated oils; stabilizers; and emulsifiers. Most foods labelled natural are not subject to government controls beyond the regulations and health codes that apply to all foods. They are organic produce in origin; but since processors have not put it for verification/qualifying under organic certification; they are not accredited “certified organic status”.

32

Indian Organic Foods Market Many processors while undertaking farming during conversion of soil into organic during first, second season tend to sell the produce as “natural certified” – this is more of a disclosure on “truthful labelling” of product that it has not been put under certification process; and the consumer has to take a call. These products are less costly that certified natural products. “Certified” Organic Products

“Certified Organic" means the item has been grown according to strict uniform standards that are verified by independent state or private organizations. Certification includes inspections of farm fields and processing facilities, detailed record keeping, and periodic testing of soil and water to ensure that growers and handlers are meeting the standards which have been set.

Eco-cert

An inspection and certification body for organic, fair trade and good agricultural practices (GAP).

INDOCERT

India's first local Organic Certification Body. It (Indian Organic Certification Agency) was established in March, 2002. It is an independent, nationally operating non-profit trust whose primary aim is in conducting inspections and granting certification for organic production methods. It provides certifications both for domestic as well as export market. INDOCERT also functions as a platform for training, awareness creation, information dissemination, and networking in the field of organic farming. It has been set up by a group of Indian NGO's and corporate organizations with the technical collaboration of FiBL, bio.inspecta, and the Swiss State Secretariat of Economic Affairs (SECO). INDOCERT has strong technical collaborations with two well reputed organizations from Switzerland: FiBL (Research Institute of Organic Agriculture) and bio.inspecta (the leading Swiss certification agency). Bio.inspecta assists INDOCERT for certification according to USDA national organic program (NOP) and JAS (Japanese Agricultural Standard for Organic Agriculture) through a re-certification procedure.

National Programme for The Government of India has implemented the National Programme for Organic Organic Production (NPOP) Production (NPOP). The national programme involves the accreditation programme for certification bodies, norms for organic production, promotion of organic farming etc. The NPOP standards for production and accreditation system have been recognized by European Commission and Switzerland as equivalent to their country standards. Similarly, USDA has recognized NPOP conformity assessment procedures of accreditation as equivalent to that of US. With these recognitions, Indian organic products duly certified by the accredited certification bodies of India are accepted by the importing countries.

33

Indian Organic Foods Market

Biodynamic Farming

A method of organic farming that emphasizes the holistic development and interrelationships of the soil, plants and animals as a self-sustaining system. One of the first modern ecological farming systems “biodynamic” like other organic farming methods, is considered to be sustainable agriculture

Natueco Farming

It’s all about harvesting the sunlight using farming as a medium to do that. The focus is on energy conservation and energy generation rather than on mere farm output by weight. It emphasizes optimal and efficient use of soil, water and labour. It questions many of the traditional methods used in agriculture and yet is scientific and experimental in its approach. Natueco Farming emphasizes `Neighborhood Resource Enrichment' by `Additive Regeneration' rather than through dependence on external, commercial inputs. The four relevant aspects of Natueco Farming are as below: SOIL-Focus on enrichment of soil by recycling the biomass and by establishing a proper energy chain. ROOTS-Focus on development and maintenance of white root zones of the plant for efficient absorption of nutrients. CANOPY-Focus on harvesting the sun through proper plant canopy management for efficient photosynthesis. EXTERNAL RESOURCES-Focus on minimizing the use of external resources including water.

Ecological Farming

It ensures healthy farming and healthy food by protecting soil, water and climate, promotes biodiversity, and does not contaminate the environment with chemical inputs or genetic engineering.

Urban Gardening

The practice of cultivating, processing and distributing food in, or around, a village, town or city. Urban agriculture in addition can also involve animal husbandry, aquaculture, agro forestry and horticulture. These activities also occur in peri-urban areas as well. Urban farming is generally practiced for income-earning or food-producing activities, though in some communities the main impetus is recreation and relaxation. It is the process of growing plants of all types and varieties in an urban environment and is also known as urban horticulture or urban agriculture.

“Slow Food” Movement

An international movement founded by Carlo Petrini in 1986. Promoted as an alternative to fast food, it strives to preserve traditional and regional cuisine and encourages farming of plants, seeds and livestock characteristic of the local ecosystem.

34

Indian Organic Foods Market

It was the first established part of the broader Slow movement. Its goals of sustainable foods and promotion of local small businesses are paralleled by a political agenda directed against globalization of agricultural products. Slow food" is a direct counter balance to the fast-food culture. It means taking the time to enjoy good food raised in clean, safe conditions and sold at a fair profit for the farmer. It means taking the time to know the food you eat is healthy - for you, for the people who produce it, and for the land. “Terra madre” Movement

It is a network of food communities, each committed to producing quality food in a responsible, sustainable way

Panchgavya

Panchgavya are the five gavya that comes from Indian Cow. It is a term used to describe medicine produced five major substances of a native Indian breed cow, which include cow's urine, dung, milk, curd & ghee. All the five products possess medicinal properties against many disorders and are used for the medicinal purpose singly or in combination with some other herbs as mentioned in Ayurveda.

Panchamrut

It is a mixture of five foods used in Hindu worship and puja usually honey, sugar, milk, yogurt, and ghee.

Agnihotra

Agnihotra is a healing fire from the ancient science of Ayurveda. It is a process of purifying the atmosphere through a specially prepared fire performed at sunrise and sunset daily. Anyone in any walk of life can do Agnihotra and heal the atmosphere in his/her own home. Thousands of people all over the world have experienced that Agnihotra reduces stress, leads to greater clarity of thought, improves overall health, gives one increased energy, and makes the mind full of love. It is a great aid to drug and alcohol de-addiction. Agnihotra also nourishes plant life and neutralizes harmful radiation and pathogenic bacteria. It harmonizes the functioning of Prana (life energy) and can be used to purify water resources.

Homa Therapy

“Agnihotra” is the basis of Homa therapy. Homa is a Sanskrit word used here synonymously with Yajnya. Yajnya is the technical term from the Vedic science of bio-energy denoting the process of removing the toxic conditions of the atmosphere through the agency of fire. You heal the atmosphere and the healed atmosphere heals you. This is the central idea in Homa Therapy. Yajnya replenishes the nutrients that pollution robs from our environment.

35

Indian Organic Foods Market

Participatory Guarantee Systems (PGS)

36

PGS are locally focused quality assurance systems. They certify producers based on active participation of stakeholders and are built on a foundation of trust, social networks and knowledge exchange. Also referred to as “participatory certification; represent an alternative to third party certification, especially adapted to local markets and short supply chains. They can also complement third party certification with a private label that brings additional guarantees and transparency. PGS enable the direct participation of producers, consumers and other stakeholders in the choice and definition of the standards; development and implementation of certification procedures and certification decisions.

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