The Organic Agri Export Conundrum: Growth and Opportunities in India

In the realm of agriculture, organic practices have emerged as a prominent force, championed for their holistic approach to maintaining sustainable food systems. As defined by the Food and Agriculture Organization/ World Health Organization (FAO/WHO) Codex Alimentarius Commission (1999), "organic agriculture is a holistic production management system which promotes and enhances agro-ecosystem health, including biodiversity, biological cycles, and soil biological activity. It emphasizes the use of management practices in preference to the use of off-farm inputs, considering that regional conditions require locally adapted systems. This is accomplished by using, where possible, agronomic, biological, and mechanical methods, as opposed to using synthetic materials, to fulfill any specific function within the system. This global shift towards organic production has been further fueled by the COVID-19 pandemic, as consumers increasingly prioritize healthy and immunity-boosting foods, propelling the organic market to new heights. According to the World Organic Agriculture (2023) report, the global organic agricultural land area reached 76.4 Mha in 2021, representing 1.6% of the world’stotal agricultural land. The major playersi.e., Australia (35.69 Mha), Argentina (4.07 Mha), and France (2.78 Mha) possess almost 70% of the global organic area. China, Uruguay, India, Spain, United States, Italy, and Germany also possess remarkable areas of organic farming (Fig.1).

Australia 35.69 Argentina 4.07 France 2.78 China 2.75 Uruguay 2.74 India 2.66 Spain 2.64 USA 2.33 Italy 2.19 Germany 1.8 0 5 10 15 20 25 30 35 40 FIGURE 1: Country wise area under Organic Farming (Mha) (Sources: WOA, 2023)

Globally, there were 3.7 million organic agri producers in 2021, with more than 91% in Asia, Africa, and Europe. India stands top among these countries, followed by Uganda and Ethiopia. With the highest number of certified organic farmers in the world, India has avast potential to cater to the increasing global demand for organic food basket. 1.1 Unlocking India's Potential as a Major Organic Produce Exporter: India has carved a significant niche for itself in the global organic agriculture landscape. India holds the sixth position globally in terms of organic agricultural area and ranks first in terms of the total number of producers in 2021 (FIBL & IFOAM YearBook 2023). The country has seen significant growth inorganic cultivated area and production from 0.5 to 5.39 Mha, and 1.3 MT to 2.95 MTrespectively, from 2012-13 to 2022-23 (Fig. 3). As per the latest statistics of APEDA, India produced around 2.9 MT (2022-23) of certified organic products which include all varieties of food products namely oil seeds, fibre, sugar cane, cereals & millets, cotton, pulses, aromatic & medicinal plants, tea, coffee, fruits, spices, dry fruits, vegetables and processed foods, etc. The production is not limited to the edible sector but also produces organic cotton fiber, functional food products, etc. Madhya Pradesh, Maharashtra, and Rajasthan have the highest area and production share under organic farming in India. These three states have a combined share of over 60% of the total organic area and 70% of the total organic production in the country. Madhya Pradesh, in particular, has emerged as the leader inorganic farming in India with the highest organic area (0.618 Mha) and production (1.263 MT) in 2021-22. This accounts for 38.19% of the total organic area and 42.8% of the total organic production in India (Fig. 2&3). The Madhya Pradesh government has taken several initiatives to promote organic farming and provide support to farmers to adopt organic practices. These include the establishment of organic farming clusters, subsidies on organic inputs, training programs for farmers, etc. Maharashtra is the second leading state with a share of 13.89% in the total area under organic, followed by Rajasthan (12.66%), Gujarat (5.05%), Sikkim (4.64%), and Odisha (4.50%) (Fig. 4). 6 5.39 5 4.7 4 3.47 3.41 2.95 3 2.6 2.7 2.7 2.3 2 1.81.7 1.9 1.3 1.2 1.21.1 1.5 1.3 1.4 1.2 1 0.7 0.5 0 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 FIGURE 2: India’stotal certified organic cultivated area (Mha) and production (MT) (Source: APEDA) 3.32 1.96 1.78 Madhya Pradesh 3.62 Maharashtra 4.50 Rajasthan Gujarat 4.64 38.19 Sikkim 5.05 Odisha 12.66 Karnataka Uttar Pradesh 13.89 Uttarakhand Kerala FIGURE 3: Percentage share of organic area indifferent states of India (2021-22) (Source: APEDA)

As far as organic production is concerned, Maharashtra and Rajasthan stand in second and third position after Madhya Pradesh with a production share of 19.7% and 11.2% respectively (Fig. 4). Even though there is a significant increase in the area under organic farming, the absolute quantity of organic produce remained same in 2021-22 from the previous year. 1.1 1.1 1.3 Madhya Pradesh Maharashtra 4.1 4.5 Rajasthan 4.6 Karnataka 5.1 42.8 Odisha Uttar Pradesh 11.2 Gujarat Jammu & Kashmir Kerala 19.7 Uttarakhand FIGURE 4: Percentage share of different states inorganic agri production (2021-22) (Source: APEDA) Processed food, oilseeds, and cereal & millet are the leaders among the commodities exported from the country. These three commodities have a combined share of about 87% of the total organic export. Processed food possessed the top position in total organic export with 61.09% share, followed by oilseeds (12.85%), cereal & millets (12.71%), and sugar (4.76%). Rest commodities contributed only 8.58% of total organic export (Table 1).

TABLE 1 COMMODITY WISE ORGANIC AGRI EXPORT-2021-22 Commodity name Exported quantity (in tons) % to total Processed food 281190.452 61.09 Oil seeds 59168.419 12.85 Cereals & millets 58513.835 12.71 sugar 21932.591 4.76 Spices & condiments 7957.918 1.73 Tea 6060.466 1.32 Pulses 5433.505 1.18 Fodder 4972.904 1.08 Medicinal plant products 4072.861 0.88 Coffee 3916.192 0.85 Dry fruits 3433.509 0.75 Fresh fruits & vegetables 1580.125 0.34 Tuber products 922.138 0.2 Miscellaneous 730.847 0.16 Flowers 243.293 0.05 Essential oil 188.346 0.04 Oils & Oleoresins 2.999 0 Total 460320.4 100 Source: APEDA 1.2 Government Initiatives to Bolster India's Organic Produce Exports: The Government of India has actively fostered organic agriculture through dedicated schemes like the Paramparagat Krishi Vikas Yojana (PKVY) and Mission Organic Value Chain Development in NorthEast Region (MOVCDNER) since 2015-16 to cater to the needs of domestic and export markets respectively. Both the schemes stress end-to-end support to organic farmersi.e., from production to certification and marketing. Post-harvest management support including processing, packaging, and marketing is made integral part of these schemes to encourage organic farmers. Under PKVY, a unique quick certification program “Large Area Certification” (LAC) was launched to harness the potential areas such as areas in hills, tribal districts, deserts, and rainfed areas in India that continue to remain free from chemical input usage. The government is also implementing its Large Area Certification program to transform “Traditional Organic Areas” into certified organic production hubs. In addition, Organic cultivation on either side of River Ganga and Large Area Certification have also been introduced under PKVY to increase acreage under organic cultivation using organic manure / bio-fertilizers. Organic Farming has also been supported under other schemes viz. Rashtriya Krishi Vikas Yojana (RKVY) and Mission for Integrated Development of Horticulture (MIDH), Network Project on Organic Farming under the Indian Council of Agricultural Research (ICAR). Natural Farming is promoted in India as Bharatiya Prakritik Krishi Paddhati (BPKP) under the centrally sponsored scheme PKVY. India is all set to launch a National Mission on Natural Farming to promote the adoption and upscaling of these practices across the country. As per the MoA&FW, more than 1 Mha area (i.e., 10,05,623 ha) is under natural farming and more than 1.6 million (i.e. 16,78,693) farmers are practicing this (GoI, 2023). 1.3 Organic Certification: In India, organic certification can be obtained either from the National Program for Organic Production (NPOP) or through the Participatory Guarantee System-India (PGS). However, certification for export is mandated through NPOP only. The NPOP is the central regulatory system for organic agriculture in India, established by the APEDA under the Ministry of Commerce and Industry in 2001. This program was originally meant for exporters and requires adherence to stringent standards. The NPOP is based on the International Federation of Organic Agriculture Movements (IFOAM) standards and includes rules for the accreditation of certification authorities, guidelines for certifying growers, and rules for the use of India’sorganic label. Mainly the Organic certification is carried out by a third-party inspection agency under the NPOP’spurview, and the government maintains the “India Organic” national seal, which is used by exporters, processors, and manufacturers. In NPOP, the exporter can get a certificate, valid for one year, from one of the 28 third-party certification agencies accredited by the APEDA. The other option is the Participatory Guarantee System-India (PGS), under which a group of farmers come together and vouch for each other’sproduce.

The NPOP and PGS both are process-based certification systems. They look at the processes and practices of farming and food processing. Testing of food for pesticide residues is a limited part of the scheme. NPOP is far more expensive than PGS and therefore, preferred by big farmers, companies, and exporters.

The organic agriculture sector has experienced significant growth, supported by government initiatives and increasing consumer demand. However, there are areas where further improvement can enhance the organic food processing industry and boost exports. Efforts are undertaken to refine certification systems to better accommodate small and marginal farmers, ensuring they receive adequate support. While multiple certificates are currently necessary for exports to various countries following the cessation of the equivalence agreement with the US certification system, this presents an opportunity to streamline processes and enhance compliance standards. Additionally, initiatives are being developed to improve traceability within the certification and export system, addressing a key challenge and further strengthening the organic food industry'sglobal competitiveness. In 2013, India embarked on a journey to enhance its processed food exports by reevaluating its unilateral equivalence arrangement with the European Union (EU), a pivotal market for Indian organic exports. Concurrently, consumer surveys in India revealed a robust preference for organic food among consumers, underscoring a growing awareness and appreciation for healthier dietary choices. Moreover, consumer survey highlighted an evolving consumer sentiment, where concerns about the quality of organic products are being addressed through increased transparency, stringent quality control measures, and heightened vigilance against adulteration and fraudulent practices. (Ramesh and Divya, 2015; Sharma et al. 2016).

Recognizing the current landscape of organic exports from India this paper delves into a comprehensive analysis of the nation'sorganic agricultural produce exports; examining trends, growth patterns, and any instabilities observed in area, production, and export volumes of organic agri produce.