High costs restricts organic food to affluent customers in India

July 3, 2018

A joint study by Assocham and Ernst & Young LLP, has reported that if a family wants to switch to organic food products, they have to bear an additional expense of Rs 1,200-1,500 per month for a family. Why? Because, organic foods are sold at high prices and at the moment restricted to affluent class of consumers.
According to the study, the organic food products are costlier because of low volumes and high expenses involved in processing and inventory holding, packaging, logistics and distribution besides training of farmers. There exist several challenges for all stakeholders involved at every stage of the value chain despite organic farming being promoted by Centre, states and even private sector.
In India, the regulatory framework for organic products has many loopholes and producers of organic products are continually struggling to optimize the scale of their operations while maintaining profitability.
Lack of standardised organic agriculture inputs and subsidy on organic inputs, supply chain issues, global competitiveness, absence of proper branding and packaging are other challenges being faced by the sector.
The study suggested that to bring down the cost of organic cultivation, the government to discourage use of fertilisers and pesticides by incentivizing and promoting use of bio-fertilizers and bio-pesticides.
Organic food processors also face significant resistance in the form of lack of adequate post-harvest facilities. And as infrastructural capabilities here are inadequate, many measures need to be taken in order to avoid contamination and cross-contamination of produce.
A greater importance should be placed on the capacity building of stakeholders, easing access to finance, monitoring and evaluation (M&E) of all assets and processes as well as research and development (R&D) to help keep abreast with global progress in the sector.

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