Organic Farming Business overview

Another goldmine and the backbone of our Indian economy is its fertile soil condition, land availability  and the agricultural and farming population of this country. If you seem to have these crossed off your profitable business opportunity list then you’ve got one. The possession of these factors are likely to open your gate to the organic farming business which is booming more than ever now. Whose market is expected to be worth ₹10,000 – ₹12000 crore, contributing to its demand by both local as well as global consumers. The reason behind the growth of this organic farming business is

• Its benefit to health, benefit to the environment.
• improved agricultural cycle.
• reduced imports of pesticides and other foreign fertilizers and
• increased employment generation.

Which made the Indian government impose a GST percentage of 18% which was previously just taxed at 5-6%  to promote the larger sector of India and foster domestic production. As well as ensure quality in food to improve the standard of living, making the organic produce a little pricey than the regular.

India is the top third country in the world that is expanding natural farming under the system of organic farming in india. More than 3,59,000 hectares of land is under farming in india. This organic agriculture has involved more than 16 lakh certified organic farmers in India. The Indian agricultural ministry has launched many different schemes for the growth and aid of organic farming business in india. 

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Market potential and uses

Organic farming involves testing of animals and cultivation of plants in a natural way thereby avoiding any sort of artificial and chemically infused fertilizer to maintain them.

It includes all variety of oils, seeds, cereals, mill, cotton, vegetable, tea, coffee, dairy etc which are organically maintained through organic wastes of crop, animal, farm and aquatic.

The market potential of organic farming is vast as specified by the following facts.

• Firstly, around 3.56 million hectare are is registered for the organic farming process.

• Secondly, the driving consumption of consumers from regular to organic produce because of health benefits.

• Large availability of livestock, labors and farmers is bringing in local as well as a global demand.

• Increased government assistance. Further, the market potential of this organic farming can be defined through its benefits.

• Organic farming incurs less cost of production due to a sense of use of fertilizers and pesticides.

• The crops and produce from organic farming is less prone to rainfall and drought conditions.

• These are huge in demand because it nutrient content which is not jeopardized by fertilizers.

• Plant diseases, weeds and pests are repelled because of natural crop rotation.

Types of Organic Farming

Organic farming is divided into two main types ie; Pure Organic Farming and Integrated Organic Farming.

• Pure Organic Farming: it’s a natural way of farming that avoids the usage of unnatural things like chemicals, fertilizer and pesticides. In this type of farming, farmers use pure things that are derived from natural sources at the time of farming process. This type of farming depends on organic fertilizers and bio-pesticides and other natural sources. 

• Integrated Organic Farming: it’s a type of farming system that focuses on delivering more sustainable agriculture. This farming method involves different cultivation techniques that combine new tools and techniques with traditional ones. It focuses on meeting ecological standards and the fulfilment of economic demands. 

Advantages of Organic Farming

There are many different benefits of organic farming few of them are mentioned below: 

• Free from harmful chemicals.
• Reduction in production cost. 
• Usage of natural fertilizers and improvement in plant growth. 
• Healthy, natural and pure food. 
• Environmental protection and helps saving energy. 
• Reduction in different types of pollution. 
• Higher food nutritional value.
• Better taste and poison-free food. 

Government assistance available:

• Capital investment subsidy offered by National centre for organic farming under NABARD.
• Subsidy amount of 25% for biological fertilizers and pesticide units ( max limit 40 lakhs per unit).
• Subsidy amount of 33% for fruits and vegetables (max limit ₹60 lakhs per unit).
• Credit linked and back ended subsidies are also made available.

Investment required

The investment required to start with an organic farming business is ₹5 lakhs- ₹10 lakhs.

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Profits made

The profits one can earn through this business is ₹30 lakhs per month through efficient produce, distribution and marketing. The profit margin which this business is likely to yield to you is 22%-35%.

Target consumers

The target consumers for your organic farming business are

Farmer’s market: The farmer’s market is the larger target customer for your organic produce in terms of fruits, vegetables, herbs, fishes, dairy and livestock because of the large household demand for farm fresh and healthy produce.

Restaurants and hotels: Many restaurants and hotels also require the organic produce to meet the consumption habits and trends of their diet and health conscious consumers also to expand their menu options.

Retail grocery stores: The retail grocery stores are also large target customers for organically produced crops like wheat, millets etc to meet the fiber and diet needs of the health conscious customers.

Coffee house and cafés: These are massive target customers because they require organically produced herbs like tea and organic seeds like coffee to give their customers an organic experience.

Dairy markets: The dairy markets like retail dairy stores and plants could also make use of the organically produced milk through natural means to meet such needs of the consumers.

Online grocery stores: Online grocery stores are another largest target consumers to meet the online shopping consumer’s needs of organically produced fruits, vegetables, grains etc.

Area required

The area required to set up an organic farming business is

• With two cows – 6-10 acres of land.
• With one cow- 5 acres of land.

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Business model and growth

The business model of an organic farming business can be defined using these four variants

Marketing strategy: The marketing strategy that can be implemented by your organic farming business is

• Advertising: Through tv commercials, brand endorsements.
• Tie ups with restaurants and online and offline grocery stores.

Growth

The organic farming business has witnessed and has the potential for the following growth prospects

• India was ranked 9th in terms of the world’s largest organic farming land and 1st in terms of worlds largest organically produce country catering to both global and domestic demand.

• The total Indian organic food export was accounted for ₹3458.48 crore.

• It is seen to be growing at a CAGR of 25%.

Conclusion of Organic Farming 

Organic farming business in India is trending by promoting ways that avoids inorganic farming practices and promotes biodiversity by creating organic products with different mechanical practices. Indian farmers are getting engaged with organic farming and has made India a leading organic producer, its several benefits are attracting more farmers and they are paying every kind of cost for organic farming crops.

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