India’s leading organic companies launch trade body

Tuesday, December 14, 2010

NEW DELHI - The Indian organic trade industry has called for scrapping of certain trade restrictions to help the country achieve exports of a billion dollars in the category in the next four years.

It has also appealed to the Union Government to provide more structured support to meet the specific needs of different industries within the organic product range.

India’s organic business has been witnessing a healthy growth over the past several years but its share of the global market share still remains less than one per cent. The global organic trade has touched 39 billion dollars, but India’s organic exports are just about 0.5 per cent at Rs 500 crore.

To further promote the consumption of organic food in India and help achieve the targeted export level, several leading organic companies have come together to form the Organic Trade Association of India (OTA), the first such organized body for the industry.

The Association expects to address several issues at the farm, certification, regulatory and international trade levels while also implementing strategies to speed up the awareness and reach of organic products both within and outside the country.

The OTA was launched on December 11, 2010 by Joint Secretary, Ministry of Commerce and Industry, Shri Siddharth, in the presence of Association members, industry participants a delegation of the US Organic Trade Association.

Shri Siddharth assured the organic industry that the Commerce Ministry will make efforts to push up exports in the category and also try to arrive at a reasonably sustainable policy that involves other departments and ministries for encouraging export of organic produce from India.

“We will try to explain to other ministries including agriculture and public distribution that certain organic products which are niche products, are expensive and not meant for the public distribution system (PDS) and are primarily produced keeping in mind the export market or a particular market should be allowed to be exported in reasonable quantities”.

“Even if an open export of certain products cannot be allowed, quantitative restrictions can be imposed on their export. This will also send a signal to the organic producers and even farmers in terms of how much to produce in a year keeping in mind the overall quantitative cap in that category”, Shri Siddharth added.

The industry has been demanding maintaining continuity of exports in all items so that it helps retain the farmers’ and producers’ interest in organic farming. Certain categories of organic products have not been allowed to be exported in the recent past on fears of causing food insecurity in the country.

The organic industry has been trying to make the distinction between produce that can be distributed through the PDS and what is fetching a 30 to 50 per cent premium in the export market. The industry has also pointed out that organic farming leads to more employment than conventional agriculture.

Globally, as their health benefits become more evident, organic products are fast replacing synthetic or chemical products. Currently, 30.4 million hectares of land is utilized for organic production worldwide. In India, the total acreage under organic cultivation is to the tune of 1.2 million hectares.he domestic market in India is also growing and the number of outlets selling organic produce has reached 2500.

At the same time, the number of total registered farmers with certification agencies has also increased and crossed the five lakh mark. The total value of organic product at farm level now stands at Rs 4000 crore.

The Association intends to increase the presence of organic outlets and also the number of consumers of organic produce significantly in the next few years. Currently, infrequent consumers of organic produce total about 1 million.

OTA President and Morarka Foundation Executive Director Mukesh Gupta said during the launch: “Organic produce is no more considered an elitist product. The concept of value for money to cater to India market is visible now as the wholesale prices are only 10 per cent above the conventional level while the retail price difference from conventional is only 15-20 per cent in most of the food products”.

Added OTA Secretary and Pure Diets India Ltd (PDIL) Director Pradeep Mathur, “We are not looking at the Government for any financial support or funds to grow. The Indian organic industry is mature enough and is not looking for any incentives. But, we are certainly seeking trade support and easing of restrictions that curtail export growth”.

The OTA has underlined several important issues that need to be addressed immediately. Some of the measures are:

1. Allowing import of organic products from other countries to be used as inputs in the processing of final products to be exported from India.

2. Allowing export of various food products with a standing permission in place for all organic products as the ban on exports harms the sustainability of organic project. A project usually takes three-four years to certify and by the time it gets the status of certified organic, if the commodity is banned for exports, all the efforts and time get wasted. The continuity of exports is key to retaining farmers’ interest in organic farming.

3. Allowing import and re-export of organic products from India.

4. Import of organic products for the domestic market to be allowed if the certification agencies are satisfied with the status of the organic products, especially for the domestic retail.

5. The certification agencies which have been allowed to certify for USDA and EU should be accepted automatically as certifier for Agmark India Organic.

6. Making provisions in the HS Codes by adding 2 digits for organic exports from India. This will ensure that organic products can be classified separately and be allowed for exports.

7. Organic should be considered a “Vishesh Krishi Utpaad”.

Organic products should be covered under the VKGUY scheme for export benefits.

8. India should explore markets beyond European Union (EU) and USA for organic exports as the potential is huge and the industry is expanding in all the countries. (ANI)

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