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Impediments in Organic Agriculture & Organic products Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad 500034, India Phone: +91 (0)40 40072526 Email: [email protected] Website: www.sresta.com , www.24mantra.com

Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

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Page 1: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

Impediments in Organic Agriculture & Organic products

Sresta Natural Bioproducts Pvt. Ltd8‐2‐468/A/1, Road No. 5, Banjara Hills

Hyderabad 500034, IndiaPhone: +91 (0)40 40072526Email: [email protected]

Website: www.sresta.com, www.24mantra.com

Page 2: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

In this presentation

• The Background• Organic Agriculture – The Roadblocks• Market – Barriers• The way forward

21-2-2013 Sresta - CSE 2

Page 3: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

The Organic Story

• Really began in 2004, when organic farming picked up traction

• Initially mostly exports• Domestic markets in a pick up mode since 2 to 3 years

• Potential to be a multi billion USD market

21-2-2013 Sresta - CSE 3

Page 4: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

Agriculture – Road blocks

• Crop production Technology– A package which works

• Marketing of produce

21-2-2013 Sresta - CSE 4

Page 5: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

Agriculture – Road blocks

• Negative Government support– Inspite of this, more than half a million ha under certification

– Policy makers look at from a wrong lens • Food security will be compromised• What about Income security. Is the farmer a factor at all?

– Support during the conversion period is crucial

21-2-2013 Sresta - CSE 5

Page 6: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

• Scaling up issues – Huge costs– Mandi Licenses– Food grain licenses– Interstate movement– Multi point market cess– Export restrictions

Agriculture – Road blocks

21-2-2013 Sresta - CSE 6

Page 7: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

The domestic market ‐Barriers

• Consumer Awareness– Pure, Natural, Healthy, Organic?– Is Organic beneficial?

21-2-2013 Sresta - CSE 7

Page 8: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

The domestic market

• Trust– How do I believe it is genuine?– No mandatory standards for domestic market– India Organic logo – Whose baby is it?– Ripe for fly by night operators

21-2-2013 Sresta - CSE 8

Page 9: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

The domestic market

• Infrastructure– Poor state of infrastructure– Pilferages / breakages

• Taxation– Nightmare for a small organisation

21-2-2013 Sresta - CSE 9

Page 10: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

The domestic market

• Customer access– Best outlets – Modern trade

• Shylock’s terms• Not bothered whether genuine• Bad supply‐chain management

– Organic shops• Small• Weak Finances

– Alternative models• Farmers markets

– Scalability– Genuiness

• General trade

21-2-2013 Sresta - CSE 10

Page 11: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

The farmer & consumer

The premium to the farmer could be much better

For the consumer the prices could be much lower?

21-2-2013 Sresta - CSE 11

Page 12: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

Is there hope?

• Many problems common to everyone in food & agri

• hard to navigate for a industry in a toddler phase

• Consumers concerned about health, nutrition and food quality

• Market gaining traction• Industry learning from mistakes and adapting

• Funding available for scalable & viable models

21-2-2013 Sresta - CSE 12

Page 13: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

The way forward

• ICAR investing in science for organic• Subsidies ‐ Govt provides a level 

playing field• Relaxing or removing mandi / market 

cess, Food grains licenses, VAT for organic products

• Making certification mandatory and implementing it effectively

• Govt provides funds for educating consumers about Organic and the ‘India Organic logo’

• making the mainstream markets work for organic consumers and farmers is the key to a step change

21-2-2013 Sresta - CSE 13

Page 14: Impediments Organic Agriculture Organic productscdn.cseindia.org/userfiles/rajashekar_reddy.pdf · Sresta Natural Bioproducts Pvt. Ltd 8‐2‐468/A/1, Road No. 5, Banjara Hills Hyderabad

Thanks for your time

21-2-2013 Sresta - CSE 14