Crave organic food? Govt to sell it cheap online

Fancy organic food? Want them cheaper than market rates? The government will enter the online organic food market and sell a range of products, on sites such as Amazon and Grofers, through its main food-trading agency, the National Agricultural Cooperative Marketing Federation of India (Nafed).

“We have just taken a decision last week after necessary processes. We are tying up with online platforms such as Amazon and Grofers,” Nafed managing director, Sanjeev Chadha, told HT.

Chadha said products sourced and sold by Nafed or its associates will be cheaper than the usual going rates for similar items. “Our products will be cheaper because we will reduce our margins. The main idea is to help organic growers, especially small farmers,” Chadha said. In business, margins refer to a firm’s total revenue minus total costs.

While many agri businesses have plunged into the organic food market because of their growing popularity among urban consumers, the Modi government also runs a scheme called the Paramparagat Krishi Vikas Yojana (PKVY) for small organic farmers.

Nafed will source from small farmers too. It will sell products such as flax seeds, pumpkin seeds, normal and flavoured honey as well as tea.

Under the PKVY, small organic producers, who mostly cater to the domestic market, self-certify their produce as “organic”.

Although many definitions abound, organic produce is generally deemed as produce that is free from chemical inputs, such as fertilizers and pesticides. This has created a fad among urban consumers because of the perceived health benefits. For farmers, organic farming means reduced costs. Under PKVY, farmers need to pool in their patches of land. Once they pool in and reach the threshold of a hectare, they are eligible for aid. For every hectare, Rs 50,000 is given as aid. This amount is shared between those who have pooled in their land.

India’s domestic organic food market is forecast to register a compound annual growth rate of over 25% during 2015-20, according to the report ‘India Organic Food Market Forecast and Opportunities, 2020’ published by TechSci Research.

Small farmers are increasingly going organic under the PKVY, according to an analysis of the scheme by the National Institute of Agricultural Extension Management (NIAEM).

Small farmers have more family labour because of larger household size, mostly inhabit rain-fed areas and therefore do better in organic farming, despite lower yields, according to A. Amarender Reddy, director of the NIAEM.

Although Sikkim is India’s first fully organic state, Uttarakhand, Himachal Pradesh, Maharashtra and Madhya Pradesh are also emerging players.