Expectations of Organic Food Industry from the Union Budget 2016

Expectations of Organic Food Industry from the Union Budget 2016

With the announcement of Sikkim as the first organic state and the Prime Minister’s presence during the event, organic farming & industry in India has recently received the much required initial boost which was lacking until now. The industry so far has completely been neglected. However, the challenges faced by the organic industry in India are tremendous. The government therefore should provide incentives to organic farmers & the industry.

Budget expectations from Mr. Raj Seelam, Founder and Managing Director, 24 Mantra Organic

The government should implement the following to encourage the sector –


  1. Assistance for farmers: Conventional farmers receive more than Rs70,000 crores in the form of fertizliers subsidy apart from subsidized pesticides. The National Mission for Sustainable Agriculture (NMSA) currently encourages adoption of organic farming with a financial assistance @ Rs. 20,000/- ha. Subject to maximum of Rs.40,000/- per beneficiary for three years. Only Rs 200 crores was allotted for this in the previous budget. The allocation for this scheme should be increased to altleast Rs 2500 Crores.  This will encourage farmers to balance their income during the gestation period and convert to organic. Organic farming will benefit farmers in rained areas and other stressed areas the most.
  2.  National Organic Board: The government should further plan and create a National Organic Board – an inter-ministerial body compressing of officials of Agriculture, commerce, Food processing ministries, FSSAI, FARMERS AND INDUSTRY.  THE NOB should oversee both regulation and development of the sector.
  3.  National Organic farming Research Institute: A dedicated research institute for organic farming should be set up by the central government along with regional centers; to do research and develop appropriate technologies for organic farming.
  4. Market development fund: for creating awareness about organic food in the domestic market and also promotion of Indian Organic food products abroad. Atleast Rs 200 crores should be allowed. This fund utilization could be overseen by a committee consisting of Govt. officials and Industry representatives till the National Organic Board is formed.
  1. Export incentives: Overall international trade has suffered due to recessionary conditions in many countries. Indian exports are likely to decline by 25% during the current fiscal. The international organic industry is USD 80 billion and is one of the bright spots. Worldwide organic food continues to grow at 8 to 10%. It is important that we tap this opportunity. Hence we recommend that all organic products bulk or packaged products should be given export incentive of atleast 5%.
  2. Avoid ban of Agricultural commodities; there should not be any restrictions on export of certified organic products so that we can build markets abroad and thereby bring in valuable foreign exchange.
  3. Improve port and internal transportation infrastructure and export procedures. Currently it takes 25 to 30 days time for various clearances and shipment to reach the ports from hinterlands. Cutting this down to 10 days will tremendously benefit organic products. Better access to ports and lower interest rates are the need of the hour for the organic industry.
  4. GST roll out: This will reduce the transaction costs and bring down the prices for the common man. Also basic food items should be fully exempt from taxes. This would be one sure way for India to move up in the ease of doing business ranking.

Organic in Telangana:

 There is a lot of potential for Telangana to become a completely organic state. However to realize this dream, the state government should come out with a comprehensive organic model policy, supported by initiatives from the central government. The policy should cover all aspects related to organic that can be made into a replicable one for other states.  The policy should focus on building the organic ecosystem rather than ad-hoc announcements which decrease the consumer confidence in organic. There should be a lot more thought on standardizing organic farming in the state, malpractices in this area should be curbed. The Government of India, the Government of Telangana, and the World Bank today signed a US$ 75 million credit agreement for the Telangana Rural Inclusive Growth Project to enhance the agricultural incomes of small and marginal farmers in the state, and ensure increased access to services related to health, nutrition, sanitation and social entitlements. This amount should be utilized for promoting organic farming apart from strengthening the SHG’s (Self Help Groups).