Why is Organic food so expensive?

Organic food in India is a niche market; it’s expected to reach a value of about USD 2.6 billion by 2026. India is the 3rd largest country to have the biggest wild harvest area for organic producers globally with the support from more than 80,0000 organic farmers. 

Increasing life-style changes, rising health consciousness due to the use of chemicals in crops have led Indians to make healthier food choices by switching to organic produce. Another factor that has certainly led to the growth of the organic food industry is increasing working-class population and urbanization. Organic foods are a new rage in metro cities. These foods, however, cost a lot more than regular food items, making it unaffordable for lower- and middle-income groups. On an average, organic pulses cost almost 2.5 times the regular pulses. Despite their health and environment friendlyness, organic foods still pinch the pockets of the average Indian.

Organic farming system in India is not new and is being followed from ancient time. The method primarily involves cultivating the land and raising crops using organic wastes (crop,
animal and farm wastes, aquatic wastes) and other biological materials along with beneficial microbes (biofertilizers) to release nutrients to crops for increased sustainable production in an eco-friendly pollution free environment.

Organic farming avoids or largely excludes the use of synthetic inputs (such as fertilizers, pesticides, hormones, feed additives etc) and to the maximum extent feasible rely upon crop rotations, crop residues, animal manures, off-farm organic waste, mineral grade rock additives and biological system of nutrient mobilization and plant protection”.

Reasons for the high costs in India :

1. High Accreditation Costs – Organic farmers are required to pay a high fee for registration, accreditation and certification. Apart from this, any chemical analysis is charged on actuals. If a farmer cultivates two different crops on his organic farm, then this fee is doubled. The average Indian farmer finds this almost unaffordable, and those who manage the costs ultimately end up pricing the produce on the higher side.

1. Export Orientation – Most of the organic produce from India is intended for sale in foreign markets. About 60 percent of organic products from the country are exported to the European Union; a further 20 percent are exported to the US. India is targeting more than US$ 2 billion worth of organic food exports in the years to come. The global markets and the prices that such products command abroad are a great influence on domestic pricing as well.
2. High Farming Costs – Organic farming is labor intensive. The biofertilizers used are also very expensive. Now add to this the scanty distribution channels and high costs incurred by storage facilities. Organic products require careful storing as the spoilage is high. Crop failure due to pests and insects is also quite common. Such costs and risks translate into a premium on the price.
3. Low Supply, High Demand – The yield from organic farms is typically low. Organic farming techniques yield anywhere between 30-to-50 percent less output. To make the same amount of profit, the produce is priced high. The supply, too, is low and demand very high, naturally pushing the price up. In case of organic crops, the risk of contamination by chemical fertilizers, pesticides, etc. from water, neighbouring farms is high. This leads to a smaller yield, resulting in expensive products.

Organic farming may be tedious, expensive and unviable on a larger scale. But it is an infinitely healthier choice. Buying organic products need not be expensive if you find the time, space and effort to put into your own kitchen or terrace garden.

Tags: featured food