Cultivating Success: Organic Farming’s FMCG Startup Growth Trajectory in the 2024 Budget Outlook
By AJEET GODARA
As the announcement of the Union Budget 2024 is around the corner, anticipations run high from various sectors as stakeholders expect healthy incentives to boost economic activities. In recent times, the food and dietary preferences of consumers have changed drastically. This change is attributed to the growing awareness about the implications of chemical and pesticide-induced foods. Beyond food, consumers are now also preferring to use other products that use organic ingredients. The organic food industry has become a major contributor to the national economy and also influences the FMCG sector to a great extent. The sector has already picked up pace do require special attention. How would the government’s financial statement impact the working of agricultural and FMCG sectors and what are the expectations of the stakeholders, let’s take a look.
Technology, the Decisive Force
The organic farming and food categories require special technological backing. Organic foods and ingredients have garnered massive demand from markets around the country. Consumers, especially in the urban areas of the country have developed a preference for organic, chemical-free and 100% natural foods. Awareness about the implications of chemically treated crops has been a major contributor. Beyond foods, organic ingredients and constituents are high in demand for other household use products such as toiletries and cosmetics. The rural market can support the rising demand and in recent times, a huge number of farmers have shifted to organic farming. Indian organic foods sector has the potential to compete with global players, however, the only missing link here is the advancement in technology. With a special focus on the latest technologies like AI-driven analytics, precision farming and smart irrigation in the organic farming sector, the budget can influence the whole sector and add fuel to its growth. Besides technology, if the government allows special grants for collaborative research and development, it can boost the agri economy by boosting agri-based businesses and entrepreneurs.
Adding More Value to FMCG Through Network
According to some estimates, the FMCG sector is expected to grow at a rate of 10% in the country and 12%, particularly in the urban-centric markets. This figure, however motivating, needs special attention from the government. The FMCG sector is a vivid network of several segments, that collectively contribute to each other’s growth and impact the overall working of the sector. Supply Chain is a very important segment of the FMCG sector and the efficiency and growth of the sector majorly depends on it. Special attention is required to smoothen the flow of goods and commodities, through rail, road and air. The budget is expected to provide special attention to transportation through Electric Vehicles (EVs). The government has been promoting the idea of public transport through electric buses on major routes across the country. If the same is implemented for cargo transport, it would be a complete game changer for the sector. It would help overcome major overheads and transportation costs. Industries would be able to invest the saved cost into developing better products through research. When special announcements are made for the sector, it would also attract more players to enter and hence draw financial investment to consolidate the position.
Recognition and Incentivisation of Organic Farmers
As stated above, organic food products and ingredients have become a major contributor to the FMCG sector as most food and non-food items are based on organic constituents. The organic food sector is at the stage where it requires the much-needed push and this can be done through proper incentivisation and recognition policy. Organic farmers rightly expect special grants and financial packages to fulfil the growing demand in the market. Besides, such financial support would result in organizing the sector, which works efficiently and contributes towards the growth of the economy. The government has time and again brought special reforms for the agriculture sector that have made the country self-sufficient for its food needs. There is now a need for special organic farming-centric policy formulation that would help the sector grow beyond leaps and bounds.
Special Focus on Cross-Border Collaborations
India has over the years entered into special joint-research projects focussed on enhancing agriculture production and efficient farming. Countries like Israel and Australia in particular have established major agriculture research establishments in our country at various places. There is a need to promote such cross-border associations for the organic farming sector alone now. Organic farmers around the world are individually contributing to their respective local economies. Each country and geographical area has special crops and foods that are grown with specialized knowledge and passed down through generations. If an organized platform is given to them, the yield and outcome of each farm can increase manifold. International entities such as research institutions, corporations, governments and even civil societies can come together and take the sector to greater heights through collective efforts. Besides the sharing of knowledge, sharing of resources can prove to be a major catalyst. The 2024 Union Budget is expected to address this need, which not only can take the organic food sector to newer heights, but also add more economic value.
(The author is AJEET GODARA – DIRECTOR AND COFOUNDER (NATURELAND ORGANICS), and the views expressed in this article are his own)
