How to Start an Organic Farming Business: All You Need to Know

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Starting an agricultural venture can be extremely rewarding. Along with the increasing market, there is also stringent competition. Therefore, organic farming is a niche that will not only help you make higher profits but also gain an edge over competitors.

This guide will equip you with all the knowledge needed to start an organic farming business.

The Organic Farming Industry in India

Organic farming is essentially the practice of growing your product without the use of artificial fertilizers, pesticides, and growth regulators. Most conventional food products are saturated with fertilizers and additives. This is commonly done for faster growth, resilient and better-looking crops, and cheaper prices. Despite the popularity of such methods, the organic food market in India has a valuation of over $815 million as of now.

As awareness around pro-health foods and additives increases, the demand for organic products is expected to skyrocket. India has seen a significant market value increase over the past six years. In fact, just in the period between 2016 and 2017, there was a 20% growth in the land used for organic farming.

Additionally, India is the largest producer of organic products in the world. This is proof enough of the booming organic industry in India.

The Future of Organic Farming

With every year, new technological advancements make agriculture much easier. Newer methods of organic farming like hydroponics, aquaponics, greenhouse farms, vertical farming, etc. are revolutionizing the farming industry.

Modern and automated machinery not only improves efficiency but also the quality of the products. According to the estimates of the IMARC Group, the organic food industry is expected to grow at a CAGR of 24% from 2021-2026.

Organic farming is rapidly becoming popular all around the world. Now, that the COVID-19 pandemic is easing out, the industry has begun bouncing back.

This style of farming is not only advantageous in all aspects but can also be practiced in more than one way.

Organic farming follows four basic principles proposed by the International Federation of Organic Agriculture Movements (IFOAM):

  1. Health: Organic farming should improve soil health and help sustain and improve animal and human health on the planet.
  2. Fairness: This farming method should be built on fair trade and just relationships
  3. Ecology: Organic farming should sustain the natural ecological cycles and ecosystems.
  4. Care: Organic farming must be practiced with utmost responsibility and care for the environment.

Types of Organic Farming

There are two types of organic farming:

  1. Integrated Organic Farming: Integrated organic farming is a method that includes integrating pest and nutrient management. This is done in order to fulfill ecological and economic demands. In this method, the use of renewable energy, smart use of organic waste, and many natural tactics are implemented. Crops grown using this method are slightly less expensive than pure organic farming.
  2. Pure Organic Farming: This method is the purest and most natural method of growing crops. No artificial fertilizers or chemicals are used. Instead, cow manure, organic waste, vermicompost, and other compost originating from natural substances are used. Pure organic farming not only boosts yield quality but significantly improves soil fertility. Additionally, this method has a significantly lower impact on the environment.

The 5 Methods of Organic Farming

Crop Rotation: This is one of the most practical and oldest farming methods known to humankind. Crop rotation goes back thousands of years and has several benefits. This method involves growing different crops across different seasons. Instead of growing a single crop all year long, farmers grow a variety of crops depending upon the season. This reduces stress on the land, maintains fertility, and prevents the formation of resilient pests.

Soil Management: This is one of the most important parts of organic farming. After some time, the fertility of the soil decreases. Therefore, to replenish the soil nutrients, natural fertilizers like straw, bone meal or manure are added. This improves soil quality and thus, the yield.

Weed Management: Weed is the unwanted growth of plants across the field. To prevent this, farmers practice mulching and mowing. In mulching, a layer of straw, compost, or plant residue is added above the soil. This prevents weed outgrowth. The second method to prevent weed outgrowth is simply cutting or mowing excess weed.

Compost: Providing adequate nutrients to plants is crucial in organic farming. Natural ingredients such as organic compost, cow manure, vermicompost, etc. are used. Farmers are able to maintain optimum plant health all year round without the use of artificial fertilizers.

Pest Management: Pest management is as much a nuisance in organic farming. However, to cull pests, chemical-laden pesticides are not used. Instead, herbicides and pesticides with the least amount of chemicals are utilized. This not only prevents pest outbreaks but also safeguards plant health.

The Numerous Benefits of Organic Farming

Gauging the benefits of organic farming is fairly simple. As one can analyze from the method of cultivation, organic farming utilizes only natural and chemical-free ingredients.

This means, that product quality is significantly higher and does not carry any side effects. You might’ve noticed this effect in person. Organically grown fruits generally taste far better than conventional ones.

Since harmful chemicals are not utilized, the environment is protected against runoffs and heavy pollutants. Organic farming is also responsible for generating large-scale employments and higher profits.

Creating an Organic Farming Business Plan

A business plan is essential to understand the financial viability and clarity of your venture. When any business idea is structured as a plan, it becomes easier to identify the success rate, drawbacks, and areas of improvement in the plan. Additionally, a business plan will help you secure the necessary investments. Therefore, to start a successful organic farming business, it is important to create a business plan.

Market Research

Conducting thorough market research is the first step in your business plan. While organic farming is becoming widely popular, some industries have a higher demand for organic products. For example, restaurants, food & beverage companies, global supermarket chains, etc. have a significantly higher demand for organic products compared to the common consumer.

Therefore, segmenting and identifying your target buyers is very important. This will ultimately decide your strategy, the crops you’ll grow, and how you will market them.

The next important step in your market research is your competitor analysis. You need to analyze the type of crops your competitors are growing and what is their pricing and marketing model.

Using this data you can learn from their strengths and weaknesses and incorporate that into your own plan.

Take some time to physically survey the industry. Visit stakeholders of such companies and businesses and understand their demands. Familiarizing yourself with what your clients want is a big factor.

Once you’ve done your research, conduct a SWOT analysis of your business to identify its strengths and weaknesses, and areas of improvement. This will give you something to work upon.

Create Strong Business Goals

Business goals and objectives are what a potential investor will go through even before your market research. Therefore, having your business goals well defined could be a deciding factor.

Start with a mission statement. What is it that you want to achieve with this business? Do you want to bring an exotic food product? Do you want to capitalize on the FMCG industry? Basically, clearly define your Unique Selling Point (USP) and how you will achieve your goals.

Give a short summary of your business: what it is, how it will run, where it will be located, etc. This is a good place to flaunt any professional angle you may have. For example, if you’ve taken a certificate course in organic farming, mention how that will help you. Or if you have hired a renowned consultancy agency, that could also make for great professional support.

Break down how your farm will operate, right from the setup to the initial months. Outline the payment structure of the funds and your long-term goals. The idea is to give the reader a deep but concise insight into your plan.

Financial Planning

Financial planning is the backbone of your business plan. Smart financial planning can help your organic farming business with a headstart. The goal of this section is to establish the financial viability of your business. Begin by defining your startup costs. This is where you break down in detail the cost involved for the equipment, land, machinery, workforce, utility rent, marketing budget, etc.

Next, work on your sales numbers. This is where you can put that initial market research and connections to use. If you’ve presold your product, you will have potential clients in the works.

Either way, you need to mention the sales forecast for the next 1-2 years. Define the product demand within your target demographic and based on that calculate your pricing. This will eventually give you your expected profit statement for the stipulated time.

Marketing Mix

Lastly, this step should not be overlooked. Marketing and branding your product can make a world of difference. This is where you need to identify what kind of marketing plan works the best for your business.

Organic products are easier to market provided you know your USP. Single out a few things that make your business stand out from the rest. This will help you create a solid marketing pitch in accordance with your target audience.

Additionally, pen down your sales strategy. Whether to choose online or offline targeting should be decided. You can even opt for a hybrid marketing platform.

Participating in seminars, food festivals, and exhibitions can help your business gain exposure and eventually create a customer base.

You can refer to this business plan template for more information.

Limitations of Organic Farming

While the benefits outnumber the disadvantages, they shouldn’t be ignored. There are some limitations to organic farming:

Low Output: Conventional agriculture uses growth regulators to boost growth and increase production. However, organic farming relies on the natural process of growth. Therefore, the crop output will take time and will be less compared to regular farming.

Higher Price: Due to the time-consuming nature of organic production, the products are priced higher. Therefore, not all consumers would be willing to buy organic products. This problem can be overcome with proper audience segmentation.

Shelf Life: Organic products are pure and untreated with chemicals. This shortens their shelf life. This can be a problem if not managed.

Successful Organic Farms in India

There are several success stories that have decorated the organic farming industry in India.

Back2basics is an ingenious organic farm startup in Bangalore. Started by S Madhubhushan in 2015, the organic farm chain spans over 200 acres in Bangalore.

The company produces over 90 types of high-quality seasonal fruits and vegetables. These seasonal crops are even exported to other parts of the world!

Growing Greens is another startup that shines bright. Founded by former Infosys employees, the small terrace farm was started in 2012. Now the farm has expanded to over 4 acres of land.

The farm produces several different varieties of organic micro-greens. This shows that you don’t always have to start big!

Government Schemes for Organic Farming

Agriculture is a highly subsidized and government-supported field in India. Interest rates for agricultural loans are lower and the government has several schemes that promote agriculture.

Paramparagat Krishi Vikas Yojana (PKVY) is a scheme for organic farming in India. This scheme promotes organic farming business and sustainable agriculture. “Under this scheme, farmers are provided assistance of Rs 50,000 per hectare per 3 years, out of which 62% i.e. Rs 31,000 is given as an incentive to the farmer for inputs of organic farming

Rashtriya Krishi Vikas Yojana (RKVY): This scheme is another incentive-based scheme for organic farming which was launched in 2007. This scheme provides assistance to organic farmers from the State. This is done in order to encourage the use of organic farming in the country.

National Program for Organic Production (NPOP): This is one of the oldest (in India) and largest organic certification schemes in the world. Launched in 2001, the scheme aims to produce large quantities of high-quality foods, and maintain long-term soil fertility.

Resources on Organic Farming

Given below are some resources to help you learn more about the business of organic farming.

Books

  1. The One-Straw Revolution: An Introduction to Natural Farming by Masanobu Fukuoka. (Link)
  2. Practical Permaculture by Jessie Blook and Dave Boehnlein (Link)
  3. No-Till Intensive Vegetable Culture by Bryan O’Hara (Link)

Courses

There are several courses available on organic farming in India. Since this is a highly specialized area of farming, it is better to do a certificate or degree course to gain the maximum benefit.

You can enroll for a diploma course in organics, or do a bachelor’s or master’s degree. However, here is a helpful resource for all the short-duration courses related to organic farming in India.

Conclusion

Organic farming is the future of farming. Awareness surrounding organic products is increasing. With the population explosion, the market size is also rapidly doubling. Therefore, organic farming can become a highly profitable and long-term business asset if done right.

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