In an effort to expand its presence in the agriculture sector, tractor and utility vehicle market leader Mahindra & Mahindra (M&M) is exploring ways to get into the Rs 1,500-crore organic farming market.
The company has appointed a leading market research company in India to carry out an in-depth research on the segment, according to sources.
The company has been operating in the agriculture space through its subsidiary company, Mahindra Shubhlabh Services (where it is engaged in procuring grapes), in the Nashik belt of Maharashtra. The company has the option of foraying into the organic food space through Mahindra Shubhlabh Services.
M&M had recently carried out a high court-approved restructuring exercise with one of its agri-focussed subsidiaries, allowing it to segregate operations. The company merged the non-fruit business of Mahindra Shubhlabh Services into itself, leaving the subsidiary to exclusively focus on the fruit business.
The agri-inputs arm, with products such as seed, seed potato and crop care products, which is now demerged into M&M, will be allowed to focus on increasing its offerings to the Indian farmer, according to the company's last annual report.
A M&M spokesperson said, "We have been looking at several opportunities in the agri vertical space and organic farming is one of them. However, there is nothing specific to report on the progress in this space."
Organic products are grown under a system of agriculture without the use of chemical fertilisers and pesticides, with an environmentally and socially responsible approach.
Several small enterprises are engaged in organic farming with products making their way through the modern retail outlets in India. Most of these products are priced at a premium, as compared to other non-organic foods.
This is a method of farming which works at grassroot level, preserving the reproductive and regenerative capacity of the soil, plant nutrition and soil management. Products through organic farming are nutritious, with higher count of vitamins minerals and fibers, offering better resistance to diseases.
Though the demand for organic food is growing multi-fold in India, the country ranks 33rd in terms of total land under organic cultivation and 88th position for agriculture land under organic crops to total farming area. The cultivated land under certification is around 4.43 million Ha ( 2010-11), according to government data.
Last year, the nation produced around 3.88 million mt of certified organic products, which includes all varieties of food products namely basmati rice, pulses, honey, tea, spices, coffee, oil seeds, fruits, processed food, cereals and herbal medicines. The production is also extended to organic cotton fiber, garments, cosmetics, functional food products and body care products.
In addition to the domestic market, several companies collectively exported $157 million (about Rs 785 crore) worth of organic products marking a growth of 33 per cent over 2009-10. Products were exported to EU, the US, Australia, Canada, Japan, Switzerland, South Africa and Middle East.
The government has actively promoted the organic farming by setting up the National Programme on Organic Farming, which now has a properly defined promotion strategy, providing necessary support for area expansion under certified organic farming.