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Switch to organic food may hike monthly expenses by Rs 1,500 per family

A joint study conducted by EY and Assocham pointed out that purchase of organic food is restricted to affluent customers due to the high cost

Press Trust of India  |  New Delhi 

Photo: Wikipedia Commons

Consumers may have to bear an additional expense of Rs 1,200-1,500 per month for a family if they want to switch to products, which are sold at high prices, the latest study said, while suggesting that the government should take steps to bring down the cost.

According to a joint study by and Ernst & Young LLP, the purchase of is restricted to affluent class of consumers due to the high cost.

The are costlier because of low volumes and high expenses involved in processing and inventory holding, packaging, logistics and distribution besides training of farmers, the study observed.

High certification charges and growing demand and lower supply - are key reasons for to have higher price mark-ups than conventional products, it added.

According to the study, there exist several challenges for all stakeholders involved at every stage of the value chain despite being promoted by both Centre, states and even private sector.

"...owing to gaps in the regulatory framework for in India, producers of are continually struggling to optimize the scale of their operations while maintaining profitability," it said.

Lack of standardised organic inputs and subsidy on organic inputs, supply chain issues, global competitiveness, absence of proper branding and packaging are other challenges being faced by the sector.

To bring down the cost of organic cultivation, the study suggested the government to discourage use of fertilisers and pesticides by incentivising and promoting use of bio-fertilizers and bio-pesticides.

The processors of on the other hand, face significant resistance in the form of lack of adequate post-harvest facilities.

"Thus several measures need to be taken in order to avoid contamination and cross-contamination of produce as infrastructural capabilities of the country often prove to be inadequate," the study said.

The study suggested the government to develop a public-private partnership model that aids the organic sector in reaching its full potential.

"A greater emphasis should be placed on the capacity building of stakeholders, easing access to finance, monitoring and evaluation (M&E) of all assets and processes as well as research and development (R&D) to help keep abreast with global progress in the sector," it added.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, July 02 2018. 16:23 IST