BUSINESS PLAN LINK

https://www.scribd.com/doc/28223399/Business-Plan-Organic-Farm

What is organic farming?

Organic farming system in India is not new and is being followed from ancient time. It
is a method of farming system which primarily aimed at cultivating the land and raising
crops in such a way, as to keep the soil alive and in good health by use of 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.

As per the definition of the United States Department of Agriculture (USDA) study team
on organic farming organic farming is a system which 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.

FAO suggested that Organic agriculture is a unique production management system

which promotes and enhances agro-ecosystem health, including biodiversity,
biological cycles and soil biological activity, and this is accomplished by using on-farm
agronomic, biological and mechanical methods in exclusion of all synthetic off-farm
inputs.
Need of organic farming

With the increase in population our compulsion would be not only to stabilize
agricultural production but to increase it further in sustainable manner. The scientists
have realized that the Green Revolution with high input use has reached a plateau
and is now sustained with diminishing return of falling dividends. Thus, a natural
balance needs to be maintained at all cost for existence of life and property. The
obvious choice for that would be more relevant in the present era, when these
agrochemicals which are produced from fossil fuel and are not renewable and are
diminishing in availability. It may also cost heavily on our foreign exchange in future.

The key characteristics of organic farming include

Protecting the long term fertility of soils by maintaining organic matter levels,
encouraging soil biological activity, and careful mechanical intervention
Providing crop nutrients indirectly using relatively insoluble nutrient sources
which are made available to the plant by the action of soil micro-organisms
Nitrogen self-sufficiency through the use of legumes and biological nitrogen
fixation, as well as effective recycling of organic materials including crop
residues and livestock manures
 Weed, disease and pest control relying primarily on crop rotations, natural
predators, diversity, organic manuring, resistant varieties and limited
(preferably minimal) thermal, biological and chemical intervention
The extensive management of livestock, paying full regard to their evolutionary
adaptations, behavioural needs and animal welfare issues with respect to
nutrition, housing, health, breeding and rearing
Careful attention to the impact of the farming system on the wider environment
and the conservation of wildlife and natural habitats

Organic Food: The Next Big Investment Opportunity in Indian Agriculture

Editors Note: Hemendra Mathur is managing director for SEAF India Investment Advisors,
the SME-focused venture capital investment firm, and has been actively investing in food and
agribusiness over the last five years. During this time, he has invested in eight companies
ranging from food ingredients, animal feed and fertilizer businesses to seeds and spices
companies. Hes also invested in Indias organic food sector, which he believes is ripe for
further investment. Mathur has a bachelors degree in agricultural engineering and is
currently leading the $150 million fundraising efforts for SEAF Indias second agribusiness
fund. Want to write a guest commentary? Email Media@AgFunderNews.com

In many ways, organic food is still a niche concept in India. Current domestic organic food
sales are estimated at around $200 million annually and growing at a compounded rate of 30
percent to 40 percent each year.

Demand is growing as incidences of food adulteration are repeatedly reported on in global

media and consumer consciousness of natural, healthy and safe foods rises. New food safety
legislation is also working towards improving the safety standards of food and, at the same
time, consumers are increasingly willing to pay for organic foods as their disposable incomes
rise.

The number of food categories sold as organic has grown to more than 200. Starting with
organic tea and spices, its grown to organic flour, breakfast cereals, ghee (clarified butter),
fruits, vegetables, milk, honey and many more.

Another key factor behind the recent pickup in growth is e-commerce which provides organic
companies with an appealing route to market. There are more than 25 e-commerce platforms
selling organic foods online in India now, plus generalist grocery sites like Bigbasket and
Peppertap are selling organic categories. In addition, there are specialised organic retailers
like ISayOrganic, JoyByNature, ekgaon, and OrganicShop.

So how is the supply chain shaping up to cater to the demand?

It takes about three years to convert a field from conventional to organic. An organic food
company, which obtains the organic certification, usually works with a group of farmers
usually 400-500 known as its Internal Control System (ICS). The company provides those
farmers with support in terms of inputs and education in organic growing practices. It also
assures the buyback of the crop throughout the conversion process.

Companies also incentivize farmers by engaging them in growing more crops that can be sold
as organic, instead of having single crop operations.

Hemendra Mathur

A very important aspect of supply chain management is certification. Different importing

countries have different sets of approved certifications so food companies need to set a
standard of organic farming and choose an appropriate agency for certification. These
agencies include the USDA, EU, Control Union and OU Kosher.

To help increase parity between India and its export markets, the Government has
implemented the National Programme for Organic Production (NPOP). It has also launched
PGS-India (Participatory Guarantee System of India) which is a quality assurance initiative
that is locally relevant, emphasizes the participation of stakeholders including producers
and consumers and operates outside the frame of third-party organic certification.

Private equity in organic foods

The organic foods segment has seen many deals in the recent past. Prominent deals include
SEAF India Agribusiness Fund and Sarona Capitals investment in Khyati Foods; Ventureast
and Peepul Capitals investment in 24 Letter Mantra; Nexus Capitals investment in Suminter
India Organics; Fabindias investment in Organic India; and SIDBI Samridhi Funds
investment in Natureland. The typical size of the deal has been $3 million to $10 million and
typical turnover of the companies at the time of investment has been in the range of $5
million to $10 million. We are also witnessing venture funding in start-ups and early stage
organic companies increase.

Why are these investors bullish on investing in Indian organic food? First and foremost, if we
look at the entire food basket and plot each food category on a graph with the scale of
opportunity and margin opportunity on two axes, organic foods is one of the few categories
that will fall into the high scale, high margin opportunity bracket.

The high scale is driven by the fact that organic food consumption is not even 0.1 percent of
Indias $300 billion annual food consumption. Likewise, Indias share in the $100 billion
global organic food market is less than 0.2 percent. As discussed above, the scale of the
opportunity is also driven by the increasing variety of organic foods hitting the market and
the emergence of e-commerce as a channel in which to sell the product.

The high margin opportunity is driven by two things: typically there is a 15 percent to 50
percent premium on organic products, which in a stable organic business can translate to 10-
25 percent EBITDA margins. Margins are also driven by the immense branding opportunities
in organic products. Indian commodities like pulses, staples, and vegetables are long overdue
a re-brand so are an example of food products which could benefit from organic branding.

Another reason for investor interest is that the typical organic supply chain is more efficient
compared to conventional agribusiness as there are fewer intermediaries and there is better
control on quality, cost and traceability of the product.

Last but not the least, the exit opportunity which is of key concern for most investors is
likely to come from players in Europe, Japan and the US which are searching for new organic
markets to tap into.

In a nutshell, there is a good chance that Indias organic opportunity could scale from $500
million to about $2 billion approx $1 billion catering to the domestic market and $1 billion
for export markets by 2020.

Roughly $300 million of investment is needed to reach these levels, and about $100 million
to $150 million of this is likely to be in the form of private equity over the next five years,
across 10 15 deals.
And this funding is needed to expand the organic farmer base, get certification, and for the
distribution and branding of organic products. This presents a unique opportunity to investors
to invest and earn top-quartile internal rates of return over the next five to 10 years.

It is an exciting time for the organic foods industry and I believe all stakeholders including
consumers, retailers, companies, farmers, investors, certification agencies, importers and the
government will benefit with the evolution of the industry.

HOW TO START AN ORGANIC FARM GREENHOUSE PROJECT IN INDIA

Muvsi Research Desk

Are you planning to start an organic farm greenhouse project? If YES, then read on to
explore more of this project to take an informed decision. An organic farm greenhouse
project business has a high potential to grow and succeed because steadily the demand for
organically grown farm products has grown.

With the increase in awareness of the multiple health risks of foods grown with
chemical,more and more people are turning away from food products are grown with
fertilizers and other chemicals towards organically grown food.
Organic farming was normally done on small, family-run farms. But since the demand for
organically grown food products is now increasing, people are investing in land for organic
farming.
Organic farming is friendlier to the environment and is more sustainable compared to newer
farming techniques. So, not only can make huge profits from organic farming, but you will
also help protect the environment and the planet as a whole.

So, if you have spent years growing various plants and produce in your family garden, you
can turn your experience into a lucrative business. No formal qualifications are required and
you can get started even on a small budget. Here are the steps involved in starting a
successful organic farm and greenhouse:

HOW TO START AN ORGANIC FARM GREENHOUSE PROJECT

1. Learn more about the business

Your first step towards starting an organic farm and

greenhouse project is to find out more about the business to have a better understanding of
how things work. Running a small farm in your yard is different from running a bigger
organic farm. So, you need to understand the extra input required to farm organically on a
commercial scale.
A good way to start is to contact the owner or manager of an established organic farm. Tell
them about your intent to start your own organic farm and greenhouse business. Then ask
important questions about the business, starting from questions on how to get started to those
on how to manage the business successfully after launch.

Learning more about the business will help you understand and avoid the pitfalls and
challenges you are likely to encounter as you start your own organic farm and greenhouse
business.

Related: Organic Farming Subsidy For Indian Entrepreneurs

2. Determine the type of crops to grow
Chances are that you dont have enough land to grow a wide range of crops. Even if you do,
you still need to specify the type of crops you will grow on your farm. These could be
flowers, vegetables, foods crops, herbs, or other plants.
Dont just choose any crop or produce out of personal preference. Conduct market research to
learn what produce is popular in your area. That is, figure out what farm produce sells well.
You dont want to invest your time, energy, and effort in growing produce that nobody in
your locality wants to buy.

Find out what other farmers in your locality are growing on their farms. This will give you an
idea of what consumers in your locality are buying. Defining which specific farm produce
you will grow will also help you better prepare your land for it.

3. Write a business plan

Important details about your organic farming business will go into your business plan. These
include your mission and objectives, your target market, your competition and unique selling
proposition, your management plan, and your financial plan.
A business plan may not necessarily guarantee the success of your organic farm and
greenhouse business, but it will significantly boost its chances of success. Your business plan
will serve as a step-by-step guide to setting up your business successfully and running it
effectively afterwards. It will also help you understand if theres really a market in your
locality for organic food products.

You can find lots of helpful resources online that explain how to write a business plan. You
can also search for free business plan templates that you can modify easily.

4. Inspect your farm and resources

Chances are that you already have a piece of land to use for your organic farming business.
But bear in mind that you need to have quality soil and water because these are the basic
things needed by plants to grow well.

Check the type of soil on your farm and find out whether it is suitable for growing your
chosen types of produce. Also, check the status of the water available to ensure its not
contaminated and does not contain chemicals that could harm your plants.
You also need to check your farm for sunlight penetration. Every inch of your land must get
enough sunlight, as this is essential for proper plant growth.
5. Start planting
Having taken the previous steps, prepare your land and start planting. You will most likely
need to hire some people to work with you while preparing the land and planting your
produce.
 SBI LOAN
CAPITAL INVESTMENT SUBSIDY SCHEME FOR COMMERCIAL PRODUCTION
UNITS OF ORGANIC INPUTS UNDER NATIONAL PROJECT ON ORGANIC
FARMING
Purpose
This scheme is to promote organic farming in the country on a large scale. Under this
scheme manufacturing of organic inputs such as bio-fertilizers, fruit and vegetable
waste compost are considered.
Who are eligible for the loan
Individuals, group of farmers/growers, proprietary and partnership firms, cooperatives,
fertiliser industry, seed industry, Companies, Corporations, NGOs are eligible New as
well as existing units (for expansion / renovation) engaged in the production are
eligible under the scheme.
Loan amount
For Biofertilizers -Biopesticides Production Unit
Owners Contribution 25-33%
Subsidy from Government of India subject to the maximum ceiling 25%
Bank Loan 42-50%
For Fruits and Vegetable Market Waste Compost Unit
Owners contribution 25-33%
Subsidy from Government of India subject to the maximum ceiling 33%
Bank loan 34-42%
Cost of the project depends on the location, capacity, technology, invoice prices etc
SECURITY
Security will be as per norms prescribed from time to time.
How to repay the loan?
Repayable in 10 years, with a grace period of 2 years.
How to apply for this loan?
You may contact our nearest branch or even talk to the marketing officers visiting your
village
Small farms can be profitable

Rupees 10 lakh every year, from one-hectare (ha) land -- an unbelievable

proposition for all those bought up on the much-propaga ted idea that small
farmlands are unprofitable. But Ramesh Chander Dagar has made this proposition
into a reality. A visit to his farmland in Akbarpur Barota village, Sonipat district,
Haryana can be quite an eye opener. The farmland resembles the laboratory of any
agricultural scientist. Says Dagar, "I am a simple farmer, who has studied only up to
the 10th standard. I used to keep hearing claims of the government that small land
holdings are not viable for agriculture. And that set me thinking. About four years
back, I set aside one ha from my agricultural land and started experimenting on it.
Today I am confident that this land can give a minimum income of Rs 10 lakh per
annum."

Dagar follows what is known as integrated organic farming. "Such farming does not
merely mean not using pesticides," he says. "It also comprises many other practices
such as bee keeping, dairy management, biogas production, water harvesting and
composting. A good combination of all these practices is sure to make organic
farming successful, both ecologically and financially," adds Dagar.

Today he is busy spreading the message of integrated organic farming in his home
state. With support of other farmers, he has set up the Haryana Kisan Welfare Club,
which has branches in all districts in the state. Close to 5,000 farmers are active
members of this club and they are fast spreading the word around. In states such as
Rajasthan, Madhya Pradesh and Gujarat there are now efforts at replicating organic
farming clubs.
Learning by doing Dagar started farming with a mere 1.6 ha land in 1971; today he
owns close to 44 ha, all of which is completely under integrated organic farming. A
clear understanding of three factors -- the market demand, the natural resources
available and maintaining the product quality -- helped him succeed. Most organic
farmers find it difficult to get good markets for their produce, but not Dagar. "Before
sowing a new crop, I first do a market survey and understand the demand. It is only
when I am 60 per cent sure of getting returns, do I take 40 per cent risk," he says.
And in most cases it works to his good.

Almost all seasonal vegetables, fruits, paddy, wheat, mushroom and flowers are
grown organically in Dagar's farm. He has also started growing exotic vegetables
and fruits, such as lettuce, baby corn and strawberry, for export. This innovative
farmer has set aside one ha for research purposes (Dagar's research lab). "Through
this land, I want to prove wrong all those who doubt the profitability of organic
farming. With a bit of hard work and understanding of nature, any farmer can earn a
minimum of Rs 10 lakh per annum. I do not understand why everyone is running
after a job?" he asks.
Dagar's research lab Dagar's lab oratory is a visual extravaganza. One can witness
composting taking place at one end, flowers growing at the other end, a farm pond
with fishes, and a biogas plant. And all these elements in his farm are interlinked
through various agrocycles and together generate an annual income of Rs 13-14
lakh (see table: Farm gold). Moreover, the farm saves precious energy by using
solar power.

Farm gold
Source of income Annual income (Rs in lakh)
Vermicompost 5
Dairy 1
Mushroom 3
Honey 4
Fishery 0.3
Total 13.3
Source: Ramesh Chander Dagar 2004, Akbarpur Barota village, Sonipat, Haryana, Mar
personal
communication
Let us look at the cycle of vermicomposting followed in Dagar's farm.
"Almost all Indian farmers burn the left over of paddy crop, locally known
as pawal. Actually this is an excellent raw material for vermicompost
(compost made using earthworms). Through its use, I produce 300
tonnes of vermicompost, annually," says Dagar. "A part of that is
consumed in the fields and rest is sold at a rate of Rs 3 per kilogramme
(kg)," he adds.

Dagar claims vermicompost is the best soil-nutrient for not only does it
help the soil retain moisture but also reduces water consumption by
almost 25 per cent. He provides 2 kg of earthworms free of cost to
farmers, who pledge to go in for organic farming He also uses thepawal to
grow mushroom, which fetch him close to Rs 3 lakh per annum. Apart
from vermicompost, Dagar also produces the normal compost; the total
annual generation of manure from his farm is about 600 tonnes. Dagar
aims to increase this to 1,000 tonnes by the end of this year.

Another agrocycle at the farm is dairy, biogas and composting. There are
about 50 buffaloes in Dagar's dairy. Their gobar (manure) is fed into an
85 cubic metres capacity biogas plant. Setting up the plant cost him
about Rs 1 lakh. The gas is then used in his personal kitchen, and also
used to run the fodder-cutting machine. The 'waste' from the plant goes
to the composting pits.
Dagar's farm pond is the site of yet another innovative cycle. Most
farmers avoid having such a pond since that would eat away precious
agricultural land. Says Dagar, "We tell farmers to go in for water
harvesting, but do not make sure it makes economic sense to them. This
predicament set me thinking. And I decided to go in for water harvesting,
which also gives immediate benefits." His farm pond collects rainwater,
which is used in the dairy to wash buffaloes. "I have also introduced fish
into the pond; that fetches me about Rs 30,000 per annum. So, I am not
only recharging groundwater, but also making money out of it," explains
the organic farmer.

The most important element of Dagar's farm practice is bee keeping; it

increases his crop output by 10-30 per cent (bees are very effective in
natural pollination). Also the honey produced has great demand . Dagar
has about 150 bee boxes; each generates about 35-40 kg of honey. His
total annual income from honey is Rs 4 lakh. "Bee keeping is a very
profitable business that can be undertaken by even a landless farmer.
And one farmer can benefit an area of about 2-3 km, the normal area
covered by one bee," says Dagar.

Dagar has also set up solar panels at a total cost of Rs 4 lakh; he spent
Rs 67,000 on it and the rest came from a government subsidy. At his
farm, solar power is used to run the pump that draws groundwater for
irrigation. The surplus power is used to recharge batteries of the
household inverter. The farmland has a green house spread on an area of
500 square metre, which is used to grow expensive crops that fetch him
Rs 1 lakh per annum.
Spreading the word
Today Dagar is busy spreading the word of integrated farming throughout
the country. Farmers from Haryana are playing a lead role in the mission.
The Haryana Kisan Welfare Club gives hands-on training on organic farming.
Since most farmers cannot come to the district clubs, workshops are
organised at village level. In February this year, a gathering of about 4,000
farmers was organised at Sonipat. Apart from farmers, experts, agricultural
scientists and bureaucrats were invited. But Dagar concedes that motivating
government machinery towards integrating organic farming is a big task. "Jo
sarak sarak kar chale who sarkar (The government is something that crawls
along slowly)," he remarks casually.

But Dagar is not waiting for government help. He has made organic farming
his mission."I keep experimenting with various crops in my field. For
instance, right now I am trying to grow a Chinese plant, which is 300 times
sweeter than sugar but is cholesterol free. If I am successful in my venture,
I will recommend it to others. Since the plant has medicinal value, it has a
huge international market," he says. Way back in 1987, Dagar had
introduced baby corn in Sonipat on a mere 0.40 ha plot. Today, almost 485
ha land in Sonipat is under baby corn cultivation.

Future challenges
With success come new challenges. The cost of organic food is priced higher
than food grown with the use of chemicals. Dagar has tried to turn this
adversity to his advantage. He makes use of good marketing tactics to
exploit the high premium on organic food. He has also tied up with voluntary
organisations that market organic food. To be doubly sure, he himself
conducts market research to ascertain the demand for various organic
foods.

Another, problem for organic farmers like Dagar is that India lacks a
streamlined procedure for certifying organic foods. Also one kind of
certificate is not valid for all countries. "Agricultural and Processed Food
Products Export Development Authority is the nodal agency which addresses
the issue of certification internationally. It has about 10 companies
registered under it, of which only one is an Indian firm. A day's visit of a
company official costs about Rs 15,000. Which Indian farmer has so much
money?" asks Dagar.

The Haryana Kisan Welfare Club has taken up this issue with the
government, but without success. Finally it approached a Gurgaon-based
private company for certification. The company should start work within a
month. The club is following group certification scheme where rich farmers
will subsidise the certification process of the poor ones. But it is high time,
the Indian government facilitates the procedure and supports farmers like
Dagar.