Organic Farming Market: Overview
The market size for organic farming was USD 102.1 billion in 2021, and it is projected to grow at a CAGR of 10.3 percent during the forecast period. The organic farming market is attributed to the sales of products by farms that produce them in organic ways. Organic farming is an alternative for crops and livestock production that doesn't utilize artificial fertilizers, pesticides, genetically modified organisms and antibiotics to grow the production. This has various benefits to the environment and the individuals utilizing these yields.
Environmental gain from organic farming is anticipated to drive the organic farming market. Organic farming is highly beneficial to the environment as it does not utilize any chemical fertilizers or pesticides that cause soil and groundwater contamination. Also, the utilization of non-renewable resources required for developing such artificial fertilizers is less. Organic farming conserves the biodiversity of the soil.
Changing dietary patterns towards organic food products propels the demand for organic fertilizers in organic farming. According to reports issued by the U.S. Food and Drug Administration, 6 in 10 U.S. citizens believe that organic foods are preferable for their health. Also, as per the U.S Department of Agriculture, 4% of total food sales in the U.S. in 2016 were from organic products. Organic retail sales in Europe stood at US$ 30.85 billion in 2014, as approximately by the International Federation of Organic Agriculture Movements.
As per the Organic Trade Association 2019 report, if every U.S. farmer shifts to organic farming annually, nearly 500 million pounds of residual and toxic pesticides can be detached from getting into the atmosphere. The utilization of organic products also has a beneficial impact on the health of organic growers, assistants, their families and customers, as they are less revealed to harmful chemicals. Therefore environmental benefits of organic farming coupled with the health benefits of organic products are growing the demand for organic food (food produced through organic farming), driving the market for organic farming during the forecast period.
Organic Farming Market: COVID-19 Impact
The COVID-19 pandemic has had a positive impact on the sales of organic food products globally. Global organic farming had to witness a substantial decrease in the initial stages of the lockdown as the supply chain got critically disrupted. Nevertheless, people soon began making healthier choices, which led to a paradigm move in the consumption of food globally and enhanced the demand for organic food products. However, an important factor that must be considered the increase in agriculture costs related to organic food products. The growing government initiatives are pushing the demand for organic food products, which is directly impacting the growth of the global organic farming market. As a result, the global organic farming market is experiencing a hike in demand after the initial phases of the pandemic. As people become aware of the benefits of organic food products, they are moving away from synthetically produced products. Considering the pandemic, it has become imperative for countries to take climate change seriously as the next major calamity. Due to climate change, various governments in developed countries focus on developing organic farming systems. The countries have started thinking of sustainable measures for manufacturing goods that can assist the economy to grow while decreasing emissions. Organic and plant-based farming is expected to grow the demand for organic food products, resulting in better growth prospects for the global organic farming market.
Organic Farming Market: Drivers
Various Schemes by Government to Drive Market Growth
The launch of several schemes by the governments of various countries around the globe promotes organic farming. Due to the health and environmental benefits of organic products, the governments are promoting organic farming activities by introducing several schemes and encouraging the population to shift towards organic products. For instance, the government of India is encouraging organic farming under its two dedicated schemes, Paramparagat Krishi Vikas Yojana (PKVY) and Mission Organic Value Chain Development for North Eastern Region (MOVCDNER). Other schemes for promoting organic farming are Rashtriya Krishi Vikas Yojana (RKVY), Integrated Development of Horticulture (MIDH), and Network Project for Organic Farming. The global introduction of the same schemes will likely provide huge avenues for the growth of organic vegetable farming during the forecast period.
Rising Demand for Organic Food Products Favoring Growth of Global Market
As per the Food and Agriculture Organization, the area earmarked for organic cultivation expanded from 15 million hectares in 2000 to 71.5 million hectares in the year 2018. This indicates the growth in the utilization of organic goods over the past few years. In 2018, India had 1.1 million farmers focused on organic farming out of the 2.8 million farmers in the globe, making up 39% of the global market. Also, it suggests that the demand for organic products overpowers the sales of organic farming, therefore expanding the organic farming market to grow. The increasing emphasis on environmentally friendly products is also increasing the demand for organic products, thereby augmenting the growth of the global organic farming market.
Organic Farming Market: Restraints
Less Productivity of Organic Food to Hamper Market Growth
Less productivity of organic food is anticipated to hinder the organic farming market. According to a USDA study, organic farming yield is crucially less than conventional farming. So, the latter is favored over organic farming to enhance food security because organic farming is anticipated to cause scarcity due to lower yield. It doesn't meet the requirement of a growing population and thereby doesn't meet the definition of food security by the Food and Agriculture Organization (FAO) of the United Nations. Therefore, the less productivity of organic farming is anticipated to hinder the market of organic farming.
Organic Farming Market: Segment Overview
Pure Organic Farming Dominate Market due to Increase in leverages Organic Manures and Bio Pesticides for Crop Management
Pure organic farming accounted for the largest share of the global organic farming market during the forecast period. Pure organic type farming purchases organic manures and biopesticides for crop management. The products utilized for crop management under such farming types are free from any chemicals. A compound supply chain process adds to the cost of organic farming, which makes it a costly affair. However, the natural way of manufacturing the food while not compromising the end-product quality adds to the consumers' confidence in the product. As a result, the growing consumer preference for organic food products is driving the growth of the global organic farming market.
Increased Demand for Removal And De-Growth of Unwanted Plants, Weed Management Category Dominated Market
The weed management sub-segment registered the highest share in the global organic farming market during the forecast period. It is anticipated to maintain its dominance in the upcoming years as well. Weed management refers to the shifting and de-growth of unwanted plants germinating from organic plants. It implies cutting the unwanted crop away or mulching the plant's surface to secure the unwanted crop from growing back. Under the mulching method, the undesirable crop is cut away, and a plastic film is slid over the surface to secure the future growth of the crop. The technique has been witnessing growing adoption rates due to its convenience. Additionally, this farming technique allows a convenient management process, one of the key prevailing issues in organic farming. Since this farming technique provides a pivotal solution in enhancing crop production, it positively contributes to the growth of the global organic farming market.
Organic Farming Market: Regional Landscape
North America to Dominate Market due to Increasing Demand for Organic Food
North America is anticipated to hold a major market share in the global organic farming market, owing to the growing demand for organic food in the region. As per the U.S. Department of Agriculture (USDA) in 2016 National Agricultural Statistics Service (NASS), the farms in the U.S. manufactured and sold US$ 7.6 billion in organic commodities that are certified. Also, the Certified Organic Survey 2016 shows that organic farm sales were enhanced by up to 23% in 2016 compared to the previous year in the U.S.
The Asia Pacific was the fastest growing region and held the highest market share, owing to growing government initiatives in promoting organic farming by supplying subsidies on organic fertilizers. For instance, in 2013, the government of India promoted the production of organic vegetables, fruits, and crops through several schemes, including National Horticulture Mission (NHM), Horticulture Mission for North East and Himalayan States (HMNEH), Rashtriya Krishi Vikas Yojana (RKVY), and others. Under NHM, the government provides stimulation to the cultivators of organic products.
Global Organic Farming Market: Competitive Landscape
In December 2019, Young living essentials, a North American-based essential oil company, started a new partnership with Golden Einkorn Farm. Through this partnership, Golden Einkorn Farm provides its ancient einkorn grain to the young and helps its movement towards sustainability, thereby being environmentally responsible. Golden Einkorn Farm is a 600-acre France-based family farm that manufactures einkorn grain, uses rainwater for irrigation, organic matter as manure instead of artificial fertilizers, and uses solar energy and other sustainable methods with a point of zero wastage. Furthermore, in September 2021, Yara Suomi Oy acquired Ecolan Oy, a Finnish manufacturer of recycled fertilizers. This is Yara's first acquisition in the organic fertilizer segment and reflects its commitment to playing a huge role in organic farming and providing for the circular economy.
Few of the players in the Organic Farming Market include ZUWA Organic Farms Pvt Ltd, Bayer AG, Organic Farmers Co., AkzoNobel N.V., Dow Chemical Company, Indian Organic Farmers Producer Company (IOFPC), BASF SE, Nalco Holding Company, Picks Organic Farm, Solvay SA, Camson Bio Technologies Limited, Amalgamated Plantations Pvt Ltd., Bunge India Pvt. Ltd., Mcleod Russel India Ltd., Aero Farm Systems, Plenty AG, Agrilution Systems GmbH, among others.
Global Organic Farming Market is Segmented as Below:
By Farming Type
Key Elements Included In The Study: Global Organic Farming Market
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