Organic fertilizer is a mixture of decayed organic matter. It is usually made by gathering plant material, such as leaves, grass clippings, and vegetable peels and animal waste into a pile or bin and letting it decompose with the help of earthworms, fungi or bacteria.
Organic compost contains essential macro and micro nutrients for plants often absent in synthetic fertilizers. Compost releases nutrients slowly over the cultivation period, which helps plants soak those nutrients better and make a healthy food in our plates.
The demand for organic fertilizers is rising in India as well as internationally due to increasing awareness of organic farming and sustainable agricultural practices. The market size for organic fertilizers in India stands at 2294 lakh metric tonnes as of FY 2013-14[1]. The major demand drivers of organic fertilizers are horticulture farmers, farmers of export oriented crops, farmers of crops such as ginger and turmeric.
What is the business opportunity?
A lot of organic waste being generated by the urban and rural areas such as fruits and vegetable waste, city house hold organic waste, farm yard manure (FYM), agri waste etc that can be a very good source of plant nutrient. But many of these inputs cannot be used directly in the farm lands and require some degree of processing. The idea is to collect as much freely available such waste as possible, sometimes even get paid as eventual waste management service provider, convert it into compost by various process of composting, palletise (optional), pack and sell it as organic fertilizer.
How to get started with manufacturing of organic compost?
One needs to have a detailed understanding of the processes involved in manufacturing, marketing and selling the compost.
It’s not a very capital intensive business and hence capital requirements are not very large. One does not need many plants and equipment’s except for pits /wilgrows to dump the waste, shredder and a palletising machine. The main cost of establishing will be land and labour. A unit of capacity 20-30 tonnes per day can be set up within a budget of INR 50 Lakhs.
Government incentives
There are a number of incentives available to manufacturers and farmers. It can broadly be categorized as incentives for farmers and incentives for entrepreneurs as given below.
Farmers are offered organic fertilizers at a subsidized cost
Entrepreneurs are offered incentives to set up manufacturing facilities/processing facilities. For example, under National Program for organic farming, manufacturers of compost from vegetable waste are offered a subsidy of 33% of the cost of project, subject to a ceiling of Rs. 33 lakh.
Challenges
The market is still in its formative stage and awareness of the benefits of organic compost has just begun to spread across farmers and farmer groups.
Reliable Data on organic input market is not present.
Organic system of farming is far more expensive than doing farming using chemical fertilisers
The economics depend on the waste procurement cost, so those have to be tightly controlled
