What is hydroponic farming, and how can it contribute to the pharma industry? Name a few companies that are active in this space and are adding value to the industry.
Hydroponics is a method of growing plants in a water-based, nutrient-rich solution. The roots are suspended in a purified water system that is enriched with nutrients. Instead of using soil, the root system is supported using an inert medium such as perlite, Rockwool, clay pellets, peat moss, or vermiculite.
Hydroponics allows the plants’ roots to come in direct contact with the nutrient solution while also having access to oxygen, essential for proper growth. Hydroponics caters to a host of challenges such as water and arable land shortage, global warming, overuse of harmful pesticides and fertilisers, among others. Few active players in this domain include Simply fresh in Hyderabad, GreenTokri Farms in Pune, Argos Greens in Khopoli, Madhavi farms in Bengaluru, HMAGreen Hydrofarms in Chennai, Srivardhan Biotech in Kolhapur and Nature Fit in Delhi-NCR.
What is the current market scenario of hydroponic farming in India as compared to the other parts of the world?
In 2019, the Indian Hydroponics market was estimated at 3100 Metric Tons (MT) and valued at Rs 35 crores. The market is expected to grow at a Compound Annual Growth Rate (CAGR) of about 26 per cent to reach 10,500 MT by 2023. With the increased commercial acceptance of hydroponic produce for exotic vegetables, demand is expected to pick up. However, the market is characterised by heavy competition from low-priced conventional farms supplying exotic vegetables. With the growing popularity of the technology, the competition has intensified, with over ten startups and large business groups entering the business over the last three-to-four years. The hydroponics market in India is still nascent compared to established segments in countries such as the US, western Europe, Singapore and China. However, due to the high untapped market potential, there is a fair playground available for the existing and new players.
What are the various challenges and opportunities for hydroponic companies when it comes to working for the pharma sector? How are these taken care of?
In the pharma industry, hydroponics can be used to cultivate nutraceutical compounds and botanical extracts, especially for Indian traditional medicine systems. While some well-known hydroponic farms acknowledge this high-growth opportunity area, not many companies are working towards it. Simply Fresh is a company that has the first-mover advantage in this segment.
Hydroponics as cultivation technology is well-suited for the growth of medicinal herbs. Studies have proven that the plants and herbs grown in this method have more nutritional content than traditional agricultural practices, mainly due to the controlled environment and constant monitoring. Plants such as ashwagandha, ginger, turmeric, shatavari, etc., are easy to grow in this technique.
Pharma and nutraceutical industries have more stringent guidelines and standards to maintain, which can be challenging to adhere to for small-scale farmers. There is also a need to invest in R&D to customise hydroponics techniques to cultivate medicinal plants, especially as the nutrient content and bioavailability of nutrients is of paramount importance. This can increase the burden of the already capital-intensive technology. Joint ventures among small-scale farmers to establish cooperatives etc., can help distribute costs. However, considering the number of pre-dominant players is less than ten and small-scale farmers are spread across the country, it’s easier said than done. This can be adopted in western and southern India considering the higher number of hydroponic farms compared to other regions. Availing government subsidies, vertical integration with nutraceutical and traditional raw material suppliers can boost the use of hydroponics in pharma and nutraceutical segments.
Tell us about the technique of milking the plants for pharmaceutical applications. At present, how often and for what specific purposes is this technique being used by the industry?
Plant milking technology is traditionally based on the aeroponic cultivation of plants. It can be customised to hydroponics cultivation. The technology involves the recovery of active ingredients and botanical extracts from roots and other plant parts. A vital advantage is that the recovery is non-destructive and is sustainable and recyclable compared to traditional Active Pharmaceutical Ingredient (API) development. Currently, the technology is being used (still in emerging stages) in the cosmetics and personal care industry. Clariant is spearheading the efforts in the personal care industry. In India, companies are not actively pursuing this technique due to various factors like:
◆ Precedence and comfort of the traditional methods of extraction
◆ Nascent stage of hydroponics in India
◆ Focus on cultivating leafy greens and exotic vegetables gaining popularity amongst HoReCa and retail consumers, making this segment a more attractive ROI
◆ Need to adhere to guidelines and standards in case of using the technique (and even traditional hydroponic methods) for pharma and nutraceuticals for domestic and export markets
How active and aware is the Indian government about hydroponic farming in India for pharmaceuticals and nutraceuticals? Are there any projects going on in the country in regard to this? If yes, kindly give details about the same.
Both central and state governments have subsidies for capital costs incurred for hydroponic farmers. The percentage of subsidies differs from state to state, ranging anywhere between 20 and 60 per cent. Hydroponic farmers can also avail credit-linked assistance from the National Horticulture Board under its hi-tech horticulture project. There is still ambiguity in governmental sops and tax credits. It is still unclear if GST is applicable for hydroponic produce and if the guidelines classify it under agricultural income. Clear guidelines from the government can help in increasing the growth of hydroponics in India.