FOM: Potential to transform India’s fertilizer landscape with a biogas byproduct

FOM: Potential to transform India’s fertilizer landscape with a biogas byproduct

Need for an eco-friendly alternate to subsidized chemical fertilizers

Indian agricultural sector has been extensively reliant on subsidized chemical fertilizers, which are available at more than 90% subsidy rates especially Urea, thus resulting in increased consumption, leading to concern about its negative impact on soil fertility and overall soil health. This concern about soil health however opens a huge opportunity for fermented organic manure (FOM), a sustainable and environmentally friendly alternative produced as a byproduct of biogas plant.


India’s move towards increased utilization of Biogas & Organic fertilizer

The Indian government is increasingly focusing on green and sustainable energy solutions and one key initiative in this direction is the heavy investment in biogas plants, which includes central financial assistance of 0.44 million EUR (40 million INR) per ~5 TPD of CBG produced under the National Bioenergy Programme for the period from FY 2021-22 to 2025-26 having a budget outlay of 94.5 million EUR (8.5 billion INR), inclusion of financial aid for CBG plants (biomass aggregation machinery scheme) and phased mandatory blending in the 2024-25 union budget. While the government provides large subsidies for chemical fertilizers, its simultaneous emphasis on biogas indirectly encourages the manufacture and commercialization of FOM, which serves as a complement to chemical fertilizers such as urea. This is backed by the recent Market Development Assistance of 17.02 EUR/MT granted to CBG producers to promote FOM/Liquid Fermented Organic Manure (LFOM)/Phosphate Rich Organic Manure (PROM) which highlights the government efforts to create market for organic fertilizer.

FOM as a sustainable complement to Chemical fertilizers

Fermented organic manure provides substantial environmental benefits by serving as a natural and organic complement to chemical fertilizers. It improves soil structure, increasing microbial activity and decreasing dependency on synthetic inputs, promoting carbon sequestration all of which contribute to more sustainable and environmentally friendly farming practices.

Implementation gap and adoption challenges

Despite its multiple benefits, FOM faces challenges pertaining to price, market acceptance, conventional practice of using chemical fertilizer and limited distribution. Substantial price gap with respect to chemical fertilizers (which is highly subsidized) leads to reluctance within the farmers group which further gets emphasized especially because of the process cost of enrichment or value-addition. The long-term benefit of FOM is not marketed enough and farmers are not able to comprehend the impact of the use of chemical fertilizer causes, also attributable to the long-held pattern and habit. The problems mentioned above add up to selling challenges for Fertilizer Manufacturing Companies (FMCs) and Biogas producers thus leaving a good portion of potential revenue on the table unclaimed.


EAC as your facilitator to a successful business in the domain

EAC works with biogas producers/FMCs to quantify the accessible opportunity in the segment and advises on efficient mechanisms to market the advantages to end users to influence future buying decision process with respect to chemical fertilizers. We also take initiatives to apprise the government bodies of the regulatory challenges stakeholders face. The constituent ratio of FOM was for example recently changed by the government as a result of constant technical lobbying by industry players, associations and consulting players together. An effective distribution & offtake is paramount in terms of importance for a company to be able to commercialize the production and EAC assists in streamlining the same as well.

To summarize, fermented organic manure business in India has huge potential, driven by a complex interaction of government policies, environmental concerns and the need for sustainable farming methods. Addressing the problems will require an intensive strategy that includes regulatory lobbying, targeted marketing and new economic models to establish FOM as a common and environmentally green agricultural input.

For further information and insights you may contact EAC team members Rajesh Raut and Komal Jha