Food Processing Sector in India-Vision 2030 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Introduction

The Ministry of Food Processing Industries organized the World Food India event at Pragati Maidan, New Delhi, attracting representatives from over 75 countries worldwide. Recognized as a high-priority industry by the Government of India, the food processing sector holds immense potential for employment and investment within the country. Projections indicate that India's domestic consumption will quadruple by 2030, positioning it as the world's fifth-largest consumer region.

• Food processing involves the preparation, alteration, preservation, and packaging of food products, utilizing harvested crops or animal products to create long shelf-life food items.

Significance of the Food Processing Industries

• Employment Opportunities: This sector can absorb surplus workers from agriculture, enhancing productivity and contributing to GDP growth while providing employment.
• Income Doubling for Farmers: Contract farming offers technological support, income security, and fair pricing, thus potentially doubling farmers' incomes.
• Crop Diversification: Demand from food processing incentivizes farmers to diversify crops, contributing to agricultural diversity.
• Benefits for Farmers: Initiatives like SAMPADA are estimated to benefit farmers and create numerous direct/indirect employment opportunities, mitigating distress migration and fostering rural employment.
• Waste Reduction: Food processing can prevent wastage of perishable produce, curbing the significant losses incurred due to food spoilage.
• Value Addition: Processed products like sauces, roasted nuts, and dehydrated fruits have high market demand, adding value to raw produce.
• Malnutrition Reduction: Fortified processed foods can bridge nutritional gaps in the population, combating malnutrition.
• Trade Boost and Foreign Exchange Earnings: Food processing is a critical source of foreign exchange, with products like Indian Basmati rice being sought after in global markets.
• Make in India Initiative: As one of the priority sectors under the Make in India initiative, food processing has the potential to position India as a leading global destination.
• Curbing Food Inflation: Processing extends shelf life, ensuring consistent food supplies and aiding in controlling food inflation. For instance, frozen peas/corn and canned onions maintain price stability under initiatives like Operation Greens.

Challenges Facing the Food Processing Industry in India

The demand for processed food primarily resides in urban areas within India, leading to several significant challenges:

• Small and fragmented marketable surplus due to landholding fragmentation.
• Low agricultural productivity due to limited mechanization.
• Seasonal fluctuations in raw material availability.
• Perishability and inadequate supply chain intermediation hinder the availability of raw materials, impacting food processing and exports.
• Inadequate cold chain infrastructure results in over 30% post-harvest losses from farm gate produce.
• Insufficient all-weather road connectivity leads to erratic supply.
• The food processing industry is highly unorganized, comprising about 75% of all product categories, leading to inefficiencies in the production system.
• Predominance of primary processing limits value addition, resulting in lower agricultural exports as a share of GDP compared to global averages.

Solutions to Address the Challenges

• The Ministry of Food Processing Industries implements the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) aimed at enhancing agriculture, modernizing processing, and reducing agricultural waste.
• Establishment of Mega Food Parks, Integrated Cold Chain Infrastructure, Value Addition, and Preservation Facilities.
• Expansion of Food Processing and Preservation Capacities, along with Agro Processing Clusters.
• Initiatives for Backward and Forward Linkages in the food processing industry.
• Foreign Direct Investment (FDI) policy allowing up to 100% investment in food processing industries under the automatic route.
• Introduction of Agri Export Zones by APEDA to promote agro product exports through a cluster-based approach.
• Adoption of a cluster approach to identify potential products, their growing regions, and integrating the entire production process from farm to market.

Conclusion

• The food processing industry holds great promise, provided there is substantial government support. Food expenses constitute a significant portion of urban Indian households' spending, highlighting the sector's relevance.
• Around 35% of total household consumption expenditure in India is typically allocated to food. The advantages of food processing, specifically tailored to the Indian context, have the potential to alleviate undernutrition.
• The government plays a crucial role in developing the industry, focusing on both small-scale enterprises and attracting substantial domestic and foreign investments.