Mains Practice Questions

Introduction

India accounts for 11.9% of the global agriculture gross value added (GVA). Despite this, only 10-15% of its produce undergoes processing. This gap highlights the underutilization of India's agricultural potential, leading to post-harvest losses, reduced farmer income, and low export competitiveness.

Body

Significance of Food Processing:

• Value Addition: Transforms raw agricultural produce into products with extended shelf life, enhancing economic value. Example: Processing mangoes into pulp increases their value 3-4 times.
• Reduction in Post-Harvest Losses: India loses approximately ₹92,651 crores annually due to wastage, that can be saved if diverted towards food processing.
• Employment Generation: The sector employs 1.93 million people, with potential for exponential growth in rural areas.
• Boost to Exports: Processed food contributes only 13% of India’s total exports, indicating vast untapped potential.

Challenges Hindering the Growth of Food Processing:

• Infrastructural Gaps: The current cold storage infrastructure can store only about 11% of India's total perishable produce
  • Wastage of horticultural produce like fruits and vegetables is as high as 30-40%.
• Technological and Innovation Shortcomings: Low adoption of modern processing technologies leads to inefficiencies e.g., lack of mechanization in sorting and grading of crops.
• Farmer-Centric Barriers: Over 86% of farmers are small or marginal, making aggregation for food processing difficult.
  • Farmers are not adequately educated on value addition and market demands.
• Policy and Regulatory Bottlenecks: Complex Licensing Procedures deters private sector investment.
  • Non-compliance with international food safety standards affects global competitiveness.
  • Singapore and Hong Kong have recently banned Indian spice brands such as MDH Pvt. and Everest Food Products Pvt., citing concerns over ethylene oxide contamination.
• Missing Middle: Despite the government announcing several measures to enhance credit availability to stressed MSMEs, nearly 80% of the MSME's in India lack access to traditional lending channels.

Recent Government Initiatives:

Solutions to Enhance Food Processing:

• Infrastructure Development: Build integrated cold storage systems to reduce wastage, especially in rural areas.
  • Develop agro-processing clusters close to production zones to reduce transportation losses.
• Technological Upgradation:: Use AI for demand forecasting and IoT for real-time monitoring of perishables.
  • Karnataka's Agricultural Policy has integrated cold storage solutions.
• Subsidize Mechanization: Encourage automation in sorting, grading, and packaging.
• Policy Reforms:: Simplify the licensing process to attract more private investments. Establish food testing labs to meet global safety standards.
• Farmer Empowerment: Support Farmer Producer Organizations to aggregate produce and negotiate better prices.
  • Educate farmers on the benefits of processing and value addition through programs like eNAM.
• Private Sector Engagement: Encourage PPP (Public-Private Partnerships) for building cold chain networks and mega food parks.

Conclusion

India’s food processing sector holds immense potential to boost farmer incomes, reduce wastage, and increase its share in global trade. A holistic approach focusing on infrastructure, policy simplification, and capacity building can bridge the gap, ensuring India transitions from an agricultural powerhouse to a processed food leader.