UP PCS Mains-2024

Approach Start with discussing Food Processing. Highlight its potential. Discuss the challenges. Mention the measures of the government. Conclude with way forward.

Introduction

Food processing generally includes the basic preparation of foods, value addition to the food products, preservation and packaging techniques. It involves all the processes that take place from farm gate to consumer plate. Food Processing Industry in India is regarded as a sunrise sector, accounting for 32% of the country’s total food market.

Body

India has huge potential for food processing:

• India has diverse agro climatic regions which enables it to produce different kinds of agricultural products.
• Driven by the high-value processing of various agricultural products, increased urbanization, rising disposable incomes, the rise of nuclear families, and the demand for convenient food, India’s food processing industry is expected to reach a staggering $ 535 billion.
• The food processing sector contributes 12.8% to the Indian GDP and provides 11.6% share in total employment. This sector is expected to generate 9 million jobs by 2024.
• India is the largest milk producer, second largest producer of the fruits and vegetables in the world.
• India’s young demography provides an opportunity to invest in food processing.
• Its marine, poultry, and meat industries are thriving and leading the world in production.
• The COVID-19 pandemic has further boosted growth by shifting customer preferences towards branded packaged goods and promoting a healthier lifestyle.
• In addition to this, with the aim of creating awareness and increasing production & consumption of millets, United Nations, at the behest of the Government of India, declared 2023 the International Year Millets.

Challenges Faced by Food Processing Industry in India:

• Supply Chain Mismanagement: Small and dispersed marketable surplus due to fragmented holdings, low farm productivity due to lack of mechanization, high seasonality, perishability and lack of proper intermediation (supply chain) result in lack of availability of raw material. This in turn impedes food processing and its exports. Demand of processed food is mainly restricted to urban areas of India.
• Infrastructure Bottlenecks: More than 30% of the produce from farm gates is lost due to inadequate cold chain infrastructure. The NITI Aayog cited a study that estimated annual post-harvest losses close to Rs 90,000 crores. Lack of all-weather roads and connectivity make supply erratic.
• Informalization in Food Processing Industry: The food processing industry has a high concentration of unorganized segments, representing almost 75% across all product categories. Thus, causes inefficiencies in the existing production system.
• Lack of Skilled and Trained Manpower: Since the food processing industry encompasses several aspects and activities, there are many areas requiring specific skills and knowledge. Gathering and transportation of foods in their raw form, processing, packaging, refrigeration, canning, transportation, and more require adequate knowledge to handle the jobs efficiently.
• Inadequate Quality Control: Food Industries deal with highly sensitive products that require routine inspection and quality control from the sourcing of raw materials to the distribution of finished goods. Quality control directly impacts the satisfaction of consumers, the brand’s reputation, and the company’s bottom line. India’s exports facing hurdles in global market in the form of Sanitary and Phytosanitary Measures.

The government has taken following initiatives in the food processing sector:

• Pradhan Mantri Kisan Sampada Yojana (Scheme for Agro-marine processing and Development of Agro-processing Clusters): It had seven component schemes including Mega Food Parks, integrated cold chain, etc.
• Pradhan Mantri formalisation of micro food processing enterprises scheme: This scheme was launched under the Aatmanirbhar Bharat Abhiyan with the aim to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector. The scheme has a special focus on supporting Groups engaged in Agri-food processing such as Farmer Producer Organizations (FPOs), Self Help Groups (SHGs) and Producers Cooperatives along their entire value chain.
• Production Linked Incentive Scheme for Food Processing Industry: The government has approved the Central Sector Scheme to support creation of global food manufacturing champions commensurate with India’s natural resource endowment and support Indian brands of food products in the international markets with an outlay of Rs.10900 crore.
• One District One Product (ODOP): It is aimed at manifesting the vision of the government to foster balanced regional development across all districts of the country. The idea is to select, brand, and promote one product from each district of the country. It aims to attract investment in the district to boost manufacturing and exports and generate employment.
• Operation Green: In the budget speech of Union Budget 2018-19, a new Scheme “Operation Greens” was announced with an outlay of Rs.500 crore to promote Farmer Producers Organizations, agri-logistics, processing facilities and professional management. Accordingly, the government has been implementing the scheme for development of Tomato, Onion and Potato (TOP) value chain which has now been expanded to all fruits and vegetables (TOTAL).
• Foreign Direct Investment (FDI) Relaxation: 100% FDI approval under automatic route has been permitted for the food processing sector.

Conclusion

Three key factors will be crucial in the growth journey of India’s food processing industry: first, the establishment of strong backward links to ensure food security and to produce nutritious processed foods; second, improved access to financial resources; and third, cost competitiveness.

India’s food processing sector is a shining pillar of the Indian economy. Focusing on this sector will lead to infrastructure development, employment generation, supply chain management and huge export of Indian products and thus will make India truly ‘AatmaNirbhar’.