The Government of India has embarked on a comprehensive and strategic policy framework to address the challenges confronting the food processing sector, recognizing its pivotal role in ensuring food security, reducing post-harvest losses and fostering economic growth. At the heart of this policy initiative is the promotion of a robust and sustainable food processing industry, which not only adds significant value to agricultural produce but also generates employment opportunities across the value chain. One key facet of the government’s approach involves facilitating ease of doing business in the sector by streamlining regulatory processes, providing financial incentives, and encouraging private sector participation. Through initiatives such as “Make in India” and “Food Processing Industries Development Fund (FPIDF),” the government aims to attract investments, both domestic and foreign, to bolster infrastructure and technological advancements in food processing units.
Furthermore, the government has implemented targeted measures to address specific challenges faced by the sector, such as inadequate cold storage facilities and logistical constraints. Schemes like the “Pradhan Mantri Kisan Sampada Yojana” aim to strengthen the supply chain infrastructure, including the creation of modernized cold chains, food parks, and processing units. Additionally, emphasis has been placed on research and development to enhance the quality and shelf life of processed food products. By fostering innovation and technology adoption, the government seeks to improve efficiency, reduce wastage, and meet international quality standards, thereby enabling Indian food products to compete in the global market.
Tag: Food processing and related industries in India- Scope and significance, location, upstream and downstream requirement, and supply chain management.
Decoding the Question:
- In the Introduction, try to write about the Food Processing Sector in India.
- In Body,
- Discuss various challenges facing the Food Processing Sector.
- Elaborate about policy initiatives taken by the government to address challenges.
- Try to conclude by writing about the significance of the Food Processing Industry.
Answer:
The food processing industry (FPI) is considered a sunrise sector that has gained prominence in recent years..The Food Processing Industry (FPI) in India is a potential source for driving the rural economy as it brings about synergy between the consumer, industry, and agriculture. A well-developed FPI increases farm gate prices, reduces wastages, ensures value addition, promotes crop diversification, and generates employment opportunities as well as export earnings.
Status of FPI in India:
- The Indian food processing industry accounts for 32 percent of the country’s total food market and is ranked fifth in terms of production, consumption, export, and expected growth.
- Gross value added in food processing increased from Rs. 1.30 lakh crore to Rs. 2.08 lakh crore in 5 years.
Challenges in the Food Processing Industry:
- Gaps in Supply Chain Infrastructure: Such as lack of primary processing, storage, and distribution facilities at the local or village level which results in wastage.
- Seasonality of Operations and Low-Capacity Utilisations: India’s regional variations in climatic conditions make it difficult to run FPI sustainably. Fruits, vegetables, and other agricultural products are seasonal.
- Institutional Gaps in Supply Chain: Dependence on APMC markets makes FPIs to purchase raw materials at high prices. This leads to higher prices of end products which makes these products costly when it comes to export in international markets.
- Quality and Safety Standards: The issues of quality and safety need to be improved to target international markets for processed food export from India.
- Lack of Private Investment: The food processing industry is the Sunrise industry and it needs huge investment to build infrastructure like cold storage, cold trucks, and vans, establishing distribution and collection centers. Therefore, the role of the private sector is important.
Steps taken by the Government:
The Ministry of Food Processing Industries (MoFPI) is implementing PMKSY (Pradhan Mantri Kisan SAMPADA Yojana) as a comprehensive package for the creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet. It is expected to provide a big boost to the growth of the food processing sector, help in providing better returns to farmers, create huge employment opportunities, especially in rural areas, reduce wastage of agricultural produce, and enhance the export of processed food. Under PMKSY the following schemes are to be implemented:
- Mega Food Parks
- Integrated cold chain, value addition, and preservation infrastructure
- Creation/expansion of food processing/preservation capacities
- Infrastructure for agro-processing clusters
- Scheme for the creation of backward and forward linkages
- Food safety & quality assurance infrastructure
- Human resources and institutions
Foreign Direct Investment (FDI) policy: FDI up to 100%, under the automatic route, is allowed in food processing industries.
Agricultural and Processed Food Products Export Development Authority (APEDA): As an apex organization under the Ministry of Commerce and Industry, APEDA focusses on the ‘export’ of scheduled products.
The Food Safety and Standards Authority of India (FSSAI) is working to strengthen the food testing infrastructure in India, by upgrading the existing food testing laboratories and setting up new mobile testing labs across the country.
The Ministry of Food Processing Industries announced a scheme for Human Resource Development (HRD) in the food processing sector. The scheme has the following four components:
- Creation of infrastructure facilities for degree/diploma courses in the food processing sector
- Entrepreneurship Development Programme (EDP)
- Food Processing Training Centres (FPTC)
- Training at recognized institutions at the State/national level
Thus, the Food Processing Industry has the biggest scope in the context of India, and it will be a key model for developing the agriculture sector by improving technology adoption and doubling farmers’ income by 2022. Moreover, villages will be self-sufficient, and promoting industries on the village level will increase contribution to India’s GDP to achieve a 5 trillion dollar economy.
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