Food processing

Sol – 

The food processing sector involves converting raw agricultural and livestock products into processed and value-added food products suitable for consumption. It is a significant contributor to India’s economy, accounting for 13% of exports and 6% of industrial investment.

Potential to solve many problems – 

1. Unemployment –
   • Approx 12% of all registered factory workers in the food processing industry 
   • Approx 50 lakh unregistered workers
2. Food Wastage –
   • Food processing can save the 92500 crore post-harvest losses 
3. Low farmer’s income –
   • Avg Income of an agricultural household is below the average Indian Income 
   • Food processing in Dairy, Meat, Poultry, and spices can give additional buffer income 
4. Food inflation –
   • Due to hoarding or crop failures, agri commodities price become many times higher 
   • Processed food like Ketchup and packaged food gives an alternative to consumers 
5. Low Agri export [Aim of $60 Billion under Agri export Policy 2018] 
6. Problem of malnutrition –
   • 57% of women [15-49 years of age] are anaemic
   • 67% of children below 5 years of age are anaemic
   • Food processing methods like Rice and milk fortification can solve the problem of Anaemia, Stunting, wasting, and malnutrition 
7. Problem of monocropping –
   • Food processing promotes sustainable agriculture by promoting millets, agro-forestry, livestock rearing etc 
8. Poor mechanization and technology in the primary sector in India
   • Food processing is the link between agriculture and industry. Hence, it induces new technology and innovation in agriculture. 

Challenges – 

At farm level – 

1. Poor quality produce (गुणवत्ता की कमी) 
2. Poor Yield (उत्पादन में कमी) 
3. Safety norms [Excessive use of Fertilizers, Pesticides, etc] – Sanitary and phytosanitary (SPS) measures 

At the factory level – 

1. > 75% is unorganized  – Credit crunch, Obsolete Machinery, Outdated skill
2. Competition with MNCs and Globalization 
3. Poor quality and safety standards 
4. High cost of marketing and packaging 

At the logistic level – 

1. No of cold chain, Refrigerated trucks 
2. Road and Rail network, Kaccha roads 
3. logistical barriers – Indian national highways, while accounting for 2 per cent of the total road network, carry 40 per cent of all cargo 
4. Exit problems at ports and customs points

At the consumer level – 

1. Health concern 
2. Ex – MDH- allegations of cancer-causing pesticide in Spices Prefer Fresh food (Culture) 
3. Prefer Fresh food (Culture)
4. Prefer brands
5. No national character of food

Owing to the above challenges, the food processing industry is yet to realize its potential, as evidenced by facts – 

1. India is the world’s second-largest producer of fruits and vegetables, after China, yet just 2% of the crop gets processed
2. India has the world’s greatest livestock population, but only around 1% of the entire meat population is transformed into value-added goods
3. At present, India is processing less than 10% of its agricultural output [USA – 65%]

Government initiatives such as the inclusion of food & agro-based processing units under Priority Sector Lending (PSL) norms, allowing 100% FDI approval under automatic route, setting up a Special Food Processing Fund of Rs. 2000 crore with NABARD, Pradhan Mantri Kisan Sampada Yojana, Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme, and Production Linked Incentive (PLI) Scheme will help leverage its full potential.