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Food Processing Industry: Issues and Developments

What an empty plate of food should symbolise

Introduction

Globally, nearly one-third of all food produced is lost or wasted, undermining both food security and climate action. For India, the cost of post-harvest losses is about ₹1.5 trillion every year, almost 3.7% of its agricultural GDP. Beyond economics, this wastage squanders nutrition, water, energy, and labour, aggravating the climate crisis. The problem is not consumer-driven, as in developed nations, but arises early in the value chain, in handling, processing, and distribution. International Day of Awareness of Food Loss and Waste (IDAFLW) highlights this as both a challenge and an opportunity: to build resilient, efficient, and climate-smart food systems.

Why is Food Loss in the News?

The recent FAO–NIFTEM–GCF study has provided the first sector-, state– and operation-wise estimates of greenhouse gas emissions from post-harvest losses and retail waste in India, covering 30 crops and livestock products. The findings are striking: even modest losses in cereals like paddy account for over 10 million tonnes of COâ‚‚-equivalent emissions annually due to rice’s methane intensity. Overall, food loss generates more than 33 million tonnes of emissions every year. For a country aiming to balance food security with climate commitments, this is both alarming and unprecedented in scale.

The Economic Burden of Food Loss

  1. ₹1.5 trillion annual cost: Post-harvest losses in India amount to nearly 3.7% of agricultural GDP.
  2. Sectoral vulnerability: Fruits and vegetables suffer 10–15% losses; even staples such as paddy (4.8%) and wheat (4.2%) are significantly affected.
  3. Farmer incomes at risk: Such losses reduce food availability and directly affect the livelihood security of millions of farmers.

The Climate Connection

  1. Greenhouse gas emissions: Food loss from 30 key commodities produces 33 million tonnes of COâ‚‚-equivalent emissions annually.
  2. Cereal losses critical: Paddy alone contributes over 10 million tonnes of emissions due to methane intensity.
  3. Livestock products’ footprint: Wastage in dairy and meat is equally damaging, given their heavy resource requirements.
  4. Link with SDGs: India has integrated SDG 12.3.1 (Global Food Loss and Waste) into its National Indicator Framework for systematic monitoring.

Where Do the Losses Occur?

  1. Early supply chain stages: Losses in India occur during handling, processing, and distribution, unlike high-income countries where waste is consumer-driven.
  2. Infrastructure gaps: Lack of modern cold chains, refrigerated transport, and efficient storage are major bottlenecks.
  3. Fragmented supply chains: Weak value-chain integration adds to inefficiency and wastage.

Practical Solutions in Sight

  1. Cold chain modernisation: Programmes like PM Kisan SAMPADA Yojana (PMKSY) focus on modernising storage, processing, and logistics.
  2. Affordable technologies: Solar cold storage, low-cost cooling chambers, and moisture-proof silos can reduce spoilage for smallholders.
  3. Digital interventions: IoT sensors, AI-driven forecasting, and tracking tools like the FAO Food Loss App (FLAPP) (launched in 2023, used in 30+ countries) improve efficiency.
  4. Circular economy practices: Redirecting surplus to food banks/community kitchens and converting unavoidable waste into compost, feed, or bioenergy.
  5. Policy support: Subsidies, credit guarantees, and low-interest loans are needed to scale up solutions.

Shared Responsibility Across Stakeholders

  1. Government: Integrate food loss reduction in climate strategies and invest in infrastructure.
  2. Private sector: Adopt circular business models and scalable innovations.
  3. Civil society & academia: Drive awareness and research.
  4. Consumers: Practice mindful consumption and support redistribution mechanisms.

Conclusion

An empty plate should symbolise nourishment received, not the silent wastage of resources and opportunities. Reducing food loss in India is not just about saving food — it is about strengthening farmer incomes, ensuring food security, cutting emissions, and meeting global sustainability goals.

PYQ Relevance

[UPSC 2019] Examine the scope of the food processing industries in India. Elaborate the measures taken by the government in the food processing industries for generating employment opportunities.

Linkage: Food loss and waste directly highlight the gaps in India’s food processing sector, where inadequate cold chains, fragmented supply chains, and weak storage infrastructure undermine both farmer incomes and climate goals, making this question highly relevant.

Value Addition

International Day of Awareness of Food Loss and Waste (IDAFLW): Observed on September 29; raises global attention to the issue of food loss and waste undermining food and climate security.

Value Chain and Food Processing Sector in India

Economic Significance

  1. Contribution to GDP : Food processing sector contributes about 10% of manufacturing GDP and nearly 13% of India’s exports.
  2. Employment Potential : Provides large-scale rural and semi-urban employment, with strong potential for women and smallholder farmers.

Infrastructure and Policy Interventions

  1. Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) : Umbrella scheme for cold chains, mega food parks, and agro-processing clusters.
  2. Mega Food Parks : Around 42 Mega Food Parks sanctioned across the country to integrate farm-to-market supply chains.
  3. Operation Greens (TOP to TOTAL) : Price stabilisation and value chain strengthening for perishable crops like tomato, onion, potato.
  4. PLI Scheme for Food Processing (2021) : ₹10,900 crore outlay to boost exports, ready-to-eat, organic, and marine food products.

Post-Harvest Losses and Value Chain Gaps

  1. High Economic Losses : NABCONS (2022) estimated ₹1.5 trillion annual post-harvest losses, equivalent to 3.7% of agricultural GDP.
  2. Crop-wise Losses : Fruits and vegetables face 10–15% losses; paddy 4.8%; wheat 4.2%.
  3. Comparative Gap : Only 10% of India’s produce is processed, compared to 65–70% in developed nations.

Technology and Innovation in Value Chains

  1. IoT and AI : Used for forecasting, tracking, and real-time storage monitoring.
  2. Affordable Storage Solutions : Solar cold storage, low-cost cooling chambers, and moisture-proof silos reduce wastage.
  3. Digital Platforms : FAO’s Food Loss App (FLAPP) (2023) monitors value-chain losses; adopted in 30+ countries.

Sustainability and Circular Economy

  1. Resource Efficiency : Cutting losses conserves embedded water, energy, and labour.
  2. Surplus Redistribution : Food banks and community kitchens absorb edible surplus.
  3. Waste Conversion : Composting, animal feed, and bioenergy generation from unavoidable waste.
  4. Global Commitments : Strengthens India’s alignment with SDG 2 (Zero Hunger), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action).

Case Study Box: Food Processing and Value Chain in India

Case Study 1: Tumkur Mega Food Park, Karnataka

  • Launched : Under PMKSY.
  • Facilities : Cold storage, warehousing, quality control labs, logistics hubs
  • Impact :
    • Reduced post-harvest losses of perishable crops.
    • Generated ~5,000 direct and indirect jobs.
    • Enhanced farmer linkages with retail chains and exporters.

Case Study 2: Operation Greens – Onion Price Stabilisation (Maharashtra, 2018–19)

  • Problem : Frequent onion price crashes and volatility in Maharashtra.
  • Intervention : Subsidised transport and storage under Operation Greens (TOP to TOTAL).
  • Impact :
    • Prevented distress sales by farmers.
    • Stabilised retail onion prices for consumers.
    • Demonstrated the role of value chain management in food security.

Case Study 3: Amul Dairy Cooperative (Gujarat)

  • Model : Farmer-owned cooperative integrating production, processing, and distribution.
  • Impact :
    • Dairy farmers receive better price realisation.
    • Efficient cold chain logistics reduce milk spoilage.
    • Became a global model of agri-value chain success.

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