Food Processing Industry: Issues and Developments

The food processing industry in India is increasingly seen as a potential source for driving the rural economy as it brings about synergy between the consumer, industry and the farmer.

Food Processing Industry: Issues and Developments

[pib] PM Formalization of Micro Food Processing Enterprises Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level : PM-FME Scheme

Mains level : Food processing industry and the required reforms

Union Minister for Food Processing Industries has inaugurated the capacity building component of the Pradhan Mantri Formalization of Micro food processing Enterprises scheme (PM-FME Scheme).

The event also sought the launch of the GIS One District One Product (ODOP) Digital Map of India.

Practice question for mains:

Q.What is the PM FME Scheme? Discuss its potential to neutralize various challenges faced by India’s unorganized food industries

PM-FME Scheme

  • Launched under the Aatmanirbhar Bharat Abhiyan, the PM-FME Scheme is a centrally sponsored scheme.
  • It aims to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector.
  • It seeks to provide support to Farmer Producer Organizations, Self Help Groups, and Producers Cooperatives along their entire value chain.
  • Under the PM-FME scheme, capacity building is an important component.
  • The scheme envisages imparting training to food processing entrepreneurs, various groups, viz., SHGs / FPOs / Co-operatives, workers, and other stakeholders associated with the implementation of the scheme.

Features of the scheme

  • The Scheme adopts One District One Product (ODODP) approach to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products.
  • The States would identify food product for a district keeping in view the existing clusters and availability of raw material.
  • The ODOP product could be a perishable produce based product or cereal-based products or a food product widely produced in a district and their allied sectors.
  • An illustrative list of such products includes mango, potato, litchi, tomato, tapioca, kinnu, bhujia, petha, papad, pickle, millet-based products, fisheries, poultry, meat as well as animal feed among others.
  • The Scheme also place focus on waste to wealth products, minor forest products and Aspirational Districts.

 About ODOP Digital Map

  • The GIS ODOP digital map of India provides details of ODOP products of all the states to facilitate the stakeholders.
  • The digital map also has indicators for tribal, SC, ST, and aspirational districts.
  • It will enable stakeholders to make concerted efforts for its value chain development.

Food Processing Industry: Issues and Developments

PM Formalization of Micro Food Processing Enterprises (PM FME) Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level : PM-FME scheme

Mains level : Food processing industry and the required reforms

The Ministry for Food Processing Industries (MoFPI) has launched the PM Formalization of Micro Food Processing Enterprises (PM FME) as a part of “Atmanirbhar Bharat Abhiyan”.

Practice question for mains:

Q.What is the PM FME Scheme? Discuss its potential to neutralize various challenges faced by India’s unorganized food industries.

PM FME Scheme

  • It aims to provide financial, technical and business support for upgradation of existing micro food processing enterprises.
  • It is a centrally sponsored scheme to be implemented over a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore.
  • The expenditure under the scheme would to be shared in 60:40 ratios between Central and State Governments, in 90:10 ratios with NE and the Himalayan States, 60:40 ratio with UTs with the legislature and 100% by Centre for other UTs.

Features of the scheme

  • The Scheme adopts One District One Product (ODODP) approach to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products.
  • The States would identify food product for a district keeping in view the existing clusters and availability of raw material.
  • The ODOP product could be a perishable produce based product or cereal-based products or a food product widely produced in a district and their allied sectors.
  • An illustrative list of such products includes mango, potato, litchi, tomato, tapioca, kinnu, bhujia, petha, papad, pickle, millet-based products, fisheries, poultry, meat as well as animal feed among others.
  • The Scheme also place focus on waste to wealth products, minor forest products and Aspirational Districts.

Credit facility provided

  • Existing Individual micro food processing units desirous of upgradation of their unit can avail credit-linked capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs.10 lakh per unit.
  • Seed capital @ Rs. 40,000/- per SHG member would be provided for working capital and purchase of small tools.
  • FPOs/ SHGs/ producer cooperatives would be provided a credit-linked grant of 35% for capital investment along the value chain.
  • Support for marketing & branding would be provided to develop brands for micro-units and groups with 50% grant at State or regional level which could benefit a large number of micro-units in clusters.

Why need such a scheme?

  • The unorganized food processing sector comprising nearly 25 lakh units contribute to 74% of employment in the food processing sector.
  • Nearly 66% of these units are located in rural areas and about 80% of them are family-based enterprises supporting livelihood rural household and minimizing their migration to urban areas.

Challenges faced

  • The unorganised food processing sector faces a number of challenges which limit their performance and their growth.
  • These challenges include lack of access to modern technology & equipment, training, access institutional credit, lack of basic awareness on quality control of products; and lack of branding & marketing skills etc.
  • Owing to these challenges; the unorganised food processing sector contributes much less in terms of value addition and output despite its huge potential.

Food Processing Industry: Issues and Developments

[pib] Scheme for formalization of Micro Food Processing Enterprises (FME)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Scheme for formalization of Micro Food Processing Enterprises (FME)

Mains level : Food processing industry and the required reforms

The Union Cabinet has given its approval to a new Centrally Sponsored Scheme – “Scheme for Formalization of Micro food processing Enterprises (FME)” for the Unorganized Sector on All India basis.

Practice question for mains:

Q. Discuss the scope and significance of Food Processing Industries in India.  Also discuss how can it benefit India becoming the global food store.

Background

  • There are about 25 lakh unregistered food processing enterprises which constitute 98% of the sector and are unorganized and informal.
  •  Nearly 66 % of these units are located in rural areas and about 80% of them are family-based enterprises.
  • This sector faces a number of challenges including the inability to access credit, high cost of institutional credit, lack of access to modern technology, inability to integrate with the food supply chain and compliance with the health & safety standards.
  • Strengthening this segment will lead to a reduction in wastage, creation of off-farm job opportunities and aid in achieving the overarching Government objective of doubling farmers’ income.

Details of the Scheme for FME

  • The Union Cabinet has sanctioned an outlay of Rs.10,000 crore.
  • The expenditure will be shared by GOI and the States in the ratio of 60:40.

Salient features

  • It will be a Centrally Sponsored Scheme. Expenditure to be shared by the Government of India and States at 60:40.
  • 2, 00,000 micro-enterprises are to be assisted with credit linked subsidy.
  • The scheme will be implemented over a 5 year period from 2020-21 to 2024-25.
  • Cluster approach.
  • Focus on perishables.

Support for Individual micro-units:

  • Micro enterprises will get credit-linked subsidy @ 35% of the eligible project cost with a ceiling of Rs.10 lakh.
  • The beneficiary contribution will be a minimum of 10% and balance from the loan.
  • On-site skill training & Handholding for DPR and technical upgradation.

Implementation strategy

  • The scheme will be rolled out on All India basis.
  • Seed capital will be given to SHGs (@Rs. 4 lakh per SHG) for the loan to members for working capital and small tools.
  • Grant will be provided to FPOs for backward/forward linkages, common infrastructure, packaging, marketing & branding.

Administrative and Implementation Mechanisms

  • The Scheme would be monitored at Centre by an Inter-Ministerial Empowered Committee (IMEC) under the Chairmanship of Minister, FPI.
  • A State/ UT Level Committee (SLC) chaired by the Chief Secretary will monitor and sanction/ recommend proposals for expansion of micro-units and setting up of new units by the SHGs/ FPOs/ Cooperatives.
  • The States/ UTs will prepare Annual Action Plans covering various activities for implementation of the scheme, which will be approved by the Government of India.
  • A third-party evaluation and mid-term review mechanism would be built in the programme.
  • The State/ UT Government will notify a Nodal Department and Agency for implementation of the Scheme.

Establishment of a National Portal & MIS

  • A National level portal would be set-up wherein the applicants/ individual enterprise could apply to participate in the Scheme.
  • All the scheme activities would be undertaken on the National portal.

Benefits of the Scheme

  • Nearly eight lakh micro-enterprises will benefit through access to information, better exposure and formalization.
  • Credit linked subsidy support and hand-holding will be extended to 2,00,000 micro-enterprises for expansion and upgradation.
  • It will enable them to formalize, grow and become competitive.
  • The project is likely to generate nine lakh skilled and semi-skilled jobs.
  • The scheme envisages increased access to credit by existing micro food processing entrepreneurs, women entrepreneurs and entrepreneurs in the Aspirational Districts.
  • Better integration with organized markets.
  • Increased access to common services like sorting, grading, processing, packaging, storage etc.

Food Processing Industry: Issues and Developments

Market Intelligence and Early Warning System (MIEWS)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : MIEWS, TOP

Mains level : Ensuring fair prices for TOP produce

 

 

The Union Food Processing Ministry has launched a new Market Intelligence and Early Warning System (MIEWS) portal to monitor the prices of TOP crops – Tomato, Onion and Potato.

About MIEWS

  • MIEWS portal is the first-of-its-kind platform for ‘real-time monitoring’ of prices of tomato, onion and potato.
  • The system has been designed to provide advisories to farmers to avoid cyclical production and issue early warnings in situations of gluts.
  • It will simultaneously generate alerts for price intervention under the terms of Operation Greens (OG) scheme.
  • It will generate early alerts in case there is going to be a major change in the prices of these crops.
  • This will help in planning and timely intervention for price stabilization. The portal can be accessed at this link- http://miews.nafed-india.com.

Utility of MIEWS

The MIEWS would:

  • Monitor the supply situation for timely market intervention,
  • Assist in rapid response during times of glut to move the produce from glut regions to regions with deficit supply.
  • Provide inputs for export/import decision making.

Back2Basics

Operation Greens

  • In the budget speech of Union Budget 2018-19, a new Scheme “Operation Greens” was announced on the line of “Operation Flood” to promote Farmer Producers Organizations (FPOs #), agri-logistics, processing facilities and professional management.
  • Accordingly, the Ministry has formulated a scheme for integrated development of Tomato, Onion and Potato (TOP) value chain.
  • Under the OG Scheme, during a glut situation, the evacuation of surplus production from producing areas to consumption centres will be undertaken in the following cases:
  1. When the price falls below the average market price at the time of harvest in the preceding 3 years.
  2. When the price falls more than 50 percent in comparison to the previous year’s market price at the time of harvest.
  3. When the price falls below the benchmark, if any, fixed by either the state or central government for a stipulated period.

For additional readings, navigate to:

https://mofpi.nic.in/Schemes/operation-greens

Food Processing Industry: Issues and Developments

[oped of the day] Storage facilities for rabi onions must be created on a massive scale

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Onion price crisis : Ling term solutions

Context

The failure to control spiking onion prices (it has crossed Rs 100/kg in several retail markets) has become a nightmare for the central government.

How future crises can be prevented

The current spike in onion prices could have been anticipated.

The trajectory of onion prices

    • Retail prices touched Rs 50-60/kg in September-October.
    • Trade controls – The government imposed minimum export price (MEP), put stocking limits on retailers and wholesalers and then banned onion exports. 
    • IT raids – When these measures failed to tame onion prices, even income tax raids were conducted on traders.
    • Previous finance minister, the late Arun Jaitley had announced and allocated Rs 500 crore for “Operation Green” in the 2018 Union Budget to stabilise the prices of tomatoes, onions and potatoes (TOP). 

Expected crisis

    • Acreage – The Horticulture Statistics Division had reported 7% lower kharif acreage compared to the previous year in major onion growing states of Maharashtra, Karnataka, Madhya Pradesh, Andhra Pradesh, Gujarat and Rajasthan.
    • Rains – Due to heavy rains in September/October, almost 58% of the kharif onions in MP, 18% in Karnataka and 2% in AP were damaged. Continuous rains led to a delay in harvesting in Maharashtra. 
    • Late response – The government woke up to the problem late and directed MMTC to import 1 lakh million tonnes (mt) of onions. With relaxed fumigation norms, onions are being imported from Afghanistan, Turkey, and Egypt.

India – Onions

    • India is already the largest exporter of onions in the world with average exports of 2 mmt a year.
    • Instead of banning exports, it is better to keep imports open so that when domestic prices rise unduly, private trade can start importing rather than waiting for the government to take a delayed decision. 
    • India can remain a reliable exporter, which will help farmers get better prices on a sustainable basis. Abrupt export bans reflect the failure of government policy.
    • India needs to build proper value chains as envisaged under “Operation Green”.

Other solutions

    • Storage – storage facilities for rabi onions must be created on a massive scale, both at the farmers’ end as well as with traders. 
    • When prices were hovering around Rs 4-5/kg in April-May, the government could have purchased onions at ~ Rs10/kg and stored the stock in modern, private-sector godowns. 
    • Repeated stocking limits and raids discourage private investment in modern cold storages. 
    • Essential Commodities Act has to go. The Competition Commission of India (CCI) has to look into traders’ collusion.
    • Dehydrated onions (flakes, powder, granules) can be promoted among urban households and bulk consumers (armed forces, hospitals, hotels and restaurants, etc).
    • Buffer stock – As onions are sensitive commodities, the government should also keep a buffer stock of dehydrated onions, which have a much longer shelf life. 1 kg of dehydrated onion equals 10 kg of fresh onions. This is the right time to promote their use. 
    • With more than 100 units, Mahuva in Gujarat is already a hub for the dehydrated onion industry. 
    • Contract farming – Jain Irrigation emerged as the largest dehydrated onion company in India engaging small and marginal farmers on contract. The price to be paid to growers is assured by the company even before planting. If the market price after the harvest is higher than the assured price, then farmers get a price that is 60 paise/kg less than the market price.
    • FPO – small and marginal farmers should be organised in Farmer-Producer Organisations and direct buying by organised retailers should be encouraged through contract farming, bypassing the mandi system.
    • Market reforms along with overhauling the infrastructure of existing APMC mandis are required. APMC reforms are needed. Without that, the prospects of unified national markets, stabilising prices or ensuring a fair price to farmers and consumers are bleak.

Food Processing Industry: Issues and Developments

[op-ed of the day] The food industry’s role in sustainable development

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Agro-industries and SDGs

Op-ed of the day is the most important editorial of the day. This will cover a key issue that came in the news and for which students must pay attention. This will also take care of certain key issues students have to cover in respective GS papers.


Context

Food crisis

  • Feeding a planet of 7.7 billion people is no easy matter. Every person on the planet needs, expects, and has the right to a healthy diet.
  • Over 820 million people are chronically hungry. Another two billion or so suffer from micronutrient deficiencies, such as a lack of vitamins or proteins.
  • Around 650 million adults are obese, an epidemic caused in part by ultra-processed foods that are stuffed with sugar, saturated fats and other chemical additives.
  • But the problems go far beyond hunger and diet.

Beyond hunger and diet

  • A growing number of food companies understand the challenge and want to forge a new direction that is consistent with human health and planetary survival.
  • The food industry is a powerhouse of the global economy and includes some of the best-known brand names, because we connect with them every day.
  • Solving the many intersecting food crises will be impossible unless the industry changes its ways.

Agro-industries are no less responsible

  • Today’s agro-industrial practices are the main cause of deforestation, freshwater depletion and pollution, soil erosion, and the collapse of biodiversity.
  • To top it off, human-induced climate change, partly caused by the food sector, is wreaking havoc on crop production.
  • With more warming and population growth ahead, the crisis will worsen unless decisive changes are made.

Need for a worldwide policy revamp

Both the SDGs and the Paris agreement require decisive changes in practices by the food industry.Each company must address four critical questions.

First, do products and strategies contribute to healthy and sustainable diets?

  • We know that the fast-food culture is literally killing us.
  • The industry has to change to promote healthy diets.

Second, are the company’s production practices sustainable?

  • Too many companies are engaged in chemical pollution, massive waste from packaging, deforestation, excessive and poorly targeted fertilizer use, and other environmental ills.

Third, are the company’s upstream suppliers sustainable?

  • No consumer food company should use products from farms that contribute to deforestation.
  • The destruction of forests in the Amazon and Indonesia—literally a scorched-earth process—underscore the need to barcode all food products to ensure that they are sourced from sustainable farms.

Lastly, is the company a good corporate citizen?

  • For example, aggressive tax practices that exploit legal loopholes should be avoided, as they deprive governments of the revenues needed to promote public services and thereby achieve the SDGs.

Failing on many fronts

  • While many companies purport to pursue sustainable development, too few report on the healthfulness of their product.
  • Too few recognize that they are part of the environmental crisis, either directly in their own production, or as buyers of products produced in environmental hotspots such as the Amazon or Indonesia.
  • In short, the food industry’s commitment to sustainability is still too often more high-minded sentiment than actual reporting and monitoring to ensure alignment with the global goals.

Conclusion

  • The food sector is a key part of a larger picture. World leaders gathered at the UN this week to review progress on the SDGs and the Paris agreement.
  • They must keep in mind one crucial fact: the world’s people are demanding change.
  • Most countries have the know-how and wealth to achieve a prosperous, inclusive and sustainable world.
  • The business sector must urgently recognize, acknowledge and act upon its global responsibilities.

Food Processing Industry: Issues and Developments

“Reducing Food Loss and Waste” Report

Note4Students

From UPSC perspective, the following things are important :

Prelims level : About the report

Mains level : Food Wastage


“Reducing Food Loss and Waste” Report

  • It is a new report published by the World Resources Institute (WRI) with the support of the Rockefeller Foundation.
  • It has quantified global food wastage.
  • It put forward a Global Action Agenda that calls on governments, companies, farmers and consumers to collectively overcome “the world’s food loss and waste problem.”
  • Some of these actions include developing national strategies for food loss and waste reduction, creating national PPP, launch supply chain initiatives, reducing small-holder losses and shifting consumer social norms.

Globally uneaten food

  • Nearly one-third of the food that is produced each year goes uneaten, costing the global economy over $940 billion.
  • The uneaten food is responsible for emitting about 8 per cent of planet-warming greenhouse gases into the atmosphere, said the report.
  • Referencing “numerous studies”, the report said most of the food loss happens “near the farm” predominantly in lower-income countries.
  • And most of the food waste happens “near the plate” predominantly in higher-income countries.

Most perishable items

  • Fruits and vegetables follow, with over 41%.
  • When viewed as a proportion, by weight, of all the food estimated to be lost and wasted globally, fruits and vegetables make up the largest share of total annual food loss and waste.
  • Using data from the Food and Agriculture Organization of the UN, the report concluded that roots and tubers are the food group that face the maximum wastage, at over 62% for 2007.

Food Processing Industry: Issues and Developments

‘Trans Fat Free’ logo

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Trans Fats

Mains level : Healthcare awareness in India


  • Bakeries, sweet shops, restaurants besides packaged food companies will now be allowed to use “Trans Fat Free” logo at their outlets and on their products, if they comply with the norms notified by the FSSAI.

Why in news?

  • The food establishments which use trans-fat free fats/oils and do not have industrial trans-fat more than 0.2 gms per 100 gm of the food, in compliance with the regulation can display ‘Trans Fat Free’ logo in their outlets and on their food products.

Bar on trans-fat content

  • Since last year FSSAI has been pushing the industry to bring down the trans-fatty acids in Vanaspati, edible bakery shortenings, margarine in a phased manner.
  • The trans fat content in fats and oils has already been limited to 5 per cent.
  • The Food Safety and Standards Authority of India (FSSAI) had last year notified the Advertisement and Claims regulations on Trans fats.
  • It stated that nutritional claim of trans fat free can only be made if products contain less than 0.2 gm trans fat per 100 gm or 100 ml of food.
  • The regulator is working on further reducing the content to 3 per cent by 2021 and 2 per cent by 2022.
  • According to FSSAI regulations, the maximum permissible limits for Total Polar Compounds (TPC) have been set at 25 per cent, beyond which the cooking oil is unsafe for consumption.

Assist this newscard with:

FSSAI launches awareness drive on trans fats

Food Processing Industry: Issues and Developments

[pib] World Food India 2019

Note4Students

From UPSC perspective, the following things are important :

Prelims level : World Food India 2019

Mains level : Food processing industries in India

  • Union Minister for Food Processing Industries has inaugurated the World Food India 2019, the biggest gathering of all global and domestic stakeholders in Food Processing Sector
  • It is aimed to position India as Food Processing Destination of the World.

World Food India

  • The government initiated a biennial event- World Food India to promote food processing sector at global level.
  • The first such event was conducted in 2017 and received wide success.
  • The event created Brand India in global food map by positioning India as a World Food Factory.
  • It was for the first time in India that all major policy makers and top industrialists across the globe in Food Processing Industries were together under one roof.

Food Processing Industry in India

  • Food processing is one of the six superstar sectors under the GoI’s Make in India initiative and has the potential to transform India as a leading food processing destination of the World.
  • It is critical to achieving the PM’s vision of doubling the farmers’ income in India and reducing food wastage.
  • Indian Food Processing Industry has grown tremendously recording 11% growth rate, which is twice the pace of Global Industry.
  • The sector has recorded double digit growth rate across all major sub-segments of the sectors both in terms of value and volume.
  • Despite huge domestic market of 1.3 billion customers with the youngest population globally and an abundant agricultural base, the processing levels in India remain low at 7.7%.
  • India lags behind several economies such as China, Malaysia and US. Its share in global exports of processed food is only 2%.
  • Besides, India also has a high share of harvest and post-harvest losses from major agricultural produces on account of poor storage, transportation and logistics to the extent of $13 Billion,3 times the agricultural budget.

Food Processing Industry: Issues and Developments

Report flags growing threat of monoculture in crop production

Note4students

Mains Paper 3: Agriculture| Transport and marketing of agricultural produce and issues and related constraints

From UPSC perspective, the following things are important:

Prelims level: FAO report on Monoculture

Mains level: Monoculture: utility and impact on ecosystem


News

  • The Food and Agriculture Organization (FAO) has flagged the growing practice of monoculture —cultivation of a single crop at a given area in food production around the world.

FAO Report

  1. FAO published its latest report The State of the World’s Biodiversity for Food and Agriculture 
  2. Of more than 6,000 plant species cultivated for food production, fewer than 200 contribute significantly to food production globally, regionally or nationally,according to FAO’s .
  3. Only 9 plant species account for almost two-thirds of total crop production.
  4. These are using large quantities of external inputs such as pesticides, mineral fertilizers and fossil fuels,” the report said.

The report lists drivers of change affecting biodiversity for food and agriculture, including:

  • Population growth and urbanization
  • Over-exploitation and over-harvesting
  • Changes in land and water use and management
  • Pests, diseases and invasive alien species
  • Climate change
  • Pollution and external inputs
  • Natural disasters
  • Markets, trade and the private sector

Various Factors

  1. The first factor contributor majorly towards monoculture as people move to cities they tend to depend more on purchased foods, citing the example of Ecuador.
  2. They often also tend to lose ties with rural areas and rural foods, and increasingly opt for processed foods rather than fresh foods.
  3. This pressures producers to continuously grow or keep only a limited range of species, breeds and varieties of crops, livestock, trees, fish, etc.
  4. Individual holdings as well as wider productive landscapes become more homogeneous in terms of their genetics and physical structure, the report added.

Impact of Mono Cropping

  1. Such changes often affect the resilience of production systems and their role in biodiversity.
  2. Private food standards adopted by supermarkets and consumers have pushed farmers towards particular varieties and management procedures.
  3. International markets particularly be restrictive for market entry effectively debar the entry into the market of minor crops from developing countries.
  4. The emphasis on meat-based diets and the use of a narrow range of major cereals (maize, wheat and rice) is growing.
  5. The report predicts that the demand for standardised foods can reduce the diversity of crops and animals.

The diverse the better

  1. If a single variety is widely grown, a pest or disease to which it lacks resistance can lead to a dramatic fall in production.
  2. Diversifying crop cultivation, on the other hand, reduces risk of economic shocks.
  3. Integrating intercrops, hedgerows or cover crops, particularly legumes, into a system can reduce drought stress by helping to conserve water in the soil profile and help to replenish depleted soil fertility.
  4. Also crop diversification including rotation and intercropping and the use of diverse forage plants in pastureland, can reduce pest damage and weed invasions.
  5. The growing exploitation of land and water sources was eating in to integrated aquaculture, which in turn was pushing farmers towards monoculture.

The need of the hour

  • New supply systems
  • Improved public-private partnerships.

Food Processing Industry: Issues and Developments

Mariculture is as important for India as agriculture

Note4students

Mains Paper 3: Agriculture | Food Security

From UPSC perspective, the following things are important:

Prelims level: Mariculture, various edible seaweeds, Photorespiration, Project RIPE

Mains level: In light of declining land crop productivity, the newscard emphasizes the feasibility of Seaweeds as an alternative food


News

Food Security at stake

  1. About 37% of the area of the entire world is agricultural land, a third of which (about 11%) is used for crops.
  2. And as the population of the world rises to 9.7 billion people in 30 years, the land available for crops will reduce.
  3. Thus, there is an immediate need to try and improve the efficiency of food production.
  4. Experts predict that agricultural yield must increase by 50% between now and 2050.
  5. How to do this is the question facing agricultural scientists across the world.

What can be done to increase Productivity?

I. Engineered Photosynthesis under Project RIPE

  1. One way of increasing productivity one such attempt is through the project RIPE (Realizing Increased Photosynthetic Efficiency).
  2. It has shown in the model plant tobacco where the scientists could “engineer photosynthesis” by increasing the expression of three genes involved in processing light.
  3. This increases the tobacco yield by 20%. The team is trying to do the same genetic engineering method in other plants.
  4. One such plant is cassava (also called sago or sabudana) whose roots are carbohydrate-rich is eaten as staple food in parts of Andhra, Kerala and the hilly areas of Assam.

II. Reducing Photorespiration

  1. Another way that scientists are trying is to reduce what is called photorespiration in plants.
  2. Here the energy and oxygen produced in the ‘light reaction’ of photosynthesis is drained by the plant to make “wasteful” products in the ‘dark reaction’.
  3. It consumes carbohydrates and other food material, particularly when the plant’s leaves close in order to reduce water loss by evaporation.
  4. If we can find ways to reduce this photorespiration, edible food yields can go up.

Hurdles

  1. Many of these research attempts involve the introduction of external genes and gene products into food crops.
  2. These are opposed by group of people who do not want genetic engineering and genetically modified plants.
  3. This is a curious situation where science finds ways to deal with genes so as to improve yields while sociology opposes it based on worries about safety.
  4. A viable solution needs to be found, failing which food production may not increase all to feed the ever growing population of the world.

Alternatives

Mariculture: A Feasible Option

  1. The most efficient use of photosynthesis is actually not by land plants but by micro and macro algae, such as seaweeds.
  2. These are the champions, contributing to about 50% of all photosynthesis in the world.
  3. Many of them, notably those with dark green, red and brown colour, are edible.
  4. They are low-calorie and nutrient-dense food items and eaten by people in most parts of South East Asia.

Include seaweeds in our diet

  1. Seaweeds are rich sources of vitamins A and C, and minerals such as Ca, Mg, Zn, Se and Fe.
  2. They also have a high level of vegetable proteins and omega 3 and 6 fatty acids.
  3. Best of all, they are vegetarian, indeed vegan, and do not have any fishy smell, thus good and acceptable.

Seaweeds in India

  1. About 844 seaweed species are reported from India, a country with a coast line of 7,500 km.
  2. While we have 63% of our land area for crop agriculture, we should not forget this vast coastal area, much of which breeds seaweeds.
  3. The Central Salt and Marine Chemicals Research Institute (CSMCRI) at Bhavnagar, Gujarat has done pioneering work in the area.
  4. The seaweeds found in plenty, Ulva, Pyropia, Porphyra and Kappaphycus are edible and that it will be good to cultivate them in large scale, as is done in countries like Japan.
  5. Of the 306 seaweeds in the Gulf of Mannar, 252 are edible.

Way Forward

  1. India should embark on Mariculture as vigorously as Agriculture, given its 7,500 km-long coastal line.
  2. Further, it does not require pesticides, fertilizers and water for irrigation, which is an added advantage.
  3. We may “break in” through the use of seaweeds as pizza seasoning, in spice sachets, so that people get used to them.

Food Processing Industry: Issues and Developments

[pib] Indus Food 2019

Note4students

Mains Paper 3: Agriculture | Food processing & related industries in India- scope & significance, location, upstream & downstream requirements, supply chain management

From the UPSC perspective, the following things are important:

Prelims level: Indus Food

Mains level: Promoting India’s export in Foods and Beverage Sector


News

  • INDUS FOOD-II with the theme of ‘World Food Supermarket’ will be held on 14th and 15th January, 2019, at India Expo Mart, Greater Noida.

About INDUS FOOD

  1. INDUS FOOD is a platform of its kind exclusively devoted to enhancing Indian exports in F&B sector.
  2. It enables B2B engagements of buyers and suppliers, after careful business matchmaking, which takes care of precise business requirements of each participant, and enables him to pick and choose whom to meet.
  3. The event is aimed at promoting India as a strong and reliable exporter of food and beverage products to the world.

INDUS FOOD 2019 

  1. INDUS FOOD 2019 will promote value addition to India’s agriculture exports and integrate Indian farmers and agricultural products with global value chains.
  2. After the success of the first edition of INDUS FOOD in 2018, Trade Promotion Council of India (TPCI) has scaled up the Reverse Buyers-Sellers Meet (RBSM) with the financial assistance under Market Access Initiative (MAI) scheme of Department of Commerce.
  3. With more than 700 buyers from 70 countries visiting INDUS FOOD-II and more than 500 food suppliers, the event will lead to greater interaction of Indian exporters with global customers.
  4. It will bring business opportunities to the doorstep of Indian producers and manufacturers and help small exporters, who cannot afford participation in overseas fairs, to have a direct interface with foreign buyers who visit India for this show.
  5. The event is divided into 15 product display zones viz. sweets & confectionary, dairy, dry fruits, fruits & vegetables, Indian ethnic food & snacks, meat poultry & seafood, non-alcoholic beverages, oil & oil seeds, organic & health food, pulses grain and sugar, spices, tea & coffee, wine & alcoholic beverages, consumer food, and ingredients and fragrances & extracts.

Food Processing Industry: Issues and Developments

[pib] 2nd Mega Food Park in Maharashtra

Note4students

Mains Paper 3: Agriculture | Food processing & related industries in India- scope & significance, location, upstream & downstream requirements, supply chain management

From the UPSC perspective, the following things are important:

Prelims level: Mega Food Park Scheme

Mains level: Food Processing Industry in India


News

Food Park in Maharashtra

  1. Union Minister for Food Processing Industries has inaugurated the second Mega Food Park in Maharashtra.
  2. A 3rd Mega Food Park has been sanctioned by the Ministry in Maharashtra and is under implementation in Wardha District while the first Park was inaugurated on 1st of March 2018 in Satara district.
  3. The Paithan Mega Food Park has been set up in 102 acre of land at a cost of Rs. 124.52 crore.

Benefits of Mega Food Park

  1. The Mega Food Park will leverage an additional investment of about Rs. 250 crore in 25-30 food processing units in the park and would eventually lead to a turnover of about Rs. 450-500 crore annually.
  2. The Park will also provide direct and indirect employment to 5,000 persons and benefit about 25,000 farmers in the CPC and PPC catchment areas.
  3. The modern infrastructure for food processing created at Park will benefit the farmers, growers, processors and consumers of Maharashtra and adjoining areas immensely and prove to be a big boost to the growth of the food processing sector in the State of Maharashtra.

Back2Basics

Mega Food Park Scheme

  1. India aims to be a resilient food economy and the Food Factory of the World as the government has made Food Processing a major thrust area of ‘Make in India’.
  2. Aimed at giving a major boost to the food processing sector by adding value and reducing food wastage at each stage of the supply chain with particular focus on perishables MoFPI is implementing Mega Food Park Scheme in the country.
  3. Mega Food Parks create modern infrastructure facilities for food processing along the value chain from farm to market with strong forward and backward linkages through a cluster based approach.
  4. Common facilities and enabling infrastructure is created at Central Processing Centre and facilities for primary processing and storage is created near the farm in the form of Primary Processing Centers (PPCs) and Collection Centers (CCs).
  5. Under the Scheme, Government of India provides financial assistance upto Rs. 50.00 Crore per Mega Food Park project.

Food Processing Industry: Issues and Developments

[pib] Ministry of Food Processing Industries issues guidelines for OPERATION GREENS

Note4students

Mains Paper 3: Agriculture | Food processing & related industries in India- scope & significance, location, upstream & downstream requirements, supply chain management

From the UPSC perspective, the following things are important:

Prelims level: Operation Greens

Mains level: Need for revolutionary measures in the supply and processing of agricultural produce


Guidelines for Operation Greens

  1. Ministry of Food Processing Industries (MoFPI) has approved the operationalisation strategy for Operation Greens
  2. Operation Greens was announced in the Budget speech of 2018-19 with an outlay of Rs 500 crores to stabilize the supply of Tomato, Onion and Potato(TOP) crops and to ensure availability of TOP crops throughout the country round the year without price volatility

The strategy

The strategy will comprise of a series of measures which include:

(I)        Short-term Price Stabilisation Measures

NAFED will be the Nodal Agency to implement price stabilisation measures. MoFPI will provide 50% of the subsidy on the following two components:

  1. Transportation of Tomato Onion Potato(TOP) Crops from production to storage;
  2. Hiring of appropriate storage facilities for TOP Crops;

(II)       Long-Term Integrated value chain development projects

  1. Capacity Building of FPOs & their consortium
  2. Quality production
  3. Post-harvest processing facilities
  4. Agri-Logistics
  5. Marketing / Consumption Points
  6. Creation and Management of e-platform for demand and supply management of TOP Crops.

Objectives of Operation Greens

  1. Enhancing value realisation of TOP farmers by targeted interventions to strengthen TOP production clusters and their FPOs, and linking/connecting them with the market.
  2.  Price stabilisation for producers and consumers by proper production planning in the TOP clusters and introduction of dual-use varieties.
  3.  Reduction in post-harvest losses by the creation of farm gate infrastructure, development of suitable agro-logistics, the creation of appropriate storage capacity linking consumption centres.
  4.  Increase in food processing capacities and value addition in the TOP value chain with firm linkages with production clusters.
  5.  Setting up of a market intelligence network to collect and collate real-time data on demand and supply and price of TOP crops

Food Processing Industry: Issues and Developments

[op-ed snap] From Plate to Plough: Sardar’s unfinished task

Note4students

Mains Paper 3: Agriculture | Food processing & related industries in India- scope & significance, location, upstream & downstream requirements, supply chain management

From UPSC perspective, the following things are important:

Prelims level: Operation Flood, White revolution

Mains level: Contribution of Sardar Patel in India’s freedom movement as well as the development of dairy sector


Context

The unveiling of the Statue of Unity

  1. On October 31, Prime Minister Narendra Modi will unveil the world’s tallest statue, the “Statue of Unity,” in the memory of Sardar Vallabhbhai Patel

Patel’s contribution to Indian dairy farmers

  1. In 1942, safety concerns drove the colonial government to tap a private dairy, Polson, in order to procure milk from Kaira district in Gujarat and supply it to Bombay, some 350 km away, where the Britishers were stationed
  2. This marked the beginning of the government’s Bombay Milk Scheme (BMS) and the creation of a market for Kaira’s milk producers
  3. But this established Polson’s monopoly over the Bombay market, as a seller. Polson also became a monopsony, as a buyer from Kaira farmers
  4. As a monopolist and monopsonist, the company extracted large rents by squeezing the prices it offered the farmers, who approached Sardar Patel for help
  5. Patel urged them to organise cooperatives and cut supplies to Polson
  6. In 1945, agitated farmers held a 15-day strike against BMS. They spilled milk on the streets, instead of supplying it to Polson
  7. The Bombay market was opened for direct supply of milk from Kaira farmers. This access to a lucrative market incentivised farmers, and they formed the first farmers’ integrated dairy cooperative — the Kaira District Co-operative Milk Producers’ Union, which was registered in 1946

White Revolution in India

  1. Verghese Kurien, the father of the White Revolution, joined the cooperative as a general manager and set up the first processing plant at Anand to convert excess buffalo milk into milk powder and cheese — a technological wonder at that time
  2. Prime Minister Lal Bahadur Shastri in 1964  urged Kurien to spread the message of Kaira’s business model across India
  3. As a result, the architecture of “Operation Flood” was laid down, and a new institution, the National Dairy Development Board (NDDB), was formed on July 16, 1965, with Kurien as its chairman
  4. Kurien spearheaded the operation by compressing the value chain and scaling-up vertical coordination between farmers, processors and consumers through cooperatives
  5. He mobilised funds through sale proceeds of skimmed milk powder and butter donated by the European Economic Commission, loans from the World Bank, and subsidies from the government and invested them in strengthening the dairy value chain
  6. Operation Flood (1970-96) has had a significant impact on milk production

De-licensing of the dairy sector

  1. In 2002 that the dairy sector was fully de-licenced by the Central government
  2. This created competition and the processing capacity created by the private sector outstripped the cooperative’s capacity
  3. India is now the world’s largest milk producer

Concerns regarding processing and quality of milk

  1. The organised cooperatives and private sector are still processing less than a quarter of milk production in India
  2. Food safety concerns with regard to milk remain

Way forward

  1. Today, the farmers have to suffer low prices of farm produce, ranging from milk to pulses and oilseeds and cotton
  2. The government has announced minimum support prices (MSPs) based on a formula that gives at least 50 per cent margin over Cost A2+FL
  3. But, market prices remain 10 to 50 per cent below these MSPs
  4. The real tribute to Patel would be to carry out large-scale structural reforms in agri-markets that can ensure a higher percentage of the consumer’s rupee going to farmers, be it through cooperatives, or any other marketing channel

Food Processing Industry: Issues and Developments

[pib] International Conference on Recent Advances in Food Processing Technology (iCRAFPT)

Note4students

Mains Paper 3: Indian Economy | Food processing and related industries in India- scope and significance, location, upstream and downstream requirements, supply chain management.

From UPSC perspective, the following things are important:

Prelims level: iCRAFPT, IIFPT

Mains level: Food processing industries in India

News

iCRAFPT

International Conference on Recent Advances in Food Processing Technology (iCRAFPT) got underway today at Indian Institute of Food Processing Technology, Thanjavur in Tamilnadu.

Food processing sector in India

  1. The unorganised segment dominates in numbers (about 25, 00,000 in 2015-16) of small enterprises and workers, but the organised segment (about 40,000) dominates in terms of value of the output and investment.
  2. The percentage share of the organised/registered food processors is hardly 1.5 percent of the total food processors.
  3. India’s export basket of food produces contains 75% of the fresh F&V and unprocessed item and only 25% of processed products.

Implementing 2 Tier Technology

  1. The first tier technology should target the unorganized sector who can be encouraged to concentrate on primary processing and provide strong supply link to the high-end secondary and tertiary processing.
  2. The second tier should deal with sophistication of secondary and tertiary processing of high value products and enable industry to compete and stand up shoulder to shoulder with world food processing industries.

About Indian Institute of Food Processing Technology (IIFPT)

  1. IIFPT is a premier national Institute working under the administrative control of Ministry of Food Processing Industries (MoFPI), Government of India functioning from its headquarters in Thanjavur, Tamil Nadu.
  2. The mandate of the Institute at its inception was to seek solutions for preserving high moisture paddy because the paddy harvest season in Southern India coincided with the tail end of the South West monsoon.
  3. The Institute was later upgraded as a national laboratory with the name Paddy Processing Research Centre (PPRC) in 1972.
  4. At the time of up-gradation the mandates of the Institute were also changed and the scientists in the Institute focused their research in identifying technologies for post harvest procession and preservation of paddy.
  5. The institute has been organizing an International Conference on Recent Advances in Food Processing Technology (iCRAFPT) during 17th to 19th August 2018 with the theme of Doubling farmers’ income through food processing.

Food Processing Industry: Issues and Developments

Eat Right Movement off to a healthy start

Note4students

Mains Paper 2: Governance | Issues relating to development & management of Social Sector/Services relating to Health, Education, Human Resources

From UPSC perspective, the following things are important:

Prelims level: Eat Right Movement

Mains level: Read the attached story.


News

The Eat Right Movement

  1. Food Safety and Standards Authority of India (FSSAI) has unveiled ‘The Eat Right Movement’, built on two broad pillars of ‘Eat Healthy’ and ‘Eat Safe’.
  2. The programme aims to engage and enable citizens to improve their health and well-being by making the right food choices.
  3. Kicked off in the city by National Award-winning actor Rajkummar Rao, the event saw the food industry, public health professionals, civil society and consumer organisations, and influencers.

The aim of the movement

To cut down salt/sugar and oil consumption by 30% in three years.


Back2Basics

Food Safety and Standards Authority of India (FSSAI)

  1. It is an autonomous body established under the Ministry of Health & Family Welfare, Government of India.
  2. The FSSAI has been established under the Food Safety and Standards Act, 2006 which is a consolidating statute related to food safety and regulation in India.
  3. FSSAI is responsible for protecting and promoting public health through the regulation and supervision of food safety.
  4. The FSSAI is headed by a non-executive Chairperson, appointed by the Central Government, either holding or has held the position of not below the rank of Secretary to the Government of India.

Food Processing Industry: Issues and Developments

Come July, label mandatory for food certified as ‘organic’

Image source

Note4students

Mains Paper 3: Agriculture | Food processing & related industries in India- scope & significance, location, upstream & downstream requirements, supply chain management.

From UPSC perspective, the following things are important:

Prelims level: FSSAI, NPOP, PGS-India, India Organic logo

Mains level: Different types of farming


Appropriate labelling of organic food mandatory

  1. From July 2018, it would be illegal to sell organic food that is not appropriately labelled
  2. The rules were finalised after almost a year of being sent out as a draft for public comments

Two authorities to provide certification

  1. The Food Safety and Standards Authority of India (FSSAI) had issued regulations that required food companies selling organic produce to get certified with one of the two authorities — National Programme for Organic Production (NPOP) or the Participatory Guarantee System for India (PGS-India)
  2. Companies could also get a voluntary logo from the FSSAI that marked its produce as ‘organic’

About NPOP and PGS-India

  1. For nearly two decades now, organic farming certification had been done through a process of third party certification under the NPOP
  2. It was run by the Ministry of Commerce and was used for certifying general exports
  3. Nearly 24 agencies were authorised by the NPOP to verify farms, storages and processing units and successful ones got a special ‘India Organic’ logo
  4. The PGS-India programme, in contrast, had been around for only two years
  5. It involves a peer-review approach
  6. Farmers played a role in certifying whether the farms in their vicinity adhered to organic-cultivation practices
  7. This programme was implemented by the Ministry of Agriculture through the National Centre of Organic Farming

Food Processing Industry: Issues and Developments

[op-ed snap] From Plate to Plough: Onion tears and how to wipe them

Image source

Note4students

Mains Paper 3: Agriculture | Major crops cropping patterns in various parts of the country,

From UPSC perspective, the following things are important:

Prelims level: Price stabilization fund

Mains level: Need for increased focus on food processing industries in India


Context

Onion prices spiked again

  1. Almost every alternate year, the roller-coaster of boom and bust in onion prices happens
  2. 2017 is interesting as it saw record low prices in May-June when farmers sold onions at around Rs 2/kg in several mandis in Madhya Pradesh

What causes high volatility in onion prices?

  1. One of the prime reasons behind high volatility in onion prices stems from a lack of storage facilities that have not kept pace with rising production
  2. The traditional storage practices incur losses as high as 40 percent
  3. About 60 percent of onion production is in the rabi season, sown in December-January and harvested in April-May
  4. This is the onion which is stored by farmers and traders and it meets export as well as domestic demand till the arrival of the Kharif onion crop, which is sown in May-June and harvested in October-November
  5. The late Kharif crop is sown in August-September and harvested in January-February
  6. Kharif onion is of rather poor quality and cannot be stored for very long
  7. The prices tend to rise in October-November when rabi onion stocks are almost depleted and Kharif onion is yet to hit the market, or if the Kharif crop is damaged, as is the case this year

What could be the way out?

  • The first policy action has to be to promote modern cold storages and develop a system akin to that of the warehouse receipt system for farmers
  1. While a bulk of the storage has to be undertaken by the private sector, the state can do some stocking under a price stabilization fund
  2. They can hire the services of specialized private sector agencies to carry out such operations on the government’s behalf
  • Second, use trade policy for price stabilization
  1. In case of a bumper crop, promote exports and in case of a deficit crop, encourage imports
  2. This has to be done well in advance — as soon as one comes to know the advance estimates of production
  • Third, encourage the setting up of onion dehydrating units and promote demand for dehydrated onions amongst large consumers (restaurants, fast food chains, army, hospitals, etc)
  1. Dehydrated onions are being exported to Japan, Europe, Russia, US and some African countries
  2. The Ministry of Food Processing and state governments can encourage entrepreneurs to avail grants for setting up onion dehydration and processing units

Conclusion

  1. Instead of raiding traders or banning exports et al, the Centre and the states would do better if they promote investment in scientific storage and processing facilities, and use trade policy more judiciously

Food Processing Industry: Issues and Developments

India pitches for FDI in food-processing industry

  1. India is pitching for FDI in the food-processing sector: India has asked the U.S. companies to take advantage
    of its liberalised foreign investment rules, ready made infrastructure and improving business environment
  2. Positive Steps in this direction: Government has significantly liberalised FDI regulations, and has allowed
    100 per cent FDI in manufacturing of food products and 100 per cent FDI in trading including e-commerce in food products manufactured and produced in India.
  3. India’s food processing industry is experiencing significant growth and boasts existing infrastructure
    in new Mega Food Parks around the country as well as state-of-the-art Cold Chain facilities
  4. India has undertaken several national and state-level programmes to improve the nation’s standing in the
    World Bank’s annual Ease of Doing Business Index
  5. World Food India 2017: From November 3 to 5, New Delhi will host the World Food India 2017, a first-of-its kind mega-scale event showcasing the large agricultural or horticultural produce base of India
  6. Leading U.S. companies are invited to learn about India’s proactive policies and profitable opportunities available across the entire food-processing and food retail value chain

Food Processing Industry: Issues and Developments

[op-ed snap] Powering up food: fortification is good but needs regulation

Context:

  1. A diversified diet meets all nutritional requirements is difficult to provide
  2. Fortification of food is relied upon by many countries to prevent malnutrition

World Health Organisation reports:

  1. WHO estimates that deficiency of key micronutrients such as iron, vitamin A and iodine together affects a third
    of the world’s population
  2. In general, insufficient consumption of vitamins and minerals remains problematic

India’s nutrition challenge:

  1. Viewed against the nutrition challenge India faces, processed foods with standards-based fortification can help advance overall health goals, starting with maternal health
  2. It is imperative to make iron-fortified food widely available, since iron deficiency contributes to 20% of maternal deaths and is associated with nearly half of all maternal deaths
  3. The shadow of malnutrition extends to the children that women with anaemia give birth to
  4. They often have low birth weight, are pre-term, and suffer from poor development and lower cognitive
    abilities
  5. Low intake of vitamins, zinc and folate also causes a variety of health issues, particularly when growing
    children are deprived

Fortification:

  1. It is a low-cost solutionThe benefit is maximised when there is focus on adequate intake of oils and fats
  2. Oils and fats are necessary for the absorption of micronutrients and something poorer households often
    miss in their diet

Food Safety and Standards Authority of India:

  1. The efficacy of the fortification standards introduced by the FSSAI will depend on enforcement
  2. It is important to ensure that all sections of producers meet the norms, since the FSSAI plans to get local flour mills to add premixed nutrients
  3. Making affordable, good quality fortified foods widely available is the key

Way ahead:

  1. Only standardised processes can provide micronutrients to women, and in turn to breastfed children in the first six months after birth
  2. A well-functioning PDS is the best channel to reach precisely those sections that need fortified food the most
  3. In the case of children, recent studies show that adding zinc to food during the six months to 12 years growth period reduced the risk of death from infectious diseases and all causes put together

Food Processing Industry: Issues and Developments

More cold chains, food parks to boost farm incomes

  1. News: Govt plans to set up 100 new cold chain projects at a cost of Rs. 12,000 crore to Rs.13,000 crore
  2. It has also started the process to invite investors to set up six new mega food parks
  3. Aim: To boost farm sector incomes by establishing farm to fork linkages
  4. More than $1 billion of FDI has come into the sector in the past two years, including some very big multinational firms such as Kellogg’s, McCain Foods and Mars International
  5. A lot of projects are already operational on the ground
  6. Wastage: The Rs.9,000 crore invested in new cold storage capacity in the past two years has reduced 10% of the country’s food wastage
  7. India loses an estimated Rs.92,000 crore a year due owing to wasted food

Food Processing Industry: Issues and Developments

FDI in food processing may cross $1 billion

  1. FDI in the food processing sector is expected to cross $1 billion in the next two years
  2. Reasons: Reforms in FDI space and streamlining of FSSAI regulations
  3. Efforts: The food processing ministry has permitted development of 17 new food parks across the country
  4. It is making efforts to operationalise all 42 parks by 2019 that will help double processing level of fruits and vegetables to 20%
  5. It has also approved setting up of 30 new cold chains in the country
  6. The government has announced 100% FDI in marketing of food products produced and processed in India in this year’s Budget
  1. FDI in the food processing sector is expected to cross $1 billion in the next two years
  2. Reasons: Reforms in FDI space and streamlining of FSSAI regulations
  3. Efforts: The food processing ministry has permitted development of 17 new food parks across the country
  4. It is making efforts to operationalise all 42 parks by 2019 that will help double processing level of fruits and vegetables to 20%
  5. It has also approved setting up of 30 new cold chains in the country
  6. The government has announced 100% FDI in marketing of food products produced and processed in India in this year’s Budget

Food Processing Industry: Issues and Developments

Cancer-causing chemicals in bread, says CSE

  1. Context: A study released by the Centre for Science and Environment (CSE)
  2. Chemicals: Commonly consumed bread contains potassium bromate and potassium iodate
  3. These chemicals can cause cancer
  1. Context: A study released by the Centre for Science and Environment (CSE)
  2. Chemicals: Commonly consumed bread contains potassium bromate and potassium iodate
  3. These chemicals can cause cancer

Food Processing Industry: Issues and Developments

Modernization of Abattoirs

  1. News: Food processing industry is implementing the Centrally Sponsored Scheme for setting up/ modernization of Abattoirs
  2. Finance: Grant-in-aid is provided for setting up of new and modernisation of existing abattoirs to local bodies, PSUs, co-operatives, etc
  3. The scheme is a part of National Mission on Food Processing
  4. Agriculture ministry is also running a similar scheme for rural areas as a component under the National Livestock Mission
  1. News: Food processing industry is implementing the Centrally Sponsored Scheme for setting up/ modernization of Abattoirs (slaughter houses)
  2. Finance: Grant-in-aid is provided for setting up of new and modernisation of existing abattoirs to local bodies, PSUs, co-operatives, etc
  3. The scheme is a part of National Mission on Food Processing
  4. Agriculture ministry is also running a similar scheme for rural areas as a component under the National Livestock Mission

Food Processing Industry: Issues and Developments

Govt mulls fresh study on post-harvest loss of farm produce

  1. Context: FY’17 Budget proposal of allowing 100% FDI in marketing of food products
  2. News: The Centre is planning a fresh study on the percentage of post-harvest losses of farm products
  3. Reason: There are contradictory findings available with govt with some show losses as high as 30%, while others put it at as low as 5%
  4. Challenge: Organisations of small retailers, street vendors and farmers have opposed the proposal by citing some of the findings which show low post-harvest losses
  1. Context: FY’17 Budget proposal of allowing 100% FDI in marketing of food products
  2. News: The Centre is planning a fresh study on the percentage of post-harvest losses of farm products
  3. Reason: There are contradictory findings available with govt with some show losses as high as 30%, while others put it at as low as 5%
  4. Challenge: Organisations of small retailers, street vendors and farmers have opposed the proposal by citing some of the findings which show low post-harvest losses

Food Processing Industry: Issues and Developments

Govt calls for tying farming with industry

  1. Minister said, agriculture sector has the potential not only to drive the economy, but linked with food processing.
  2. According to India Meteorological Department, 302 districts across India, or nearly half of all districts, received deficit or scanty rainfall this year.
  3. The Maharashtra CM said that countries in Europe and elsewhere are doing precision farming.

Union food processing minister called for “tying farming with industry” and stressed on “cooperative farming”

  1. Minister said, agriculture sector has the potential not only to drive the economy, but linked with food processing.
  2. According to India Meteorological Department, 302 districts across India, or nearly half of all districts, received deficit or scanty rainfall this year.
  3. At least half a dozen states declared drought and sought central assistance to deal with the agricultural crisis and farmers’ suicides.
  4. The Maharashtra CM said that countries in Europe and elsewhere are doing precision farming.

Developments in Food Processing Industry

The food processing industry in India is increasingly seen as a potential source for driving the rural economy as it brings about synergy between the consumer, industry and the farmer. However, food processing activity is still at a nascent stage in India with low penetration.

Importance of Food Processing Industry

  • It holds the potential of reducing enormous wastage of agricultural produce in the absence of processing technologies and cold chain facility
  • It is labour-intensive industry, which has the potential to employ 13 million people directly and 35 million people indirectly
  • This will also lead to increase in farm income, generate employment opportunities, foster forward and backward linkage effects, contribute to exports and integrate Indian economy with the rest of world

What is the magnitude and size of this industry?

India is strategically located at the centre of the Middle-East and South-East with a long coastal line and easy sea connectivity as well as plenty of raw material for long period which can attract multi-national companies instead of food processing.

It is the 5th largest industry and has the highest rate of growth as well as a very high employment elasticity. Currently, it accounts for nearly 16% of total employment in the organized manufacturing sector and 32% in unorganized sector.

What are the factors which can drive this industry?

  • India’s demographic profile with 65% of population below 30 years of age
  • Fast changing consumption patterns
  • Increase in disposable incomes of the people
  • Fast increase in the number of working women, who prefer the packaged food
  • Growth of organised food retail in India
  • Nearly 55% of the total expenditure on an average is spent on food and grocery in rural areas and nearly 40% in urban areas and only 10% of what we grow is processed in India

What are the challenges faced by FPI?

  • Indifference of policy makers as very little outlays are allocated in Five Year Plans. In the XI FYP, an outlay of Rs. 4000 crore was earmarked out of which significant proportion was not spent
  • The legislation’s like APMC Acts, Essential Commodities Act, etc restricts free movement of commodities
  • Very poor infrastructure i.e. near absence of technologies, incubation facilities, pre-cooling chambers, irradiation facilities, etc < Food Irradiation is a technology that improves the safety and extends the shelf life of foods by reducing or eliminating microorganisms and insects>
  • High tariffs in the form of high excise duties as well as import duties
  • Non-tariff barriers in the form of stringest regulation of laboratory testing, grading, sampling and packaging
  • Lack of entrepreneurship, as 70% of the total value of food processing items manufactured in India is dominated by the unorganised sector
  • Lack of training facilities related to this industry
  • Very low Research & Development
  • Indian agriculture focuses on traditional crops rather than market-oriented agriculure with diversified commercial crops

What are the Govt efforts to promote this industry?

XI Five Year Plan: Govt. recognized the potential of this sector and launched Mega Food Park. It also adopted various measures such as modernization of Abattoir (Slaughter houses), modernization of meat shops, upgradation of street food, effective implementation of Food Safety and Standards Act 2006, technology upgradation, entrepreneurship development programme, setting up of training institutes, etc

Mega Food Park

These are the parks with state-of-art infrastructure related to all of the facilities required for food processing industry with their captive power plants, transportation and other hygienic facilities to attract food processing units to avail of this infrastructure for manufacturing food-processed items.

The target was to set up 30 Mega Food Parks, but only 9 came up.

XII Five Year Plan: There was significant shift in govt. policy towards this industry in XII FYP, as it allocation to the tune of 4-times as compared to XI FYP, with an outlay of Rs. 15000 crore. It also launched National Mission on Food Processing, in the background of the success of National Mission on Horticulture.

National Mission on Food Processing

The mission has two main principles: Decentralization and Outreach.

The mission is totally centrally sponsored and the responsibility of its implementation lies with the state govt., who will have to take initiative in organizing the unorganized food processors into SHGs (Self-Help Group) and provide them training and other facilities. State govt. will have to bring about synergy between agriculture and food processing industries.

Budget 2016-17

Govt. has decided to allow 100% FDI in multi-brand retail for food products produced and processed in India will play a catalytic role in leapfrogging Indian economy.

Future

It will be the endeavor of policy makers to ensure that food processing industry conform to global standards of health and hygiene and adopt CODEX standards (related to food safety) laid down by Food & Agriculture Organization and WHO, for the protection of consumer health.

Food processing needs a fillip in the form of better logistics, access to credit, technology indigenisation and implementation of food safety laws.

Suggested Readings: 
Untapped potential of food processing – The Hindu
Food Processing in India – Make in India

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