Title : FOOD PROCESSING INDUSTRY OF INDIA
Date : Dec 11, 2021
Based on a News Article published in the ‘The Press Information Bureau’ on 10th December 2021
Useful for UPSC CSE Prelims and Mains (GS Paper III)
Original Article published in ‘The Hindu’:
What is the definition of food processing:
- Any agricultural, dairy, animal husbandry, meat, poultry, or fishing raw product is transformed through a process (involving employees, power, machines, or money) in such a way that its original physical properties change and the transformed product has commercial value and is suitable for human and animal consumption.
- It also involves the process of adding value to produce items through methods such as preservation, food additive addition, drying, and other ways in order to effectively preserve food ingredients, increase their shelf life, and improve their quality.
- The Food Processing Industry (FPI) is extremely important because it promotes crucial links and synergies between the economy's two pillars, agriculture and industry.
- Because it serves as a link between agriculture and manufacturing, it creates both direct and indirect employment opportunities.
- Farmers' income will double as demand for agri-products rises, resulting in a rise in the price paid to the farmer, resulting in an increase in revenue.
- Reduce malnutrition: When supplemented with vitamins and minerals, processed foods can help close the nutritional gap in the population.
- Reduce food waste: The United Nations estimates that 40% of food output is wasted. In a similar vein, the NITI Aayog predicted yearly post-harvest losses of over Rs 90,000 crore. This wastage could be decreased by putting more emphasis on effective sorting and grading close to the farm gate, as well as redirecting additional produce to FPI, resulting in higher price realisation for farmers.
- Increases Trade and Earnings Foreign currency: It is a significant source of foreign currency. Indian Basmati rice, for example, is in high demand in the Middle East.
- Food processing, as a labor-intensive business, will give localised job options, hence reducing the push factor in migratory source regions.
- Food Inflation Limit: Processing extends the shelf life of food, allowing supplies to keep pace with demand and thereby control food inflation. Frozen Safal peas, for example, are available all year.
- Crop diversification: Food processing will necessitate a variety of inputs, incentivizing farmers to grow and diversify their crops.
- Preserves food's nutritional integrity and extends its shelf life by preventing spoiling caused by bacteria and other spoilage factors.
- Enhances the quality and flavour of food, providing more options in the food basket.
- Increases the number of options available to customers: Food processing now permits food to be moved from all over the world to our local market and vice versa.
- Food Processing Situation India is one of the world's most populous
- After China, India is the world's second greatest producer of fruits and vegetables, yet just 2% of the supply is processed.
- Despite having a huge production base, the processing level is low (less than 10 percent ). Approximately 2% of fruits and vegetables, 8% of marine products, 35% of milk, and 6% of poultry are processed. This sector continues to face considerable challenges because to a lack of suitable processable types.
- India has the world's greatest animal population, with 50 percent of buffaloes and 20% of cattle, but only approximately 1% of total meat production is transformed to value-added goods.
- The unorganised sector accounts for more than 75% of the industry.
- Primary and secondary processing are two types of processing. Primary processing includes rice mills, sugar mills, edible oil mills, and flour mills, to name a few. Fruits and vegetables, dairy, bread, chocolates, and other commodities are all subjected to secondary processing.
- The majority of processing in India is categorised as primary processing, which adds less value than secondary processing. To increase farmer earnings, it is necessary to go up the value chain in processed food products. When compared to cereal crops, horticulture products, such as fruits and vegetables, have a better potential for value addition.
- At the moment, India's agricultural exports are mostly raw commodities that are processed in other countries, indicating that there is still room to advance up the value chain.
The food processing industry in India can be divided into the following categories:
- Milling of cereals and pulses
- Processing of fruits and vegetables
- Milk and dairy products
- Coffee, tea, and chocolate are examples of beverages.
- Fish, poultry, eggs, and related items
- Meat and meat-related products
- Soft drinks and aerated waters Beer and other alcoholic beverages
- Bakery items such as bread, biscuits, and other baked goods
- Oils and fats that are edible.
- Extruded food products, breakfast cereals, malt protein, weaning
- Issues in the Food Processing Industry
- The majority of industries are now unorganised. As a result, a variety of issues are appearing in several businesses. The following are some of the most common issues that Indian food companies face at various levels.
Issues at the farm level:
- Farm product yields are low, resulting in low returns.
- Inadequate material resources for development.
- Farming techniques that are primitive.
- There is no control over the quality of the inputs, and there is no money to manage.
- The weather's whims.
- Lack of a dependable handling and transportation system.
- At the farm, there are no storage facilities.
The goals of the National Food Processing Policy for 2017 are as follows:
- Reduce wastage, boost value addition, and assure higher prices for farmers while ensuring customers have access to inexpensive and high-quality produce
- To combat malnutrition and malnourishment by guaranteeing the availability of nutritionally balanced diets.
- Create suitable infrastructural facilities along the supply chain, apply current technology and innovation, promote traceability and food safety, and encourage optimum capacity utilisation of assets and resources to make food processing more competitive and future ready.
- To make India the most attractive investment destination in the agricultural and food processing industries.
- To increase the number of chances for the agriculture and food processing industries to grow and create jobs.
The difficulties faced by distributors:
- High costs and a lack of modern transit facilities
- Insufficient cold storage capabilities
- Inconsistent quality and quantity of farm products is a challenge in the processing industry.
- Higher import duties as a source of funding
- Higher raw material and packaging costs
- Transport and cold storage facilities are insufficient.
- Refrigerated containers are in short supply.
- Costs of advertising are out of control.
- Domestic market is small.
- Consumer dissatisfaction
- Doesn't provide good value for money
- The price fluctuates on a daily basis.
- Dependence on seasonal products will continue to be a problem.
- There is a scarcity of economical semi-processed or prepared convenience foods.
Reasons for India's delayed expansion of processed foods:
- The majority of the population is low-income and unable to purchase processed foods.
- The high cost of packaging drives up the cost of processed goods, putting them out of reach for the average person.
- Indians have traditionally preferred fresh, prepared dishes over stored goods.
- There is no such thing as a national cuisine culture, and it varies from region to region.
- However, the situation is changing, as some meals, particularly fast food, are taking on a national flavour. Idli, dosa, Punjabi dishes like chhole, alu mutter, etc., Chinese foods, and increasingly western foods like burgers and pizza are all gaining popularity across the country.
- Transportation (both by road and by rail) and communication are insufficient.
- There are no trustworthy cold chains for temperature-sensitive foods such as fruits and vegetables, ice creams, and so on.
- Tiny-scale manufacturers cannot afford modernization, yet huge corporations cannot justify investment due to the market's small size.
- Supermarkets are not yet widely available, though a few are beginning to sprout.
- Concerns concerning food quality have been raised as a result of the widespread use of fertilisers, pesticides, and other chemicals, which should be investigated. Furthermore, protection against unfair and dangerous activities such as adulteration is required.
- Processed foods, although fortified, may not be nutritionally balanced and may constitute a health risk, particularly to youngsters. This could lead to a poor perception of processed foods, which would certainly have an influence on the sector's economic gains.
- Low value-added processing: Food processing capacity is highly fragmented, with a significant disorganised segment and extensive usage of rudimentary processing. This results in decreased value-adding at the processing stage, particularly in terms of nutrition.
- Controlling quality and safety is difficult: The vast number of entities participating in the food value chain, particularly in the big unorganised segment, makes enforcing quality and safety standards challenging. As a result, procedures like milk adulteration and the use of carbide for fruit ripening have become more common.
- Consumer knowledge is low, which is a vital component of improving the country's nutritional position. Consumers are currently unaware of a number of nutritional, food safety, and quality issues.
- Infrastructure and storage capacity should be expanded.
- Develop the agricultural facilities through sound agricultural practises that lead to a shift away from staple food crops and toward crop diversification.
- Backward connections to farmers must be strengthened. Contract farming is a viable option. The contract will detail the quantity, quality, and price of the produce being supplied, according to the Model Contract Farming Act of 2018. Farmers would be protected from price fluctuation if quality assurances were made.
- There are two degrees of skill that are required. The first step is to promote agricultural best practises and processing activities at the farm gate.
- Increased public investment and connectivity are needed.
- Slaughter animal regulations should be part of a larger policy framework.
- Diversification of farm patterns leads to the production of a variety of crops rather than a fixed set of crops, which creates a large number of work opportunities.
- The technology used in the Second Green Revolution should be upgraded.
- We need to support homegrown startups and industry more than overseas corporations.
- Between the centre and the state, there should be a Center of Excellence.
- There should be more training institutes for aspiring entrepreneurs in all states.
- Entrepreneurs that are just starting out should be awarded a scholarship.
- In training institutes, new technology should be implemented, and skill development should be prioritised.
Initiatives of the Government:
- The government has worked hard to promote the food processing business in the country in order to reduce agricultural waste and minimise post-harvest losses.
- According to the ICAR study "Assessment of Quantitative Harvest and Post-Harvest Losses of Major Crops and Commodities in India," the proportion of post-harvest losses is as follows:
- The Ministry of Food Processing Industries (MoFPI) is executing PMKSY (Pradhan Mantri Kisan SAMPADA Yojana) to complement agriculture, modernise processing, and reduce agri-waste with these goals in mind.
- It's an umbrella programme that encompasses a variety of continuing programmes.
The following schemes will be implemented under PMKSY:
- Food parks of epic proportions.
- Infrastructure for integrated cold chain, value addition, and preservation.
- Capacities for food processing and preservation are being created/expanded.
- Cluster infrastructure for agro-processing.
- Backward and forward linkages are created using a scheme.
- Infrastructure for food safety and quality assurance.
- Institutions and Human Resources
Policy on Foreign Direct Investment (FDI):
- In the food processing industry, FDI up to 100% is permitted under the automated method.
- Apex body under the Ministry of Commerce and Industry, the Agricultural and Processed Food Items Export Development Authority (APEDA) focuses on 'export' of scheduled products.
- Food processing has a number of advantages that are unique to India. It has the potential to help millions of people escape poverty and starvation.
- The government should develop industry in a way that considers the needs of small businesses while also attracting large-scale local and international investments.
- Multiple ministries, departments, and regulations in India regulate the entire food value chain.
- A comprehensive strategy will ensure that numerous departmental programmes are linked with the general goal of guaranteeing food availability, awareness, affordability, access, quality, and safety.
- To achieve the goal of providing food security for more than a billion people, all stakeholders, including the government and the food processing industry, must work together.
- Industry organisations and academia, in addition to private companies and government, will play a critical role in the success of these projects.
Tags : Agricultural and Processed Food Items Export Development Authority (APEDA)