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Food Processing for Non-Farm Sector

What is the role of food-processing sector in India?

1. India’s vast agricultural resources produce enormous potential for investments in its food processing and equipment industry.

2. Food processing sector in India plays an important role in linking Indian farmers to consumers in the domestic as well as international markets.

3. It is significant for country’s development and provides synergies to support industry and agriculture by contributing to social and economic growth.

4. The Government of India promotes this sector with a number of financial relief and incentives to improve commercialization and value addition.

Where does the sector stands now?

1. The food-processing sector in India accounts for almost 1/3rd of the total food market in India and is valued at 258 billion USD and is expected to grow at a CAGR of 14.6%.

2. Domestically, it is the fifth largest sector in terms of production, consumption and export.

3. Major industries constituting food-processing industries are grains, sugar, edible oils, beverages and dairy products.

4. It contributes to around 14% of manufacturing GDP and 13% of India’s total food export and 6% of total industrial investment.

5. It also employs approximately 1.77 million people in the country.

How does government aims to increase growth in food sector?

1. Government aims to boost growth in this sector by allowing 100% FDI in marketing of food products and various incentives at central and state government level.

2. It also aims to focus on supply chain infrastructure.

3. It has identified food-processing sector as one of the priority sectors under Make in India campaign.

Pradhan Mantri Kisan SAMPADA Yojana aims at:

1. Establishment of mega food parks

2. Integrated cold chain and value addition infrastructure

3. Expansion of food processing and preservation capacities

4. Infrastructure for agro-processing

5. Export of processed foods

6. Creation of backward and forward linkages

7. Food safety and quality assurance infrastructure

8. Generation of human resources and institutions

9. Reduction in wastage of agricultural produce

Which are the challenges and opportunities of the sector?

Challenges

1. Capital intensiveness of the sector.

2. Poor supply chain linkages.

3. Infrastructure bottlenecks.

4. Lack of skilled manpower.

5. Ensuring remunerative prices to the farmers.

6. Low adherence to quality standards due to low competition levels.

Opportunities

1. Huge agricultural land in India makes it an ideal sourcing centre for food products internationally.

2. Modern processing techniques for food will lead to an improved shelf life of the agricultural produce and ensure steady revenue of the farmers.

3. New practices and methods are being developed to enhance the quality of processed food.