Q. Food processing sector in India holds the promise to increase farmers' income substantially. Discuss the potential of the food processing sector in India and highlight the government initiatives taken to promote it. (Answer in  150 words)

04 Oct, 2022 GS III Daily Answer Writing 2022-23 ( Upgrade)
Modal Answer

While improved productivity & technology helped India increase its agricultural production by 6 times since independence, it has not translated into increased farmers’ incomes. 

Food processing sector holds immense potential to serve as a ‘prosperity link’ between Agri & Manufacturing sector, benefitting farmers through logistics, reduced wastage & distress sale, incentivising crop diversification, and markets linkages for enhanced incomes.

Potential of food processing in India:

  • Huge Market size: India’s food market is ranked 6th in the world and 5th in production, consumption, and export.
  • Resource advantage: Different soil & climate types àdiverse food crops. g - India ranks 1st globally in the production of Milk, Ghee, Ginger, spices, Bananas etc.
  • Increased Demand for processed food: due to busy lifestyles, preference for ready-to-eat & healthy snacks.
  • Rapid growth in Organised retail: Emergence of tier 1 & 2 cities and “shopping mall culture”.
  • Employment generation - Highly labour intensive sector (12% of total employment) è key to rural prosperity.
  • Tapping growth of Online food industry: COVID induced preference for ‘no-contact delivery’. Eg Zomato, Swiggy.
  • International demand – For eg. Basmati Rice in Middle East, brands like Haldiram’s & Bikarnervala with presence in 70+ countries etc.
  • Multifarious benefits: Ensures food safety, nutritional security (Golden Rice), enhance choices, & curbs inflation.

Key Government Initiatives:

  • Schemes: National Food Processing Mission, PM SAMPADA Yojana, Matsya Sampada Yojana, PM Formalisation of Micro Food Processing Enterprises etc
  • Marketing reforms: Operation Greens (‘Top to Total’), One District, One Product (ODOP), e-NAM etc
  • Food Standards: Food Safety & Standards Act, 2006.
  • Affordable Credit: NABARD’s Special Food processing Fund
  • Focus on infra: Agri Export Zones, Mega Food Parks, etc
  • Awareness programs: United by Food and Ann Devon Bhava

 

Outstanding Challenges 

  • Small sized food processing units: >40% is unorganised.
  • Distorted backward agri-linkages: fragmented lands, low farm productivity, delayed agri market reforms etc.
  • Export problems: high rejection due to low quality; inadequate global branding of Indian products like Darjeeling Tea, Basmati rice, Alphonso mangoes, etc.
  • Other Challenges: Inadequate modernized infra, poor access to Skilled manpower, complicated tax regime etc

Way Forward:

  • Institutional reforms to encourage private investment Eg. Reforms in APMCs, Contract farming, land, credit etc.
  • Improving logistics & storage facilities and Encouraging export facilitation (Agriculture Export Policy).
  • Maintaining quality standards: certified testing facilities.
  • Localise rural food processing units
  • Promote innovation - innovation fund to reward innovation in food technology & entrepreneurship.


 

Thus, food processing provides opportunity not only in enhancing the incomes of the farmers, but also to help India become the “Food Factory of the World”.

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