Government Policy to meet the challenges of the food processing sector

Government Policy to meet the challenges of the food processing sector

The food processing industry is of enormous significance because of the vital linkages and synergies that it promotes between the two pillars of our economy-agriculture and industry. Recently, Government has initiated measures to address the issues and challenges faced by this sector by devising a well-defined, long-term policy for this sector which would help in boosting economic growth. One of the key developments in the recent past is the establishment of the Food Processing Authority through an Act enacted by Parliament. It is a well-thought-out support system that intends to cover all aspects of FPI development in the country. There are provisions with respect to credit, taxation, investment promotion, product development, etc.

Scope of food processing industry in India:

Food Processing is one of the important sectors for any economy. In India Food Processing industry has grown at a rapid pace since its launch and it's estimated to grow even further in coming years due to increasing disposable income coupled with rising awareness about the benefits of processed food products.

The Indian food processing industry has great growth potential because of the huge market and the availability of raw materials such as vegetable oil, maize, rice, spices, milk products, meat and fish at reasonable prices. In spite of the limited investment from the government side, this sector is a dynamic one with increasing marketing and export orientation.

With a population of over 1.25 billion, India is the second most populated country in the world and is expected to be the fastest-growing consumer market. The food processing industry has ample opportunities for growth with an increasing awareness towards a healthier lifestyle and innovative food products coupled with rising disposable income in the urban areas.

India ranks no 1 in the world in the production of milk, ghee, ginger, bananas, guavas, papayas and mangoes. Further, India ranks no 2 in the world in the production of rice, wheat and several other vegetables & fruits. If the surplus production of cereals, fruits, vegetables, milk, fish, meat and poultry, etc are processed and marketed both inside and outside the country, there will be significant increase in the foreign exchange earnings as well as employment opportunities within India.

The scope of the food processing industry in India is directly reflected upon the eating habits of its people. In general, the consumption pattern of vegetarians is more inclined towards processed foods than non-vegetarians, who are more prone to consuming meat. Despite this, consumers are more likely to have vegetable snack products instead of animal derivative snack products.

Measures for the development of the food processing sector

Pradhan Mantri Kisan Sampada Yojana (PMKSY): Pradhan Mantri Kisan Sampada Yojana (PMKSY) is an umbrella scheme that incorporates various ongoing schemes like Mega Food Parks, Integrated Cold Chain, Value Addition Infrastructure, Food Safety and Quality Assurance Infrastructure, Infrastructure for Agro-processing Clusters, Creation of Backward and Forward Linkages and Creation and Expansion of Food Processing and Preservation Capacities.

Mega Food Parks Scheme: The mega food parks scheme is launched with an objective to enhance the value addition in farm produce, provide for processing facilities and create infrastructure for better market access. The scheme will take the form of a central sector scheme and will be available for all states, Union territories and those parts of national capital territory of Delhi which are outside the jurisdiction of any state government.

Scheme of Cold Chain, Value Addition and Preservation Infrastructure: With a view to tap the opportunities of demand for chilled and frozen agricultural products, fruits and vegetables, meat and meat products, dairy products, eggs, ice-cream, health care products and food grains created by the growing tourism industry and the increasing per capita income at the country-level, the Government has launched an integrated scheme to provide cold chain facilities, preservation facilities and value addition infrastructure in the country.

Modernisation of Abattoirs scheme: The main objective of the Scheme is a creation of processing and preservation capacities and modernisation and expansion of existing food processing units with a view to increasing the level of processing, value addition leading to reduction of wastage; encouraging private investment in the food and related agro-processing sectors; integration with other agri-businesses including cultivation of high value crops like vegetables, milk production, value-addition of perishables like fruits and vegetables etc.

Make In India: The Make In India initiative is one that will create employment opportunities across the country. Food processing is a sunrise sector that has a great potential to provide jobs to the youth of the country. I am confident that Make In India will strengthen our position in agriculture and enhance the food safety net of the country.

Food Processing Fund: The Food Processing Fund (FPF) is a special fund in the National Cooperative Agriculture & Rural Development Banks (NABARD) created to provide affordable credit to food processing units in Mega Food Parks and Designated Food Parks. A special fund in the NABARD worth Rs. 2,000 crore, designated as the Food Processing Fund, was set up in the FY 2014-15 for providing affordable credit to food processing units in Mega & Designated Food Parks.