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Food Processing: A Key Enabler for Enhancing Farmers' Income

May, 2018

How has the Indian food Industry transformed in the last few years?

The food industry has seen a progressive transformation, both in terms of food consumption as well as processing. Changing food habits driven by convenience, growing concerns on health and awareness on food safety have led to technology upgradation, new and innovative product development and stricter adherence to food safety norms. However, the opportunities are still immense and we are yet to tap many of them. The last few years have set the right platform for growth of this industry and I am sure that the coming years will witness revolutionary outcomes. More interestingly this growth will be inclusive, i.e, growth will not only be driven by the urban populace but equally well by the rural masses and our farmers will play a very critical role in this growth story.

How is the Kisan SAMPADA scheme shaping up? What impact do you envisage 5 years down the line?

We have received an overwhelming response for the Kisan SAMPADA Scheme. This is a unique initiative by the Govt. of India for infrastructure development at such a large scale for food processing. We are also adopting a cluster based approach to establish the food processing industry near the existing production hubs. Most of this infrastructure is focused on perishables. The infrastructure created and the investment leveraged through this scheme will go a long way in enhancing food processing levels, reducing wastages and most importantly enhancing farmers’ income. With such measures put into place, wastages will come down by a minimum 50 per cent and processing level will reach around 20 per cent, 5 years hence.

Currently, just 10 per cent of food produced in India is processed and you are targeting to take it to 20 per cent. Your plans to scale up this industry?

The food processing levels in India are very low (~10 per cent) and even lower in our very strong fruits and vegetables segment (~2 per cent). The Ministry of Food Processing Industries (MoFPI) is working towards creating an overall amiable ecosystem for the sector right from providing access to agri information (up to district level) through our portal ‘Nivesh Bandhu’ to supporting infrastructure creation and also helping out investors to reach out to the right partners and facilitators.

Under our flagship program-Pradhan Mantri Kisan Sampada Yojana we will spend `6,000 crore over the next three years to create requisite infrastructure which will leverage investments worth `31,000 crore, handling of 33 Mn MT agro-produce valuing  `1.04 lakh crore, benefitting 2 Mn farmers and generating half million direct and indirect employment in the country by 2019-20.

Mega Food parks are a critical element of this scheme and the Parks that have been created offer a great opportunity for investors and entrepreneurs. They can use multiple facilities under the plug and play model, thus reducing heavy investment on processing infrastructure.

The entire infrastructure created under the Pradhan Mantri Kisan Sampada Yojana will bring in the best international technology to India. We aim at making India the food processing hub of the world.

We have also signed MoUs worth ~US$ 14 Bn with various food companies and the projects will be grounded in next 2-3 years. These projects and the units created under the SAMPADA scheme will together help achieve the objective of taking food processing levels to 20 per cent.

The allocation for food processing sector has been doubled to `1,400 crore in the recent budget. How will doubling allocation help in actualizing growth of this sector?

I am grateful to the finance ministry for favorably considering our proposal of doubling budget allocation. The fund would be utilized to create infrastructure at farm-gate level besides being used for preservation and processing of perishable fruits and vegetables; this will help in reducing wastages. Also a part of this budget would be spent towards creation of cold chain grid for seamless transfer of agricultural items from producing centres to consumption points.

Food processing as a sector has a deep rural connect. But how much will the farmer benefit through this transformational journey of the food processing sector?

As an industry the food processing industry is closest to farmers. Farmer connect is required for procuring raw material. Further, establishment of food processing enterprises in the vicinity of production center opens up additional marketing avenue for the farmer. We are also promoting backward linkages of these industries so that infrastructure development takes place at farm level and the farmer has option to store or process his/her own produce and avoid selling at distressed prices. Food processing is gradually emerging as a key enabler for doubling farm incomes and employment generation. Under our SAMPADA Yojana alone, we are envisaging an outreach of around 2 Mn farmers and significant job creation.

What has been the impact of World Food India? Your plans for the next edition?

WORLD FOOD INDIA 2017 was the first international standard investment summit in the food processing industry by the Government and has been successful in creating a positive impression across the globe. It has drawn tremendous response from Indian as well as the global food fraternity. All key players were present at the Summit and many have shown interest in establishing or diversifying or increasing their business in India. MoFPI and various State Governments, together have signed MoUs worth ~ US$ 14 Bn of investment and we are closely monitoring project-wise developments for each of our partners. We are also trying to resolve any bottlenecks and challenges towards grounding of these projects in the country. Such a huge amount of investment in the food processing sector will definitely be a turning point for the industry and have a direct impact on the farming community. On the consumption front the availability and accessibility of processed products will impact the demand of processed food positively.

We are definitely looking at the second edition of WORLD FOOD INDIA in 2019 which will not only show the developments of the projects committed & initiated in the inaugural edition but also address corrective measures to challenges faced during execution. We are certain that the second edition of the World Food India will be an important ‘block your calendar’ for industry captains across time-zones.  

Traditionally Indian households prefer fresh to processed food. Do you think this is a major challenge for the industry?

In India, people are used to cooking & consuming fresh food. However, the new generation, millennials in particular, prefer ready-to-cook and ready-to-eat food, owing to convenience driven preferences, nuclear families, working women and fast changing consumption habits. There are many processed products like ghee, butter, curd, pickles, jams that have been an integral part of our daily diet. The only difference now is that instead of processing these at home, we buy them from the market. So, the demand is growing and so is the potential and opportunity. We have brought in a lot of infrastructure because we realize that processing is the way in future. Moreover, the Food regulator FSSAI has been taking very proactive steps towards food safety and standards, which has helped build a trust towards processed food in consumer mind.

What do you think of StartUps and Innovations in the food processing space?

Over the last 3-4 years we have seen a huge wave of innovation which is fast transforming the landscape of food processing value chain in India. In this context, I would like to mention the Food Processing Start-Up Awards (FPSUA)- a unique and first of its kind initiative, anchored jointly by MoFPI and YES BANK, which received an overwhelming response from start-ups. The Awards identified some really interesting start-ups which are addressing critical challenges in the processed food sector through interventions on shelf life improvement, innovative packaging & food products, supply chain solutions, renewable energy based last mile storage solutions and indigenous processing technologies. We are planning to continue the Awards this year also. India is poised to emerge as the food factory and food tech incubator of the world.

Food wastage off and on the plate is huge in India? What can we do to reduce this wastage?

Yes, I agree…the food wastage statistics in India is alarming! We waste agri produce worth around `92,000 crore. This wastage takes place across the food value chain. At individual level we can at least avoid food wastage on our plates. The wastages off the plate can only be curtailed through adequate infrastructure development and efficient supply chain management which is our priority now. During the World Food India 2017, the visitors pledged to reduce food wastage – this was an initiative to spur consciousness amongst individuals at personal level.