The India Scenario
No matter how much a farmer strives for a good harvest, the truth is that even a bumper harvest does not guarantee an increase in the farmer’s income. The profit from the farm is determined rather by a host of other factors, such as market forces and the available infrastructure for handling the surplus. And food processing is that mid-way intervention that can enhance the shelf life of agricultural produce that would otherwise just be laid to waste
The food processing industry is at a nascent stage in India, but if it can be considered as a natural progression of harvest, then it can change the fortunes of agriculture by extending the shelf life of the produce.
Even if the farmers sell the surplus at a cheaper rate, it will atleast fetch him a reasonable payment. This way the farmer’s income can be raised.
We’re at a perfect time in India to launch a national food processing plan. There is immense potential in this sector as India has abundance of seasonal agricultural produce, skilled man power, ambient environmental conditions and geographical location which gives it a good chance to gain from food processing, which can definitely become a high growth and high profit sector
Consider the facts: The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. The Indian food processing industry accounts for 32 percent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. This sector is also a ripe ground for Foreign Direct Investment (FDI). The Confederation of Indian Industry estimates that food processing sectors have the potential to attract as much as 33 billion USD over the next 10 years and also generate employment of 9 million person-days.
Indians are driving the demand for processed food in India. The opportunities that are coming up in the food processing industry are also somewhat beyond the conventional food processing activities. A stable market is in the making for traditional healthy snacks. Many companies are coming up with offerings in the healthy snacking category, like roasted makhanas, fruits and nuts and vaccum fried vegetables and snacks, and juices. The ready-to-eat food category is another upcoming segment, which will definitely receive wider acceptance owing to people living in different cities and dependent on themselves to meet food requirements.
The advances in the food processing industry will definitely create space for more technologies in packaging, and creation of innovative products. Packaging especially is a lesser-explored area, which demands new solutions, and features like ease of handling; longer shelf life and retaining taste come into play. All this requires the aid of technology.
A rise in the demand for processed food is bound to create challenges for food safety. Food safety sector will need to equip itself with knowledge about food hygiene as well as standards and certification. The micro, small and medium scale industries will need to put in place procedural and compliance systems. While Indian consumers were earlier not so aware of food saftery, this awareness is increasing, especially among urban consumers. Such awareness can also be taken to rural consumers through mass-media campaigns. Once consumers begin to push the demand for food safety, the food producers and handlers are automatically compelled to put systems in place.
In India, we have the Food Safety and Standards Act of 2006, which was designed to improve the overall food safety and food trade within and outside the country. The FSSA consolidated responsibility for food safety in the hands of the Food Safety and Standards Authority of India (FSSAI). The transition from the old food safety laws into the FSSA’s integrated standards and regulations took about a decade. However, spillovers from the old time exist, which are maintained by other regulatory bodies. A higher level of clarity is required if all stakeholders are to conform to FSSA regulations.
Temperature-controlled warehouses for perishables, cold storage, and appropriate logistics will also emerge as a pre-equisite for the development of this sector. This area requires intensive efforts from the government and the corporates as it is investment-intensive. The only way of revolutionising the food processing segment is by channelising the capital into this niche area. The government has taken up this massive responsibility and has committed to spend Rs.6,000 crore over the next three years to create the infrastructure which will leverage investments worth Rs.31,000 crore. Considering the seasonality in the procurement of raw materials, infrastructure can play a significant role.
It’s high time that food processing has to be integrated as a significant component of agriculture. It is the best way to overcome a peculiar situation of abundance on one side and lack of adequate storage facilities on the other. This calls for an intervention that can convert the abundance into products with longer shelf life.
The value addition of food processing not only addresses the issue of surplus of produce, but also conserves the value of agricultural commodities in the market.
Food processing in India is a sunrise sector. It offers huge opportunities for investments with encouraging growth in the food retail sector. India’s organic food market is also expected to increase by three times by 2020.
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