The food processing sector in India is part of the overall food supply chain, transforming raw agricultural and livestock products into processed, value-added food products ready for consumption. The sector comprises diverse activities, technologies, and processes designed to increase food safety, convenience, shelf-life, flavor, and nutritional value.
Significance of the Food Processing Sector in India
The food processing sector is a substantial contributor to India’s economy, accounting for 13% of exports and 6% of industrial investment. From 2014 to 2020, it attracted significant foreign direct investment (FDI), with USD 4.18 billion indicating investor confidence in the sector’s future. The sector is projected to create 9 million jobs by 2024, and by 2030, India is expected to be the world’s fifth-largest consumer of food and food technology, highlighting the sector’s immense growth potential.
Government Measures Supporting the Food Processing Sector
The government has introduced several initiatives to stimulate the food processing sector. These include the classification of food and agro-based processing units and cold chain as an agricultural activity under Priority Sector Lending in April 2015. The Food Safety and Standards Authority of India switched to an ingredient and additive-based approval process in 2016, making business easier. For the food processing sector, 100% FDI approval under the automatic route is permitted. A special Food Processing Fund of Rs 2000 crore was established with the National Bank for Agriculture and Rural Development. Other plans include the Pradhan Mantri Kisan Sampada Yojana, the Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme, and the Production Linked Incentive Scheme for the food processing industry.
Challenges Encountered by the Food Processing Sector
Despite the promising potential of the food processing sector, several challenges persist. These include inadequate cold storage and transport facilities, resulting in significant post-harvest losses of perishable goods. The fragmented supply chain in India leads to inefficiencies and increased costs. The sector is also subject to complex regulations, permits, and licenses, which can be difficult for businesses to navigate. Ensuring food safety and quality standards across the supply chain remains a significant challenge. Furthermore, limited investment in research and development hampers innovation and the creation of new, value-added products.
Future of the Food Processing Sector: Proposed Solutions
Several proposals aim to address these challenges and pave the way for future growth in the food processing sector. These include establishing smart food processing hubs equipped with advanced technologies like IoT, AI, and blockchain to improve quality, traceability, and efficiency. Developing functional and nutraceutical foods tailored to specific health needs can also contribute to sector growth. Implementing zero-waste processing techniques where every part of the raw material is used can further enhance the sector. For example, food waste can be converted into bio-fuels or food by-products used to create new items like bio-plastic or animal feed. Another proposal involves setting up community-based food processing centers in rural areas to reduce post-harvest losses and create rural employment opportunities.
Exam Study Questions
UPSC Civil Services Examination Previous Year’s Question, Prelims: What is the purpose of the Government of India promoting the concept of “Mega Food Parks”?
a) To provide good infrastructure facilities for the food processing industry.
b) To increase the processing of perishable items and reduce wastage.
c) To provide emerging and eco-friendly food processing technologies to entrepreneurs.
The correct answer is (b).
Mains Q: What are the reasons for the poor acceptance of a cost-effective small processing unit? How can the food processing unit be helpful to uplift the socio-economic status of poor farmers?
