Food Processing Sector

The government's recent efforts to help the food processing sector were recently detailed in a written response to the Rajya Sabha Minister of State (Food Processing Industries).

Present status of the food sector in India

• A type of manufacturing called food processing uses science and technology to transform raw ingredients into intermediate foods or edible products.
• A range of methods are used to transform bulky, perishable, and occasionally inedible food resources into more palatable, concentrated, shelf-stable meals or beverages.
• It enhances the end product's ability to be stored, transported, enjoyed, and conveniently used.

Relevance:

• The Indian food industry, which accounts for over 6% of GDP, 13% of exports, and 6% of all industrial investment in the nation, ranks sixth in terms of size.
• India is currently the second-largest producer of fruits and vegetables in the world, behind China, but just 2% of the output is processed.
• Despite a sizable manufacturing base, there is little processing (less than 10 percent).
• About 2% of fruits and vegetables, 8% of marine goods, 35% of milk, and 6% of poultry are processed.
• India has the largest livestock population in the world, with 50% of buffaloes and 20% of cattle, yet just 1% of the country's total meat production is turned into items with value-added.

Various measures by the government

• Priority Sector Lending (PSL) regulations added cold chain and food processing facilities as agricultural activities in April 2015.
• The Food Safety and Standards Authority of India (FSSAI) changed the clearance process from product-by-product to ingredient- and additive-based in 2016 as a step toward making business easier.
• The food processing industry has been given 100% automatic permission for Foreign Direct Investment (FDI).
• With the National Bank for Agriculture and Rural Development (NABARD), a Special Food Processing Fund of Rs. 2000 crore was established to offer loans at reasonable rates for investments in the creation of Mega Food Parks (MFP) as well as processing units in the MFPs.
• Along with the establishment of individual manufacturing units, the coverage of the fund was expanded in 2019 to include the establishment of agro-processing clusters.
• Additionally, a Designated Food Parks (DFPs) plan will be implemented in several states to allow businesses to use NABARD's special funds for low-cost lending.

Way forward

• India now processes less than 10% of its agricultural production, offering an enormous opportunity to increase processing levels and draw investments in this industry. The government's actions are therefore going on the correct path.
• In addition, the demand in retail and the rise of health-conscious consumers will drive the sector's growth.
• To strengthen the food processing sector through the MSME sector, a robust agricultural value chain with enough funding and technology applications is required.