Food Processing Sector can transform Rural India April 2015

The food processing sector forms an important segment of the Indian economy in terms of contribution to GDP, employment and investment, and is a major driver in the country’s growth in the near future. This industry contributes as much as 9-10 per cent of GDP in agriculture and manufacturing sector.

PHD Chamber of Commerce and Industry and Technopak have forecast that Indian food processing industry is likely to register a consistent growth rate of over 10 per cent from 2015 onwards in view of its emerging potential, in which the private sector has already begun to invest, responding to the call of Make in India given by Prime Minister Narendra Modi. Currently, Indian food processing industry is growing at an average growth rate of 8.4 per cent. A joint sturdy “ India: World’s Emerging Food Leader “ has also projected that India’s food processing sector, which ranks fifth presently in the world in terms of production, growth, consumption and export is likely to reach $194 billion by the end of 2015.

Indian has a rich resource base to offer for food processing. Despite being a number one producer in many farm products, only two per cent of the farm produce is processed in India. India loses a considerable amount of agriculture produce due to lack of proper post harvest infrastructure.

The government has therefore been focusing on commercialization and value addition to agricultural produce, minimizing pre/post harvest wastage, generating employment and export growth in this sector, through a number of regulatory and fiscal incentives. The Government has formulated and implemented several schemes to provide financial assistance for setting up and modernizing of food processing units, creation of infrastructure, support for research and development and human resource development in addition to other promotional measures to encourage the growth of the processed food sector.

India’s wide diversity and throbbing domestic market have invited attention from foreign investors. Liberalization and the growth of organized retail have made the Indian market more attractive for global players. With a large agricultural sector, abundant livestock and cost competitiveness, India is fast emerging as a sourcing hub of processed food.

Rising income levels and a growing middle class is an important factor that has been changing India’s dietary patterns. Besides, the government has also created a favourable environment for foreign investors to carry forward the momentum of the sector as they not only bring in investments but also know how and technology. The massive amounts of losses of farm products post harvest has been due to the shortage of suitable infrastructure such as cold chain, packaging centres, value added centre, modernized abattoirs etc. Realizing the significance of infrastructure in developing the food processing sector, the Government has implemented several schemes for infrastructure development.

Apart from strengthening schemes to establish infrastructure facilities, measures to widely popularize them among farmers are crucial. The farmers’ traditional means of storage, transport and marketing has to be further bolstered by technology, know how and financial support. Food processing has huge potential to dramatically improve rural livelihoods by raising farm incomes through value addition in agricultural produce..

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