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Tapping the Huge Potential of Food Processing Sector

Food grain production has registered a record growth in the country in recent years. India also ranks high among fruit, vegetable, milk, poultry and meat producing countries of the world. This has led to remarkable improvement in the earning capacity of population engaged in agriculture and allied sectors. However, due to lack of efficient supply chains and processing infrastructure, the processing levels in the country are quite low. This results in considerable amount of wastage of agricultural and horticultural produce. As per a study conducted by the Central Institute for Post-Harvest Engineering and Technology, post-harvest losses in 2009 were to the tune of Rs. 44,000 crore.

To harness the full potential of the food sector, the Ministry of Food Processing Industries launched new schemes in the 11th Plan, which are at different stages of implementation. The focus of these schemes is on creation of modern infrastructure to facilitate growth of food processing and cold chain system for handling perishable produce. More specifically, these schemes relate to the setting up of mega food parks, integrated cold chains, value addition and preservation of infrastructure, and modernization of abattoirs.

Mega Food Parks Scheme
The Mega Food Parks Scheme (MFPS), a flagship programme in the food processing sector, facilitates establishment of a strong infrastructure backed by an efficient supply chain. The Mega Food Parks have farm proximate facilities such as primary processing centres, collection centres and a central processing centre. The food processing units within a Mega Food Park use common infrastructure required for processing, packaging, quality control labs, trade facilitation centre etc, based on their needs. This cluster approach makes food processing more economically viable. The state-of-the art processing infrastructure gives them the required technical edge.

Mega Food Parks have the potential to revive the agriculture in the surrounding areas by increasing returns for farmers, besides creating large employment opportunities in rural areas.

Each Mega Food Park is envisaged to catalyse an investment of Rs. 250 crore, leading to annual turnover of about Rs. 400 – 500 crore. The scheme provides for a capital grant of 50 percent of the project cost (excluding the cost of land) subject to a maximum of Rs. 50 crore. In difficult and ITDP notified areas, the grant is even higher at 75 percent of project cost (excluding the cost of land) with a ceiling of Rs. 50 crore. The grant is utilized towards creation of common infrastructure in theMega Food Park and also setting up of Primary Processing and Collection Centres.

Scheme for Cold Chain, Value Addition and Preservation Infrastructure
The Scheme for Cold Chain, Value Addition and Preservation Infrastructure intends to address the shortage of cold storage capacity. Huge gap of 9 to 10 million tonnes of cold storage capacity was identified in the country by the Task Force on Cold Chains. The scheme aims at providing integrated and complete cold chain, value addition and preservation infrastructure facilities without any break, for perishables from the farm gate to the consumer. The assistance under the scheme includes financial assistance (grant-in-aid) of 50% of total cost of plant and machinery and technical/ civil works in general areas and 75% for North East region and difficult areas, subject to a maximum of Rs. 10 Crore.

Concurrent evaluation of projects reveals substantive value addition, reduction in wastage and enhancement in farmers’ income.
Taking note of the high demand for and the gap in the availability of cold storage, processing, preservation and cold logistics facilities in India, the Ministry is planning to upscale the Scheme and the Planning Commission has accorded ‘in-principle’ approval for the same.

A number of other initiatives have been taken in the last few years to upgrade the food processing capacities in different areas. As part of it, in the 1st phase 10 projects have been approved for modernization of abattoirs which are progressing well. Two projects have already been completed.

Research, education and training in the food processing sector are being supported by the Indian Institute of Crop Processing Technology. The National Meat and Poultry Processing Board is engaged in promotion of meat industry. Grape processing is being supported by the Indian Grape Processing Board to cater to the needs of fast-growing wine industry.

The food processing sector is progressing well. The average growth has doubled from 7% in 2004 to 14% in 2010. The Vision 2015 Document has set the goal of tripling the size of the processed food sector. A number of schemes are already under operation in the sector and some more are in the pipeline to achieve the goal. These schemes, coupled with other flagship programmes in agriculture and allied sectors, are bound to change the face of rural India and add prosperity to the life of the common man.


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