Food processing and related industries in India - scope and significance, location, upstream and downstream requirements, supply chain management. The sector of food processing industry in India has grown rapidly and that has gained immense importance in modern time. Several academicians stated that food processing is the alteration of raw ingredients into food, or of food into other forms that is food processing may signify direct manufacturing of food or value addition on existing food. Food processing usually takes reaped crops or slaughtered animal products and uses these to yield long shelf-life food products. Food processing is done since ancient time when crude processing amalgamated slaughtering, fermenting, sun drying, preserving with salt etc. Currently, food processing adopts newest technologies and practices. There is easy availability of raw materials, changing lifestyles and relaxation in policies that has given a substantial momentum to the industry's development. This sector serves as a dynamic link between the agriculture and industrial segments of the economy. It is necessary to strengthen this link is to improve the value of agricultural produce; make sure remunerative prices to farmers and create favourable demand for Indian agricultural products in the global market. A push to the food processing sector indicates noteworthy development of the agriculture sector and ensures value addition to it.
Processes in a food processing industry:
There are two types of processes in a food processing industry:
In India, there is huge land for food production. It is estimated that more than 50% of Indian population work in Agriculture related actions. If there are good food processing industries in India, raw materials such as grains or meat can be converted into food for domestic and foreign consumption. Food processing units acts as a linkage between agriculture and industries. Food processing industries can absorb a major share of workers from the agriculture sector, who face disguised unemployment. It can result in better productivity and GDP growth. Reports indicated that Food processing averts food wastage and help in attaining food security. Processed food requires less space for storage. Processed food can be exported. This may assist government to get foreign exchange reserves.
The Indian food processing industry has remarkable capability to grow, considering the still promising levels of processing currently. Though India's agricultural production base is practically strong, wastage of agricultural produce is large.
Section wise assessment of food processing Industries in India:
I. Dairy Sector: India holds first rank in the world in terms of milk production. Milk and milk products contribute to a significant 17 per cent of the country's total expenditure on food. Traditional dairy products account for about 50 per cent of the total milk produced.
II. Fruits and Vegetables: India produces huge amount of fruits and vegetables in the world. It is the second largest vegetable and third largest fruit producer accounting for 8.4 per cent of the world's food and vegetable production. Major products exported include fruit pulps, pickles, chutneys, canned foods, concentrated pulps and juices and vegetables.
III. Grain Processing: India has third position in the production of grains in the world.As per the estimates, India produced nearly 209.32 million tonnes of grains in 2005-06. India's production covers all major grains: rice, wheat, maize, barley and millets like jowar, bajra and ragi.
IV. Meat and Poultry Processing: India has huge number of livestock population in the world accounting for 50 per cent of buffaloes and 16 per cent of the goat population. Animals generally used for production of meat are cattle, buffaloes, sheep, pigs and poultry.
V. Fisheries: India has third position in producing fish in the world and second in in-land fish production in the world. The Fisheries sector in India has been classified into marine, inland and aquaculture. Processed fish product exports comprises of conventional block frozen products, individual quick frozen products and minced fish products like fish sausage, cakes, cutlets, pastes.
VI. Consumer Foods Including Packaged foods, Beverages and Packaged Drinking Water
Packaged Foods: It is estimated that Packaged food segments in India registered a growth of 8 per cent in 2005-06. Soup market is small in India.
Beverages: The beverages market in India mainly include non-alcoholic beverages which can be broadly classified into carbonated drinks, non-carbonated drinks and hot beverages. Hot beverages include health drinks such as white beverages such as Horlicks and brown beverages such as tea/coffee as well as branded drinks for example, Boost. India is the largest producer of tea in the world.
Staples- Bread, Wheat Flour, Salt and Sugar: Bread is gradually entering to be a staple product consumed by people of all economic classes in India. It is estimated that India is the second largest producer of wheat in the world with an output of more than 70 million tonnes.
It has been appraised by experts that the total food production in India is expected to double in the coming years and there is an opportunity for huge investments in food and food processing technologies, skills and equipment, especially in fields of Canning, Dairy and Food Processing, Packaging, Frozen Food/Refrigeration and Thermo-Processing. Fruits and Vegetables Processing, Fisheries, Milk and Milk Products, Meat & Poultry, Packaged/Convenience Foods, Alcoholic Beverages & Soft Drinks and Grain processing are vital sub-sectors of the food processing manufacturing. The customer product groups like confectionery, chocolates and cocoa products, Soya-based products, mineral water, high protein foods, soft beverages, alcoholic and non-alcoholic fruit beverages, along with the health food and health food supplements is another fast growing division of this industry which is gaining huge popularity.
It is recorded that India produces nearly 16% of the world's total food grain manufacture. It is one of the largest producers of agricultural produce. India has a massive potential domestic demand for processed foods other than the demand from the exports. There are many socio-economic factors that are driving the demand side of the Indian Food Processing Industry. The varying consumption patterns, both in tier 1 and tier 2 cities, increasing income levels among the middle-class and changing lifestyles, are some of the factors providing the demand side drive for the Food Processing Industry. Furthermore, the central government has given a priority to all agro-processing industries.
Resource advantage of India: India is rich in natural resources. Different soil types and different climate types for farming of diverse food crops, long coastal line appropriate for fishing, huge resource of domestic animals.
The main advantage is that it increases employment. It is expected to create more than 10 lakh new jobs.
Curbing Migration: Agricultural resources in India provides employment in rural areas, hence reduces relocation from rural to urban and resolves issues of urbanization. It also control food inflation: These resources removes issues of wastage or middle man. It curbs food inflation. Indirect relief on non-food inflation too. Crop Diversification: Because of long shelf life, agriculturalists can expand their products.
Government initiatives to boost food processing: Various government initiatives such as attracting FDI, discount in excise duties have enhanced food processing.
Future driver of Indian growth: Food processing relates to around 10% of GDP in agriculture-manufacturing sector.
Major Segments Of Food Processing: (Source: Ministry of food processing in India. 2014)
Downstream stage: The downstream stage in the production process involves processing the materials collected during the upstream stage into a ended product. The downstream stage further comprises of the genuine sale of that product to other businesses, governments or private individuals. Downstream process has direct contact with customers through the finished product.
Latest processing techniques.
Latest processing machinery.
Quality testing facilities.
Organized retail stores for faster distribution.
Supply chain improvement and promotion
1. Regular supply of raw material through contract farming.
2. Incentives in the form of reimbursement
1. Ensuring regular market for their products by establishing linkages by market.
2. Assistance for market survey, test marketing, brand building.
1. Marketing promotion campaign for new products mix and brand name support.
2. Publications, journals, press advertisements.
1. Seminars, workshops, symposiums.
Studies, surveys, feasibility reports to assess the potential and relevant aspects.
2. Association with APEDA, CFTRI, Industry association etc. Participation in national and international exhibitions and fairs.
Various schemes under vision 2015
National Mission on food processing: Ministry of Food Processing Industries (MOFPI) implemented a new Centrally Sponsored Scheme (CSS) National Mission on Food Processing (NMFP) on 1st April 2012 for implementation through States/UTs. The NMFP visualises establishment of a National Mission as well as corresponding Missions in the State and District level. The major objectives of this schemes are as follows:
Major Programmes / Schemes to be covered under NMFP during 2012-13 are
Mega food parks: Mega Food Park Scheme is the effective program of the Ministry of Food Processing Industries, Government of India. Mega Food Park Scheme suggests a demand driven/pre-marketed model with strong backward/forward linkages and sustainable supply chain. It can be said that the policy of Mega Food Park is intended to offer a mechanism to relate agricultural production to the market through bringing together farmers, processors and retailers in order to maximize value addition, reduce wastages, increasing farmers' income and creating employment opportunities particularly in rural sector. The Mega Food Park Scheme is based on ï¿½Clusterï¿½ approach and visualizes a well-defined agri/ horticultural-processing zone containing state-of-the art processing facilities with support infrastructure and well-established supply chain.
Total 42 Mega Food Parks have been sanctioned by the Government for setting-up in the country. This step of the Government will create huge modern infrastructure for food processing sector and provide impetus to the development of the area.
List of Mega Food Parks
Eligible Proposals from Private Sector Agencies
Modernization of abattoirs: According to reports, The Scheme of Modernization of Abattoirs was launched during 2008. The Scheme is employed through local bodies (Municipal Corporations and Panchayats)/Public Sector Undertakings/Cooperatives/ Boards under Government and will have the flexibility for participation of private investors on PPP basis. The scheme offers facilities for scientific and less painful slaughtering, chilling, waste treatment plant, by-product utilization, water and power with required sanitary / phyto sanitary conditions for modernization of abattoirs. Transformation of abattoirs will also enhance essential supply base of hygienic raw material to the meat processing industry, both for domestic consumption and exports, besides discouraging illegal slaughtering. Scheme of Setting up/ Modernization of Abattoirs offers for initiation of private capital, better technology, backward and forward linkages. The system also provides for execution of projects preferably under PPP mode with the involvement of local bodies and has the flexibility for involvement of private investors/exporters on a BOO/BOT/JV basis.
Cold Chain Infrastructure: The Government of India identifies that development of cold chain is an essential step in upgrading India's food processing industry and consequently offers many incentives for promoting growth Scheme for Integrated Cold Chain, Value Addition and Preservation Infrastructure has major objective to motivate setting up of cold chain facilities to provide integrated cold chain and preservation infrastructure facilities without break from the farm gate to the customer.
Scheme of Technology Up-gradation/Establishment/ Modernization of Food Processing Industries: The Scheme is implemented to support prospective entrepreneurs to establish food processing units to decrease the wastage of agricultural and horticultural produce.
R&D, QA, Codex and Promotion:
Scheme for Quality Assurance, Codex, R&D and Other Promotional Activities is being executed to build infrastructure of food testing laboratories in the country to establish quality monitoring system for food processing, implement HACCP/ISO22000, ISO14000/GHP/GMP and other quality management systems and to encourage research and development for innovative products and process.
Food Testing Laboratories: The objective of the scheme is to guarantee safety and quality of food products with the analysis of the samples received from food processing industries and other stakeholders. The formation of a surveillance system to monitor the quality and composition of food and thereby ensuring compliance of international standards on food.
Implementation of HACCP: The goal of the scheme is to encourage the food processing industries to adopt food safety and quality assurance mechanisms such as total quality management including ISO 14000, ISO 22000 HACCP, GMP, GHP, to prepare them to face global competition in post STO Regime, to enable faithfulness to stringent quality and hygiene standards, to improve product acceptance by foreign buyers and to keep Indian industry technologically up-to-date of international best practices.
Research & Development: Main aim of this scheme is that the end product/findings of R&D work must benefit food processing industries in terms of product and process development, improved packaging, value addition and leading to advanced products and process with profitable value.
Promotional Activities: In the Scheme for Promotional Activities, the Ministry offers financial support for organizing pan India level Seminars/Workshops/Fair/ Exhibitions and also partake in pan India level Fair/Exhibitions spearheaded by Apex Industry Associations and Autonomous Bodies/PSUs of Govt. of India with the objective of distribution of information regarding food processing industries.
Scheme for Human Resource Development: Ministry of Food Processing Industries has executed the Scheme for Human Resource Development since 9th Plan and onwards to boost the supply of trained manpower/ personnel at all levels for food processing sector such as entrepreneurs, managers, sales persons, floor workers. The ministry of food processing has taken the following initiatives for policy support for food processing Industries:
The Centre has requested state Governments to undertake the following improvements: