The food processing industry, termed as the sunrise sector of the Indian economy, is growing at the rate of 15% annually. It used to grow at 7% before 2005. Even though India is the second largest food producer in the world, processing level of agriculture and allied commodity is only 6-8% compared to 70-80% in developed countries.
The cost of production in India is 40% cheaper comparable to a location in the European Union and 10-15% over a location in Hong Kong. ?There is huge technological gap in post harvest management and processing of agriculture produce. Around 30-35% of the produce gets wasted annually due to lack of proper cold chain in India. Market-driven agriculture with strong backward linkages and the cold chain supply network can boost production and minimise wastage? said Subodh Kant Sahai, minister of food processing industries (MoFPI), at an entrepreneur meet on Friday.
?There has been around 16% improvement in food wastage in the last five years. Agricultural produces worth Rs 60,000 are wasted annually. Gaps in infrastructure and backward linkages need to be identified to cut produced wastage further.? said Ashok Sinha, secretary of the food processing ministry. On the ministry?s 100-day agenda, Sinha said work is going on a number of projects, and is under various degrees of completion.
Between 1991 to November 2006, the total inflow of foreign direct investment in the food processing sector stood at Rs 5,270 crore ($ 1.2 billion). The highest investment in a single year was at Rs 1,000 crore recorded in 2001-02.
The ministry plans to set up 10 integrated cold chain projects, including one irradiation project, which will create a storage capacity of over one lakh million tonne in the country. ?The proposal for upscaling this scheme has been approved and the ministry is likely to come out with the expression of interest shortly for selecting around 25 more cold chain projects,? Sahai said.
Currently, 50 proposals for setting up cold chains across the country, are under consideration added Sahai.
Ten mega food parks are at various levels of implementation. Four more will come up after the government approval. The projects are to be implemented under the public-private-partnership mode with a total expenditure of Rs 100-150 crore. A maximum of Rs 50 crore will be provided by the government.
The ministry is contemplating soya processing board and guar gum processing board on the lines of national meat and poultry processing board and Indian grape processing board.
An investment in food processing sector can generate higher rate of employment than any other sector. The industry employs an estimated 1.6 million people, one-fifth of the country?s industrial labours, and accounts for 14% of the total industrial output.
ITC, Dabur, Britannia, Parle, Amul, Godrej and Venky?s are the major Indian firms present in food processing, while multinationals like Wal-Mart, Nestle, Pepsi, Coke, Kellogg?s, Unilever and Glaxo have their operations in the country.