Agri-reforms & food business: A win-win combination

March 13, 2021 3:15 AM

The food business environment is undergoing changes owing to various policy initiatives taken by the government. Youth are willing to participate in various food business activities and are also encouraged by the various initiatives taken by the government, like the new farm laws

A rough estimate suggests that food business operations, based on the licences issued post-Covid-19 have the potential to engage 21.28 million.A rough estimate suggests that food business operations, based on the licences issued post-Covid-19 have the potential to engage 21.28 million.

By P Chandra Shekara

India is one of the world’s youngest nations with an average age of 29 years and more than 50% of the total population less than 25 years. India’s total workforce is 487.4 million; agriculture hosts almost half (48%) of it (Basu and Kaaushik, 2017). The food processing industry, widely recognised as a ‘sunrise industry’, has the potential to play an important role in involving this workforce effectively, but this may need effective enforcement of food safety standards. Accordingly, Food Safety and Standards Authority of India has been constituted to issue permit food business operators to practice food-related business by issuing three types of licences based on the volume of business and location of operations, namely, central licences, state licences and registration for small business.

Growth in food business operations: The information compiled by FSSAI on licences issued under different categories suggests a visible growth in food business operations over the years and specifically during June-2020 to January-2021 as compared to June-2017-January-2018.

Investment on account of food business operations: The different kind of licences issued by the authority and average investment made under each category, as reflected by the survey conducted by MANAGE and NIAM during Covid-19 period, can roughly translates into Rs 2.41 lakh crore going into agro-processing. Accordingly, the Centre has introduced various subsidy based schemes like PM SVANidhi, Pradhan Mantri Kisan Sampada Yojana and ISAM on agricultural marketing infrastructure.

Focus on infrastructure: Government of India sanctioned over 134 food processing projects during 2020 across different states, which are expected to leverage private investment of Rs 2,026.32 crore and generate direct and indirect employment for 77,330 persons.

Liberal agricultural marketing system: The government has taken various reforms introduced during 2003 and 2017 and subsequent introduction of the new farm Acts in 2020 to create a liberal agricultural marketing system. As per the aforesaid survey, the decision of 48% of the operators to obtain licences was influenced by the farm Acts. A total of 64% of food business operators expressed that the farm Acts will encourage agro-processing, and also, it will benefit in sourcing raw material directly from farmers without paying any licence fee to regulated markets.

Capacity building: In addition to FSSAI efforts, there is a need for establishing institutional arrangement like Agri-Clinics and Agri-Business Centres scheme having capacity building, hand holding, credit and subsidy integral to it. Similarly, Diploma in Agricultural Extension Services for Input Dealers (DAESI) with an understanding of agriculture and having business orientation can be easily encouraged to invest in food business operations.

Employment creation: A rough estimate suggests that food business operations, based on the licences issued post-Covid-19 have the potential to engage 21.28 million. Government schemes like Pradhan Mantri Kaushal Vikas Yojana and other ministry specific schemes, like skill training of rural youth, may be used to improve skills appropriately.

Participation of FPOs: Formation and promotion of 10,000 Farmer Produce Organisations (FPOs), Pradhan Mantri Kisan SAMPADA Yojana, Integrated Scheme for Agricultural Marketing and PM Formalisation of Micro Food Processing Enterprises Scheme may be used to supplement the efforts of aggregation of farmers, who can, in turn, also operate food businesses. The mobile app, Kisan Rath, introduced by the government, will help stakeholders in availing logistic services.

Change in consumer behaviour: There is a jump in the number of online operators providing home delivery of safe food during Covid-19. The restaurants which provided food items to online operators mandatorily need licences. The opening of economy, created opportunities.

Making agriculture attractive: Retaining youth in agriculture is important. Secondary agriculture activities like grading, packaging, warehousing and processing have the potential to retain the youth in agriculture. This would require that the youth be oriented about food business opportunities and need for obtaining licence from the authority to function as an operator. They may be linked to various programs to encourage agri startups. Rashtriya Krishi Vikas Yojna (RKVY-RAFTAAR), a government of India scheme, supports agri startups, including innovative food processing and food business operations through financial support and mentorship.

The food business environment is undergoing changes owing to various policy initiatives taken by the government. Youth are willing to participate in various food business activities and are also encouraged by the various initiatives taken by the government, like the new farm Acts. Same has also been observed in terms of increased number of licences issued by FSSAI. This increase in food business operations guided by enabling environment created by the farm Acts and other initiatives of the government will help in bringing a paradigm shift in the complete system covering infrastructure, skill development, expansion of secondary agriculture activities, retaining rural youth in agriculture and ultimately transforming agriculture into agribusiness.

The author is Director General, National Institute of Agricultural Extension Management (MANAGE). Views are personal

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