Food Processing Sector Reforms in Last 10 Years

What’s in today’s article?

• Why in News?
• What is World Food India (WFI)?
• Food Processing Sector in India
• Steps Taken by the Government to Boost Food Processing Sector in India
• Challenges and Road Ahead for Food Processing Sector in India

Why in News?

• While addressing the 3rd edition of World Food India 2024, the Indian PM said the government has undertaken many reforms in the past 10 years for the growth of the food processing sector.
• The PM also said that the Global Food Regulators Summit by the FSSAI will bring together global regulators (WHO, FAO) and domestic institutes to issues such as food safety, quality standards, and best practices.

What is World Food India (WFI)?

• The 1st edition of the WFI was launched by the Ministry of Food Processing Industries (MoFPI) in 2017, with the objective of
  • Introducing the world to rich Indian food culture.
  • As well as promoting investments in the diverse food processing sector of the country.
  • In view of celebrating 2023 as the International Year of Millets and to bring the global food processing industry together, the MoFPI organised the 2nd edition WFI in 2023.
  • The 3rd edition of the WFI 2024 will be organised from 19th to 22nd September 2024.

Food Processing Sector in India:

• Scenario:
  • Food processing in India - 'A Sunrise sector' - has an essential role in linking Indian farmers to consumers in the domestic and international markets.
  • Major sectors constituting the food processing industry in India are processed fruits and vegetables, ready-to-eat/cook (RTE/RTC), mozzarella cheese, processed marine products, edible oils, beverages, and dairy products.
  • The sector has grown substantially, averaging an annual growth rate of around 7.3%, during 2015-2022.
  • The industry has a share of 12.22% in the employment generated in all Registered Factory sectors engaging approximately 2.03 million people.
  • Unregistered food processing sector supports employment to 5.1 million workers, constituting 14.18% of employment in the unregistered manufacturing sector.
• Growth drivers:
  • Agri-commodity hub:
    • Due to its diverse agro-climatic conditions, it has a wide-ranging and large raw material base suitable for food processing industries.
    • India has access to several natural resources that provides it with a competitive advantage in the food processing sector.
    • India is the largest producer of milk and spices and one of the leading producers of fruits and vegetables, poultry, and meat.
  • Huge consumer base; strong economy; conducive policies; One District, One Product (ODOP); etc.
  • Future prospects: The market size of the food processing sector in India is estimated to reach US$ 1,274 billion in 2027 from US$ 866 billion in 2022, backed by changing lifestyle and food habits due to rising disposable income and urbanisation.

Steps Taken by the Government (MoFPI) to Boost Food Processing Sector in India:

• PM Kisan SAMPADA Yojana (PMKSY): It has been envisaged as a comprehensive package which will result in creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet.
• PM Formalisation of Micro food processing Enterprises (PMFME) Scheme: It aims to enhance existing individual micro-enterprises in the unorganised segment of the food processing industry.
• Production Linked Incentive Scheme for Food Processing Industry (PLISFPI): It aims to -
  • Boost domestic manufacturing, increase exports, while supporting food manufacturing entities with stipulated sales.
  • Make investment for expansion of processing capacity. For example, 100% FDI is permitted in the food processing sector
  • Incentivise emergence of strong Indian brands. Food processing units qualify for complete profit exemption in the first five years.
• The One District One Product (ODOP) scheme:
  • It was launched under the PMFME to provide the framework for value chain development and alignment of support infrastructure.
    • ODOP approved for 713 districts in 35 States/UTs with 137 unique products.
• The Mega Food Park (MFP) scheme:
  • The scheme follows a cluster approach, establishing modern food processing units within well-defined agri/horticultural zones.
  • Under the MFP scheme 41 projects were approved, of which 24 are operational as of December 2023.
• Operation Greens:
  • It was launched to boost Farmer Producers Organisations (FPOs), agri-logistics, processing facilities, and professional management, focusing initially on Tomato, Onion, and Potato (TOP) value chains from 2018.
  • As part of the "Aatmanirbhar Bharat Package", the scheme was extended from TOP crops to all fruits and vegetables (TOTAL).

Challenges and Road Ahead for Food Processing Sector in India:

• Challenges:
  • Lack of cutting-edge infrastructure: Many food processing businesses operate in the small and medium enterprises (SMEs) sector, which often lacks the resources needed to upgrade their facilities and machinery to the latest technology.
  • The industry is also plagued by:
    • Inefficient supply chains,
    • Inadequate storage and transport facilities, and
    • A lack of access to credit and financing.
• Impact of these issues: These issues make it difficult for SMEs to enter the market and compete with larger, more established companies.
• Road ahead:
  • The ever-increasing demand for processed food products in domestic and international markets, as well as supportive government policies, are providing the impetus for the sector.
  • Therefore, the sector can become an even more important component of India’s GDP and economic growth, if all stakeholders - from the government and private players - come together and realise this goal.

Q.1. What is the Global Food Regulators Summit by the FSSAI?

The Global Food Regulators Summit aims to foster international collaborations and knowledge-sharing on food safety and regulatory issues. It also seeks to promote dialogue on critical aspects such as food safety, risk assessment, analytical competence and capacity building initiatives.

Q.2. What is the significance of the International Year of Millets?

The International Year of Millets in 2023 was a year-long celebration to raise awareness of the many benefits of millets, including their nutritional value, environmental impact, and economic potential.

Source: World Food India 2024 | PM Modi: Wide-ranging reforms undertaken in food-processing sector in last 10 years | HT | ToI