Context

• The Food and Agriculture Organization (FAO) roughly estimates food waste at around 40% of the total annual production in India. The stated reasons are an inefficient supply chain and a fragmented food system. 
• The foolproof solution to food wastage, along with taming price volatility and securing food security, is supplementing the supply chain strengthening with creating a strong food processing industry with deep penetration in the hinterlands. 

Potential of Food Processing Sector

• Food processing is a process through which agricultural produce is turned into food, or one form of food is turned into another. This includes many forms of processing foods, from grinding grain to make raw flour to home cooking to complex industrial methods used to make convenience foods. 
• The sector already has a mark on the overall development of the Indian economy, with an 18.8% share of GVA (gross value added) in agriculture and allied sectors of the total economy. 
• It generates 12.32% of the total employment while contributing 10.4% to India’s exports. 
• The Indian Food Processing market is growing at a compound annual growth rate of 15.2% and is estimated to reach $535 billion by 2025. 

Government Initiatives

• The Government of India recognises the potential of this emerging sector and has launched several initiatives.

1. Pradhan Mantri Kisan Sampada Yojana (PMKSY): 

• PMKSY has been envisaged as a comprehensive package that will result in the creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet. 
• It is supposed to help deliver greater returns to the farmers’ income, creating huge employment opportunities, particularly in rural regions, reducing agricultural waste, raising processing levels, and enhancing the export of processed foods.

2. Pradhan Mantri Formalisation of the Micro Food Processing Enterprises Scheme (PMFME): 

• This centrally sponsored scheme was launched in 2020, under the Aatma Nirbhar Bharat Abhiyaan. 
• The goal of the scheme is to set up or upgrade 2 lakh micro food processing enterprises by providing financial, technical, and business support through credit-linked subsidies. 

3. Production Linked Incentive Scheme for Food Processing Industry (PLISFPI): 

• It is a central sector scheme to assist in the emergence of global food manufacturing champions commensurate with India’s natural resource endowment and to encourage Indian brands of food products in foreign markets. 
• It aims to boost domestic manufacturing and increase exports from India.

Conclusion

• The food processing industry is a sector with tremendous potential, not only for contributing to the nation’s economic growth but also for improving food security, reducing post-harvest losses, and enhancing the livelihoods of millions of farmers. 
• However, the path forward is not without obstacles. The food processing industry in India faces issues related to infrastructure, supply chain inefficiencies, technology adoption, and regulatory bottlenecks that need to be addressed for the sector to reach its full potential.