Definition:

• Food processing  involves transforming raw agricultural products into consumable food  items, adding value and extending shelf life.

Potential and Opportunities of Food Processing Industry:

• • Food Production capacity: India is the largest producer of goods like Milk, pulses and second largest producer of rice, wheat, sugarcane and many vegetables and fruits. This capacity gives a chance to process varied types of foods.

• Varied Products: India has a diverse food production basket, which also enhances the chances to produce various food products.

• Limited Processing food consumption: At present less than 10% of the agricultural output of India is processed. This gives opportunities to expand the industry.

• Huge Market: India has a large and growing population. With rising economic ability, working population and increasing nuclear family setup, the  supply of processed food becomes essential for the needs of this market.

• Economic growth: Food processing industry’s growth can contribute to the growth of a country’s Gross Domestic Product(GDP).
• Employment Opportunities: Food processing sector can provide gainful employment to the people of the country. It is a labor intensive sector and can help in reducing poverty and unemployment.
• Nutrient Security: This sector helps in food fortification, which can help in addressing the nutrient deficiency of the people. 
  • Food fortification refers to the process by which nutrients are added artificially to the food products in the processing stage. Eg: Vitamins in cooking oil. 
• Rising Demand for healthier foods: In today’s fast paced world, demand for nutrient rich food is increasing. Enhanced economic ability of the people also strengthens this demand.

Challenges faced by Food Processing Industry:

• Post Harvest Wastage: The national-level study conducted by Central Institute of Post-Harvest Engineering and Technology (CIPHET) estimated that nearly 4.65-5.99% of cereals are wasted, and nearly 4.58-15.88% of fruits and vegetables are wasted. 
  • Among pulses, the losses increased from an earlier estimate of 4.3-6.1% in 2010 to 6.36-8.41% in 2015. Overall losses also increased in milk, meat, poultry and marine fisheries. The study also estimated that the value of the post-harvest losses is at Rs 92,651 crores.  
• Gaps in Supply chain: There exist gaps in supply chain infrastructure which means inadequate primary processing, storage and distribution facilities.  Inadequate link between production and processing due to lack of processable varieties.  
  • Logistics time and cost in India is higher in comparison to China and other competing countries.
• Subsistence Agriculture: Around 80% of the farmers are small and marginal farmers and a significant part of them take up agriculture for subsistence activity which leads to little farm produce directed at the market and low-capacity utilisation.  
• Quality and Safety Standards: Lack of focus on quality and safety standards, and not having enough of product development and innovation.
• Outdated Technology: Many small and medium enterprises (SMEs) use outdated processing techniques, which reduce efficiency and product quality. The high cost of adopting advanced technology and automation is a barrier for many businesses, especially SMEs.
• Credit Constraints: Small and medium enterprises often face difficulties in accessing finance due to stringent lending norms and collateral requirements. The cost of borrowing is relatively high, making it difficult for businesses to invest in expansion and modernization.
• Seasonal Production: The availability of raw materials is often seasonal, leading to irregular production cycles and underutilization of processing capacity during off-seasons. The seasonal nature of agricultural produce also results in price volatility, affecting the profitability of food processors.

Government Schemes for Food Processing Industry:

• • Pradhan Mantri Kisan SAMPADA Yojana (PMKSY): A comprehensive scheme with an outlay of ₹6,000 crore, aimed at creating modern infrastructure for food processing and reducing wastage.
    • It includes Mega Food Parks, Integrated Cold Chain, Food Safety and Quality Assurance Infrastructure, and Infrastructure for Agro-processing Clusters.
  • PM Formalisation of Micro Food Processing Enterprises (PMFME): This scheme provides financial, technical and business support for upgradation of existing micro food processing enterprises. 
    • The Scheme aims to enhance the competitiveness of existing individual micro-enterprises in the unorganised segment of the food processing industry and promote formalisation of the sector. 
    • It supports Farmer Producer Organizations (FPOs), Self Help Groups (SHGs) and Producers Cooperatives along their entire value chain.
  • One District One Product: The PMFME Scheme adopts One District One Product (ODOP) approach to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products. 
    • The ODOP products selected are either a perishable agro-produce, cereal-based product or a food product widely produced, Minor Forest Produce or traditional food products in a district and their allied sectors.
  • Mega Food Parks Scheme: Establish large-scale food processing facilities with modern infrastructure, ensuring backward and forward linkages from farm to market. It provides a platform for producers, processors, and retailers, leading to greater efficiency and reduced wastage.
  • Production Linked Incentive (PLI) Scheme for Food Processing: This scheme aims  to diversify India’s export portfolio by focusing  on value-added segments and incentivising  manufacturing in specific food product segments. Moreover, the scheme  promotes innovative and organic products from  SMEs.
  • Agri-Export Policy: Promote exports of agricultural products by identifying and developing clusters, facilitating logistics, and creating an export-friendly environment.
  • 100% FDI in Food Processing: The government allows 100% Foreign Direct Investment (FDI) under the automatic route in the food processing sector, encouraging foreign investment and technology transfer.
  • Skill Development and Training: Initiatives like the “National Skill Development Corporation (NSDC)” and sector-specific skill councils offer training programs to create a skilled workforce in the food processing industry.
  • APEDA Initiatives: APEDA supports exporters through various schemes such as market development assistance, export promotion, and infrastructure development. Programs like SUFALAM to enhance the capabilities of exporters and stakeholders.
  • Food Safety and Standards Authority of India (FSSAI) Initiatives: FSSAI sets standards and regulations to ensure the safety and quality of food products, fostering consumer confidence and boosting domestic and international market access.
  • Mega Cluster-Based Approach: Identifying and developing specific clusters for the processing of certain commodities like fruits, vegetables, and spices, which enhances local value addition and increases efficiency.

• National Bank for Agriculture and RuralDevelopment (NABARD) has taken initiatives like the Food Processing Fund and Warehouse Infrastructure Fund for providing financial support to development of this sector.

• National  Agricultural Cooperative Marketing Federation  of India (NAFED)’s initiatives: As people increasingly recognise the  importance of healthy food, NAFED , which is an agriculture-based  cooperative, has expanded its business towards  coming out with healthy food initiatives like  Millets, Bharat Atta, Bharat Dal, and Bharat Chawal.  These initiatives align with NAFED’s dedication to  promoting healthy eating at affordable prices. 
• Skill Development Initiatives: In order to  address the skill gap, the MoFPI has been working  in close collaboration with the Food Industry  Capacity and Skill Initiative (FICSI), the Sector Skill  Council (SSC), and the National Institute of Food  Technology Entrepreneurship and Management  (NIFTEM), an institute under the MoFPI, to regularly  guide and assist it in achieving its mandate.

Way Forward:

• Food processing is one of the sectors that has immense potential for transforming the lives of people and contributing to the national economy. 
• Organised state intervention can help the food processing industry in the region have a good share in the global market. 
• The immediate need of the region is to create ways to enhance the competitiveness of small units in terms of production, design, packaging, distribution, prices, etc., and provide the necessary technical support. 
• Market forces are also needed to develop appropriate tools like collective brand promotion to build a market in terms of credit, enabling environment, marketing, and extension services.
• Technological interventions like the use of Robotics, Artificial intelligence, Internet of Things should be inculcated into the food processing sector.
• A long-sighted outlook is essential to utilise the raw materials from the food industry and the organised way of producing food products. 
• In the last three decades, ready-to-eat meals, juices, ice creams, bakery products, and other convenience foods have become popular in households. This is mainly due to the organised way of production, packaging, distribution, etc., as well as mass educational and industrial development levels. 
• With this as the base, the food processing industry should be developed for catering the needs of local and global markets.