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FOOD PROCESSING INDUSTRY
Read more on - Polity | Economy | Schemes | S&T | Environment
- Food processing industry: A well-developed food processing sector with higher level of processing helps in the reduction of wastage, improves value addition, promotes crop diversification, ensures better return to the farmers, promotes employment as well as increases export earnings.
- Overall help: This sector is also capable of addressing critical issues of food security, food inflation and providing wholesome, nutritious food to the masses.
- High agri production in India: Over the years agricultural production in India has consistently recorded higher output. India ranks first in the world in the production of Milk, Ghee, Pulses, Ginger, Bananas, Guavas, Papayas and Mangoes. Further, India ranks second in the world in the production of Rice, Wheat and several other vegetables & fruits.
- Growth in FPI: Abundant supply of raw materials, increase in demand for food products and incentives offered by the Government has impacted food processing sector positively. During the last 5 years ending 2017-18, Food Processing sector has been growing at an Average Annual Growth Rate (AAGR) of around 8.41 per cent as compared to around 3.45 per cent in Agriculture at 2011-12 Prices.
- Contribution to economy: Food Processing Sector has also emerged as an important segment of the Indian economy in terms of its contribution to GDP, employment and investment. The sector constituted as much as 8.83 per cent and 10.66 per cent of GVA in Manufacturing and Agriculture sector respectively in 2017-18 at 2011-12 prices
- Employment: The food products industry, compared to other industries has the largest number of factories and engages largest number of persons as well. Since the food products industry does not figure in top five with respect to fixed capital, it shows that this sector is highly labour intensive per unit of capital deployed.
- Good output: Despite low capital intensity, the output of food products is not compromised as it is the largest among all industries. Thus, every unit of capital invested in food products industry employs largest number of persons as compared to other industries while generating the highest output level as in other industries.
- Facts: According to the latest Annual Survey of Industries (ASI) for 2016-17, the total number of persons engaged in registered food processing sector was 18.54 lakhs.
- Unregistered food processing sector supports employment to 51.11 lakh worker as per the NSSO 73rd Round, 2015-16 and constitutes 14.18% of employment in the unregistered manufacturing sector.
- The value of import of processed food during 2018-19 was US$19.32 Billion which is 3.95 percent of India’s total imports (US$ 514.03 Billion).
- Exports and imports: The share of India’s food export in the world was 2.31% in 2018 and the share of India’s food imports in the world was 1.30% in 2018.
- FDI: 100% FDI is permitted under the automatic route in food processing industries. 100% FDI is allowed through Government approval route for trading, including through e-commerce in respect of food products manufactured and/or produced in India. (The sector has witnessed FDI equity inflow of USD 3.28 billion during April 2014 to March 2019.
- Wastage: In the case of cereals, majority of losses occur at farm level during harvesting, collection and threshing. Storage losses are only 0.75 – 1.21 percent. Most of the wastage is occurring in fruits and vegetables. With adequate processing facilities, much of this wastage can be reduced
- Make in India: Food processing sector has been identified as one of the priority sectors under “MAKE IN INDIA”.
- Government schemes: The Ministry of Food Processing Industry (MoFPI) runs various schemes, the most wide-ranging of them being the PM Kisan SAMPADA Yojana. Many mega food parks too are being opened, and cold chains being established.
- Ultimate aim: The value addition possible in food processing makes it viable to motivate farmers to move to this industry to ‘double their incomes’.
- The pandemic could aid the growth of the FPI in India, with Tier-II and tier-III cities mimicking the metropolitan areas, by buying more processed food in the coming years. This would be due to the pandemic restricting mobility thus forcing people to work and learn from home. As a result, the market could touch $470 billion by 2025 from $263 billion in 2020, an increase of more than $200 billion in five years. The central government needs to negotiate more free-trade agreements with foreign nations, and also invest in testing and certification to meet stringent hygiene standards of these countries to improve exports.
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