Government’s initiative to support Food Processing sector

Government’s initiative to support Food Processing sector

News: Recently, in a written reply to the Rajya Sabha Minister of State (Food Processing Industries) stated the initiatives taken by the Government to support the Food Processing Sector.

What is Food processing?
• Any form of value addition in food in the form of sorting, grading, packaging, branding etc is called food processing. Apart from adding value to the product, food processing also increases its utility.
• For example, Tomatoes that are not fit for consumption but may still be good enough to be processed can be used to make tomato puree i.e. Sauce! This is food processing.

Where does the Potential lie?
• India is the world’s second-largest producer of fruits and vegetables, after China, yet just 2% of the crop gets processed.
• Despite a significant manufacturing base, the processing is little (less than 10 percent).  Processing accounts for around 2% of fruits and vegetables, 8% of marine products, 35% of milk, and 6% of poultry.
• India has the world’s greatest livestock population, with 50% of buffaloes and 20% of cattle, but only around 1% of the entire meat population is transformed into value-added goods.

Advantages of Food processing
Better prices for Farmers
Employment intensive industry
Can address Distress migration as jobs can be created in Rural India
Boost agricultural exports
Food security
Minimize Food wastage
Vital link between Industry and Agriculture

List of Initiatives taken by Government to help the Food processing sector:
• Inclusion of food & agro-based processing units and cold chain as an agricultural activity under Priority Sector Lending (PSL) norms in April 2015. Thereby helping it to gain cheap credit and attention of banks.
• 100% Foreign Direct Investment (FDI) approval under automatic route has been permitted for the food processing sector.
• A Special Food Processing Fund of Rs. 2000 crore was set up with National Bank for Agriculture and Rural Development (NABARD) to provide affordable credit for investments in setting up Mega Food Parks (MFP) as well as processing units in the MFPs. 
• 22 Mega food parks are operational in the country. The Scheme of Mega Food Park aims at providing a mechanism to link agricultural production to the market by bringing together farmers, processors and retailers so as to ensure maximizing value addition, minimizing wastage, increasing farmer’s income and creating employment opportunities particularly in rural sector. For example, Gujarat agro mega food park is operational in Surat.