What are the challenges and opportunities of the food processing sector in the country? How can the income of the farmers be substantially increased by encouraging food processing? UPSC IAS Mains 2020 General Studies Paper – 3)
Food processing generally includes the basic preparation of foods, the alteration of a food product into another form, and preservation and packaging techniques. For example, extraction of mango juice from the pulp.
Challenges Faced by Food Processing Industry In India
- Supply Side Bottlenecks: Fragmented land holdings result in low farm productivity. Due to this, farmers are left with a small and dispersed marketable surplus.
- Demand Side Bottlenecks: The demand for processed food is mainly restricted to urban areas of India and the middle and higher class of population.
- Infrastructure Bottlenecks: Lackofmechanizationandpropersupply chainresultsinpooraccesstomarket.High seasonality and perishability requires cold storage & warehousing facilities and road, rail & port connectivity.
- Manpower: There is a shortage ofskilled workers. At each level in the value chain, there are strong deficiencies in technical know-how and support.
- Sanitary and Phytosanitary (SPS) Measure: The stringent SPS measures applied by developed countries also impedes the exports of processed foods.
Opportunities Associated with Food Processing Industries
- Employment Generation: FPI provides vital linkage between the two pillars of the economy – agriculture and industry. Therefore, it provides direct and indirect employment opportunities.
- Nutritional Security: Processed foods when fortified with vitamins and minerals can reduce the nutritional gap in the population.
- Trade and Foreign exchange: Food export can be an important source of foreign exchange, given the huge demand for nutritious, easy to eat and time-saving food in the evolving busy liefestyle.
Food Processing Industry & Farmers’ Income
- Value Addition: Processed foods fetch a better price than the raw items. For example, the value of biscuit is higher than flour although the raw item is the same. Thus, FPI can help farmers in getting a favourable price for their products.
- Demand for Agro-Products: Urbanization is increasing at a rapid pace in India, which subsequently, increases the demand for processed food. The rise in demand for processed food will, in turn, lead to rise in farmers’ income.
- Combating Rural Unemployment: Food processing being a labour-intensive industry will provide localized employment opportunities and thus will reduce the push factor in source regions of migration.
Food processing has become an integral part of the food supply chain in the global economy. India being an agrarian dominated country must leverage its potential in the Food Processing Industry. It will be help India in doubling farmers’ income by 2022-23.
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