What are the reasons for poor acceptance of cost-effective small processing unit? How the food processing unit will be helpful to uplift the socio-economic status of poor farmers?. (UPSC IAS Mains 2017 General Studies Paper – 3)
India being an agricultural country offers ideal conditions for development of emerging food processing industry. Easy availability of raw materials, changing lifestyles in urban and rural areas and favourable fiscal policies are giving a push to this sunrise sector.
But small processing unit in India are suffering from many challenges such as-
- Infrastructure: Small processing units cannot invest heavily in infrastructural support such as grading, packaging, cold storage, warehousing, logistics, supply chains etc. They rely on the common facilities in these activities.
- Manpower: Skill shortage is hampering the competitiveness of this sector. There are few institutes which provide adequate training to the labour force in this sector.
- Seasonality and perishability: Most of the agricultural products such as fruits, vegetable, fisheries etc are highly perishable and thus increase the vulnerability of the entrepreneurs to wastage of commodities. The supply of raw materials is also seasonal in nature.
- Credit: Although the industry has been included in the priority sector lending, there are inherent risks involved in small enterprises.
- Competition: Increasing investment in the sector has led to intense competition which has adversely impacted the operating profitability of the units.
- Technology: Value addition is the key factor in the food processing but India still lacks the universalisation of robust technology in this sector.
Food processing industry plays an important role in uplifting the socio-economic status of poor farmers through following ways:
- By providing a vital link between the agriculture and manufacturing sectors, it reduces the wastage of agricultural raw materials and increases shelf life of food products. This helps farmers to sell more in the long run.
- It links farmers to the agricultural market and provides them better income especially for horticultural products.
- Farmers can also earn more through more exports as value addition increases the competitiveness of products in the international market.
- It provides employment opportunities in sectors such as packaging, sampling, logistics and other non-farm activities. Thus it helps farmers to shift from farming to non-farming activities and have better lifestyles.
India must leverage all the available resources to emerge as a leader in food processing sector. It has come out with SAMPADA scheme, Mega Food Park Schemes, Value Addition Centres, Irradiation facilities etc. to promote this sector. However more needs to be done to enable small farmers to benefit from these initiatives.
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