Core Demand of the Question
- Examine the effectiveness of India’s policy framework in promoting value addition.
- Discuss the Effectiveness of India’s policy framework in reducing wastage:
- Mention the reforms necessary to make the sector globally competitive
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Answer
A strong food supply chain is key to food security, reducing wastage, and boosting economic value. While India’s policies have advanced value addition, gaps in infrastructure and technology remain. Bridging these is essential for global competitiveness.
Effectiveness of India’s policy framework in promoting value addition
- Operation Greens rollout and utilisation: Scheme aims to integrate production, processing and marketing for 22 perishable crops, but budget use remains low.
- Agricultural Export Policy targets vs. outcomes: Policy sought to double exports from ~US $ 30 billion to ~US $ 60 billion by 2022, with a focus on high-value products.
Example: India’s agriculture exports rose 6.4% to $51.9 billion in 2024-25, from $48.8 billion during the preceding fiscal year ended March 2024.
- Production-Linked Incentive (PLI) in food processing: Encourages firms to expand processing capacities and brand development.
Example: PLI-supported food processing exports have surpassed ₹ 5.31 lakh crore (US $ 61.8 billion) since 2020 .
- Growth in food processing GVA: Value addition measured by Gross Value Added (GVA) in the sector has risen steadily.
- Cold chain incentives under PMKSY: Subsidies for farm-level and warehouse cold storage aim to enhance post-harvest processing.
Example: Investments under the Pradhan Mantri Kisan Sampada Yojana have supported automated cold facilities, though adoption remains uneven .
Effectiveness of India’s policy framework in reducing wastage
- Cold chain coverage vs. losses: Despite growth, many perishables still transit without refrigeration, causing spoilage.
Example: Inefficiencies in handling and transport lead to significant wastage and estimated US $ 19.4 million of crops lost annually without proper cold chains .
- E-NAM digital market integration: Online trading platform intended to shorten supply chains and reduce spoilage.
- Food loss taskforce and guidelines: Government-led initiatives outline best practices but lack enforcement.
Example: Such a Taskforce can play a pivotal role to reduce Food loss and wastage (FLW) and deliver to SDG 12.3, reducing food loss and waste by half in 2030.
- Cold chain infrastructure gaps: Far more demand than capacity, especially at farmgate level.
Example: About 30% of the fruits and vegetables grown in India (40 million tons amounting to US$ 13 billion) get wasted annually due to gaps in the cold chain.
Reforms necessary to make the sector globally competitive
- Enhance budget execution and expand scope: Streamline approvals under Operation Greens and broaden crop coverage.
- Boost private investment through fiscal incentives: Extend tax breaks and viability gap funding for cold chain and processing units.
- Strengthen quality and safety standards: Enforce stricter FSSAI regulations on grading, packaging and traceability to meet export norms.
Example: Adopting EU-style traceability could help Indian mango and spice exports capture premium segments.
- Scale digital supply-chain solutions: Expand E-NAM, integrate blockchain for end-to-end traceability and real-time monitoring.
Example: A blockchain project in Andhra Pradesh tracked red chilies from farms to export markets, boosting transparency and consumer trust. This innovation helped local farmers secure better prices.
- Foster global partnerships and capacity building: Leverage multilateral funding (e.g., World Bank) and PPPs to upgrade infrastructure and train workforce.
Reforms in infrastructure, technology, and farmer-focused policies can enhance efficiency and sustainability. Public-private partnerships and innovation are vital to make India’s food supply chain globally competitive.
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