Answer: 

Introduction:

The food processing industry encompasses a wide range of activities, including the processing, preservation, packaging, and distribution of food products. The Indian food processing sector contributes to almost 6% of GDP, 13% of Indian exports, and 6% of overall industrial investment in the country.

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Body:

Scope of food processing industry:

• India’s large raw material base: India’s is the largest producer of meat and is the second largest producer of several fruits and vegetables. This surplus production is ideal to feed the processing industry.
• Diverse products: India has a large and diverse base of raw materials, which includes a wide range of agricultural and horticultural crops, as well as livestock and fishery products given the large coastline and diverse agro-climatic conditions.
• Market size: India is one of the largest consumer markets in the world and given the growing middle-class population, the demand is only going to increase.
• Investments: India’s food processing industry is one of the largest FDI recipients and there are a number of government initiatives that aim at boosting the food processing sector.
  • Example: Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), PM-Formalization of Micro Food Processing Enterprises (PMFME) Scheme, Production Linked Incentive scheme (PLIS) for Food Processing Sector
• Untapped potential: Only 2% of the fruits and vegetables and only 10% of marine produce is processed currently. So there is a lot more that can be done in this sector.

Significance

• Profit for farmers: It can provide an alternative profitable market to farmers that can contribute to doubling the farmers income. It leads to better utilization of agricultural produce by value addition.
• Crop-diversification: Food processing will require different types of inputs thus creating an incentive for the farmer to grow and diversify crops.
• Employment: It can contribute to employment generation. Agriculture already has a problem of disguised unemployment and seasonal employment. More than 10 lakh new jobs are anticipated to be created in the food processing industry.
• Reduced migration: Employment opportunities in the rural areas would reduce migration to urban areas. This works in favour of rural as well as urban areas.
• Contribution to economy: Food processing industry accounts for about 12% of the GDP in India. With further growth in the industry, this share is expected to increase in the future.
• Reduce wastage of agricultural produce: Food processing minimizes wastage by utilizing excess of the produce. Processing also increases shelf life of produce thereby ensuring that seasonality of some agricultural products can be reduced. This would aid in controlling inflation as well.
• Nutritional value: Food fortified with vitamins and minerals can reduce the nutritional gap in the population. Food processing can help improve the availability, accessibility, and affordability of food products, particularly in rural and remote areas.
• Export potential: Smooth functioning of forward and backward linkages can enhance the export capacity of Indian trade in the international market and curb the food inflation in the domestic market.

Conclusion:

Despite its many benefits, the level of processing of agricultural produce is less than 10% and more than 75% of the industry is in the unorganized sector. It also faces a number of challenges. To overcome these challenges and further develop the industry, the government has implemented a number of initiatives, which would go a long way in achieving the sector’s true potential.

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