1. The entire value chain of the food processing industry has the potential to create gainful employment for both the rural and the urban economy. Do you agree? Substantiate by taking examples.
In introduction, provide benefits and employment generation potential of food processing industry in India.
Urbanisation, rise in disposable incomes and changing lifestyle and aspirations are leading to significant demand for processed food.
The industry is in dire need of highly skilled/trained manpower across different levels to handle various operations.
Food Processing sector has strong synergies with the inclusive growth mandate of the government and also provides a platform to significantly transform the face of rural India.
It forms the vital link between the agriculture sector and final food consumption.
You can write on –
· ‘Operation Flood’ à the ‘billion litre idea’ of Dr Varghese Kurien, also known as the Father of the White Revolution (How dairy cooperatives offer employment opportunities to about 12 million agricultural families – both rural and urban)
· Success story of Amul or any other examples
Best answer 1: Spectre
Being named as the sunrise sector, food processing industry has huge potential that can be reaped for the benefit of both and rural and urban economy.Food Processing Industry is one of the major employment intensive segments contributing 11.69% of employment.
Benefits to rural economy:
>it provides an effective infrastructural facilities such as warehouse, cold storage, irradiation centres etc
>provision of transportation facilities for collection of raw material
>employment opportunities to the farmers . eg:the mega food park intiative is likely to benefit about 6000 farmers/ producers directly and 25000-30000 farmers indirectly,benefitting both organised and unorganised sector workers.
>with 100% fdi in food processing sector being approved it is estimated that it will enable the target of the centre to double the farm income by 2020 as farmers will get better rate for their produce.
>there is good scope for crop diversification
Benefits to urban economy:
>it is beneficial to local entrepreneurs who can open retail counters. India being the second most populous country in the world, has immense scope for retail expansion as along with time, urbanization and consumerism has also been increasing.
>food packaging industry, storage industry, and transportation industry amongst others, will see a rapid growth and expansion.
> HRD scheme under the National Mission on Food Processing aims to create infrastructure facilities for degree/diploma courses in the food processing sector, promote entrepreneurship, and develop food processing training centers at National and State recognized institutions.
Make in India campaign has already attracted multinational giants such as Mars (USA), Kraft (USA), Nestle (Switzerland) etc. Thus the emerging trend holds a huge promise to the food processing industry which can benefit both urban and rural economy.
Best answer 2: Valar dohaeris
Food processing value chain mainly consists of PRODUCTION-PROCESSING-PACKAGING-DISTRIBUTION AND RETAIL/SALE activities.
Rural employment generation-
· Producers get incentives for crop diversification and other sectors- horticulture, apiculture, pisciculture, poultry etc labour intensive practices, skilled manpower needs increase skilled labour too
· Basic processing units on fields and farms for cleaning, sorting, grading, drying etc create jobs for unorganised workers
· Also cold storage units, godowns etc build in rural hinterland create jobs of supervision, goods handling with readily available labour around
· Transportation and distribution activities
Urban employment created by later stages-
· Final packaging, regulatory and supervisory jobs to high grade management jobs as food processing retail is big business today
· Foreign companies invest in the field- setting up stores, plants and retail chains- potential for jobs for middle class in day to day management
· Departmental stores culture in big cities create front end and back end jobs- sales, marketing, operations handling
However, for food processing industry to reach full potential, necessary infrastructure availability is crucial- road & rail transport, power for cold storage, and easier access to markets. Development of this sector will also help release burden on farmers, unorganised sector unemployment, land resource and economy in general.
2. What do you understand by the terms ‘upstream and downstream requirements’, ‘backward forward integration’ in the parlance of food processing industry? Explain by taking suitable examples.
Provide definition of Food Processing Industry for introduction.
– Write what is upstream and downstream requirements.
-Give examples of who comes under upstream and downstream.
Upstream can be farmers, mandis including all who produce raw materials and wholesalers, retailers and consumers form downstream.
-If possible draw a small diagram with pen itself.
-Write what is backward forward integration and link it with part 1.
-give examples of those coming under backward and forward integration.
For instance, if coffee company (Bru, nescafe) directly grows or invests in coffee production then it is backward and if they directly open outlets selling coffee to customers it is forward integration (like CCD outlets).
-Draw a small diagram at the end of answer.
End with optimistic note about the importance of FPI for growth of economy and how such linkage increases efficiency and provides affordable products to end customers and also good earning to producers.
Food processing industry (FPI) works with food as raw material, processes and packages food items as per requirements, takes them to the consumers to be consumed. It is all a supply chain management process.
Upstream and downstream requirements in FPIs are requirements for production and sale processes respectively
? Eg for a chips manufacturer- upstream requirements would be raw material i.e. potatoes from farmers in needed quantities, preservatives, labor for washing, sorting, cutting etc jobs, packaging material etc
Downstream requirements will be- contractors to buy the chips, distributors to take the finished product to the consumers, sales operators to sell the final product
Backward and forward integration-
? Backend activities- production, done in upstream areas which is often rural areas as raw material supply is there, labour availability.
? And front end business activities are nearer to the markets where the end consumer is situated
The integration is of these activities to keep the supply chain running by supplying the finished products from factories, go-downs and cold-storage facilities to the stores and retailers.
It is only when above process work in tandem with each-other that a successful FP supply chain management can be established. Need is for infrastructure, policy and government support.
3. The potential of the food processing industry isn’t confined to creating employment opportunities but is equally vital for the ongoing social transformation and nutrition transition. Elucidate.
Start with the present situation of FPI like In era of ready to eat and processed food craze, the importance of FPI is ever increasing. It not only provides employment to rural and semi urban sector but also is playing vital role in social transformation and nutrition transition.
-A line or two about how it helps in employment.
-Encourage co-operative farming and removing hurdles like middleman and mandis which eat away their profits and helps in doubling there income.
-Helps in empowerment of women by allowing them to work and at same time provide healthy food to her children’s.
-Helps in moving people from below poverty to lower and middle class strata.
-Small families increasing and migration problem leaving old people at their own mercy, healthy food options is now available.
-Talk about how it helps in controlling hidden malnutrition by value addition of micro nutrients to food. Also how it helps in preservation of nutrients for long time and preventing spoilage.
-Affordable and customized food options are made available.
-Tasty yet healthy foods unlike junk foods.
You can say how this is be next big thing in agriculture reform and next green revolution can be started by this. Also talk you can say how allowing 100% FDI will play a game changer for industry and help achieving doubling of farmers income goal by 2022.
Best answer 1: Yogesh Bhatt
India in spite of one the largest food producers, able to processed only 4-5% food which is very little compare to western countries where it is up to 70-80%. In the era of ready to eat and glob competition, food processing is one sector which has ample opportunity in multiple dimensions.
It offers employment generation for like dairy sector, meat and poultry, fruit and vegetables processed product like juice and pickle, fisheries, grain products like Papad and so on. Distress labour of agriculture can shift in post harvest processing phase which will provide year around employment, financial stability, decrease price unpredictably for farm product, and reduce the food wastage. It will promote farmers group, SHGs like Lijjat papad, and producer companies.
Beyond employment, food processing also helpful for social transformation and nutritional transition also as
1- It assures nutrient security by food fortification which now uses for Mid day meal program like Akshay Patra innovation
2- Rising middle class demanding for ready to eat but healthy food that opens huge opportunity for food processing.
3- Pregnant women need good quality processed food for healthy child so it helps to achieve SDGs also.
4- Food processing opens door for millet revolution so its traditional users like small farmers and tribal community will get benefit out of it.
5- It can help to substitute to junk unhealthy food and contribute for healthy India and cash demographic dividend.
Food processing need to be integrated part of next green revolution and for that mega food park concept and 100% FDI is welcoming step.
Explain in brief about ‘hub and spoke model’ of mega food parks.
The Mega Food Park Scheme will be set up along the hub and spoke pattern. The core processing facilities will be located in a central area with processing plants at the periphery. One park will serve a cluster of three to four districts. The central processing centre will have dry warehouses, cold chain infrastructure and an irradiation centre not to mention facilities for sorting, grading and packaging.
Mention the advantages of this model and benefits to rural economy.
These Mega Food Parks are expected to provide high quality food processing infrastructure near the farms. These included logistics, transportation, and central processing centres so as to ensure –
Direct as well as indirect employment generation in rural areas
Exposing farmers to a more systematic, market driven and profitable farming activities
Generation of additional income for the farmers
Reduction in post- harvest losses
Maintenance of value chain from the farm to the market
to provide the crucial link between the farmers and traders
Push for overall development of area
(you can add more points here)
Your conclusion should say that the need of the hour is to invest and prioritize the development of food processing industry as it will not only increase the opportunities of income but also reduce the dependency of farmers on monsoon. Govt. of India’s initiative in this direction (Mega food parks, various missions) are laudable but the intent should also match the implementation on ground.
The biggest challenge before the food processing industry in India is the lack of an integrated institutional arrangement that brings the interested parties together for optimum output.
The Hub and Spoke model aims to fill this gap. It consists of: Collection Centres: The cultivators can bring their produce directly; run by local entrepreneurs. Primary Collection Centres: Sub-district level points where cleaning, sorting, etc. is done. Central Collection Centres: Usually district level points providing facilities like cold-storage, transportation on demand, etc.
This model is employed in the Mega Food Parks, like the recently opened one in Punjab.
Clearly demarcated task domains; reduces confusion and increases efficiency.
Acts as the agent providing forward and backward linkage.
Traceability and transparency due to an inventory based system.
While the bigger cities, being the PHCs, attract the front-end business, the smaller adjacent towns receive the transmitted prosperity.
The rural economy, largely agrarian, benefits the most of such projects.
Provides a systematic framework to do business, even for the smaller cultivators.
Provides employment and increases income and rural wealth.
Brings in ancillary infrastructure to rural areas like roads, electricity, etc.
Reduces wastage and pilferage, particularly of perishable food items, making agriculture a profitable business.
Some of the concerns arise in the form of lack of enough supporting infrastructure, bureaucratic inertia in finalising and operationalising the parks and uneven distribution of the same across different states. (232 words)
5. Discuss the scope/ potential of poultry and meat industry in India. Also identify its upstream and downstream requirements. What are the main challenges that the industry is facing today?
Give some facts regarding the poultry and meat industry in India (additional material is also given for reference)
India’s livestock sector has continuously provided structural support to the rural economy as an important vocation for rural population, next only to crop raising. On account of favourable socio economic factors such as changing eating habits, higher purchasing power, urbanization, increasing health consciousness towards protein rich diet, preferred meat due to religious preferences, there has been increase in demand for meat and the sector has gained importance in terms of contribution to income, employment and foreign exchange earnings.
India has the world’s largest population of livestock and is world’s 5th largest producer of meat.
In the world poultry market, India ranks ninth. The domestic poultry industry is the fastest growing segment with a compound growth rate of 15%. Being the most popular meat in India, poultry meat has been receiving significant boost through investments. Latest techniques of breeding, hatching, rearing and processing have transformed the poultry sector tremendously. Popularization of hybrid poultry breeds, thanks to efforts by both government and private sectors, has brought in more profits. Poultry meat production in India is estimated at about 2.47 million tonnes. Exports of poultry products are currently worth about Rs 457.8 crore.
Egg production has increased from 30 billion in 2000 to 66 billion in 2012, with per capita egg consumption increasing from 28 to 55 per year during the period. India now ranks as one of the fastest growing major world poultry markets.
Mention the scope/ potential of the same.
The domestic market is mostly confined to fresh meat because of the eating habits of the Indians. Therefore, hardly 40-50% of the total processing capacity of over 1 million tonnes per annum is utilized. Among processed meat, 6% of production of poultry meat is sold in the processed form of which only 1% is marketed as value added ready-to-eat/ready-to-cook types. Of the total meat produced, only about 1% is converted into value added products like sausages, ham, bacon, kababs, meatballs, etc.
The growth in meat production is primarily due to increasing domestic consumption, growing exports and a new trend of raising male buffalo calves for meat production. Spent buffalo cows are also used for meat purpose. Currently, the processing level of buffalo meat is estimated at 21%.
The buffalo meat share in total meat exports from India is more than 90 percent (in value terms), followed by 3% per cent share of goat and sheep meat and the rest comprising of poultry meat and animal casings. Exports of other types of meats such as from pork, poultry, and processed meat are almost negligible due to higher costs, inadequate meat processing facilities, and infrastructure constraints. For exports mostly deboned frozen buffalo meat is used. The demand for bovine meat has increased over the years in the global markets resulting in higher prices of cattle meat. This has opened new opportunities for us and led to increase in buffalo meat exports from India in recent years.
The factors favoring meat sector development
Low cost of production of meat type of animals to a desired age of 2 years.
Leanness of Indian meat: contains less fat and the present international trend is favorable for low fat meat. Average fat content of Indian beef is around 4% compared to 15-20% in most of the developed countries.
Green fodder feeding, absence of animal protein (carcass meal; meat and bone meal) in the ration are favorable factors for Indian meat industry.
Price structure of various meats in international market. Beef price is the highest followed by pork, mutton, and chicken.
The absence of hormones, antibiotics and growth promoters’ in the feed, the Indian meat is considered not only lean but also clean and organic.
There is no incidence of Bovine Spongiform Encephalopathy (BSE) in India.
Close proximity to promising Middle East market.
Recent initiatives of Govt. of India to improve the production(Pink Revolution)
Upstream stage: The upstream stage of the production process involves searching for and extracting raw materials. This part of the process simply finds and extracts the raw material.
Downstream stage: The downstream stage in the production process involves processing the materials collected during the upstream stage into a finished product. The downstream stage further includes the actual sale of that product to other businesses, governments or private individuals. Downstream process has direct contact with customers through the finished product.
Accessibility to raw materials.
Good linkages with farmers.
Modern extraction techniques.
Storage facilities for raw materials like Grains, Meat, Fish etc.
Quality testing facilities.
Latest processing techniques.
Latest processing machinery.
Quality testing facilities.
Organized retail stores for faster distribution.
Mention the challenges that the industry is facing today:
There are many reasons for slow growth rate in India:
Myths about meat consumption and half-truths in the media against meat consumption.
Insanitary and unhygienic conditions of the slaughterhouses and the meat shops.
Lower carcass weight and dressing percentage of food animals due to the slaughter of spent / aged animals.
Indian consumer prefers fresh meat, resulting in less demand for frozen meat.
Diseases such as Foot and Mouth Disease (FMD) are a major concern
Subsidies in developed countries, stipulation of Sanitary and Phyto Sanitary (SPS) measures, and increasing cost of production and inputs as compared to competing Nations.
Non availability of good quality livestock in the open market.
Overcrowding of food animals during transport resulting into inferior meat quality.
The lack of a sufficient cold chain infrastructure
Recent laws adopted by various state governments like Maharashtra, Gujrat etc.
Your conclusion should say that livestock sector has always played a major role in rural economy. Growth of meat and poultry sector will not only provide helping hand to rural economy in time of stress but also increase the GDP of the nation. The need of the hour is to streamline the efforts in improving the status of the industry by providing technical expertise and improved infrastructure.
NMPPB initiatives for Meat Industry:
The National Meat & Poultry Processing Board is fostering the sustainable development of the Meat and Poultry Processing Sector. It is helping the industry in setting up and modernizing abattoirs by providing technical consultancy for production of hygienic meat and meat products and for utilization of slaughterhouse wastes to prepare animal by products with value addition. Setting up quality control and analytical laboratories for meat and meat products to meet the required domestic and international market standards are being undertaken. Meat producers and entrepreneurs are being promoted and trained to adopt Good Manufacturing Practices (GMP), Hazard Analysis & Critical Control Points (HACCP), ISO-22000 in meat production. Market surveys are undertaken to help the industry to create market intelligence, data base and its dissemination on regular basis for improvement of the meat sector.