1. What are the demand drivers for the food processing industry in India? Also discuss the present set of challenges being faced by the industry.
Food processing industry is one of the largest industries in India and ranks fifth in terms of production, consumption and exports. In 2015-16, the food processing industry constituted 11.8% of India’s manufacturing sector GDP.
Keydrivers of Indian Food Processing Industry:
The demand for processed food is increasing due to increasing disposable income, urbanisation, young population and nuclear families; leading to changing lifestyle and increasing expenditure on health and nutritional foods.
India is bestowed with a diverse agro-climatic conditions; large agriculture sector with cost competitiveness. With the increased linkages of primary sector with secondary sector; Investment opportunities to arise in agriculture, food infrastructure, and contract farming.
The food processing sector is a sunrise sector and government sees it as a future driver of Indian economy. Government has launched various infrastructure development schemes to increase investments in food processing infrastructure like Megafoodpark scheme with strong backward and forward linkages (Hub and spoke model) ,Sampada scheme for agro processing and maketing
4)Rapidgrowth in organized retail, a catalyst for the food industry
Increased consumer spend as organized retail and hypermarkets
Employment generation and higher tax revenue
Productivity gains across entire supply chain through dis-intermediation and superior technology
5)Globalshift to outsourcing from India across products/ services including food
6)De-regulation and liberalization of the Indian economy, driven by central and state governments
It has the potential to bring in FDI and latest global technologies and best practices
Challengesof the Indian Food Processing Sector:
FICCI report of 2014 says of the country’s total agriculture and food produce, currently only 3% is processed currently in comparison to 40% in countries such as Malaysia and Thailand. There are several challenges which span across the entire value chain and are as follows:
A major area of concern is food production itself. Despite being an agrarian economy and one of the largest producers of vegetables, fruits, wheat etc., it is unfortunate that the productivity of crops is quite low relative to international standards.
Human resource development needs to cover the entire gamut from basic infrastructure, education, vocational and technical guidance to qualified professionals in the sector.
Long and fragmented supply chains leading to high wastage and high costs especially due to seasonality, perishability and variability of produce.
Indian export- related infrastructure for agro-produce is grossly inadequate, especially at sea ports and airports. More than 30 percent of the produce is lost due to poor post-harvesting facilities and lack of cold chain infrastructure.
Unavailability of basic standardization and certification infrastructure. Given the size of the industry, there is a huge gap in the availability of laboratories, trained manpower, and certification agencies. The recent Maggicontroversy and the role of FSSAI was under severe scrutiny.
6)Lowlevel of Linkages between Industries
Low level of interaction between industry and research institutes are one of the major problems. In order to improve farm productivity, continuous introduction and implementation of innovative technologies calls for existence of a strong R&D network. While investments are being made in this regard, the efforts have not been as rewarding.
Given the changes in the Indian landscape, the packaged foods segment holds immense promise and a concerted move to develop India’s Food Processing sector will be a force multiplier in creating large-scale employment, enhancing farm incomes and combating
2. What is the ‘hub and spoke model’ of mega food parks being followed to promote the food processing industry in India? What are its advantages? How is it beneficial to the rural economy? Discuss.
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 scheme of developing Mega Food Parks introduced under 12th FYP follows Hub and spoke model of developing food processing industry.
The Hub and spoke model is a system of collection by which several local centres are connected to a single head centre like the spokes of a wheel connected to its centre. The hub and spoke model of being followed for the mega food parks includes the following centers –
1) Collection centers (CCs) – These are present close to the farms and collect raw material from farmers/SHGs right after harvest.
2) Primary processing centers (PPCs) – These collect goods from CCs and do contain preliminary processing equipment like for washing, salting etc. The CCs act as spokes for a PPC hub.
3) Central Processing Centers (CPCs) – These centers are spread over large areas of about 50 acres and contain a conglomeration of processors who collect their raw materials from the PPCs and sell their product to retail consumers. Here, the PPCs act as spokes for the CPC hub.
– 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.
– It gives impetus to innovation, R&D in this sector.
– Increase in export can limit CAD.
Benefits to rural economy
1) Better farm gate prices to farmers, increased remunerative prices.
2) Increase of productivity of soil due to investment and high quality seeds in farms.
3) Provide opportunities to women by giving impetus to SHGs. Therefore help in women empowerment and social transformation.
Some of the concerns arise in the form of lack of enough supporting infrastructure, bureaucratic inertia in finalizing and operationalising the parks and uneven distribution of the same across different states which need to be addressed at the earliest. The food processing sector is one of the growth engines out of 25 sectors identified for the “Make in India” initiative this mega food park scheme helps in realizing the potential of the food processing industry.
3. 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?
Scope of Poultry and meat Industry in India:
In spite of big potential of the large livestock population, meat industry in India has not taken its due share although India has acquired Number One position in the world contributing 13% of the world milk production. The meat production, which jibes well with dairying, is placed at No. 8 position in the world. India produces about 4.9 million tones of meat annually valued at US $ 4,600 millions, and has grown @ 4.5% during the last two decades. However, during the last five years, this segment has been growing very fast at the rate of 27% annually and has a good future given the present attention by the Government and Private Entrepreneur.
The share of bovine meat in the total meat production in India is about 60% as against small ruminants (15%), pigs (10%) and poultry (12%). To produce the above quantities, the extraction rates in cattle are about 6%, buffaloes 11%, sheep 33%, goat 38% and pigs 84%.
India exports, both frozen and fresh chilled meat to more than 54 countries in the world. Last year (2001-2002) export was 243,560 MT. The major export was of deboned and deglanded buffalo meat, which accounts for 98% of the total meat exports. The rest of the meat exported is from sheep, goat and poultry. Meat is produced from animals procured from disease free zones and processed in the state of the art processing plants following world class sanitary and phytosanitary measures and certified with HACCP and ISO-9002. There is, however, very little processing of meat (1%) for ready to eat meat products.
There are around 10 fully integrated eco-friendly processing plants in the country with processing capacity of producing 50,000 to 120,000 tones of meat per annum. Six more fully integrated meat plants are already in the process of construction. Meat industry has shown a tremendous change in the last one decade with the establishment of the eco-friendly fully integrated processing plants and in the next ten years, there will also be great change with the establishment of the feedlots as a backward integration to the processing plants. With the Government of India taking up FMD control programme in three Zones in the country (North, Central and South) consisting of 56 Districts, it is assumed that India is poised with a major breakthrough in the meat and dairy product exports in the international markets.
Availability of healthy and disease-free cattle and poultry as infected meat will attract export ban
Presence of state of the art Abattoirs
Quality fodder for the cattle, poor fodder will not provide good quality meat
Development of veterinary infrastructure
Good Strorage facility, inclusing the cold storages
Good Processing and packaging facilities, which can increase the shelf life and prevent contamination
Good Transport facilities, which can reduce the transportation time, as meat is highly perishable item
Markets for the sale of produce, Indian meat exports have to face competition from other countries like China, Bangladesh and Vietnam
5. Recently, the Prime Minister suggested holding of simultaneous Lok Sabha and Assembly elections all over the country. Do you think it’s a good idea? What are its pros and cons? Discuss.
Recently, the prime minister of country suggested having simultaneous elections to Lok Sabha and Assembly all over the country in order to save time and concentrates more on growth and development. It is a good idea however the possibility and support for it from various quarters are bleak.
Pros of having simultaneous election:
Election and campaign: It will allow ministers and members to concentrate on government than spend time in campaigning.
Money: Huge some of revenue can be saved in form of expenses.
Availability: Huge man power will be available for which they are meant for.
MCC: policy implementation and populistic policies will find back place.
Development: Full concentration on growth and development by government.
Accountability: Government can be held accountability for work done in 5 years.
Safety and security: Huge defense personnel’s are needed which will put defense of country at stake.
Manpower: Huge man power is required which is not available.
National and regional issues: Both issues get mixed up.
Regional politics: Regional party will be diminished.
Employment: Many youths and party workers will become unemployed. In case of election they can earn some money.
Early dissolution: In case of no-confidence or loss of majority or break up in coalition partners. In such cases what happens next.
All stake holders should come together and decide keeping in mind the welfare of country and establishing the ideals of our framers of constitution. Utmost care should be taken to preserve the federal structure and our democratic setup.