Food processing is an activity that changes the raw food stuff into a suitable form that can be marketed. Food processing sector provides for the working together of industry and agriculture and contributes to economic and social growth. In the last decade, India has transformed from insufficiency to surplus in terms of food production which is expected to double in the next ten years.

Importance of Food Processing Industry:

• The Government of India has devised a number of schemes for financial relief, incentives, commercialization and value addition in food processing sector.
• India can become the leading supplier of food items in the future as it stands 2nd in terms of food production.
• It will strengthen the use of modern processing and storage technologies in the food processing sector.
• Food processing activities bring together farmers, processors and retailers.
• It helps to reduce wastage in the supply chain and in attaining food security.
• The sector also helps address issues food inflation and providing healthy food to the public.
• The increase in the income levels and change in food habits has led to an increase in the demand for nutritious fruits and vegetables.
• Processed food needs less space for storage and hence promotes exporting.
• It will also help in crop diversification, commercialization of agriculture, reduction of wastage, enhancing shelf life, and ensuring better returns to the farmers.
• The consumer also benefit from an increase in the supply of food products with a longer shelf life.

Current Scenario in India:

• Grains, sugar, edible oils, beverages and dairy products are the Major industries in the food processing sector.
• Value addition processes includes packaging, canning, making frozen food, dairy processing and thermo processing industries.
• The sector accounts for almost one-third of the total food market in India.
• With a valuation of $ 258 billion, it is the fifth largest domestic sector in terms of production, consumption, export and expected growth in the country.
• The sector contributes to around 14 % of manufacturing GDP, 13 % of total food exports and 6% of total industrial investment.
• It contributes 8.80 % and 8.39 % of Gross Value Added (GVA) in manufacturing and agriculture, respectively.
• The food market in India is growing at a Compound Annual Growth Rate (CAGR) of 20 %.
• The sector employs around 1.77 million people.
• Food processing sector in India has received around $ 7.54 billion as Foreign Direct Investment (FDI) between 2000 and 2017. FDI during 2017-18 was $ 484 million.

Importance of Food Processing sector in Livelihood Sustainability:

• Food processing is a major source of employment and income in the rural areas.
• The sector reduces the problem disguised unemployment in agriculture.
• The sector also enhances agricultural yields, productivity and the quality of living.

Government Initiatives:

• The government has introduced 100% FDI in marketing of food products and various incentives with a strong focus on supply chain infrastructure.
• Pradhan Mantri Kisan Sampada Yojana (PMKSY) is a scheme by the Ministry of Food Processing Industries to boost investments in the food processing sector. It covers the following aspects:
• Establishment of mega food parks, integrated cold chain and value addition infrastructure, expansion of food processing and preservation capacities, infrastructure for agro-processing, creation of backward and forward Linkages, food safety and quality assurance infrastructure, generation of human resources and Institutions.
• Under the Mega Food Park Scheme 42 mega food parks will be set up while 17 are already functional.
• Make in India campaign: Government has identified food processing sector as one of the priority sectors.

Challenges:

• The sector lacks adequate infrastructure for processing and marketing.
• There is a need to ensure remunerative prices to the farmers.
• Poor supply chain linkages.
• Lack of skilled manpower in rural areas to be employed in the sector.
• Low adherence to quality standards due to low competition.

Future Prospects:

• Food and beverages companies are adding new products in markets by modernizing more professional promotional campaigns.
• India has an advantage of huge agricultural land and this can help potentially to become an ideal sourcing destination for food products internationally.
• In order to expand food processing sector and exports from the sector, the government has launched numerous schemes by making huge investments.

Way forward:

• Substantial investments are required in various components of food processing and equipment industry.
• There should be awareness programmes for rural farmers who are primarily engaged in agricultural activities
• A well-developed food processing sector will help in improved shelf-life of the agricultural produce and ensure steady revenue for farmers.
• Food processing sector can expand with an appropriate set of policy support and implementation.
• The policy should focus on the involvement of rural farmers as they play an important role in the management of Indian food ecosystem.