Q. Highlighting the problems faced by the food processing sector in India, elaborate on the approach adopted by the government under the Pradhan Mantri Kisan SAMPADA Yojana to
address the same.
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• Briefly mention the status of the food processing sector in India.
• Discuss the problems faced by the sector.
• State the approach adopted under the Pradhan Mantri Kisan SAMPADA Yojana.
• Conclude the answer on the basis of the above point.
The Indian food processing industry accounts for around 32% of the country’s total food market and is ranked fifth in terms of production, consumption, export and expected growth. It contributes around 14% of the manufacturing GDP and 13% of India’s total food exports.
Further, it employs around 25% of the workforce. However, despite its immense potential, the food processing industry faces key issues, which include:
• Supply-side bottlenecks: Low farm productivity, high seasonality, perishability of raw materials etc. lead to supply constraints, and in turn, impede processing and exports.
• Inadequate infrastructure: Reliance on traditional mode of transportation, inadequate storage and cold chain infrastructure result in loss of farm produce.
• Inefficient production system: Due to high concentration of unorganised processing units and inability of the small regional players to invest in technology upgradation.
• Deficient regulatory environment: Due to existence of numerous laws governing food safety and packaging, which leads to contradictions in specifications, approach, coordination and administrative delays.
• Lack of holistic approach: It is manifested in the absence of vital peripheral infrastructural linkages and legislation for contract and corporate farming, poor implementation of the Agricultural Produce Market Committee (APMC) Act and cumbersome procedures to avail grants by producers.
• Besides these, challenges such as mounting cost of finance, lack of skilled and trained manpower, inadequate quality control and high taxes and duties, thwart the sector’s development.
In order to address the constraints faced by the food processing sector, the government launched an umbrella scheme, Pradhan Mantri Kisan SAMPADA Yojana in 2016. The schemes envisaged under it and their objectives are:
• Establishing mega food parks: Creation of state of the art support infrastructure for setting up of modern food processing units based on cluster approach to provide a mechanism to link agricultural production to the market by bringing together farmers, processors and retailers. • Developing integrated cold chain and value addition infrastructure: Its objective is to provide integrated cold chain and preservation infrastructure facilities, without any break, from the farm gate to the consumer.
• Expanding food processing capacities: Creation of additional processing and preservation capacities and modernization/expansion of existing food processing units in order to increase the level of processing and value addition, and reduce wastage.
• Creating backward and forward linkages: Providing financial assistance to ensure effective and seamless backward and forward integration for the processed food industry by plugging the gaps in the supply chain in terms of availability of raw material and linkages with the market.
• Setting up food safety & quality assurance infrastructure: In order to ensure that various aspects of quality management like quality control, quality assurance etc. operate in a horizontal fashion, the government provides financial assistance to set up/upgrade quality control and food testing laboratories.
• Establishing human resources development framework: To promote institutional training and capacity building to enhance the skills of the workers.
Going forward, the success of the scheme will be dependent on a numbers of factors such as effective implementation on the ground level, adequate communication channels between the government, industry and producers, provisions of appropriate tax.