Government initiatives and measures in food processing sector

 

Some of the major initiatives taken by the Government of India to improve the food processing sector in India are as follows:

  1. National Mission on food processing
  • Ministry of Food Processing Industries (MOFPI) launched a Centrally Sponsored Scheme(CSS) – National Mission- on Food Processing (NMFP) in 2012 for implementation through States/UTs
  • The NMFP envisages the establishment of a National Mission as well as corresponding Missions in the State and District level.
  • The basic objective of NMFP is the decentralization of implementation of food processing related schemes for ensuring substantial participation of State Governments/UTs.
  • The mission is expected to improve the Ministry’s outreach significantly in terms of planning, supervision, monitoring of various schemes apart from playing a more meaningful role in policy formation
  1. The Government of India aims to boost growth in the food processing sector by leveraging reforms such as 100% Foreign direct investment (FDI) in marketing of food products and various incentives at central and state government level along with a strong focus on supply chain infrastructure
  2. In Union Budget 2017-18, the Government of India has set up a dairy processing infra fund worth Rs 8,000 crore (US$ 1.2 billion).
  3. The Government of India has relaxed foreign direct investment (FDI) norms for the sector, allowing up to 100 per cent FDI in food product e-commerce through automatic route.
  4. The Food Safety and Standards Authority of India (FSSAI) plans to invest around Rs 482 crore (US$ 72.3 million) to strengthen the food testing infrastructure in India, by upgrading 59 existing food testing laboratories and setting up 62 new mobile testing labs across the country.
  5. The Indian Council for Fertilizer and Nutrient Research (ICFNR) will adopt international best practices for research in fertiliser sector, which will enable farmers to get good quality fertilisers at affordable rates and thereby achieve food security for the common man
  6. The Ministry of Food Processing Industries announced a scheme for Human Resource Development (HRD) in the food processing sector. The HRD scheme is being implemented through State Governments under the National Mission on Food Processing. The scheme has the following four components:
    • Creation of infrastructure facilities for degree/diploma courses in food processing sector
    • Entrepreneurship Development Programme (EDP)
    • Food Processing Training Centres (FPTC)
    • Training at recognised institutions at State/National level
  7. PM Kisan Sampada Yojana
    • This scheme is aimed at promoting entrepreneurs in setting up food processing units, closer to agricultural areas.
    • Development of cold storage facilities, specialised packaging units, warehousing facilities, etc and other preservation facilities are eligible for grants under the scheme.
    • The scheme provides a grant in aid of 35% of the eligible project cost in most states and 50% of the project cost in North-east and Himalayan states.
    • The development of agricultural facilities under the scheme intends the benefits investors, entrepreneurs, farmers, farmer organisations, and agriculture cooperatives.
  8. Creation of Mega Food Parks
    • A mega food park is an integrated facility that provides for storage, processing. Additionally, value additions to a large number of players in the food processing industry.
    • Under the Mega Food Park Scheme, the Government of India provides financial assistance up to Rs. 50.00 Crore per Mega Food Park project.
    • Most food parks have the following services – tetra-packaging, food testing laboratories, drying chambers for spices and agricultural produce, cold storage, warehousing, packaging and printing facilities
    • Thus, the food park provides financial incentives to investors. It also provides convenience to processors and companies utilising its facilities, in addition to generating employment and better services
    • The Mega Food Park Scheme is based on the “Cluster” approach and envisages a well-defined Agri/ horticultural-processing zone containing state-of-the-art processing facilities with support infrastructure and well-established supply chain

  1. Operation Greens
    • In the budget 2018-19, the government announced the Operations Greens scheme to promote integrated value chain development for crops. They are tomato, potato, onion.
    • Post-harvest processing facilities will be eligible for a grant in aid of up to 50% of the project cost. It also subjects to the maximum limit of 50 crores
  2. PM Formalization of Micro Food processing Enterprises
    • This scheme aims at helping small micro-units engaged in the food processing industry.
    • Many businesses at the grass-root level such as chilli drying, spice packaging, pickle, and papad making engage directly with farmers.
    • Recognising the role of such micro-units, a 35% subsidy can be availed by such units on their project cost, up to a maximum of ₹10 lacs
  3. Production-linked incentive (PLI) scheme for the food processing sector
      • The Government announced this scheme this year with an outlay of 10,900 crore Rupees
      • This will help create 2.5 lakh jobs by 2026-27, boost exports and facilitate the expansion of food processing capacity to generate processed food output worth Rs 33,494 crore.
      • The effort is to take the country’s food processing to a next level amid the rising global demand for Indian ready to eat foods, organic products, processed fruits and vegetables, marine products
      • The objectives of the scheme are to support food manufacturing entities with stipulated minimum sales and that are willing to make minimum stipulated investment for expansion of processing capacity and branding abroad to incentivise the emergence of strong Indian brands

 

    • The shortcomings associated with Government schemes are:
      • Lack of adequate infrastructure: Though the government has initiated various measures for the development of the food processing industry related infrastructure, they are not sufficient to meet the growing needs of the sector
      • Credit facilities: Despite the creation of the Food Processing Fund over a couple of years ago, the sector has been facing a resource crunch. Though the foreign investment has picked up now, it is still doesn’t match the requirements of the industry
      • Lack of comprehensive policy: The food processing industry is a sunrise sector. Lack of a comprehensive policy addressing the various needs of the food processing industry is obstructing its growth