15 November 2024 : Daily Answer Writing

Q1) Food Processing Industries (FPIs) can act as a bridge between the informal farming community and the formal industrial sector, which can help boost the rural economy. Examine.

(250 Words/15 Marks)

ANS

Food processing is a sunrise sector that engages in value addition to the agricultural products. Food Processing Industries (FPI) can act as a bridge between the informal farming community and the formal industrial sector in following ways:

1. Employment Generation:
2. Food processing, a labor-intensive industry, can reduce the burden of disguised unemployment from the agriculture sector. E.g., According to ASSOCHAM, the food processing sector is expected to employ 9 million people in India by 2024.
3. FPI as a sunrise sector will also increase the participation of women in formal economy. E.g., role of women in entire food value chain.
4. Farm gate infrastructure:
5. Growth of FPI industries will lead to development of state-of-the-art farm gate infrastructure providing farmer-market linkages to small and marginal farmers. E.g., Better grading and sorting facilities will reduce processing rejections.
6. FPI can play a major role in minimizing food wastage between farm to fork. E.g., wastage of perishables like Tomatoes and Onions due to market and climate shocks.
7. FPI can add to farmer’s prosperity and rural growth through increased trade and exports. E.g., rice-based products exported for manufacturing noodles.
8. Augmenting farm income:
9. Value addition to agricultural products is one of the surest ways to enhance farm incomes. E.g., production of organic fruit jams can boost export potential of Indian farmers.
10. FPI can provide economy of scale to farmers. E.g., branding and marketing products at regional, national, and global level.
11. In addition to initiatives like ODOP, FPI can help in developing local/regional hubs of Agri-production.
12. FPIs can enhance income for tribals by making value additions in MFP or traditional food products.

Despite huge potential of FPIs in boosting rural economy, it is an underperforming sector as it faces following challenges:

1. Lack of uninterrupted supply, and uniform quality of raw materials negatively affects the quality and standard of processed food products.
2. Want of end-to-end cold chain, slow transportation and lack of adequate network of retail supermarkets limit the up-scaling of FPI in India.
3. FPI is largely dominated by MSMEs which have not sufficiently invested in sophisticated processing or R&D. The sector is thus dominated by low-value addition processes and low shelf-life packaging.
4. Large influence of the unorganized sector in FPIs, low consumer awareness and insufficient regulation keeps reputation of processed food sub-par from point of view of safety and quality. E.g., allegation of pesticides in cold drinks.
5. There is cultural preference for fresh food and produce over stored and canned food such as vegetable, meat or fish.

In order to overcome these challenges and make FPI sector more vibrant and robust, following measures can be adopted:

1. Apart from FPIs, upstream sectors should also get adequate focus to improve the whole value chain. E.g., Paramparagat Krishi Vikas Yojana for organic products, PM Matsya Sampada Yojana for fisheries exports.
2. Climate-smart enterprises. E.g., millet-based products; lab-grown-meat to reduce global beef consumption.
3. Infrastructure support in cold-chains and farm-gate infrastructure is needed.
4. Increase research & development in government labs such as CSIR-CFTRI for processed food as per niche markets and climates to serve distant and diverse markets.
5. Innovations and research in packaging will enhance shelf-presence of processed food.

Given the significance of FPI, it is an imperative to reenergize the sector. In this light, steps like Pradhan Mantri Kisan Sampada Yojana, Production linked incentive scheme (PLI) etc., are a step in a right direction.