Sectoral Performance of Agro-Processing Industries in India A Perspective

Dr.K.Suhasini Associate Professor (Agril.Eco) ANGRAU

Contents
       

Declining growth in Agricultural production Projection of production requirement Need for accelerating the production Competitive strengths of India Opportunities in agro processing Performance, policy Enhancement in Agril. Production Constraints

Growth in Agricultural production

Year Category Food grains Oilseeds Pulses Egg Milk Meat Veg+tubers Fruits+nuts GSDP 1986-95 1996-2005 1986 - 2005 Period I Period II Over All Period 1.71 0.65 1.44 3.87 -2.096 -1.48 1.48 7.26 3.18 6.75 16.11 10.43 5.07 6.9 5.91 1.06 24.04 10.21 NA 1.88 1.88 NA 2.95 2.95 6.44 6.36 5.95

Factors decelerating food production

No remunerative prices Shifts in cropping pattern Un favorable climatic conditions Decrease in gross cropped area Out break of pest and diseases Changed consumption patterns
Decelerating growth

Lack of processing

Problem in handling bulk produced

Dearth in infra structure

  

   

Oilseed production Negative (-2.09) Pulses (7.26)- due to area expansion Egg (16.11) growth in poultry sector Meat (24.24) Milk (6.9) Veg+tubers (1.88) Fruits and Nuts (2.95)

Post WTO Period



Changed consumption Pattern in Rural and Urban Areas Emerging trend in different sectors is noticed like Milk, Meat, Fruits and Vegetables Opened new export markets for processed foods Opportunities in domestic markets have for ready to eat kind of foods

DEMAND PROJECTIONS

Production Year/Category Food Grains 000 tons Cereal production Oilseeds 000 tons Pulses 000 tons Veg+roots+tubers 000 tons Fruits+nuts 000 tons Eggs million no Milk 000 MT Meat 000 MT GSDP Crores 2010 14962.35 10042 1645.88 1180 259417 263633 24660 8830 572 141253 2025 16032.45 11654 1813.5 1370 349945 354813 40457 11641 928 188364.9

Food Grains 000 t ons

Food Grains 000 tons

12000 11500 11000 10500 10000 9500 9000

Cereal production

16500 16000 15500 15000 14500 14000 1 2

Cereal production

Pul ses 000 t ons

Oilseeds 000 tons 1850 1800 1750 1700 1650 1600

Oilseeds 000 tons

1400 1350 1300 1250 1200 1150 1100

Pulses 000 tons

1550 1 2

1050 1 2

Milk 000 MT 14000 12000 10000 8000 6000 4000 2000 0 1

Milk 000 MT
1000 800 600 400 200 0 1

Meat 000 MT

M eat 000 M T

Eggs million no 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 1 2

Eggs m

no

Veg+roots+tubers 000 tons Veg+roots+tubers

000 tons
400000 350000 300000 250000 200000 150000 100000 50000 0 1 2

Fruits+nuts 000 Fruits+nuts 000 tons

tons
400000 350000 300000 250000 200000 150000 100000 50000 0 1 2

A Definite enhancement of Agriculture production is needed

How to Achieve this? 1.Conventional Breeding techniques 2. Better Management Practices 3.Bio technological tools 4.Organic farming 5.Farming systems Approach and 6.Food Processing can boost agricultural production

NEW AREAS EMERGED

FOOD PROCESSING FOOD RETAILS

Basic Requirements Being.. Huge Investment FDI (Foreign Direct Investment) PPP (Public Private Partnerships) Finally aims at Transforming Agriculture into Agribusiness

Competitive Edge for India

Particulars Arable Land(Million Hectare) Irrigated Land(Million Hectare) Coast line (Kms) Major Food Crops (MTs) Fruits (MTs) Vegetables(MTs) Rice/Paddy(MTs) Wheat (MTs) Milk (MTs) Sugar Cane (MTs) Pulses(MTs) Tea(MTs) Edible Oil seed(MTs) Cattle(Million) India 161 55 7000 35 47 82 132 65 88 209 12 0.88 25 226 Global Rank 2 1 19 3 2 2 2 2 1 2 1 1 3 1 Share in Global Production (%) ---4 10 10 22 12 16 21 21 20 7 16

Opportunity
Indian food market size is 66.7Billion USD  Food Exports account for 22.2 Billion USD  Value addition is only 7 % of total output  Wastage is 20% of out put There is large potential in food processing in domestic and external markets


Level of processing (Fruits & Vegetables)

UK  USA  Malaysia France  Philippines  Thailand China  India 

88% 80 % 80 % 70 % 45% 30 % 23% 1.8 %

Opportunity sectors for food processing

Name of the sector Food Grains/Cereals Fruits and Vegetables Fishing & Fish Processing Meat & Poultry

Few Products Bambino,Atta, Noodles, Corn Flakes Fresh and Dehydrated Shrimp frozen, Lobster, Fish Fillets egg powder, frozen egg yolk, albumin powder,meat canned,ready to eat products Curries, chips, namkeens

Packed and convenience goods Milk and Milk Cheese, butter, ghee, dairy whiteners and ice-creams Products

Major Domestic Players

         

Parley Agro Foods Cadbury India Ltd Nestle India Ltd Pepsi MTR Foods Ltd Brook Bond Godrej foods Ltd Amul Priya foods Ltd Dabur

Policy thrust


 

Food Security through MSP and PDS Food Safety BIS (ISO) and HACCP Promotion of Food Processing 10th plan Food Retailing

Organizations To Look after

Giving importance to external market  EIC-1963- (Export Inspection Council of India)  APEDA-1986 (Agricultural Processed Food Products Export Development Authority)  MPEDA Marine Products Export Development Authority)  MFPI-1988 Ministry of Food Processing Industries

Performance of Processing
Item Level of rocessing in Organized Sector Level of rocessing in Unorganized Sector Total rocessing

Fruits and 1.20% Vegetables Dairy roducts 15% Meat 21% oultry 6% Marine Fisheries 1.70% Shrimps 0.40%

0.50% 22% --9% 1%

1.80% 37% 21% 6% 10.70% 1.40%

Number of Food Processing Units Organized Sector - 2004

Category F lo u r ills F is r o c e s s in g u n it s No of units 516 568(+4 82 c o ld u n it s ) F r u it s and Ve g e t a b le s 5,2 93 r o c e s s in g u n it s e a t P r o c e s s in g u n it s 171 S we e t e n e d a n d a e r a t e d 656 wa t e r u n it s ilk r o d u c t u n it s 2 66 S u g a r m ills S o lve n t e xt r a c t u n it s ic e m ills o d e r n iz e d r ic e m ills 429 72 5 139,2 0 8 35,0 88

s to ra g e

MFPI -Policy Support

    

Five Year tax holiday for profits on Food Processing business 25% of profits will be considered for tax next five years Subsidy 25% for cold chains, for investments on infrastructure Capacity Building National Institute for entrepreneur ship Financial assistance to other Institutes for training etc

Present Market Scenario

        

Primary grading/ collection centers - non existent Warehousing and cold storage - inadequate Cold chain - non existent Quality certification system - non existent Transportation for perishables - non existent Rural markets - complete lack of infrastructure Wholesale markets -, lack modern facilities Private / direct markets - not permitted Post harvest losses: 25 to 30 % in perishables

What can be achieved by development of Agro processing

         

Mobilizes capital - Agriculture Reduction in wastage at harvest storage transport processing Value Addition cleaning grading packing Food chain management Scope for women empowerment Encourages contract farming forward contracts synergic Improvement in farmers livelihood - income Generate employment opportunities Mn Jobs by 202 Provide choice product to consumer - affordable prices Ensure equitable distribution via proper food policy As is rural based and community oriented benefits poor

Constraints
      

Seasonal production, perishable and bulkiness Uncertainty and risk in supply of raw material - quantity and quality Inadequate infrastructure, cold storage and transportation Rural godowns storage capacity created 158.68 lakh MTs Capital intensive nature involving high cost of infrastructure High cost in processing and irradiation etc Cumbersome and costly certification process these quality parameters hamper export market Un-organized producers/farmers

    

Small scale producers can not compete with the big players Long and fragmented structure of retail supply chain Lack of special handling facilities at airports and ports Inadequate post harvest management Limited access to appropriate technology for processing & packaging, Low investment in Research & Development by industry for technology development Produce food insecurity if not handled carefully