• UGI USER
  • Nov 03, 2023
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Food Processing industry

Relevance

  • GS Paper 3 Food processing and related industries in India- scope’ and significance, location, upstream and downstream requirements, supply chain management.
  • Tags: #foodprocessingindustry #PMModi #WorldFoodIndia2023 #BharatMandapam #GS3 #UPSC

Why in the News?

  • The Prime Minister will inaugurate the 2nd edition of ‘World Food India 2023’ at Bharat Mandapam in New Delhi.
  • During the event, the PM will provide Seed Capital Assistance to over 1 lakh members of SHGs. This financial support aims to enhance the packaging and manufacturing quality of SHGs, ultimately leading to improved market prices.
  • Additionally, World Food India 2023 will feature the inauguration of a Food Street. The Food Street is designed to showcase India’s regional cuisines and culinary heritage, with participation from more than 200 chefs.

Food Processing: Contribution to India’s GDP

  • In India, this sector is valued at around $380 billion, with a projected CAGR of 11%, aiming to reach $540 billion by 2025.
  • This sector plays a significant role in India’s economy, contributing to 8% of the nation’s GDP.
  • In 2022-23, India exported agricultural and processed food products with a total value of US$ 25.6 billion.
  • The GVA in this sector was Rs. 2.24 lakh crore in 2019-20, accounting for 1.69% of the overall GVA in the country.
  • In the period from April 2021 to March 2022, this Sector in India attracted FDI equity inflow amounting to USD 709.72 million.
  • Collectively, the cumulative FDI received in this sector from April 2000 to March 2022 amounted to US$ 11.08 billion.

Empowering Self Help Groups Through Food Processing

  • Generating Income: Food processing enables SHG members to generate revenue by processing and marketing various food products, such as pickles, jams, snacks, and spices, both locally and in distant markets.
  • Adding Value: Food processing enhances the value of raw agricultural produce. SHGs can convert perishable goods into longer-lasting products, increasing their market worth and reducing post-harvest losses.
  • Enhancing Skills: Participation in food processing activities equips SHG members with new skills in food preservation, packaging, and quality control. These skills have personal development and employment potential.
  • Expanding Market Reach: Food processing helps SHGs overcome challenges in reaching broader markets for their agricultural goods. It opens doors to larger markets, including urban and export sectors, expanding their customer base and sales.
  • Community Empowerment: Food processing strengthens the self-sufficiency and empowerment of SHGs. Collaborative management of processing ventures encourages decision-making, shared responsibilities, and profit generation, fostering a sense of community and mutual support.
  • Improving Quality: SHGs can enhance the quality and hygiene of their food products through processing. This ensures that their goods meet regulatory standards and consumer expectations, improving their market acceptance.
  • Diversification: Food processing empowers SHGs to diversify their product range, allowing them to explore various items, including seasonal and specialty products, and adapt to evolving market demands.
  • Accessing Financial Support: Governments and financial institutions frequently offer support and loans to SHGs engaged in food processing ventures. This financial aid is essential for initiating and expanding their processing activities.
  • Minimizing Food Waste: Through processing, SHGs can reduce food wastage by preserving surplus agricultural produce during peak harvest seasons. This contributes to food security and sustainability efforts.

Benefits of Food Processing for Farmers

Food processing provides farmers with multiple advantages, including minimizing post-harvest losses, augmenting income, and supporting food security. This essential component of contemporary agriculture promotes sustainability and economic resilience among farmers.

  • Prolonging Product Shelf Life: Through food processing, farmers can extend the shelf life of their agricultural produce, curbing losses incurred after harvesting. This strategy allows them to stock and vend their goods over an extended duration, reducing wastage and bolstering income.
  • Expanding Market Reach: Processed foods often have more extensive market reach. This opens doors for farmers to access distant and urban markets, potentially fetching higher prices for their agricultural products.
  • Value Enhancement: Food processing increases the intrinsic value of raw agricultural goods. By marketing processed products, farmers can secure higher earnings compared to raw commodities, as processed items usually command premium prices.
  • Diversifying Product Portfolio: Food processing empowers farmers to diversify their range of products. They can explore various offerings, including seasonal, specialty, and niche items, reducing their dependence on a single crop or commodity.
  • Mitigating Seasonal Dependency: Processing allows farmers to market their products year-round, diminishing their reliance on the fluctuating nature of seasonal yields, thus ensuring a more stable income.
  • Generating Employment: Establishing processing units can create job opportunities within the local community, further contributing to rural development and economic growth.
  • Contributing to Food Security: Processed foods play a significant role in ensuring food security by preserving excess agricultural produce during times of abundance, ensuring a steady food supply throughout the year.
  • Unlocking Export Potential: Processed food products often possess export potential, opening up opportunities for international trade and access to global markets, which can be economically advantageous for farmers.

Why millets are the focus

World Food India 2023 presents a platform to promote the advantages of millets and advocate for their increased cultivation and consumption.

  • The objective is to elevate millets to the status of a mainstream food crop and enable farmers and food processors to leverage the rising demand for millet-based products.
  • 2023 is designated as the International Year of Millets by the UN with the aim of raising global awareness regarding the significance of millets in the context of food security and nutrition.

Millets

Millets offer a range of benefits for farmers and the world, from climate resilience and improved nutrition to economic advantages and sustainability, making them a crucial crop in the context of evolving agricultural and environmental challenges.

  • Drought Resistance: Millets are robust crops with lower water requirements compared to major cereals like rice and wheat. They are well-suited for cultivation in arid and semi-arid regions, presenting a vital option for farmers in water-scarce areas.
  • Climate Resilience: Millets exhibit enhanced adaptability to climate change, withstanding extreme temperatures and unpredictable weather conditions. This resilience makes them a dependable choice for farmers confronted with climate-related challenges.
  • Nutritional Value: Millets boast high nutritional value, containing rich amounts of fiber, protein, vitamins, and minerals. Their consumption can address malnutrition and facilitate the provision of balanced diets, rendering them pertinent for both farmers and global food security.
  • Crop Diversification: Cultivating millets supports crop diversification among farmers, decreasing reliance on a single crop and mitigating risks associated with crop failures or market fluctuations.
  • Economic Advantages: Millets present economic benefits due to their lower production costs. They hold higher market value, especially in the context of the growing demand for healthy and gluten-free foods, which can be financially advantageous for farmers.
  • Preservation of Biodiversity: The promotion of millets contributes to the conservation of biodiversity. These crops are often cultivated using traditional and indigenous methods, preserving local agrobiodiversity.
  • Enhanced Global Food Security: Millets possess the potential to bolster global food security by serving as a climate-resilient source of nutrition for millions of people. This reduces dependence on a few major crops and encourages sustainable agricultural practices.

Mains Question

What is the significant contribution of the food processing industry in enhancing agricultural sustainability and economic growth in India? Discuss with relevant examples and data.