The Rs 8,80,000 crore Indian food industry is poised for a giant leap forward to bag the additional Rs. 440,000 crore (US $ 100 billion) opportunities by year 2015, if coordinated policy level initiatives of the government, industry-government partnership and collaboration with farmers are finetuned in the areas in the areas of production, processing, marketing, supply chain, infrastructure development, technology upgradation and education, according to a FICCI- Technopak study. Alongside, serious efforts need to be made to promote Indian food items at
international level by the government and the industry. The Knowledge Paper, prepared by FICCI and Technopak Advisors Pvt. Ltd., presents a detailed recipe to the stakeholders to give the Indian food industry the required traction and realise its optimum growth potential.
The FICCI-Technopak study has recommended creation of new infrastructure and upgradation of the existing infrastructure. There is urgent need to create and augment strong Infrastructure to wipe off wide spread inefficiencies in the food value chain. The core infrastructure required for Food Processing Industry is -
- Production infrastructure — like germplasm and seed multiplication facilities, agricultural inputs (seeds, plant nutrients and plant protection chemicals), irrigation, controlled production facilities, farm mechanisation etc is required to increase production of processable produce at lower cost and to make it available in required quantity round the year.
- Processing infrastructure — like farm level post harvest facilities – cool chambers, grading and sorting facilities, pack houses for the back end support; integrated industrial processing units for processing and value addition
- Distribution infrastructure — There is a need to establish an integrated supply chain like warehousing, cold chain and transport from farm gate to the food plate for strong backward and forward integrations. Supply chains are to be created in such a way that they can be utilised round the year for multiple commodities to increase the efficiency of utilisation.
In addition to the above agricultural infrastructure directly required by food processing industry, basic support Infrastructure like - road, rails, communications, power etc. is also to be strengthening at different places. Some quick milestones can be achieved by upgradation of existing infrastructure like APMCs, Quality Control Labs (QC labs), cold storages, processing plants etc, initiatives for which has already been taken by MoFPI and
others.
- Successful Implementation of FSSA — There is an urgent need of successful implementation of FSSA in its original spirit, protecting the interest of all stakeholders. In addition, harmonised rules and transparent implementation mechanism needs to be placed. Appropriate infrastructure and capacities in terms of scientific resources, pool of scientists, analytical laboratories need to be created to support the scientifically conducted risk analysis implementation of FSSA.
- Increase Public Private Partnership — Development of infrastructure duly supported by hi tech interventions requires huge investment from the private sector. Government needs to take all possible steps for the incentivisation of private sector to invite investment in creating the agricultural infrastructure possibly by viability gap funding through public private partnerships. This will not only ensure the optimal utilisation of resources but will also utilise the advantages of new technologies and human skills of private sector. Public Private Partnerships should be encouraged in the sectors of joint infrastructure projects, R&D, capacity building, information sharing, international branding etc
- Market demand driven production — The Indian production system is still largely “supply driven”. A paradigm shift is required in the production system from “supply driven” toward “market demand-driven production”. It would require collective endeavours of all the stakeholders’ right from the R&D organisations, extensions, market players and the govt machinery. Farmers will have to play active role in adoption of new technologies shared by the public and private extension system.
- Meeting global standards of quality — All possible efforts are required to be done by technology interventions, training of various stakeholders to produce the world class processed food products in India. The output should be able to meet the global standards like Global GAP, Codex Alimentarious, HACCP standards etc.
- Technological knowhow and support — Looking at industry and users’ demands it would appear that steps need to be taken to further nurture high quality institutions in this field. An apex institution could be established, which would inter alia provide for world-class graduates and research programmes; carry out cutting edge research; provide for a framework for constantly updated curricula to sister institutions, assist and provide a linkage to regional institutions in their activities.
- Capacity building on quality standards — The apex institute can also be created by upgradation of state agricultural universities and various other central research institutes in close tie up with private organisations and other world leaders in the similar sector.
- Technology transfer, capacity building and skill upgradation — Strong linkages are required to transfer the technologies developed in isolations at different public and private research organisation to their targeted beneficiaries. While the farmers are to be linked to the agri research companies and research organisations, the processors are to be linked to the post harvest research centres. The extension workers should not only be trained about increasing the production but should be educated about saving the post harvest losses through value addition.
- Market promotion & branding — The Indian consumer’s demands are still dominated by consumption of fresh. Packaged and processed foods are readily not accepted in the larger portion of consumers due to various reasons. Government and industry should run sustained campaigns to create awareness for increasing acceptance of processed food. It is equally for all the stakeholders in production and distribution to ensure availability of quality processed food at affordable prices. It is more important to handle the challenges of non homogeneous food habits of India and varied cultural diversities.
- Branding of India as processed food basket to the world market is equally important to tap the opportunities in overseas markets. This will require holistic efforts from government, export promotion bodies, business chambers and associations on a long term basis.
- SME support — Due to the low investment capacity of SMEs, sectors reserved for SMEs and SSI are to be empowered with suitable support in terms of skill up gradation, assistance for certification, capacity building and
connecting them to the markets.
- Market research-based offerings — Focused studies on Indian customers and markets are required to design appropriate marketing strategies for processed food in Indian markets. The industry should share the responsibility of product innovations by offering “value for money proposition” and designing customised products to be readily accepted by the Indian household.
- Promoting entrepreneurship and innovations — Policy-level efforts need to be initiated by the government in consultation with farmer groups, cooperatives and entrepreneurs to promote Producer Group Companies and contract farming. Help from the NGO, private sector should be taken for the recognition and reward of innovative technologies and recipes. This will not only be a step towards farmer’s empowerment, but will also ensure supply of quality raw material to the industry.
- Organised retail as a key driver — Like developed countries, organised retail has come up as a key driving factor in the development of packaged and processed food through its innovative methods of marketing. Clarity on the policy front from the govt on FDI in retail, regulatory framework facilitating backward integration would further strengthen the development of food industry in India.
- Linking farmers to the markets — Linking farmers to the markets by allowing them to directly connect with retailers, processors, aggregators etc. The amendment of APMC should be implemented in the original spirit so as to increase buyer-producer interaction.
- Single window system — Various initiatives taken by Central and state governments to incentivise the investors are not being properly communicated and do not reach to the target beneficiaries due to complexity in roles and channels. There is urgent need to bring all the investor and industry incentive policies, regulatory policies under single window. This will not only remove the undesired confusions for the investors but will also increase efficiency in the execution..
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