Answer:

India is one of the world’s largest producers as well as consumer of food products. In order to facilitate and exploit the growth potential of the sector, the government on its part has initiated extensive reforms. Some of the key measures: amendment of the Agriculture Produce Marketing Committee Act, rationalization of food laws, implementation of the National Horticulture mission etc. The government has also outlined a plan to address the low scale of processing activity in the country by setting up the mega food parks, with integrated facilities for procurement, processing, storage and transport. 100% FDI in the food processing & cold chain infrastructure is also allowed.

However, despite of continual efforts and initiatives of the Government to provide the required stimulus to the sector, processing activity is still at a nascent stage in India with low penetration. In terms of development of the country’s total agriculture and food produce, only 2 % is processed.

Following are the major factors hampering the growth of food processing sector:

♤ Inadequate Infrastructure Facilities is the biggest bottleneck in expanding the food processing sector: long and fragmented supply chain, inadequate cold storage and warehousing facilities, rail, road and port infrastructure. Also, lack of modern logistics infrastructure such as logistics parks, integrated cold chain solutions, last mile connectivity, dependence on road over rail, customized transportation, technology adoption (barcoding, RFIDs) and government support via incentivizing private public partnerships are some of the lacunae that exist in supply chain & logistics sector in India.

♤ Absence of Comprehensive national level policy on food processing sector: The food processing sector is governed by statues rather than a single comprehensive policy on food processing.

♤ Food Safety Laws & Inconsistency in State and Central policies: Though historically various laws were introduced to complement and supplement each other in achieving total food sufficiency, safety and quality the result is that the food sector in India is governed by a number of different statutes rather than a single comprehensive enactment.

♤ Lack of adequate trained manpower: Many positive developments in the food processing sector have also resulted in the apprehension about the emerging skill shortages due to mismatch between the demand for specific skills and available supply.

♤ Uncontrollable and controllable factors which affected the growth of the sector: The uncontrollable factors include fragmentation of land holdings which has resulted in lack of scale and has made investments in automation unviable, regional climatic variations which impact the production and constraints in land availability due to competing pressure from urbanisation, constructions and industrialization. While, controllable factors includes issues of quality of raw materials, low labour productivity, with slow adoption of technology etc.

Apart from the above major challenges hampering the growth of sector, the other identified constraints are in raw material production, taxation, access to credit, processing plants with obsolete technologies, lack of applied research etc.