Answer:

Accounting for about 32% of India’s total food market, the Food Processing Industry (FPI) is ranked 5th in terms of consumption, export and expected growth. Government has taken following initiatives for the growth of the sector:

♤ Till 2005, there were about 13 laws regarding FPI. Government passed Food Safety and Standard Act, 2006 to act as a single reference point for regulation.

♤ Government has allowed 100% FDI in industry.

♤ Infrastructure Facilities: Mega Food Parks, Packaging centers, Integrated clod chain facility, Value Added Centre, Irradiation Facilities, Modernization of Abattoir

♤ National Mission on Food Processing for all round development of industry.

♤ Reforms in APMC Act and rationalization of Food Laws.

Because, of these efforts by the government, the industry is growing at a satisfactory rate. However, it’s still well below the potential as the processing activity is still at a nascent stage with low penetration.

Government schemes have not been adequately able to address the following problems that arise due to inadequacy and poor implementation of reforms.

♤ The inadequate support infrastructure is the biggest bottleneck in expanding the sector, in terms of both investment and exports. Long and fragmented supply chain, inadequate cold storage and warehousing facilities, road, rail and port infrastructure, 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) are still not addressed.

♤ Inconsistency in State and Central policies. In a survey done by FICCI, absence of comprehensive national level policy on food processing sector has been identified as the second most critical factor hampering Industry’s growth.

♤ Shortage of skilled, semi-skilled and unskilled workers has harmed the competitiveness sector.

♤ Declining support to R&D.

♤ Constraints in raw material availability because of inconsistent and insufficient supply of raw material due to seasonality of crops, poor quality of raw material supply and high losses during transport from farm to factory.

♤ Lack of enthusiastic private sector participation in important schemes like Mega Food Parks which still prefers to outsource and as a result about 50% processed food sold by FMCGs in India is outsourced.

♤ Still credit is a big problem to the industry which includes farmers and micro and small enterprises on a large scale.

♤ Failure to integrate land holdings and promote contract farming, which are key to the success of industry.