Food Processing Industries: A Sunrise Sector
How would you define the last 48 Months of Transforming India under the leadership of PM Narendra Modi with regards to scale, speed and innovation?
Last 48 months have seen India being transformed in all areas be it economy or social sector or education or welfare of downtrodden/ minorities. You name it and you will see the changes. There cannot be any comparison in the scale of achievement, speed of implementation and degree of innovation in the last 4 years with respect to the period prior to May, 2014. Some examples are:
- India’s rise in global order– today India has raised its standing in global space. India’s role in Paris climate change meeting, setting up of International Solar Alliance, India’s strategic partnership with USA, Germany, Japan, France etc. bear testimony to this. Indian Prime Minister’s visit to Israel for the first time by flying over Saudi air space and his subsequent visit to Palestine exhibits the respect that Indian Prime Minister and India commands today. This is unprecedented.
- India’s ranking by almost all rating agencies has gone up. Moody’s has upgraded India to ‘Positive’ category.
- Forex reserves are at an all-time high over US$ 400 Billion.
- India is one of the fastest growing amongst big economies. Faster than most of EU countries, USA, Japan etc.
- India is now the highest recipient of Greenfield FDI for the last 2 years.
- Our ranking on various counts have improved. In Ease of Doing Business ranking India has reached 100th position from 142nd in the last 2 years.
- The speed of highways and road construction has almost doubled.
- We are developing inland waterways in a big way that will reduce travel time, cost and save environment.
- We are connecting the north east and other difficult terrain of the country to the mainland in a scale that is unprecedented. Only 2 days back Hon’ble PM has laid the foundation stone for construction of Asia’s longest bi-directional Jojila tunnel to be constructed between Leh-Srinagar which will reduce the travel time by 3 hours immensely helping logistic supply to armed forces and the local population.
- Schemes like Direct Benefit Transfer (DBT), PM Jan Dhan Yojana, PM Mudra Yojana, PM Fasal Bima Yojana, PM Jeevan Jyoti Bima Yojana, PM Suraksha Bima Yojana, PM Ujjwala Yojana, Saubhagya Yojana, RURBAN Mission, Deen Dayal Upadhyay Gram Jyoti Yojana, various Scholorship schemes for SCs/STs have impacted the life of poor and downtrodden in a positive way. Now, they are tasting the fruits of development for the first time ever in the history of country.
What are the most impactful initiatives and schemes of the Ministry/Ministries led by you?
Ministry of Food Processing Industries has taken a number of initiatives in the last 4 years to make this sunrise sector a major contributor to industrial growth and an important tool in realizing the goal of doubling the farmers’ income by 2022. Some glimpses are:
- An umbrella scheme named Pradhan Mantri Kisan Sampada Yojana has been approved by the government in May, 2017.
- PMKSY is a big step towards doubling of farmers’ income, providing better prices to farmers, creating huge employment opportunities especially in the rural areas. It provides a comprehensive package for creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet. It helps in reducing wastage of agricultural produce, increasing the processing level, enhancing the export of the processed foods, enabling availability of hygienic and nutritious food.
- The scheme details are as under:
- Budget allocation of Rs. 6,000 Crore for the period 2016-20.
- To benefit 20 lakh Farmers.
- To generate 5,30,500 Employment.
- Covers following ongoing Schemes:
- 42 Mega Food Parks.
- 238 Integrated Cold Chain and Value Addition Infrastructure.
- 109 Food Testing Laboratories.
- Institutions and Skill Development
- It has three new components :
- Creation of Food Processing and Preservation Capacities.
- Infrastructure for Agro Processing Clusters.
- Creation of Backward and Forward Linkages.
We have so far approved 75 projects out of 400 under Unit Scheme, 23 out of 50 under Backward Forward Linkage Scheme and 8 out of 100 under Cluster Scheme. Last year we sanctioned 100 cold chains and this year again we are going to allot 50 more cold chains.
- During the last 4 years we have operationalized 10 mega food parks as against 2 during 2008-14. Similarly, we have operationalized 85 cold chains in past 4 years as against 37 between 2008-14. In the current year we will operationalize another 15 mega food parks and 30 cold chains. This is result of continuous monitoring and follows up with concerned authorities at official as well as my level.
- Guidelines of existing schemes were reviewed and revised to make it more transparent and investor friendly.
- Easing out the regulation for FDI, 100% FDI under Government approval route for trading, including through e-commerce, in respect of food products produced and/ or manufactured in India was permitted.
- Ministry has made the system for filing applications against EoIs and claims completely online to ward of human interface for greater transparency. We have also strengthened the Grievance Redressal Mechanism through CIM (Committee of Independent Monitors) & Personal Hearing.
- RBI vide its guidelines issued on 23.04.2015 has classified food and agro based processing unit and cold chain infrastructure under agriculture activities for Priority Sector Lending(PSL).
- In 2014-15 , a special fund of 2,000 Cr. has been set up in NABARD to provide affordable credit in designated Food Parks & food processing units to be set up in these parks
- We organized the largest international event in India in the food processing sector World Food India, 2017. The event saw participation of 61 countries (including Denmark, Germany & Japan as Partner Countries and Italy & Netherlands as Focus Countries), presence of over 60 global CEOs and MoU signing worth US$ 14 Billion. This shows the immense interest generated in the last 4 years in food processing sector not only amongst indian industry but world over.
- In this years’ budget, major thrust has been given to Agricultural and Food Processing Sector.
- Allocation of Ministry of Food Processing has been doubled from Rs. 715 Crore in RE 2017-18 to Rs. 1400 Crore in BE 2018-19.
- ‘Operation Green’ is being launched to develop infrastructure for preservation, storage and value addition of TOP (tomato, onion & potato).
- A dedicated and specialized financial institution will be set up to handhold and provide affordable credit to food processing sector.
- To set up State-of-the-Art Testing Facilities in all the 42 Mega Food Parks.
- Organic Farming by Farmer Producer’s Organization (FPOs) & Village Producer’s Organization (VPOs) in large Clusters, preferably of 1,000 hectares each, will be encouraged.
- Women Self Help Groups (SHGs) to be encouraged to take up organic agriculture in clusters under National Rural Livelihood Programme.
- Encourage Entrepreneurs to set up Food Processing Units.
- Reducing Food Wastages and increasing Farmer’s income.
- Our two institutions namely NIFTEM (National Institute of Food Technology Entrepreneurship and Management), Sonepat and IIFPT (Indian Institute of Food Processing Technology), Tamil Nadu have secured 50th & 87th rank in NIRF under MHRD. Apart from imparting technical education to the students, they are engaged in promoting skill development, incubation and R&D.
Our goal is to make a cold chain grid throughout the country for seamless and efficient transfer for food from production to consumption areas and also to make India a global Food Factory and Global Sourcing Hub.
How would you measure the success and reach of these initiatives and schemes?
The above measures and initiatives resulted in:
- Generating higher levels of investment, generating more employment, creating huge food processing capacity and benefiting more number of farmers across the country. Some of the important indicators are:
- 08 FDI proposals in food retail worth US$700 million approved.
- Overall FDI inflow as green field investment of US$2571 million during 2014-2017 (Up to December) against US$1736 million during 2010-11 to 2013-14.
- The 85 cold chain projects operationalized in the last 4 years have benefitted 1,55,000 farmers, preservation capacity of 8,27,208 MT of agro – produce, processing capacity of 22,09,938 MT of agro-produce valued at Rs. 5,525 Crore. These 85 projects have also created capacity of 36.594 LLPD of milk processing, 2.76 lakh MT of cold storage, IQF of 85.35 MT/HR and 545 Reefer Trucks.
- Similarly, the 10 Mega Food Parks operationalized during lat 4 years as against 2 in the past, have benefitted 20,525 farmers and generated 9,023 direct employment & 3,04,581 indirect employment and created preservation and processing capacity of 14.07 lakh MT per annum of agri-horti produce in comparison to previous capacity of 3.08 lakh MT/annum.
- During World Food India – 2017, MoUs for investment worth around US $13.56 billion were signed between the industry and MoFPI. The major investment commitment was from France, Germany, Netherlands, UAE, USA, etc.
- The most successful thing about the ministry’s achievement during the last 4 years has been that it has come out of oblivion and now taken a centre stage attracting attention of investors and industry not only from within the country but abroad as well. This is going to translate into grounding of huge investments and creation of infrastructure in next 2-3 years largely benefitting the farmers & youth.
When you assumed office, what were the key challenges faced in the sector relevant to the Ministry/Ministries led by you? How did you overcome those challenges and achieve the goal of last mile delivery of governance?
It was really a trying time. First of all there was no separate minister for this ministry. It was tagged with Agriculture Ministry. So, despite there being several mega food parks, cold chains sanctioned by the government, all were laggard (only 2 out of 42 and 37 out of 138 cold chains were operational at that time) and actual benefits to farmers and the people were not visible on ground. The project monitoring was very weak leading to delay in project implementation.
Then there was another challenge of huge food wastage. Despite large food production, there were huge harvest and post-harvest losses in the supply chain. In a study conducted by Central Institute of Post-Harvest Engineering & Technology (CIPHET), Ludhiana under the Indian Council of Agricultural Research (ICAR), the extent of harvest and post-harvest losses of major agricultural produce was assessed at various levels of operations. It was found that the average wastage of food grain, oilseeds and fruits and vegetable varied from 4.65% to 15.88% resulting in total loss of about Rs. 92,651 Crore annually based on wholesale price index of year 2014. Most of the wastage was occurring in perishables including fruits and vegetables.
To overcome the above challenges we took a number of initiatives. Project monitoring was made very tight, delayed projects were reviewed and cancelled wherever required. To give a boost to the Sector, new schemes such as Infrastructure for Agro Processing Clusters, Creation of Backward and Forward Linkages and Creation/Expansion of Food Processing & Preservation Capacities were introduced under the umbrella scheme of PMKSY.
World Food India, 2017 was organised in Delhi to attract investment to the sector. Utilization of funds in the last 4 years has been more than 95% in all schemes of ministry.
You must have met with many citizens across the country who have largely benefited from the initiatives taken up by Ministry/Ministries led by you…. Could you detail some of the memorable experiences and untold stories shared by citizens?
There are so many of them! It’s a pleasure when you go to so many programs not just within the country but even outside, I just met the Dutch delegation today and there were Dutch companies who have tied up after my visit to Netherlands with our people and how mutually both have benefited. I have been to so many mega food parks where I have interacted with farmers who have benefitted because of huge industry coming up because of demand for crop has gone up; as a result of demand of crop going up the industry has partnered with them new technology seeds and as well as assured prices so the farmers lives have been transformed. Same way I must congratulate our institutions under us which is NIFTEM in Kundli in Sonipat in Haryana as well as IIFPT in Tamil Nadu which are only two institutions for food processing sector which does B.Tech and M.Tech courses. 100 % placements for all students passing out; not only that NIFTEM has been rated as 50th university in the country ranking and IIFPT has got the 87th in the ranking of Indian which I think says a lot that not just they are giving good education, ensuring good jobs, but at the same time through their outreach program and training programs they are working on what is being taught in the labs to be implemented on the land through their village adoption program; to their outreach to farmer program, we have seen banana farmers of Tamil Nadu who have been transformed where there was huge wastages in Banana; but working with IIFPT in techniques on how to harvest, how to transport, how to pack; they have not just become from banana farmers they have become banana exporters now, where their income has increased manifold. Same with the onion growers of down south these small onion growers where there was huge amount of wastages with the machine and technology that IIFPT has worked to make it specific to what they require; their incomes have increased five times the amount, I would say NIFTEM with their incubation center, with their food testing labs, with their trainings – now farmers can come with their crops; they don’t have to put up the infrastructure, come to the incubation center at NIFTEM process what they have not been able to sell up the mandi; brand it and sell it as the processed variety, and what our aim is to put farmers into value addition, not just farming, but towards value addition; without having to put up with entire infrastructure, they can use these incubation centers of these two institutes and enhance their incomes.