Professional Documents
Culture Documents
THE SUNRISE
SECTOR
GOALS / OBJECTIVES OF MFPI
Reduction in wastages
Value / quality addition
Employment generation
Remunerative income for farmers
STATUS OF FOOD PROCESSING INDUSTRIES
Crores
Industry growth rate during the last five years is estimated
at 7.14% against GDP of 6.2%
Investment required during next ten years – Rs. 1,10,000
crore
Status of Food Processing
Industry
• Low level of processing –
– 2% in the case of fruits and vegetables
– 14%in milk
– 4% in fisheries
– 1% in meat and poultry products
• India’s share in world’s processed food
production-1%
• Value addition 20% against 45% in Philippines
Status of Food Processing
Industry
• India’s share in global agricultural export is 1.6%
of $520 billion
• Exports have stagnated during the last five years
• Unorganised marketing and distribution of food
items
– 72% of food consumption in the world is through
organised set up whereas it is 1% in India
– Fragmented retailing results in high cost due to
inefficiency ,wastage
• Estimated wastage fruits & vegetables in India-
35%
Processing of Fruits and
Vegetables
80
70
60
50
percentage
40
30
20
10
0
USA Brazil China Thailand India
Why increased focus on Food
processing?
The second Green Revolution will be
centered around the concept of ‘farm to plate’.
Low share of processed foods in the country will
open doors to other countries to tap the emerging
market for processed food triggered by a
burgeoning middle class with increased purchasing
power.
Why increased focus on Agro-
processing?
• Lack of infrastructure
• Inadequate investment
• Agricultural development programmes focused
generally on production
– Post harvest handling including agri/food processing
was not a priority agenda under agricultural extension
• Lack of access to world class technology
• Lack of processing varieties
Reasons for Sub Optimal Growth of Food
Processing
Contd
Budget 2006-07 Announcements
1. Food Processing identified as industry with employment potential
2. Food Processing to be a priority sector for bank credit
NABARD- a refinancing window corpus of Rs 1,000 crore
for agro processing infrastructure and market development
3. NIFTEM to be setup; Paddy Processing Research Center
Thanjavur a National level institute
4. Rs 150 Crore earmarked for NHM for terminal markets
Continued…
5. Custom Duty on packaging machines to be reduced from
15 % to 5%
6. Excise on condensed milk ,icecream, preparation of
meat,fish & poultry ,pectins,pasta and yeast to be
fully exempt
7. Excise on ready-to-eat packaged foods and instant food
mixes like dosa & idli mixes reduced from 16% to 8 %
8. Excise on aerated drinks has reduced from 24 % to 16%
9. Excise on packaging paper reduced from 16% to 12%
10. Custom Duty on Vanaspati increased to 80%
Major initiatives of last two years
Integrated cold chain 25% of the total cost of plant upto a maximum
of Rs.75lakhs (NE region assistance is
facility 33.3.%)-cold storage for non horticulture
produce,Spl.CS with Controlled and Modified
atmosphere facility
MoFPI Schemes
Value added centre 25% of the total cost of plant upto a maximum of
Rs.75 lacs (NE region assistance is 33.3.%)
enhancing the shelf life,documentationetc
• Food park
– Formulated like other industrial parks-supply driven
– Not pre-marketed
– Not location specific
– Absence of backward linkages
– Inadequate financial assistance - Rs.4 Crore does not
commensurate with the investment
– Insistence of a minimum number of 20 units will not attract
medium and big investors
Contd…
Gaps in the Present Scheme
• Food park
– Modification during the Tenth Plan insisting on
investors’ share of 75% made it more rigid
– Lack of a sustainable management arrangement
from it’s inception to commissioning
– No arrangements to harness resources available
else where for complementary activities and
channelise to the project to make it more viable
Current Status of Food
Parks
• So far 51 Food Parks approved under the
scheme
• Most of them are yet to be commissioned
• Those commissioned facing issues of capacity
utilisation
• Low level of occupancy in the park
Approach to Agro/food Parks: Comparison
• Existing scheme • Suggested framework
– Targeting small & medium – May not restrict the number of
enterprises with a minimum units-restriction can be on the
of 20 units for a 30 acre park quantity of material to be handled
– Activities confined to Park – Complementary activities can
alone take place outside the Park
– No stake holder participation – To be implemented on a PPP
format
SPV to manage the park
51% equity in the SPV to be with
private entrepreneurs
– Inadequate financial – Financial assistance to be 50%
assistance-25% or Rs.4 subject to maximum of Rs.50
Crores per park Crores per park
Approach to Agro/food Parks: Comparison
Capacity Building
Project Development
Project Financing
Shareholders
Shareholders SPV Lenders
Shareholders SPV Financing Lenders
Agreements Agreements
Contracts
Construction/ for Service
O&M technical /Supply
Contract studies/ Agreements
services
Construction
Construction Consultants User
UserUnits
Units
agencies
agencies Consultants
STATES INITIATIVES REQUESTED
Collection Yard-3
Secondary
processing units