February 10, 2011

 

India plans private venture in food processing industry

 

 

The Indian government called on the private sector yesterday to invest in food processing to build supply chain and help in boosting the country's share in the global trade.

 

The private sector can play an important role in the growth of the sector by setting up processing centres and storage facilities and help farmers in marketing their products, Minister of State for Micro, Small and Medium Enterprises Virbhadra Singh said at an Assocham function here.

 

He said that infrastructure is a major problem faced by the sector. "We should reflect on how best we can increase private sector's investment in these areas," he added.

 

Currently, the agriculture and food processing sectors face problems like lack of cold storage facilities, inadequate technological know-how and marketing facilities.

 

In 2009-10, India's share in the international food trade was less than 2%. In the last fiscal year, the country's food and agriculture exports declined by 9% to US$15.62 billion on-year.

 

The Micro, Small and Medium Enterprises (MSMEs) constitute more than 80% of the US$74 billion food processing sector. As per 4th Census in 2006-07, there were about 1.53 million units providing employment to over 3.89 million people.

 

Citing various constraints both in backward and forward linkages in the food and agriculture sector, Singh said, "If we can get our act together, as we must, India can emerge as a leader in the global food industry. I would like the Indian industry to think big and to think globally about the future of this important sector of our economy."

 

Further, he said, there are various schemes of different ministries like agriculture, food processing and MSME meant for the sector which leads to duplication of schemes and they are not complementary to each other.

 

"I think all these ministries should sit together and look at various schemes to make changes in them. This will help in avoiding overlap of such schemes and ensure that wastages are cut in the food and agriculture sector," the minister said.

 

Ministry of Food Processing Industries Joint Secretary Ajit Kumar said that at present, commodities worth INR35,000 crore (US$7.72 billion) are wasted each year. Indian businesses must slash wastages and improve productivity to be able to export as the domestic consumption is rising.

 

Under this broad framework of Vision 2015 Strategy and Action Plan, the government has introduced a number of supportive policies to meet its goals like increased focus on agro-based small units in trade policy and automatic approval for foreign equity up to 100% in food processing units.