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    Fundamentals of Agri-Business: Assignment ON

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    pritam pokhrel
    The document provides an overview of the food processing industry in India. It discusses that food processing plays an important role in the development of the economy by linking agriculture and industry. It enhances farmer incomes, provides markets for farm goods, and generates employment. The food processing sector in India is one of the largest globally and produces a wide variety of processed foods. However, it also faces several constraints like low incomes, socio-cultural preferences for fresh food, lack of infrastructure and access to credit for farmers and processors. The government is working to address these challenges to further develop the food processing sector in India.

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    Fundamentals of Agri-Business: Assignment ON

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    pritam pokhrel
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    The document provides an overview of the food processing industry in India. It discusses that food processing plays an important role in the development of the economy by linking agriculture and industry. It enhances farmer incomes, provides markets for farm goods, and generates employment. The food processing sector in India is one of the largest globally and produces a wide variety of processed foods. However, it also faces several constraints like low incomes, socio-cultural preferences for fresh food, lack of infrastructure and access to credit for farmers and processors. The government is working to address these challenges to further develop the food processing sector in India.

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    About Food Proceessing Industries

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    Food Processing Industries

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    The document provides an overview of the food processing industry in India. It discusses that food processing plays an important role in the development of the economy by linking agriculture and industry. It enhances farmer incomes, provides markets for farm goods, and generates employment. The food processing sector in India is one of the largest globally and produces a wide variety of processed foods. However, it also faces several constraints like low incomes, socio-cultural preferences for fresh food, lack of infrastructure and access to credit for farmers and processors. The government is working to address these challenges to further develop the food processing sector in India.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    723 views18 pages

    Fundamentals of Agri-Business: Assignment ON

    Uploaded by

    pritam pokhrel
    The document provides an overview of the food processing industry in India. It discusses that food processing plays an important role in the development of the economy by linking agriculture and industry. It enhances farmer incomes, provides markets for farm goods, and generates employment. The food processing sector in India is one of the largest globally and produces a wide variety of processed foods. However, it also faces several constraints like low incomes, socio-cultural preferences for fresh food, lack of infrastructure and access to credit for farmers and processors. The government is working to address these challenges to further develop the food processing sector in India.

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    Attribution Non-Commercial (BY-NC)
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    The key takeaways are that food processing industries play an important role in the development of the economy by linking agriculture and industry, enhancing farmer incomes, and generating employment. The Indian food processing industry is one of the largest in the world in terms of production, consumption, exports and growth prospects.

    The term 'food processing' refers to adding value to agricultural or horticultural produce through methods like grading, sorting, packaging and manufacturing/preserving food to enhance shelf life, quality and functionality.

    Some major constraints include low incomes, socio-cultural preferences, low productivity and infrastructure, restrictions of the APMC Act, lack of trained workforce, access to technology and credit, and low foreign investment despite permissions.

    FUNDAMENTALS OF AGRI-BUSINESS

    ASSIGNMENT
    ON
    FOOD PROCESSING INDUSTRIES OF INDIA

    SUBMITTED BY:
    Tengkam G. Momin
    Muniram Prasad Sharma
    FOOD PROCESSING INDUSTRIES
    Introduction:
    Food Processing Industries or Sectors are the indispensible elements for
    the overall development of an economy. It provides a vital linkage and
    synergy between the agriculture and industry. It helps in commercialising,
    diversifying and sustaining the agricultural sector by enhancing the income of
    the farmers, by providing the market opportunities for the agricultural products
    intended for exports and by absorbing the employment problem by generating
    employment opportunities. The Agricultural produce can be sold or exported
    to far off places for earning revenues and as such these industries play a
    serious role. The Food Processing Industry sector in India is one of the largest
    in terms of production, consumption, export and growth prospects.
    Meaning of Food Processing:
    The term 'food processing' is mainly defined as a process of value
    addition to the agricultural or horticultural produce by various methods like
    grading, sorting and packaging. In other words, it is a technique of
    manufacturing and preserving food substances in an effective manner with a
    view to enhance their shelf life; improve quality as well as make them
    functionally more useful. It covers spectrum of products from sub-sectors
    comprising agriculture, horticulture, plantation, animal husbandry and
    fisheries.
    Indian Scenario:
    The changing pattern of living and lifestyle of the Indian people has
    generated new avenues for the growth and prosperity of these Industries.
    Urbanisation has supported a lot and the consumers’ demand for quality food
    products at a convenient and better way have compelled these industries to
    adapt changes arising due to the demand scenario by adopting newer
    technologies. The Indian food processing industry is one of the largest in the
    world in terms of production, consumption, export and growth prospects.
    Earlier, food processing was largely confined to the food preservation,
    packaging and transportation, which mainly involved salting, curdling, drying,
    pickling, etc. However, over the years, with emerging new markets and
    technologies, the sector has widened its scope. It has started producing many
    new items like ready-to-eat food, beverages, processed and frozen fruit and
    vegetable products, marine and meat products, etc. It also include
    establishment of post-harvest infrastructure for processing of various food
    items like cold storage facilities, food parks, packaging centres, value added
    centres, irradiation facilities and modernised abattoir.
    India has a strong agricultural production base with diverse agro-climatic
    conditions and arable land of 184 million hectares. It is one of the major food
    producers in the world and has abundant availability of wide variety of crops,
    fruits, vegetables, flowers, live-stock and seafood. As per the available
    information, it produces annually 90 million tonnes of milk (highest in the
    world); 150 million tonnes of fruits and vegetables (second largest); 485
    million livestock (largest); 204 million tonnes of food grains (third largest); 6.3
    million tonnes of fish (third largest); 489 million poultry and 45,200 million
    eggs. As a result, Indian food processing industry has become an attractive
    destination for investors the world over.
    The total inflow of foreign direct investment (FDI), year-wise, in food
    processing sector during the period 2000-01 to 2007-08 (up to November2007)
    is as follows:
    Year Foreign Direct Investment (Rs. in Crores)
    2000-01 0198.13
    2001-02 1036.12
    2002-03 0176.53
    2003-04 0510.85
    2004-05 0174.08
    2005-06 0182.94
    2006-07 0441.00
    2007-08 (up to November 2007) 0061.63
    Grand Total 2781.28

    (Source: Annual Report 2007-08, Ministry of Food Processing Industries)

    Key Growth Drivers of Food Processing Sector in India:


    Increasing spending on health and nutritional foods.
    Increasing number of nuclear families and working women
    Changing lifestyle
    Functional foods, fresh or processed foods
    Organised retail and private label penetration
    Changing demographics and rising disposable incomes
    Indian food processing industry is widely recognized as a 'sunrise industry'
    having huge potential for uplifting agricultural economy, creation of large
    scale processed food manufacturing and food chain facilities, and the resultant
    generation of employment and export earnings. The industry is estimated to be
    worth around US$ 67 billion and employing about 13 million people directly
    and about 35 million people indirectly. The food processing sector in India is
    geared to meet the international standards. Food Safety and Standards
    Authority of India has the mandate to develop standards and also to harmonise
    the same with International Standards consistent with food hygiene and food
    safety requirement and to the conditions of India's food industry.
    Increased urbanization, improved standards of living, and the convenience
    needs of dual income families point to major market potentialities in the food
    processing and marketing sectors. This is also evident from the presence of
    several global foods giants and leading Indian industrial enterprises in the
    country's food processing sector, such as: Nestle India Ltd, Cadbury's India
    Ltd, Kelloggs India, Hindustan Lever Ltd, ITC-Agro, Godrej Foods and MTR
    Foods Ltd Besides, in the current globalized milieu, our surplus food
    production, as well as the increasing preference for Indian foods (in several
    regions of the world) need to be leveraged to achieve economic, and strategic
    objectives through exports.

    Opportunities in Food processing Sector:

    Processable varieties of crop


    Contract farming
    Investments in infrastructure through Public Private Partnership (PPP)
    Mega Food parks
    Integrated cold chain
    Food safety Management Systems

    Important segments in Food Processing Industries ( Exports and


    Turnover figures ):
    Fruits and Vegetables Processing (In 2008-09, India's export of fresh fruit and
    vegetable was estimated at US$ 0.79 billion and in case of processed fruits and
    vegetables it stood at US$ 0.68 billion.)
    Meat Processing (In 2008-09, India's export of meat products (including
    buffalo meat, sheep/goat meat, poultry products, animal casings and processed
    meat) stood at U$ 1.25 billion.)
    Diary Processing (In 2008-09, export of dairy products was estimated at US$
    0.21 billion.)
    Fisheries Sectors (The export of marine products has steadily grown over the
    years - from a mere US$ 0.84 million in 1961-62 to US$ 1,849.08 million in
    2008-09. Marine products account for approximately 1.1 % of the total exports
    from India.)
    Grain Processing Sectors (Export of oil meals, oilseeds, minor oils (fats) and
    castor oil during the financial year 2007-08 is reported at 62.6 lakh tonnes
    valued at US$ 2.32 billion against the exports of 58.9 lakh tonnes valued at
    US$ 1.39 billion in the previous year.)
    Consumer Food Industries (India's biscuits industry is the largest among all
    the food industries and has a turnover of around US$ 0.64 billion)
    Major Players in Indian Food processing:
    ITC Limited
    Parle Products Pvt. Ltd.
    Agro Tech Foods
    Amul
    Perfetti India Ltd.
    Cadbury India Ltd.
    PepsiCo India Holdings
    Nestle India Pvt. Ltd.
    Britannia Industries Ltd.
    Hindustan Lever Limited
    Milkfood
    MTR Foods Limited
    Godrej Industries Limited
    Gits Food Products Pvt. Ltd.
    Dabur India Ltd.
    Unilever
    Conagra Foods
    Nissin FoodsWalmart Venky's

    Constraints:
    While the food-processing sector offers several opportunities, it faces
    constraints as well, such as:
    • Low income and the high share of basic food in the household consumption
    expenditure which acts as a deterrent in the growth of processed food sector.

    • Socio cultural factors such as preference in India for freshly plucked/cooked


    food, variation in food habits across the country, easy availability of raw
    materials for cooking, preference for consumption of food at home etc.

    • Low productivity, high wastage.

    • Inadequate infrastructure for sorting, grading, packing etc. in addition to the


    high cost of raw material (at processor’s level).

    • APMC Act which restricts sourcing materials from farmers.

    • Lack of a common policy on Contract farming.


    • Lack of trained man power for various stages of processing, storage,
    marketing and branding.

    • Lack of access to modern technology.

    • Low share of sale of food products through organized retail, which are the
    usual drivers of quality, scale and integration. Globally 72 %, or more of food
    sales, is through organized retail. Share in India is just one percent. The high
    proportion of unorganized sale leads to low product quality, low hygiene levels
    and safety.

    • Access to Credit for farmers as well as small and medium food processors is
    a key issue. Over 75% rely on informal credit at very high interest rates
    leading to increase in cost of production affecting competitiveness.

    • Inability to attract investment by large corporate houses who complain of


    unreliable sources of supply of raw material.

    • Inability to induce investor confidence.

    • Low inflow of Foreign Direct Investment, in spite of the permission for


    100% FDI in the food processing sector (except in food retailing, alcoholic
    beverages and plantations).

    • Inability of Government Schemes to have the desired impact on productivity,


    technology and market arrivals.
    • Advantages of low price at farm gate for raw materials not available to
    processors, affecting international competition.
    Conclusion:

    To conclude, Food Processing Industries or Sectors form an


    integral part of our economy. It is one of the main components of
    export-oriented industries who have changed the overall development
    scenario of the Indian economy by exporting the produce from the
    processed agricultural products and earning foreign exchange and also
    absorbing employment problem to a certain extent possible. In the
    present context, its contribution cannot go unseen and many foreign
    companies and investors have vested their interest in venturing in these
    sectors in India by investing in these sectors and industries.

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