chapter no. 05: progress of food processing...
TRANSCRIPT
158
Chapter No. 05:
Progress of Food Processing Industry.
Introduction.
An Overview of Indian food processing industry.
Infrastructure in Food Processing Industry.
Challenges before Food Processing Industries in
India.
Opportunities to Indian Food Processing Industry.
Food Parks.
Food Processing Industry in Maharashtra.
Maharashtra’s Position on India’s Food Processing
Map.
Status of Maharashtra’s Food Processing Industry.
The Food Parks in Maharashtra.
159
Introduction:
The future of the Indian farmer depends on the success of the
food industry as India’s prosperity is predominantly linked to the
growth of incomes in the agrarian sector of the economy.
Increasing liberalization of the economy has tried to lift the
protection that the food and agriculture sector once enjoyed in the
country. This has exposed the sector both to the opportunities and
challenges of the global food economy. The market forces arc
compelling the Indian agriculture producers to increase the quality
of their farm produce while continuing to maintain their cost
competitiveness in order to be able to compete effectively in the
global food market. Even in the domestic market, rising per capita
incomes and changing demographic profile of the population has
ensured the growing demand for processed and convenience foods.
Increasing consumer awareness about health and hygiene has
shifted the focus of the market to safe foods. The Indian food-
processing sector is undergoing a veritable revolution all the way
from the plate to the plough.
Indian food processing industry has seen significant growth
and changes over the past few years, driven by changing trends in
markets, consumer segments and regulations. These trends, such
as changing demographics, growing population and rapid
urbanization arc expected to continue in the future and, therefore,
will shape the demand for value added products and thus for food
processing industry in India. The Government of India’s focus
towards food processing industry as a priority sector is expected o
ensure policies to support investment in this sector and attract
more FDI. India having access to vast pool of natural resources and
160
growing technical knowledge base, has strong comparative
advantages over other nations in this industry. The food processing
sector in India is clearly an attractive sector for investment and
offers significant growth potential to Investors.1
An Overview of Indian food processing industry:
In the post-independence period, India witnessed rapid
growth in food-processing sector specifically during 1980s. It
followed the first phase of the Green Revolution that had resulted
in increased agricultural production and the need for its post
harvest management.2 The importance of the sector was realized
by the business community leading to diversification from grain
trading to processing. Initially it was, rice processing which was
followed closely by wheat milling, paper and pulp industry, milk
processing sector, jute industry, sugarcane processing and oils
extraction through solvent plants. In some areas like the solvent
extraction industry, the growth in installed processing capacity has
been far higher than the supply of the raw materials. However, in
other areas like fruits and vegetable processing, the growth has not
been encouraging due to poor demand for processed products by
the consumers. In such cases, the industry has also not been able
to develop the demand adequately.
India is the largest producer of milk, fruits, pulses, cashew
nuts, coconuts and tea in world and accounts for 10 per cent of the
world fruit production. Confederation of Indian Industry has
estimated that the food processing sector has potential of
attracting Rs. 1.5 Lakh Crores of investment in next ten years. The
Indian domestic food market is expected to grow by nearly 40 per
161
cent of the current market size to Rs. 12,900 billion by 2015 and
Rs. 17,200 billion by 2025. The state wants to fully utilize the
untapped potential of the sector, and generate more revenue from
the sector. If the policies of government towards food processing
industry are analyzed, there also it comes out that according to the
vision 2015, the food processing industry is moving towards higher
avenues, for example increase in the level of processing of
perishables from 6 to 20 per cent, value addition from 20 to 35 per
cent, increase in share of global food trade from 1.5 to 3 per cent.3
These targets can be achieved if policies are implemented properly
and international standards match then food processing industry
can become the leading industry of India’s economy, generating
huge employment opportunities and increase in Income.
The low levels of processing are driven primarily by the food
habits of the population. Fresh fruits and vegetables are preferred
compared to processed fruits and vegetables. Even after a strong
agricultural production base, India’s food processing industry is
still under developed. The highest share of the processed food is in
the dairy sector, where 35 per cent of total produce is processed, of
which only 15 per cent is processed by the organized sector. The
processing level is around 2.2 per cent in fruits and vegetables, 21
per cent in meat and poultry products. Of the 2.2 per cent
processing in fruits and vegetables only 48 per cent is in organized
sector remaining in unorganized sector. Food and food products
are the biggest consumption category in India, with spending on
food accounting for nearly 21 per cent of India’s GDP and with a
market size of Rs. 9,050 billion. The share of food processing
industry in GDP has gone up to Rs.44,93,743 crore in 2009-10
162
from Rs 32,54,216 crore in 2005-06, with Compound Annual
Growth Rate (CAGR) of 8.40 per cent. CAGR for total
manufacturing sector during the same period has been 9.35 per
cent.4
Table No. 5.01:
State-wise estimated Number of Factories in Registered
FPI units for 2011-12.
Sr.
No.
Name of the State
No. of Factories
Total
Food
Products Beverages
1 Andhra Pradesh 9,018
341
9,359
2 Andaman &
Nicobar Islands
4
0
4
3 Assam
1,172
40
1,212
4 Bihar
682
33
715
5 Chandigarh (U.T.)
18
5
23
6 Chhattisgarh
1,013
15
1,028
7 Dadra & Nagar
Haveli
8
-
8
8 Daman & Diu
12
23
35
163
9 Delhi
139
6
145
10 Goa
49
36
85
11 Gujarat
1,791
133
1,924
12 Haryana
577
73
650
13 Himachal Pradesh
145
26
171
14 Jammu & Kashmir
132
18
150
15 Jharkhand
154
15
169
16 Karnataka
1,875
104
1,979
17 Kerala
1,387
50
1,437
18 Madhya Pradesh
712
42
754
19 Maharashtra
2,838
275
3,113
20 Manipur
18
-
18
21 Meghalaya
14
4
18
22 Nagaland
12
-
12
164
23 0disha
828
47
875
24 Puducherry
56
14
70
25 Punjab
2,700
84
2,784
26 Rajasthan
683
94
777
27 Sikkim
10
8
18
28 Tamil Nadu
4,912
274
5,186
29 Tripura
49
6
55
30 Uttar Pradesh
1,988
128
2,116
31 Uttarakhand
357
24
381
32 West Bengal
1,527
73
1,600
Source: Annual Survey of Industries, 2011-12.
165
Table No. 5.02:
Number of Registered FPI Units (2007-08 to 2011-12)
Description 2007-08 2008-09 2009-10 2010-11 2011-12
Meat
77
90
85
115
146
Fish, crustaceans and
molluses and production
thereof
340
352
359
436
390
Fruits and Vegetables
735
709
832
1,052
1,078
Vegetable & animal oils
and fats
2,515
2,429
2,421
3,307
3,394
Dairy Products
1,096
1,100
1,112
1,493
1,653
Grain Mill products
12,807
13,464
13,397
17,792
18,244
Starches & Starch
products
442
589
670
757
766
Bakery products
955
993
1,056
1,450
1,399
Sugar
778
733
744
895
906
Coca, chocolate and
Sugar confectionery
404
456
466
509
560
Macoroni, Noodles,
Couscous & Similar
farinaceous products
73
61
51
83
75
Prepared meals & dishes
-
45
139
343
416
Food Products N.E.C.
4,091
4,290
4,225
5,114
5,101
Prepared Animal feeds
555
547
606
677
755
166
Distilling, rectifying &
blending of sprits
280
291
296
325
378
Manufacture of Wines
64
79
69
74
77
Manufacture of malt
liquors and malt
120
96
117
154
141
Production of mineral
water & other bottled
waters, Soft drinks
887
896
834
1,264
1,401
Total
26,219
27,220
27,479
35,838
36,881
Source: Annual Survey of Industries, 2011-12.
Table No. 5.03:
State-wise Estimated Number of Persons engaged in FPI
Sector (2011-12).
Sr.
No.
Name of the State
No. of Persons engaged
Total
Food
Products Beverages
1 Andhra Pradesh
237,362
20,589
257,951
2 Andaman &
Nicobar Islands
107 0
107
3 Assam
85,867 3093
88,960
4 Bihar
22,060
3,063
25,123
5 Chandigarh
(U.T.)
538
294
832
167
6 Chhattisgarh
23,544
2,034
25,578
7 Dadra & Nagar
Haveli
473
-
473
8 Daman & Diu
506
1,208
1,714
9 Delhi
13,097
446
13,543
10 Goa
5,409
1,981
7,390
11 Gujarat
93,165
3,063
96,228
12 Haryana
31,513
5,538
37,051
13 Himachal
Pradesh
10,336
1,848
12,184
14 Jammu &
Kashmir
5,846
1,625
7,471
15 Jharkhand
3,487
491
3,978
16 Karnataka
99,282
8,782
108,064
17 Kerala
180,406
6,025
186,431
18 Madhya Pradesh
38,451
4,509
42,960
19 Maharashtra
208,950
19,755
228,705
168
20 Manipur
309
-
309
21 Meghalaya
353
234
587
22 Nagaland
115
-
115
23 0disha
22,900
2,174
25,074
24 Puducherry
4,232
869
5,101
25 Punjab
85,327
9,493
94,820
26 Rajasthan
30,854
8,117
38,971
27 Sikkim
1,214
657
1,871
28 Tamil Nadu
173,130
13,298
186,428
29 Tripura
1,549
113
1,662
30 Uttar Pradesh
147,925
17,081
165,006
31 Uttarakhand
25,535
3,011
28,546
32 West Bengal
75,321
7,957
83,278
Total
1,629,161
147,482
1,776,643
Source: Annual Survey of Industries, 2011-12
169
Food Processing Industry is one of the major employment
intensive segments constituting 12.13 per cent of employment
generated in all Registered Factory sector in 2011-12. According to
the latest Annual Survey of Industries (ASI) for 2011-12, the total
number of persons engaged in registered food processing sector is
17.77 lakhs. During the last 5 years ending 2011-12, employment in
registered food processing sector has been increasing at an Annual
Average Growth Rate of 3.79 per cent. Unregistered food
processing sector supports employment to 47.9 lakh workers as per
the NSSO 67th Round, 2010-11.
Table No. 5.04: Food Processing Units in MSME Sector
Sr.
Food Processing Units in MSME Sector
Principal Characteristics
Unit Registered
Units
Un-Registered
Units
Total FPI
1
Working
Enterprises Lakh
2.23 22.89
25.12
2 Employment Lakh
14.68 48.31
62.99
3
Original Value of
Plant & Machinery
Rs.
Crore
13,261
14,431
27,692.30
4
Market Value of
Fixed Assets
Rs.
Crore
60,196
31,106
91,301.69
5 Gross Output
Rs.
Crore
137,287
51,561
188,848.64
6 Gross Input
Rs.
Crore
94,628
30,264
124,892.66
7 Gross Value Added
Rs.
Crore
42,659
21,297
63,956.00
Source: MSME Census, 2006-07
170
Table No. 5.05:
Export of Processed Food & Related Commodities.
Sr.
No. Commodity
2009-
10
2010-
11
2011-
12
2012-
13
1 Tea
623
736
848
866
2 Coffee
430
662
953
866
3 Pulses
87
191
228
235
4 Rice -Basmati
2,289
2,494
3,217
3,564
5
Rice(Other Than
Basmati)
76
51
1,723
2,652
6 Wheat
0
0
202
1,934
7 Other Cereals
626
804
1,128
1,505
8 Dairy Products
117
187
129
326
9 Spices
1,302
1,768
2,750
2,821
10 Sugar
23
1,199
1,839
1,575
11 Molasses
4
47
43
41
12
Cashew Nut Shell
Liquid
6
7
12
5
171
13 Cashew
591
619
915
747
14 Sesame Seeds
317
507
553
528
15 Groundnut
302
480
1,093
747
16 Spirit & Beverages
129
186
309
361
17 Guergam Meal
241
646
3,355
3,919
18 Oil Meals
1,659
2,438
2,420
3,039
19 Castor Oil
462
654
972
793
20 Shellac
15
31
53
74
21 Niger Seeds
5
10
25
17
22
Fruits / Vegetable
Seeds
31
41
60
64
23 Fresh Fruits
480
479
529
608
24 Fresh Vegetables
622
560
600
605
25
Processed
Vegetables
159
168
222
206
26
Processed Fruits &
Juices
245
229
344
362
172
27
Misc Processed
Items
442
577
796
912
28
Meat &
Preparations
1,333
1,971
2,921
3,292
29 Marine Products
2,095
2,623
3,444
3,464
30 Poultry Products
77
62
80
85
FPI-Exports
14,787
20,427
31,762
36,212
India' Total Export
178,751
249,816
305,964
300,401
(%) Share Of FPI 8.3 8.2 10.4 12.1
(%) Growth-FPI -9.35 38.14 55.49 14.01
(%) Growth- Total
Export -3.53 39.76 22.48 -1.82
Source: Annual Survey of Industries, 2011-12.
173
Table No. 5.06:
Contribution to GDO (Rs. In Crores ) at 2004-05 prices.
Sector 2004-
05
2005-
06
2006-
07
2007-08 2008-
09
2009-10 CAGR
2005-
06 to
2009-
10
Manufacturing 453225 499011 570436 629052 655775 713428 9.35
Food
Processing
Industries
44355 47690 52164 57320 67122 66078 8.49
Registered
Food
Processing
Industries.
22148 26780 30710 34752 43893 43910 13.16
Non-
Registered
Food
Processing
Industries.
22207 20910 21454 22568 23229 22168 1.47
Total GDP 2971464 3254216 3566011 3898958 4162509 4493473 8.40
Source: www.mofpi.nic.in
Table No. 5.07:
Contribution of food processing industries in GDP
Sr. Year Contribution to GDP in %
1 2008-09 1.5
2 2009-2010 1.3
3 2010-2011 1.4
4 2011-2012 1.6
5 2012-13 1.5
Source: www.mofpi.nic.in
174
The table No. 5.07 shows that the contribution food
processing industries has increased in Indian GDP in 2008-09 is
1.5 per cent. It has grown 1.6 per cent in the year 2011-2012. It is
increasing trend as an average 1.3 per cent.
Table No. 5.08:
Number of Food Processing Industries in Organized
Sector in India
Food Processing
Industries
Number of Food
Processing
Industries
Ratio in Total
Food Processing
Industries
Flour Mills 516 0.28
Fish Processing 1050 0.57
Fruit & Vegetable 5293 2.88
Meat Processing 171 0.09
Sweetened & aerated
water
656 0.36
Milk Product 286 0.16
Sugar Mills 429 0.23
Solvent extract 725 0.40
Rice Mills 139208 75.89
Modernized rice mills 35088 19.14
Total 183422 100
Source: www.mofpi.nic.in
The table No. 5.08 shows that the 139208 rice mills working
in India on first rank in food processing industries in India
i.e.75.89 per cent. Modernizes rice mills has second rank that is
35088 units working in India i.e.19.14 per cent and third rank goes
175
to the fruit and vegetable food processing industries in India
i.e.2.88 per cent. Overall 97.91 per cent ratio has above three types
of food processing industries in India and only 2 per cent ratio has
in other all remaining food processing industries in India.
Table No. 5.09:
Status of Food Processing Industry in India
Sr. Particular Status
1 Rank of Industry 5th
2 Employment in lakhs 16
3 % of total Industrial Labour Force 19
4 Total Industry Output in percentage 14
5 Output as % of GDP 5.5
6 Estimated Turnover (Rs. in crores) 1,44,000
7 Unorganised Sector (Rs. in crores) 1,11,200
Source: www.mofpi.nic.in
This industry ranks fifth in the country and employs 16 lakh
workers, comprising 19 per cent of the country’s industrial labour
force. It accounts for 14 per cent of the total industry output with
5.5 per cent of the GDP. Its turnover is estimated at Rs.1,44,000
crore, of which Rs.1,11,200 crore is in the unorganised sector.
Table No. 5.10:
Export of agro food product in %.
Sr. Year In Quantity In Value
1 2010-11 32.93 37.12
2 2011-12 36.08 38.79
3 2012-13 31.53 35.76
Source: www.mofpi.nic.in
176
The table No.5.10 shows that the export of India’s agro food
processing product has increased in value in 2011-2012 as compare
to the year 2010-2011 i.e. 38.79 but in the year 2012-2013 has
decreased in up to 35.76 per cent. And in quantity also the same
position in the same period.
Table No. 5.11:
Financial Year Wise FDI Equity Inflows in Food
Processing Industry from April 2000 to March 2014
Annual Figures Cumulative Figures
Year
(Apr-
Mar)
FDI in FPI: Annual FDI Total: Annual
Share
of FPI
in
Total
FDI:
Annua
l (US $
Millio
n)
FDI-Cumulative (in
Million $)
FDI-Cumulative (Rs.
crore)
Share
of FPI
in
Total
FDI-
Cumul
ative
(US $
Millio
n)
FDI
(Rs crore)
FDI
(US$
million)
FDI
(Rs
crore)
FDI
(US$
million)
FPI Total FPI Total
2000-
01 198.13 45.75
10,733
2,463
1.86 45.75
2,463 198.13
10,733
1.86
2001-
02 1,036.12 219.39
18,654
4,065
5.40 265.14
6,528
1,234.2
5
29,387
4.06
2002-
03 176.53 36.88
12,871
2,705
1.36 302.02
9,233 1,410.78
42,258
3.27
2003-
04 502.39 109.22
10,064
2,188
4.99 411.24
11,421 1,913.17
52,322
3.60
2004-
05 201.32 43.98
14,653
3,219
1.37 455.22
14,640 2,114.49
66,975
3.11
2005-
06 182.93 41.74
24,584
5,540
0.75 496.96
20,180
2,297.4
2
91,559
2.46
2006-
07 457.28 102.00
56,390
12,492
0.82 598.96
32,672
2,754.7
0
147,949
1.83
2007-
08 279.01 70.17
98,642
24,575
0.29 669.13
57,247
3,033.7
1
246,591
1.17
2008-
09 455.59 102.71
142,829
31,396
0.33 771.84
88,643
3,489.3
0
389,420
0.87
2009-
10 1,314.23 278.89
123,120
25,834
1.08 1050.73
114,477
4,803.
53
512,540
0.92
2010-
11 858.03 188.67
97,320
21,383
0.88 1239.4
135,860
5,661.5
6
609,860
0.91
177
2011-
12 826.16 170.21
165,146
35,121
0.48 1409.61
170,981
6,487.7
2
775,006
0.82
2012-
13 2,193.65 401.46
121,907
22,423
1.79 1,811.07
193,404
8,681.3
7
896,913
0.94
2013-
14 25,106.78 3,982.88
147,518
24,299
16.39 5,793.95
217,703
33,788
1,044,431
2.66
Source: www.mofpi.nic.in
Losses in Supply Chain:
Despite the large production of food in India, food inflation
and food security issues are major concerns for policy makers in
the country as they affect the basic need for Indian citizens – to
have sufficient, healthy and affordable food. It may be seen that
most of the wastage is happening in fruits and vegetables, pulses
and cereals. With adequate processing facilities, much of this waste
can be reduced thus increasing remunerative wage to the producer
as well as ensuring greater supply to the consumer.5 The
percentage of losses estimated for major products shows as below.
Table No. 5.12: Percentage of losses estimated for major produces
Crop Cumulative wastage
(per cent)
Cereals 3.9 – 6.0 per cent
Pulses 4.3-6.1 per cent
Oil seeds 2.8-10.1 per cent
Fruits & Vegetables 5.8-18.0 per cent
Milk 0.8 per cent
Fisheries (Inland) 6.9 per cent
Fisheries (Marine) 2.9 per cent
Meat 2.3 per cent
Poultry 3.7 per cent
Source: www.mofpi.nic.in
178
Infrastructure in Food Processing Industry:
If Infrastructural facilities present at village level or all over
India are considered, then the most important part of
Infrastructure facility in food processing industry is Cold storage
facilities, which are crucial for the value addition. In India there
are 5,381 cold stores with a storage capacity of 24.45 MT. Uttar
Pradesh and West Bengal account for more than 60 per cent of the
cold storage capacity followed by Punjab, Bihar, Gujarat, Andhra
Pradesh and Madhya Pradesh. Over ninety five percent of the cold
storages are in the private sector. According to the Report of the
Task Force on Development of Cold Chain in India constituted by
Ministry of Agriculture in May, 2007 more than 80 per cent of the
capacities are utilized only for potatoes and about 17 per cent fall
under multi commodity category.6 Most of the multi-purpose cold
stores are also used for potato storage besides providing storages
for chilies, dry fruits, spices, vegetables etc. Cold Storages for meat,
fish, milk and milk products and for other commodities such as
chilies and other spices account for about one percent of the total
cold storage capacity. These cold storages are usually smaller in
capacity. This difference in storage of potatoes and other products
is mainly attributed to the high and annual intake of potatoes, and
its longer shelf life.
Challenges before Food Processing Industries in India:
Lack of skilled and trained manpower in food processing
industry is also a big issue. Many positive developments in the food
processing sector have also resulted in the apprehension about the
emerging skill shortages due to mismatch between the demand for
specific skills and available supply. In fact, of late, shortage of
179
skilled, semi-skilled and unskilled workers has emerged as a
critical factor impacting the competitiveness of Indian food
industry. Around 58 per cent of the employers are dissatisfied with
technical skills and knowledge needed for the job. Also 72 per cent
showed discontent with employees’ ability to use appropriate and
modern tools, equipment, and technologies specific to their jobs.
Technological challenges in cold storage facility in India are-7
Designed to store single commodity, not suitable for
multipurpose.
Not suitable for providing storage conditions of uniform
temperature, humidity, air circulation and fresh air
requirements.
Pre-cooling technologies such as forced air evaporative
cooling, package icing, and vacuum cooling are non-existent
in India.
Controlled atmosphere cold storages still in nascent stage.
Over 90% of cold stores use old ammonia refrigeration
compressor without any capacity control, which is inefficient
and expensive.
Managed by unskilled and untrained manpower, not aware
of latest technology and techniques in handling and storing
fresh perishable produce to international standards.
The food processing industry has many challenges in front of
it, ranging from infrastructure to human resources and to
technological backwardness. Now, with the growing demand of
processed food there is a need to address these problems and
concerning issues on priority basis. Else, India will miss a golden
opportunity of using its vast agri-livestock resources to strengthen
180
its economy, revive its rural industries and create employment for
thousands of people.
Opportunities to Indian Food Processing Industry:
Indian food processing industry has seen significant growth
and changes over the past few years, driven by changing trends in
markets, consumer segments and regulations. These trends, such
as changing demographics, growing population and rapid
urbanization are expected to continue in the future and, therefore,
will shape the demand for value added products and thus for food
processing industry in India. The Government of India’s focus
towards food processing industry as a priority sector is expected to
ensure policies to support investment in this sector and attract
more FDI. India, having access to vast pool of natural resources
and growing technical knowledge base, has strong comparative
advantages over other nations in this industry.
The food processing sector in India is clearly an attractive
sector for investment and offers significant growth potential to
investors. There is a huge opportunity to develop S&T capability
and R&D in the sector.8 There is a need to train the unskilled labor
force, need for development across various human resource
profiles. India can harness all the opportunities present in food
processing sector only when its labor force is educated and skilled.
The government needs to strengthen its skill development
program; new training institutes should be open up, which are in
tune with market demand. The development of infrastructure
facilities like cold chain, road facilities, and power will strengthen
the food processing industry. It will have a very positive sign on
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perishable food products industry, such as fruit and vegetable,
dairy industry, meat and poultry segment. The food processing
industry is all set to drive Indian economy to higher growth, only
need is to pay due attention on technological development of field,
and generation of skilled manpower.
The kinds of units, which have come up, include:
Sr. Area Kinds of Units.
1 Fruit and
Vegetable:
Beverages, Juices, Concentrates, Pulps,
Slices, Frozen & Dehydrated products, Wine,
Potato wafers/chips etc.
2 Fisheries: Frozen and canned products mainly in fresh
form
3 Meat and
Poultry:
Frozen and packed mainly in fresh form, egg
powder (only a couple of units)
4 Milk and
Dairy:
Whole milk powder, Skimmed milk powder,
Condensed milk, Ice cream, Butter and Ghee
5 Grain and
Cereals:
Flour, Bakeries, Biscuits, Starch, Glucose,
Cornflakes, Malted foods, Vermicelli, Pasta
foods, Beer and Malt extracts, Grain-based
Alcohol
6 Consumer
Industry:
Chocolates, Confectionary, Soft/Aerated
Beverages/Drinks
Source: http://www.ediindia.org
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Food Parks:
Food Parks are comprehensive industrial estates for food-
processing units where the industries would have the provision of
common facilities like cold storage, cold chain, effluent treatment
plant, warehousing, power connection, water facilities, sewage etc.
The creation of these common infrastructures would benefit the
individual units particularly the small and medium scale units,
because these are expensive to be set up by any single individual
unit. Therefore a common park with all the infrastructures would
help in the growth of this industry. The ministry of food processing
industries has envisaged an initial investment of Rs 120 Crore for
setting up the common infrastructure in a park. It is of the view
that by providing a grant of Rs 1,500 Crore for 30 parks, Rs 50
Crore for each, the private sector would be encouraged to invest up
to Rs 9,000 Crore in various parks across the country.
Food Processing Industry in Maharashtra:
The Food Processing Industry is an important sector of the
Indian economy. The food processing industry sector, which leap-
frogged during the period 1990-95 has slowed its pace in the past
half decade as, the manufacturers have realized that the consumer
is yet to familiarize himself with the products available in the
market. The food industry contributes about 18 per cent of India’s
manufacturing output and around 5 per cent of total industrial
investment. The estimated turnover of this highly heterogeneous
food and beverage industry exceeds Rs. 570 billion. Niche
segments comprising packaged and branded food products have
recently witnessed rapid growth accompanied by intense
competition. Nearly 52 per cent of the Indian household budget is
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spent on food items and the share of processed food entering the
market is expected to rise rapidly. Both in terms of foreign
investment and number of joint ventures / foreign collaborations,
the consumer food segment has top priority. By last year, foreign
investment of Rs. 20,870 Million had been proposed. Deep sea
fishing and aquaculture, milk and milk products, meat and poultry
segments attracted attention of foreign investors, interest is also
growing in fruit and vegetables and grain / cereal based products.
Maharashtra has been one of the major producers of fruits and
vegetables, milk and meat products. Maharashtra has 10 to 15 per
cent production share of agro produce related to processed
industry. Major units in Maharashtra are - Fruit and Vegetables,
Bakery Products, Dairy Products, Cereals, Meat Products, Fish
Products, etc. Maharashtra and Gujarat will continue to dominate
this industry with more than half the nation’s output and value
addition.
Maharashtra is a key state that contributes significantly to
the food and food processing sector in India. The state occupy
highest ranks in the country in area and production of mango,
grapes, chillies, coriander, cashew, flowers, banana, ginger and
guava based on area and production. It also contributes 25-30 per
cent to the total sea food exports of the country. The food
processing industry contributes 19.36 per cent to total industrial
production in the state. It ranks second in the production of value-
added products and beverages with a 10 per cent contribution to
the exports of the country. The state is also well endowed with
human resources with the right skill sets. Maharashtra is a major
fruit and vegetable producing States of India. A variety of tropical
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and sub-tropical fruits and vegetables are grown in the state. The
state occupies a distinct place in the national scenario in respect of
some fruits and vegetables as indicated in table.
Maharashtra is a leading producer of agricultural,
horticultural and marine products; it is poor as far as their
processing is concerned. As per the estimates, the state’s overall
processing rate - excluding those of dairy and food grains - is about
seven per cent. It certainly can increase its value addition to 25 per
cent over the next ten years with proper focus and implementation
policies. Major processing sectors in Maharashtra. Maharashtra
accounts for about 90 per cent of India’s wine production, and is a
leading processor of mangoes and onions. Oil is another
commodity in which the state’s processing industry has a major
share. It is also known for the processing of grapes, bananas,
oranges, pomegranate, cashew nuts, strawberries, tomatoes,
sugarcane, milk and milk products and fish. There is a good scope
for the processing of all the aforementioned commodities, as there
is a huge production base. It has huge potential in the post-harvest
treatment of fruit and vegetables in the coming days. Due to the
changes in lifestyles and urbanization, the demand for quality fruit
and vegetables is increasing. Even the demand for ready-to-use
fruit and vegetables is increasing. The scope for cut vegetables is
also high due to the growing demand. Apart from traditional food
processing, the sector needs value-addition to be able to pay back
higher returns to the farming community and have inclusive
growth. Maharashtra is seeing a paradigm shift, and sectors such
as nutraceuticals, wine processing, pre and probiotics, packaged
water, ready-to-eat foods, traditional foods, cut vegetables, fruit
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treated post-harvest, exports, food additives and manufactured
food processing equipment could fuel the growth of food
processing and be game-changers for the state.
For the last 50 years, Maharashtra has been a leader in food
processing, owing to many advantages, such as political stability;
friendly government policies; good work in basic agricultural
research and hybridization; forward-thinking farmers and good
production supply; a good industry base; closeness to the market
and high export potential. For the growth of the food processing
industry, many inputs (including raw material) are required. The
biggest challenge faced by the food processing sector is that it is
dominated by unorganised players, who contribute to 80 per cent
of the industry’s volume. There is a conversion of unorganised
players to organised ones, but a fair distance still needs to be
crossed. The main challenges are the unavailability of a
processable quality and quantity of fruit and vegetables; the low
productivity of agri-products; the small and holdings of farmers;
the poor processing conversion; the low technology base and low
automation; labour-intensive operations, the high degree of
seasonality and erratic input availability; the high operating costs
due to small-scale operations; the fact that it is a less competitive
sector, etc. These challenges could be overcome by proper planning
and focus if given to this sector.
Maharashtra has a family base of about three crore, taking
into account an average family size of four. If each family spends
Rs 2,500 on foods (such as milk, oil, grains, vegetables and fruit),
the state’s monthly expenditure on food is Rs 7,500 crore. This
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works out to an annual food expenditure of Rs 90,000 crore. Now
the questions are: (a) Is the state able to cater to a market of that
size; (b) Are its resources being utilized fully to cater this market;
(c) Does it have adequate facilities to fulfill the demand, and (d) Is
it dependent on imports from other states or countries?
Considering its adequacy of infrastructure and facilities and its
closeness to big markets, Maharashtra has larger potential in value
addition processing than traditional commodity base processing.
Maharashtra’s Position on India’s Food Processing Map:
Maharashtra’s share in Indian food processing, as stated
earlier, is about 13 per cent, and its overall growth is about 12 per
cent. Its gross state domestic product (GSDP) is Rs 11,99,548 crore.
Of this, only 15 per cent is contributed by the agriculture and food
processing sector. However, 55 per cent of the population is
dependent on the agri and food processing sector. This is mainly
due to the lack of value addition by the processing sector. This
scenario needs to be changed and the money should be repaid to
the farmers as per their value addition. The agri and food
processng sectors should contribute equally to the GSDP, which is
possible in Maharashtra because of the aforementioned
advantages. However, proper focus is a must. Recently, the Centre
announced the scrapping of the Agricultural Produce Marketing
Committee (APMC) Act, thus fuelling direct trade between the
farmers and the consumers. To boost exports, India must work on
improving its supply quality.9
Maharashtra, being India’s leading state with respect to food
processing, is the natural choice for investors. However, this sector
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has a huge scope for future growth. Various other sectors within
the food processing industries (such as nutraceuticals, the post-
harvest sector, traditional foods and convenience foods) are still in
a nascent stage, and Maharashtra has the potential to be a hot
destination in those as well. They can boost economic growth by
bringing good value addition to the farmers, the processors and the
consumers.
Status of Maharashtra’s Food Processing Industry:10
Share of food processing industry in the total share of the
industrial sector is 11.1 percent
There are 173 FDI proposals approved in the food processing
sector with an investment of Rs. 1,039 crore between August
1991 to March 2012
90 percent of the wine industry of the country is located in
Maharashtra
Eight notified Agri Export Zones for products like mangoes,
grapes, pomegranate etc
The state has two wine parks- Nashik and Sangli
Six food parks were established in the state during 10th FYP
under MoFPI’s Food Park Scheme
Under its Mega Food Parks Scheme, Ministry of Food
Processing Industries (MoFPI) has awarded Final Approval to
the Mega Food Park project in Paithan (Aurangabad) and In-
principle approval to the Mega Food Park project in Satara
There are approximately 10 projects approved by MoFPI under
its Cold Chain, Value Addition and Preservation Scheme
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The Food Parks in Maharashtra:
The State Government has considered for establishing of
Food Parks on the lines of industrial colony /clusters and
extending all the required common facilities and infrastructure at
one place to small and medium food processing units. The State
Government has appointed MAIDC as agency to establish Food
Park at Orange City, Five Star zone of MIDC, Butibori, Nagpur
under Centrally Sponsored Scheme. Orange City Food Park is the
brainchild of MAIDC & MIDC. People call it a food-processing
zone, but we call it a food-processing home. The home where you
find every kind of advanced common facilities managed efficiently
for you to offer custom service, which enables you to run food
processing business with utmost ease and speed. Orange City Food
Park, having an area of 58.3 acres.11 The required infrastructure
and common facilities like cold Administrative building, canteen,
cold-storage, warehouse, Tetra pack building, processing and allied
machinery equipment facilities, weighing bridge, quality control
laboratory, potable water, effluent treatment plant, etc have been
developed on 8 acres of Food Park area to extend support to food
processing community for promotion of the industries in the zone.
The following developmental activities have been taken place:
Table No. 5.13: Developmental activities of Food Park.
Sr. No Description Nos.
01 Total Plots developed 68
02 Plots allotted 68
03 Units commissioned and in operation 13
04 Units under construction 07
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1. A brief report on Food Processing Sector in India (2012) –
Corporate Catalyst India, New Delhi.
2. Meeta P (2007) - Emerging environment for Agribusiness
and Agro-Industry Development in India. Food and
Agricultural Organisation - United Nations, New Delhi,
India.
3. Government of India, Ministry of Food Processing
Industries (2011) - Strategic Plan for Food Processing
Industries in India.
4. Majumdar K and Basu P. (2012) - Measurement of Growth
Trades: An Econometric Analysis of Food grains Production
in West Bengal -ICFAI Journal of Agricultural Economics.
5. Jairath, M.S. (1996) Agro-processing and infrastructure
development in hilly area: A case study of Fruit and
vegetable processing. Indian Journal of Agricultural
Marketing.
6. Mukherjee A. and Patel. N. (2005) - FDI in retail sector
India, Academic FoundationS New Delhi.
7. FICCI Study on Implementation of Food Safety and
Standards Act. (2007) - An Industry Perspective Report.
8. Ministry of Food Processing Industries, Government of
India - (2009) - Retail in Food Processing Manual Report.
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processing industry in Maharashtra
http://www.fnbnews.com
10. Mohammed Asmatoddin, G.T. Pawar And M.Atefuddin
(2008) - Employment And Income Pattern In Bakery And
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Confectionary Units In Maharashtra India – Concepts
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