Model Answer
0 min readIntroduction
The food processing sector is a vital component of the Indian economy, contributing significantly to agricultural growth, employment generation, and export earnings. It accounts for approximately 32% of the country’s food market. However, the sector faces numerous challenges including inadequate infrastructure, high post-harvest losses, lack of access to modern technology, and insufficient financial support. Recognizing these issues, the Government of India has implemented a series of policies and schemes aimed at boosting the sector’s growth and competitiveness. This answer will elaborate on these policy interventions.
Challenges in the Food Processing Sector
Before delving into the policies, understanding the challenges is crucial. These include:
- High Post-Harvest Losses: Estimated at around 16% of total produce, valued at ₹2.23 lakh crore annually (as per 2019 estimates, National Centre for Cold-chain Development).
- Inadequate Infrastructure: Lack of cold storage facilities, transportation networks, and processing units.
- Technological Gaps: Limited adoption of modern processing technologies and packaging techniques.
- Financial Constraints: Difficulty in accessing credit and investment for small and medium-sized enterprises (SMEs).
- Supply Chain Inefficiencies: Fragmented supply chains and lack of integration between farmers, processors, and retailers.
- Regulatory Hurdles: Complex licensing and regulatory requirements.
Government Policies and Interventions
1. Policy Framework
The government has introduced several policies to address these challenges:
- National Policy on Food Processing Industries (2017): Aims to promote growth of the sector by attracting investments, creating employment, and increasing exports. It focuses on infrastructure development, technology upgradation, and skill development.
- New Food Safety and Standards Act, 2006: Consolidates various food laws and regulations to ensure food safety and quality.
2. Infrastructure Development
Significant emphasis has been placed on improving infrastructure:
- Pradhan Mantri Kisan Sampada Yojana (PMKSY) (2017): An umbrella scheme encompassing various sub-schemes like Mega Food Parks, Integrated Cold Chain and Preservation Infrastructure, and Food Processing Units. It aims to create modern infrastructure for food processing and preservation.
- Mega Food Park Scheme: Provides financial assistance for setting up Mega Food Parks, which offer integrated infrastructure facilities for food processing units. As of 2023, 22 Mega Food Parks have been approved.
- Integrated Cold Chain and Preservation Infrastructure: Provides financial assistance for setting up cold storage facilities and refrigerated transportation.
3. Financial Assistance and Incentives
The government offers various financial incentives to support the sector:
- National Bank for Agriculture and Rural Development (NABARD) Schemes: NABARD provides financial assistance to food processing units through various schemes, including direct lending and refinance schemes.
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): Provides credit guarantees to banks for loans extended to food processing SMEs.
- Transport Subsidy: Subsidies are provided for the transportation of fruits, vegetables, and other perishable goods.
4. Technology Upgradation and Skill Development
Promoting technology adoption and skill development is a key focus:
- Scheme for Technology Upgradation/Establishment/Modernization of Food Processing Industries (SMFP): Provides financial assistance for upgrading technology in food processing units.
- Skill Development Programs: The Ministry of Food Processing Industries (MoFPI) conducts skill development programs to train personnel in food processing techniques.
5. Recent Developments & Initiatives
Recent initiatives include:
- PLI Scheme for Food Processing Industry (2021): Production Linked Incentive (PLI) scheme to support food manufacturing entities to boost production and exports.
- Digitalization of Agriculture: Promoting the use of digital technologies like e-NAM and Farmer Producer Organizations (FPOs) to improve market access and supply chain efficiency.
| Scheme/Policy | Objective | Key Features |
|---|---|---|
| PMKSY | Infrastructure Development | Umbrella scheme encompassing Mega Food Parks, Cold Chain, and Food Processing Units. |
| PLI Scheme | Boosting Production & Exports | Financial incentives based on incremental sales of specified food products. |
| National Policy on Food Processing Industries (2017) | Overall Sector Growth | Attracting investment, creating employment, and increasing exports. |
Conclusion
The Government of India has taken significant strides in addressing the challenges faced by the food processing sector through a combination of policy interventions, infrastructure development, and financial assistance. While progress has been made, challenges remain in terms of infrastructure gaps, technological adoption, and supply chain inefficiencies. Continued focus on strengthening these areas, coupled with promoting innovation and attracting private investment, will be crucial for realizing the full potential of the Indian food processing sector and ensuring food security.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.