Food Processing Industry - Scope Significance Obstacles in India PDF

18/09/2019 Food Processing Industry:Scope Significance Obstacles in India
(https://unacademy.com/plus/course/course-on-general-studies-prelims-mains-2020-sep-
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
[Food Processing] Introduction, Scope, Significance, Awesomeness (hardly),

Obstacles (truckload of) for GS Mains
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1. Prologue
2. Indian food processing industry: Signi cance
1. Increasing Employment
2. Curbing Migration
3. Curbing Food In ation
4. Crop-diversi cation
3. Scope/Potential
1. Abundant Raw Material
2. Geographical advantages
3. New Demand

https://mrunal.org/2013/08/food-processing-introduction-scope-significance-awesomeness-hardly-obstacles-truckload-of-for-gs-mains.html 1/27
18/09/2019
4. Government Initiatives Food Processing Industry:Scope Significance Obstacles in India
4. Obstacles to food processing?

1. Economies of scale
2. Lack of organized retail
3. Lack of Food testing facilities
4. Lack of Skilled Manpower
5. Lack of R&D
6. Transport problems
7. Export Problems
Prologue
In the new Mains syllabus, UPSC has included: Food processing and related industries in India-
their Scope, signi cance, Location

Supply chain management (SCM)
Upstream and downstream requirements
But ^that’s not “the end”. Food processing topic also overlaps with
1. Ministries and Departments of the Government

GS-
2. Government policies and interventions for development in various sectors and issues arising
2
out of their design and implementation.
GS- 3. storage, transport and marketing of agricultural produce and issues and related constraints;
3 4. Sci-Tech research e.g. Food irradiation, developing new crop hybrids, animal-breeds etc.
+ same food processing points can be selectively used for discussing rural-unemployment, food in ation,
general in ation, FDI in multi-brand retail; even current account de cit and rupee depreciation: whether its
essay / interview or group discussion (in case of SBI/CAT) hell even RBI O cer phase II descriptive papers.
Structure of the [Food processing] Article series:
1. We get basic overview of signi cance-scope-potential-obstacles

2. Truckload of Government schemes related to post-harvest management, Mega Food parks etc.
3. Model APMC acts, the direct cooperative marketing etc.
4. Finance, taxation, FDI, export related issues
5. Then we start basic theory of supply chain management (SCM), and upstream downstream issues of
individual food processing sub-sectors viz. Dairy, Fruit and Veggies, Egg-Meat-Fishes, Confectionary,
Wine, Edible oil etc.

References used for this article series
Source Title comment
1. A Manual for
Initial chapters provide the challenges/problems with food
Entrepreneurs: Food
processing industry. Rest goes into actual management,
Processing Industry
accounting, sales, marketing strategy for a food
(Tata McGraw-Hill
entrepreneur=useless from UPSC point of view.
Publication)
Books 2. Food processing: Some chapters deal with food industries in China, Australia etc but
Opportunities and hardly any good fodder pointsSome chapters provide details of
Challenges (ICFAI individual food processing sector but mere copy paste job from
university press) Vision 2015 PDF document.
3. IGNOU MBA booklets for theory on supply chain management, upstream-downstream

(Coursecode: MS-55) requirements
State of Indian agriculture

2012-13 (By Agricultural for agro-livestock- sh-production information and schemes
Ministry)
Vision 2015 for food for opportunities and obstacles in individual sector: dairy, meat,
industries: part 1 and 2 wine etc.
Flavors of Incredible India:

for supply chain diagrams of individual food processing sector+
A report by Ernst & Young
Additional points for opportunities, obstacles.
and FICCI
PDFs plenty of fodder on
Planning commission’s
report on Encouraging
supply chain,
Investments In Supply
opportunities, obstacles
Chains and cold storages
various schemes
doesn’t have much speci c fodder points for food processing

12th FYP documents
though.
IBEF report on Food

some fancy charts, numbers.
processing industry
Web pib.nic.in, Indian express for government schemes, salient features, export/dumping issues.
Note: All those Food processing related PDFs have been uploaded on
https:// les.secureserver.net/0sL2N0Ej5XwsWc (https:// les.secureserver.net/0sL2N0Ej5XwsWc)
12th Five year plan uploaded on https:// les.secureserver.net/0sLrYY0FFJRric
(https:// les.secureserver.net/0sLrYY0FFJRric)

Indian food processing industry: Significance
Has more than 35000 registered units

size Output of ~5-6 lakh crores
Food processing contributes about 9-10% of GPD, in Agro-Mfg. sector.
Location wise: Maximum factories in (ie. more than 1000 in given state)Coastal states: Andhra,
Maharashtra, Karnataka, Kerala, Gujarat, Punjab, WBNon-coastal States: UP, Punjab
location
Observe majorities of the food processing factories are concentrated in the coastal states.
Increasing Employment
Food processing industry provides plenty of direct and indirect employment opportunities, because it
acts as bridge between Agriculture and Manufacturing
As per ASI survey in 2010, Food processing industry generated highest employment among all industry.
Giving employment to almost 17 lakh people.
12th Five year plan (FYP) wants to create more than 50 million jobs. Out of that, Food processing sector is
to create one million jobs.
Curbing Migration
When food processing plants are setup near agro/rural regions, they reduce:
1. Poverty among villagers,

2. disguised unemployment
3. exploitation of farmers
4. rural-urban migration
1. unplanned urbanization,
2. slums/hygiene/social problems in cities
Curbing Food Inflation
In the last few years Food in ation has been a major problem. Food in ation is eventually passed
through into manufactured goods through higher money wages.
Therefore persistent high food in ation= bad for general macroeconomic stability.
well-developed food industry + compact supply chain=reduces food in ation via:
1. Disintermediation (meaning no middlemen/commission agents)
2. less wastage/spoilage of perishable products
Thus food industry is signi cant for reducing food in ation.


Crop-diversification
Indian villagers are away from market= have to grow cereals. (as we learned in Von Thunen model
(https://mrunal.org/2013/07/geography-location-factors-wheat-corn-milk-meat-pig-poultry-vegetable-
and-wine.html#1112))
In recent years, Government increased Minimum support prices for rice and wheat.
That leads to surplus grain production=>Pvt. Players give less price to farmer=>government has to buy
wheat @Minimum support price (MSP) but FCI didn’t have enough storage capacity
Result: Wheat gets rotten @godowns and railway stations.
On the other hand, we’ve to rely on imported oilseeds because of higher MSP, farmers prefer to grow
rice/wheat than oilseeds=> higher oilseed import adds to Current account de cit and leads to 1$=62
rupees=>crude oil expensive=petrol expensive=everything transported through petrol/diesel gets
expensive=thus the cycle of middle class exploitation is complete.
Coming to the original point: we need crop diversi cation, all farmers shouldn’t be growing just rice and
wheat. But if want to seduce the farmers into growing other crops, then following must be done
1. Promote food industry with backward linkages to farmers growing fruits, vegetables, milk, sh, meat,
poultry, grain, etc.
2. Aggressively market the processed food in India + Abroad
once we’ve done #1 + #2=> then even the farmers away from market area will see good income opportunity
in growing non-cereal crops => crop diversi cation => the excessive “rotting-wheat” surplus problem is
solved.
Some ller signi cance points: food processing

1. Increases shelf life: milk vs butter
2. Increase value: milk vs butter
moveing to….
Scope/Potential

(https://www. ickr.com/photos/97816112@N02/9561743429/)
Abundant Raw Material
India’s world
in production of
Rank
1 milk, ginger, chickpea, banana, guava, papaya, mango, bu alo meat
rice, wheat, potato, garlic, cashew nut, groundnut, dry onion, green peas, pumpkin,
2
gourds, cauli owers, sugarcane, tea
among top
co ee, tobacco, spices, oilseeds
ve
With such a huge raw material base, we can easily become leading food supplier in the world. (But we
haven’t, because of the obstacles discussed later).
Geographical advantages
1. 46 out of 60 soil types are present in India.

2. More than 26 types of climatic conditions= can cultivate large variety of fruits, crops, vegetables.
3. Large coastline, villagers in 13 states engaged in shing as their secondary activity.
4. Variety domestic animals such as cows, bu aloes, goats, chicken, lamb, sheep. 
5. Large irrigated area under cultivation. Ample supply of fresh water for human, plant and animals.
New Demand
In the upcoming years, there will be good demand for healthy, modern food products due to following
reasons:
1. Youth population (age group 15 – 25): doesn’t shy away from trying new food products.
2. More Nuclear families: usually working couple => less cooking time + expensive maids=need ready to eat
/ ready to cook food.
3. Rising incomes, middle class and rich families=can a ord processed food.
4. Emergence of Tier 1 and Tier 2 cities, shopping mall culture.
5. Growing migration from rural to urban India + rising income = demand for bread, butter etc.
6. Media penetration, advertisements=> “demand” is created for health-drinks, noodles, cream-biscuits,
corn akes etc.
7. Celebrity chefs, cookery channels= new dishes, international cuisines introduced=>demand for their
ingredients, vegetables in India.
8. Diabetes, obesity, Blood pressure, lifestyle diseases =>demand for healthy food.
As a result, food processing industry is expected to reach
year turnover USD
2015 >250 billion
2020 >300 billion
Government Initiatives
Many food processing sectors that were earlier reserved for small scale industries (SSI) have been de-
reserved
FDI limits have been relaxed, Excise duties have been reduced, export subsidies given
National mission on food processing, Vision2015 for food processing,
New schemes for mega food parks, cold chain etc.
Many states have reformed their outdated APMC laws.
and so on… (^all these elaborated in later articles.) Together they facilitate the expansion of food processing
industry in India. More ‘scope’ points, speci c to individual sector (i.e. Dairy, meat, sh etc) later articles.

so18/09/2019
far everything sounds hunky dory butFood Processing Industry:Scope Significance Obstacles in India
if our food processing industry was so awesome, then UPSC
wouldn’t have included it in the syllabus. Then, what are the….
Obstacles to food processing?
country __ % of total fruits/vegetables processed
India barely 6-7
China >20
USA >60
So, why low level of food processing in India?
Economies of scale
When you produce something on large scale, the unit production cost decreases. How / Why?
1. When you purchase raw material in large bulk, you negotiate/bargain with supplier.
2. Fixed cost remains same (building rent, cost of lights, initial cost of buying machinery etc.) e.g. you
bought a ice cream machine for 10 lakh- whether you make 100 liters ice cream or 1000 liters ice-cream
per day- its upto you but the more ice cream you produce, the average unit cost decreases. (think of
100/5 vs. 100/50)= hence bigger the plant, cheaper to produce.
Most of Indian food processing units/companies/enterprises/factories are small sized meaning = poor
economies of scale. It leads to following problems:
Aspect problems of small company / poor economies of scale
Since unit production cost is high, he can’t sell his products cheap unlike a big MNC, and
Pricing
Indian consumers are price sensitive.
Small players=small pro t, seasonal business. In global market they can’t establish
Brand-
themselves as a long-term player – they only do opportunistic businesses, undercut each
Building
other.
Can’t invest in R&D to develop new products (e.g. chilli chewing gum or tomato cream
Low
biscuit!)
Technology
Can’t do marketing research / survey to nd out what consumers want?

Can’t invest in advertisement campaigns to create new demand.
e.g. Kellogs is aggressively advertising its corn akes in India, highlighting ‘weightloss’
Marketing bene ts.
but on the other hand, an Indian Halwai (sweet maker) can’t do same level of marketing
in USA to create demand for jalebi or peda.
can’t do backward linkage e.g. contract farming: giving seeds/fertilizer/pesticide to

farmer.
Instead small company relies on multiple small supplier hence Raw material=non-
Un-Export
uniform in quality.
Quality
Then their products are rejected in US/EU market for not meeting the Codex/HACCP
standards. (e.g. mango juice rejected for stone weevil, bu alo meat rejected for food-n-
mouth disease, sh rejected for heavy metal contamination and so on.)
Can’t do forward linkage e.g opening its own factory retail outlet like Nike, Adidas or
retailing Apple => small company has to rely on third party retailers and need to give them
margin from sales= pro t decrease and poor economies of scale continues.
But why do we have this poor economies of scale?
1. For long, many food processing items were reserved for Small scale industries only.
2. High input costs due to multiple taxes, middle men. Pro t level is low=can’t expand.
3. Government schemes, subsidies, grants have ‘low-ceilings’ =Individual person can’t setup big plants
4. Hard to get bank loans. (more elaboration in later article)
5. Bigger the plant, bigger the headache in terms of tax-liabilities. Creative Indian entrepreneurs rather
setup multiple small plants to get subsidies/tax bene ts of MSME-industries, and sell unbranded food
products.
Anyways, some more obstacles for Indian food processing industry:
Price Indian public=Low per capita income = higher price sensitivity and higher income
Sensitivity elasticity in relation to food expenditure.
Preference
Indians prefer freshly cooked products as compared to packaged products. Traditional
For Fresh
mindset: fresh = nutritious.
Food

truckload of agri-problem. We’ll see the individual problems in later articles. for the
overview:
Agriculture/Dairy production yield levels are among the lowest amongst the BRIC
countries.
Agri Problems
Land holdings=small, fragmented.
Area under cultivation is decreasing due to urbanization, real-estate development,
industrialization and ofcourse thanks to totally awesome people like Raabert
Vadhera.
there is no common policy on contract farming throughout India
high cost of raw material (driven by low productivity and poor agronomic practices)
Supply Chain Presence of intermediaries thanks to Nuisance called APMC acts.
Problems high cost of packaging, nance, transport and distribution
lack of organized retail
Logistics cost= transportation, warehousing, material handling etc.

In India, Logistics accounts for about 13% of GDP, which translates to over USD130
Logistics
billion.
This cost is signi cantly higher as compared most developed countries.
Inadequate infrastructure of storage, sorting, grading and post-harvest

management.
Infrastructure
Private sector unwilling to invest in logistic or infrastructure under prevailing
economic conditions and policy paralysis.
Finance hard to get loans (for both farmers and food-entrepreneurs)
food industry subjected to variety of taxes.

Taxes on processed food in India are among the highest in the world.
Except India, No country distinguishes between branded and unbranded food
Taxation
sectors for taxation.
Multiple and complicated tax regimes have rendered the food industry
uncompetitive
Plethora of government schemes: overlapping, ambiguous, low ‘ceilings’. e.g. you

Schemes need crore rupee worth machine, they barely give few lakhs- that too after months
of visits to various o ces.
Food laws are often inconsistent and overlapping.

The Food Inspectors cause of harassment and bribe-demands in terms of pulling up
entrepreneurs under the Weights and Measures Act, ingredient content and mix,
Laws
labelling norms, etc.
While the various acts are necessary, court cases turn out to be expensive for small-
entrepreneurs- especially if involved in inter-state trade.

Market information not easily accessible
Market Small players cannot buy international journals/magazines to nd the latest trends
Information in demand/innovation. Most of them also don’t know how to use internet for
business/marketing.
Lack of trained manpower.

Manpower Very few universities o er special courses for food processing and
entrepreneurship.
Since Indian consumers= price sensitive, most of the food products are sold in small
Packaging packages (Rs.5 noodles, biscuits etc)=more plastic required= higher share of
packaging costs as a proportion of total costs.*
*High packaging cost
Packaging cost is ___ % of total production cost
Potato Chips 20%
Fruit Juice 19%
Jam 12%
Chicken Nuggets 8%
Branded Atta 6%
A recent ICAR study on Status of Post-Harvest losses

(https://www. ickr.com/photos/97816112@N02/9561742345/)
type post-harvest % loss
cereal wheat 6
pulses blackgram 6
oilseed groundnut 10
fruits guava 18
veggies tomato 12
spices turmeric 7
marine inland- sh 7
moving to more problems faced by Food processing industry:
Lack of organized retail
In USA there are two types of retailers
1. Big malls: Walmart etc.

2. small kirana walla known as mom and pop shops
But both of them have cold-storage facilities, hence they sell l both dry and wet/fresh food products

dry fresh
bakery items, noodles, pasta, our, cheeze etc. fruits, milk, veggies, meat, chicken, sh
But in India, kirana stores don’t have cold storage facilities=> they only sell dry food products.
and fresh produce is sold through vendors with push-carts=>wastage because they don’t have cold
storage.
Meat, poultry and marine products are primarily sold in separate markets but they too don’t have cold
storage=>wastage.
Thus, lack of organized retail, leads to
1. low product quality 4. low hygiene levels

2. lack of variety, choice 5. low value for money
3. poor shopping experience 6. high cost of product
Lack of Food testing facilities
1. The number of laboratories in the country is insu cient. Most of these laboratories lack world-class
facilities and infrastructure. Equipment, Testing manuals outdated
2. Many laboratories are not equipped with basic facilities such as for testing antibiotic residues, heavy
metal contamination and other toxic contaminants in the food items.
3. Very slow response time of Government controlled food laboratories is long, extending to upto 5 years.
4. Most laboratories at sea ports are not fully equipped to handle testing of imported products, organic
foods, residual radioactive matter, new toxins and allergens, textural analysis, residues of veterinary
drugs, enzymes and hormones etc. these tests are necessary for complying with Codex, HACCP , GMP ,
GHP etc before exporting to in US/EU markets.
Lack of Skilled Manpower
A food processing unit requires skilled manpower, including
Production Managers or Supervisors Quality Control Scientists

Product Development Technologists Research Technicians
Food Engineers Technical Representatives
Food Microbiologists machine operators, assistants
Problems

As per a study by National Skill Development Corporation: the annual human resource
requirement in food processing industry is estimated at about 5 lakh persons including
Lack Of
about one lakh persons in the organized sector.
Men
But right now, every year, barely ~5000 graduates and postgraduates pass out from in
di erent disciplines of Food science and technology.
very few universities o er graduation/PG courses, entrepreneurship courses for food

science and technology
Lack Of
Need short-term, diploma/certi cate type courses for rural youth.
Courses
need to introduce courses for small scale players such as retailers, halwais
Need specialized institutes for training/R&D in bakery, confectionery, wine making.
Syllabus/courses in university departments are not being updated regularly and are in
Outdated
most cases, outdated with respect to the present trends and food industry
Syllabus
requirement.
And
The teaching faculty in most of the Indian academic institutions studied has limited
Professors
industry experience / exposure.
Food inspectors unaware of GMP, GHP & HACCP standards, latest developments in
Inspectors
food standards, new products, and laboratory network
Engineering curriculum does not equip graduate engineers with the skill of designing
cold chain infrastructures. Fresh graduates nd it di cult to make heat load
Engineering
calculation and con gure the plant & machineries in energy-e cient manner.
There is urgent need to upgrade the syllabus accordingly.
Lack of R&D
Indian food processing industry is mainly madeup of small scale players= they
can’t invest money in R&D=> becomes government’s responsibility to do the
1. Sarkari Domain R&D.
But Sarkari Research objectives are outdated, food market requirements keep
changing frequently given the new product launches by MNCs.
Multinational Food companies typically have an in-house global network of

R&D professionals.
2. Baba Adam’s Although they’re willing to work with Indian institutions for developing India-
Mindset speci c products and processes.
But the quality of R&D currently undertaken by existing Indian institutions is
not in line with their requirements.
The chairmanship of public research institutes usually given to (retired) IAS or

politicians=> lack of dynamism/market-orientation of the hardcore
professionals in food-MNCs.
3. Manpower
Many students prefer alternate careers which are found to be more ful lling
and remunerative. There has been a signi cant drop in the quality of people
entering the R&D eld

Indian Government recently introduced a variety of kiwifruit in North India,
4. Implementation but could not provide adequate support/advice on cultivation practices.
Result= domestic kiwi produce is much smaller in size than imported kiwi.
5. There is a huge opportunity for developing and commercializing desi foods for export e.g. ethnic
beverages such as kokum, coconut water and ethnic food such as khakra, amla preserve etc. But, to
make them appealing to foreign consumers, R&D required for product development, food-texture,
rheology, mouth-feel, smell, color, packaging etc.
6. Internationally, following research-developments are ongoing, while we are generations behind in
research:
area What foreign players are doing in R&D?
Non-thermal food processing technologies to preserve the nutrients in milk, fruit juices
and also for killing microorganisms in eggs.
processing
Role of ozone in fresh food sterilization
Calcium treatment to extend the shelf life of melons
Packaging lms that o er optimal barrier properties to extend shelf life.

Biodegradable lms made from pectin and starch
Silicon oxide lms that improve oxygen and moisture barriers.
packaging Use of natural antioxidants in packaging materials for shelf life extension of combat
rations for soldiers.
Active and intelligent packaging systems – To monitor product quality and trace a
product’s history through critical points in the food supply chain.
Transport problems
Transport capacity India developed countries
Normal distance covered by trucks/trailers 250 -300km / day 600- 800 km/day
roads’ capacity to handle maximum weight 16 tonnes 36 tonnes (USA)
Indian national highways account for only 2% of the total road network but carry 40% of all cargo.
This puts a high pressure on the highways due to the high tra c volumes => delays in transit + damage
to perishable products
Though highways are well-spread, they’re yet to connect all 550,000+ villages in India

Railway is cheaper than road transportation but railways currently contribute barely
~25% of the total cargo transported
Last mile connectivity from rail transporters =absent.
Ine ciencies associated with a government monopoly. (timing-schedules, technology
Railway upgrades etc)
problems Lack of wagons with cold storage facilities.
Congested rail stations, lack of sorting, grading, warehousing facilities nearby.
Road transport operators provide more exibility.
Although The Dedicated Freight Corridors are expected to improve the connectivity of
the railways, increase carrying capacity and reduce the transit time.
Environmental and social hurdles in land acquisition= hard to get setup new port /
expand the existing port.
High dependence on manual labor + low technology usage= increases the turnaround,
Ports
loading/unloading times at ports, thus impacts entire supply chain lead time and
increases cost For e.g. the cost of an import container in India=~$500, elsewhere ~350 in
foreign ports.
Export Problems
Although India is the second largest producer of food in the world but its share in world’s exports is very low
despite its inherent strength in tea, spices and rice. Why?
Fragmented base of suppliers=uniform quality not available

expensive
Lot of intermediaries=raw material cost increased.
Raw
High duties on imported raw material: additives/ avorings etc.
Material
As a result input cost =high, hence pricewise, we cannot compete with other exporters.
Our processing has largely remained in primary forms like pickling, sun drying and/or
low making preserves. Sometimes we just export intermediate product to second country
processing – they’ll further process it and sell to third country @even higher price. (e.g our
shrimps to Japan, Japan selling them to US)
Often our products rejected from US/EU markets for not meeting Codex, HACCP
low quality
quality standards
yet to Build global brands on the back of India’s strengths (Darjeeling tea, Basmati rice,
Durum wheat, Alphonso mango, Tamilnadu Banana or Kashmiri Apples)
Branding
Developed countries view India as an unpredictable and unreliable source of food and
agro products.
transport Poor cargo facilities at airports and ports are other bottlenecks discussed earlier
yet to develop packaging technologies for Indian food products to make them more
Packaging
acceptable to foreign consumers.
Dumping Desi shrimps face Anti-dumping duties in USA.


1$=~60 Indian rupees while 1$=~100 Paki rupees
Given these exchange rates and local prices of Basmati in India vs Pakistan. From an
Devaluating
American/European’s point of view, it is cheaper to import Basmati from Pakistan than
from India.
^these are just few of the many problems/obstacles faced by Indian food industry. In the next article, we see
various government schemes related to post-harvest management, food processing industries and agro-
export.
Tags:Food Processing (https://mrunal.org/tag/food-processing)
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18/09/2019 Food Processing Industry:Scope Significance Obstacles in India

[Food Processing] Introduction, Scope, Significance, Awesomeness (hardly),

4. Obstacles to food processing?

their Scope, signi cance, Location

1. Ministries and Departments of the Government

Structure of the [Food processing] Article series:

1. We get basic overview of signi cance-scope-potential-obstacles

Source Title comment

3. IGNOU MBA booklets for theory on supply chain management, upstream-downstream

State of Indian agriculture

Flavors of Incredible India:

doesn’t have much speci c fodder points for food processing

IBEF report on Food

Has more than 35000 registered units

1. Poverty among villagers,

Curbing Food Inflation

Thus food industry is signi cant for reducing food in ation.

Some ller signi cance points: food processing

Abundant Raw Material

1 milk, ginger, chickpea, banana, guava, papaya, mango, bu alo meat

1. 46 out of 60 soil types are present in India.

As a result, food processing industry is expected to reach

year turnover USD

2015 >250 billion

2020 >300 billion

Obstacles to food processing?

country __ % of total fruits/vegetables processed

India barely 6-7

So, why low level of food processing in India?

Aspect problems of small company / poor economies of scale

can’t do backward linkage e.g. contract farming: giving seeds/fertilizer/pesticide to

But why do we have this poor economies of scale?

Anyways, some more obstacles for Indian food processing industry:

Logistics cost= transportation, warehousing, material handling etc.

Inadequate infrastructure of storage, sorting, grading and post-harvest

Finance hard to get loans (for both farmers and food-entrepreneurs)

food industry subjected to variety of taxes.

Plethora of government schemes: overlapping, ambiguous, low ‘ceilings’. e.g. you

Food laws are often inconsistent and overlapping.

Lack of trained manpower.

*High packaging cost

Packaging cost is ___ % of total production cost

Potato Chips 20%

Fruit Juice 19%

A recent ICAR study on Status of Post-Harvest losses

type post-harvest % loss

moving to more problems faced by Food processing industry:

Lack of organized retail

In USA there are two types of retailers

1. Big malls: Walmart etc.

Thus, lack of organized retail, leads to

1. low product quality 4. low hygiene levels

Lack of Food testing facilities

Lack of Skilled Manpower

A food processing unit requires skilled manpower, including

Production Managers or Supervisors Quality Control Scientists

very few universities o er graduation/PG courses, entrepreneurship courses for food

Multinational Food companies typically have an in-house global network of

The chairmanship of public research institutes usually given to (retired) IAS or

area What foreign players are doing in R&D?

Packaging lms that o er optimal barrier properties to extend shelf life.

Transport capacity India developed countries

roads’ capacity to handle maximum weight 16 tonnes 36 tonnes (USA)