Wednesday, January 18, 2012: 02:31:58 PM

Food Processing Case Study

Eleventh Five-Year plan strategy and National Policy on Food Processing

New integrated approach to develop food processing sector and the impact of the National Policy on food processing evaluated

While some of the schemes under the Tenth Five-Year Plan will continue during the Eleventh Five-Year Plan, they need to be restructured with appropriate management/implementation arrangements in public-private partnership mode, with strong project implementation capabilities. Also, it is proposed to decentralise the Scheme for Technology Upgradation and operate it through nodal banks in place of State Nodal Agencies to provide back-ended credit linked subsidy.

The new integrated approach not only addresses issue of financial assistance but also the following issues:
  • Skill development
  • Entrepreneurship
  • Investment
  • Institutional Development
  • Providing a policy environment that stimulates growth
Core elements of the proposed strategy are:
  • Better project selection, development and implementation
  • Decentralised cluster-based development, particularly for creation of infrastructure and fostering linkages to retail outlets
  • Industry led capacity building and upgradation of standards
  • An integrated food law and science based food standards
Strategic intervention with redesigned schemes and strong implementation arrangements at the following points:
Food Parks- carefully planned, cluster based, privately driven.
Abattoirs- publicly owned and privately managed.
Cold chains- integrated cold chain facilities and strategic distribution centres.
Street Food- upgrading quality and hygiene in the cities/towns.
Wine Policy- liberalised, leveraging the agri/horticultural surpluses.
Testing and certification labs- both public and private
Importantly, the Ministry of Food Processing Industries has to be strengthened appropriately to meet the challenges in implementing various new initiatives proposed for energising the food processing sector in the country.
Priority Areas for Intervention
The priority areas identified for intervention therefore are:
  • Infrastructure development
  • The food park scheme is proposed to be modified into a scheme for an Integrated Food Zone/Mega Food park
  • Modernisation of Abattoirs and setting up of National Meat Board
  • Cold Chain, Value Addition and Preservation infrastructure (Cold storages, Reefer vans, etc)
  • Irradiation Centres
  • R&D – Products, Technology, Quality and Skills
  • Capacity Building – Human Resource Development, R&D, Quality, Safety, Related Infrastructure
  • Implementation of Food Safety and Standards Act, 2006.
  • Establishment of NIFTEM
  • Modernisation of PPRC, Thanjayur into a National Crop Processing Centre
  • Upgrading safety and quality of street food and establishing food streets in identified
  • Wine Sector Development- Establishment of Wine Board
The national policy on food processing
The national policy on food processing aims at increasing the level of food processing from the present 2% to 10% by 2010 and 25% by 2025. The government has allowed 100% FDI in processing sector.
The policy will seek to create an appropriate environment for entrepreneurs to set up food processing industries through: 
  • Fiscal initiatives and interventions like rationalisation of tax structure on fresh foods as well as processed foods and machinery used for the production of processed foods. 
  • A concerted promotion campaign to create market for processed foods by providing financial assistance to industry associations, NGOs/cooperatives, private sector units, state government organisation for undertaking generic market promotion.
  • Harmonisation and simplification of food laws by an appropriate enactment to cover all provisions relating to food products so that the existing system of multiple laws is replaced and also covering issues concerning standards nutrition, merit goods, futures marketing, equalisation fund and the like.  
  • Efforts to expand the availability of the right kind and quality of raw material round the year by increasing production, improving productivity. 
  • Strengthening of database and market intelligence system through studies and surveys to be conducted in various states to enable planned investment in the appropriate sector matching with the availability of raw material and marketability of processed products. 
  • Strengthening extension services to farmers and co-operatives in the areas of post harvest management of agro-produce to encourage creation of pre-processing facilities near the farms like washing, fumigation, packaging and the like. 
  • Efforts to encourage setting up of agro-processing facilities as close to the area of production as possible to avoid wastage and reduce transportation cost. 
  • Promotion of investments, both foreign and domestic
  • Simplification of documentation and procedures under taxation laws to avoid unnecessary harassment arising out of mere technicalities. 
This case study has been done by the Ministry of Food Processing Industries.

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