Food processing is the transformation of agricultural products into food, or of one form of food into other forms. Food processing includes many forms of processing foods, from grinding grain to make raw flour to home cooking to complex industrial methods used to make convenience foods. Food processing typically takes harvested crops or butchered animal products and uses these to produce long shelf-life food products.
It also includes the process of value addition to produce products through methods such as preservation, the addition of food additives, drying, etc. with a view to preserve food substances in an effective manner, enhance their shelf life and quality.
Processes in a food processing industry
There are two types of processes in the food processing industry :
> Manufacturing: Raw materials - Food.
> Value Addition: Increase shelf life and value of manufactured food.
Food processing is a large sector that covers activities such as:
> Agriculture,
> Horticulture,
> Plantation,
> Animal husbandry and
> Fisheries, etc.
> Milk & milk products
> Beverages like coffee, tea & cocoa
> Fish, poultry, eggs & products
> Meat & meat products
> Aerated waters/soft drinks 8. Beer/alcoholic beverages
> Bread, biscuits & other bakery products
> Breakfast cereals, malt protein, weaning, extruded food products
Food processing also includes other industries that use agriculture inputs for the manufacturing of edible products. Based on the International Standard Industrial Classification, it has been assumed that the factories listed in the following groups can be summed up to constitute Food Processing industries.
India is one of the world’s largest producers as well as consumers of food products, with the sector playing an important role in contributing to the development of the economy. It is the fifth-largest industry in our country in terms of production, consumption, export, and growth. It has increasingly come to be seen as a potential source for driving the rural economy as it brings about the synergy between the consumer, industry, and agriculture. A well-developed food processing industry is expected to increase:-
> Farm gate prices,
> Reduce wastages,
> Ensure value addition,
> Promote crop diversification,
> Generate employment opportunities as well as export earnings.
Upstream and Downstream requirements of food processing industries:
=> Upstream stage: The upstream stage of the production process involves searching for and extracting raw materials. The upstream part of the production process does not do anything with the material itself, such as processing the material. This part of the process simply finds and extracts the raw material. Thus, any industry that relies on the extraction of raw materials commonly has an upstream stage in its production process.
Upstream requirements:
> Accessibility to raw materials.
> Modern extraction techniques.
> Good linkages with farmers.
> storage facilities for raw materials like Grains, Meat, Fish, etc.
> quality testing facilities.
> Transport facilities.
> Workforce.
=> Downstream stage: The downstream stage in the production process involves processing the materials collected during the upstream stage into a finished product. The downstream stage further includes the actual sale of that product to other businesses, governments, or private individuals. The downstream process has direct contact with customers through the finished product.
Downstream requirements:
> Latest processing techniques.
> Latest processing machinery.
> quality testing facilities.
> Organized retail stores for faster distribution.
> Workforce.
Significance of Food Processing Industry:
The Food Processing Industry (FPI) is of enormous significance as it provides vital linkages and synergies that it promotes between the two pillars of the economy, i.e. agriculture and industry.
=> Employment Generation: It provides direct and indirect employment opportunities because it acts as a bridge between Agriculture and Manufacturing.
=> Doubling of farmers’ income: With the rise in demand for agri-products, there will be a commensurate rise in the price paid to the farmer, thereby increasing the income.
=> Reduce malnutrition: Processed foods when fortified with vitamins and minerals can reduce the nutritional gap in the population.
=> Reduce food wastage: UN estimates that 40% of production is wasted. Similarly, NITI Aayog estimated annual post-harvest losses of close to Rs 90,000 crore. With a greater thrust on proper sorting and grading close to the farm gate, and diverting extra produce to FPI, this wastage could also be reduced, leading to better price realization for farmers.
=> Boosts Trade and Earns Foreign exchange: It is an important source of foreign exchange. For e.g. Indian Basmati rice is in great demand in Middle Eastern countries.
=> Curbing Migration: Food Processing being a labor-intensive industry will provide localized employment opportunities and thus will reduce the push factor in source regions of migration.
Status of Food Processing In India:
> India is the world's second-largest producer of fruits & vegetables after China but hardly 2% of the produce is processed.
> In spite of a large production base, the level of processing is low (less than 10%). Approximately 2% of fruits and vegetables, 8% marine, 35% milk, 6% of poultry are processed. Lack of adequate processable varieties continues to pose a significant challenge to this sector.
> India's livestock population is largest in the world with 50% of the world's buffaloes and 20% of cattle, but only about 1% of total meat production is converted to value-added products.
> Rice, sugar, edible oil, and flour mills are examples of primary processing. Secondary processing includes the processing of fruits and vegetables, dairy, bakery, chocolates, and other items.
India’s strengths in the Food Processing Sector:
=>Favourable-Factor Conditions
> India has access to several natural resources that provides it a competitive advantage in the food processing sector. Due to its diverse agro-climatic conditions, it has a wide-ranging and large raw material base suitable for food processing industries.
> India’s comparatively cheaper workforce can be effectively utilized to set up large low-cost production bases for domestic and export markets.
> Cost of production in India is lower by about 40 percent over a comparable location in the EU and 10-15 percent over a location in the UK.
=>Related and Supporting Industries:
The Indian food processing industry has significant support from the well-developed R&D and technical capabilities of Indian firms. India has a large number of research institutions like Central Food Technological Research Institute, Central Institute of Fisheries Technology, National Dairy Research Institute, National Research and Development Centre, etc. to support the technology and development in the food processing sector in India.
=> Government Regulations and Support:
The Government of India has taken several initiatives to develop the food processing industry in India. The government has been developing agri-zones and mega food parks to promote the food processing industry in India. In order to promote investment in the food processing sector, several policy initiatives have been taken during recent years.
Reasons for the slow growth of processed foods in India:
> The Majority of the population has low-income levels and cannot afford processed foods.
> The high cost of packaging pushes up the cost of the processed items and thereby makes them out of reach of the common man.
> Indians traditionally prefer fresh foods that are cooked rather than use preserved foods.
> Transport (both road and railways) and communication are poor.
> There are no reliable cold chains, which are necessary for temperature-sensitive foods like fruits & vegetables, ice creams, etc.
> Modernization is unaffordable for small-scale manufacturers but the large companies do not find investment justifiable due to the small size of the market.
> Supermarkets are not yet popular although a few are making an appearance.
Challenges for the Food Processing Sector in India:
The challenges for the food processing sector are diverse and demanding and need to be addressed on several fronts to derive maximum market benefits.
> Extensive use of fertilizers, pesticides and other chemicals has raised concerns about the quality of the food which should be looked into.
> The uncontrollable factors include fragmentation of land holdings which has resulted in lack of scale and has made investments in automation unviable; regional climatic variations which impact the production; and the constraints in land availability due to competing pressure from urbanization, constructions, and industrialization.
> Even today India is grappling with issues of quality and quantity of raw produce, low labor productivity with slow adoption of technology. On the Infrastructure front, we have a supply chain and wastage related problems and low levels of value addition, etc.
> The other issues of concern, holding this sector back are impaired access to credit; inconsistency in state and central policies, which requires both the Center and the State to work as one single cohesive unit.
> Low value-added in processing: There is major fragmentation of food processing capacity, with a large unorganized segment and widespread use of primitive processing. This results in lower value-addition at the processing stage, especially from a nutritional point of view.
> Low consumer awareness: Consumer awareness is a critical aspect of an improved nutritional situation in the country. Consumers currently lack awareness of several nutritional and food safety and quality aspects.
Suggestions:
> Storage capacities and infrastructure should be increased.
> Develop the agricultural facility with good agricultural practice which leads to the transition from staple food crops to the diversification of crops.
> Skilling is required at two levels. First at the farm gate in promoting agricultural best practices and in processing activities.
> Public investment and connectivity should be increased.
> Slaughter animal rules should be framed in a comprehensive policy framework.
> Farm pattern diversification which leads to the production of a variety of crops other than a constant set of crops which creates a lot of job opportunities.
> Second Green Revolution should be updated with the diversified technologies.
> We have to encourage the domestic startups and industry than the international companies.
Major Schemes by Government include:
The government of India took many initiatives to improve the status of food processing industries. Government is motivating food processing industries through:
> 100% FDI in this sector.
> Agri Export Zones.
> National Mission on Agriculture.
> PM FME Scheme
It aims to provide financial, technical, and business support for the up-gradation of existing micro food processing enterprises. It is a centrally sponsored scheme to be implemented over a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore.
> National Mission on food processing: Ministry of Food Processing Industries (MOFPI) launched a new Centrally Sponsored Scheme(CSS) – National Mission- on Food Processing (NMFP). The NMFP envisages the establishment of a National Mission as well as corresponding Missions in the State and District level. The basic objective of NMFP is the decentralization of implementation of food processing related schemes for ensuring substantial participation of State Governments/UTs.
> Mega food parks: The Scheme of Mega Food Park aims at providing a mechanism to link agricultural production to the market by bringing together farmers, processors, and retailers so as to ensure maximizing value addition, minimizing wastages, increasing farmers’ income and creating employment opportunities particularly in the rural sector.
> Modernization of abattoirs(बूचड़खानों): The scheme aims at providing facilities for scientific and less painful slaughtering, chilling, effluent treatment plant, by-product utilization, water, and power with required sanitary conditions for modernization of abattoirs. Modernization of abattoirs will also augment the essential supply base of hygienic raw material to the meat processing industry, both for domestic consumption and exports, besides discouraging unauthorized slaughtering.
> Cold Chain Infrastructure: Scheme for Integrated Cold Chain, Value Addition and Preservation Infrastructure aims to encourage setting up of cold chain facilities to provide integrated cold chain and preservation infrastructure facilities without break from the farm gate to the consumer.
Conclusion:
Food processing has numerous advantages that are specific to the Indian context. It has the capacity to lift millions out of poverty and malnutrition. The government should develop industry in a way keeping in mind the interests of small scale industry along with attracting big-ticket domestic and foreign investments.
The target of ensuring food security for more than a billion people requires a concerted effort by all stakeholders including government and the food processing industry. In addition to private players and government, industry bodies and academia will also have a crucial role in the success of these initiatives.
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