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Punjab to get food processing parks

Posted on Oct 30, 03:21PM | IBNS

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) would soon identify two districts for setting up "food processing parks" in consultation with the Punjab Government.

The chamber has already adopted two districts each in Bihar, West Bengal and Orissa along with government of India - UNIDO and respective state governments. The field work is expected to start from January next year.

Chamber Secretary General D.S. Rawat in a statement issued here said, Punjab has huge surplus agriculture products and if tapped could bring in unutilized and underutilized land and labour resources into use which can be poverty alleviating.

India's food processing industry is regarded as a sunrise industry. While it is true that there has been rapid growth in the sector over the past few years, the fact remains that level of processing and value addition have remained significantly low, said Rawat.

One of the reasons is the low level of indigenous R and D and innovation applications. Where research does exist, the scientific community lacks the wherewithal to ensure its commercialization. Ironically, the converse is also true.

Food processing units - especially SMEs - lack access to research and technological innovations emerging from research labs.

The status report puts the spotlight on this problem and highli8ghts some of the research and innovations taking place in scientific institute and universities across the country.

Indian food processing sector is one of the largest sectors in the country in terms of production, consumption, export and GDP growth.

he sector accounts for around 14 percent of total industrial output and around 6 percent of the GDP. The size of the industry is estimated at US USD 70 billion. Presently, the sector employs about 13 million people directly and about 35 million people indirectly.

The industry is mainly unorganized with 75 percent of the processing units belonging to the unorganized sector.

The organized sector is relatively small, with around 5,300 fruit and vegetable processing units, over 500 fish processing units, over 500 flour mills, ne3arly 200 meat processing units, and numerous dairy processing units at state and district levels.

Of the country's total agriculture and food production, only 2 percent is percent is processed, which is much lower when compared to countries such as USA (65pc ), china (23pc ) and Brazil (70pc ).

The level of processing in India is estimated to be 37pc in dairy sector, 26pc in disheries sector, 2pc in fruits and vegetable sector and 1pc in meat and poultry sector, said Rawat.

The global processed food industry is forecast to reach a value of USUSD 1,621 billion by 2012. The compound annual growth rate (CAGR) of the market size during 2007-2012 is predicted to be 3.3pc .

However, the slowdown in overall global exports following the recession in the global financial markets is also likely to affect the processed food industry.

The processed food industry, which is a working-capital-intensive industry may face difficulties in investing in critical infrastructure such as creation of value chain, technology upgradation, and investments in R and D, which may result in difficulties in complying with international food regulations and other non-tariff barriers imposed by the developed country markets.

Though the processed food product exports from India and hold significant potential, the medium term outlook is grim due to several factors, including the pressure on cost competitiveness.

Nonetheless, the Government of India, in line with its Vision 2015 for the food processing sector, in its 11th Five Year Plan proposes to give greater thrust on infrastructure development, which will include setting up of Mega Food Parks, cold chain infrastructure, value added centres and packaging centres.

The emphasis will be on building strong linkages with agriculture and horticulture, enhancing project implementation capabilities, increased involvement of private sector investments and support for creation of rural infrastructure to ensure a steady supply of good quality agriculture/horticulture produce.

Exports of agriculture products from India are expected to cross around USUSD 22 billion mark by 2014 and account for 5 per cent of the world's agriculture exports, according to the Agricultural and Processed Food Products Export Development Authority (APEDA).

Export of floriculture, fresh fruits and vegetables, processed fruits and vegetables, animal products, other processed foods and cereals stood at USUSD 7,347.07 million in 2009-10.

According to Business Monitor International, India's Food exports are expected to increase by 72.8 percent over 2008 to USD 24.25 billion in 2013.

However, in spite of vast natural resources, import growth of food products in India is also expected to be strong over the forecast period, to reach USD 12.3 billion by 2013. At an overall Food and Beverage level, the export of processed segments is growing much faster.

During the period 1980-2007 India's share of the global food exports has increased from 1.1 percent to 1.4 percent, with majority of the increase coming during the current decade.

India's agro-climatic conditions and rich natural resource base sets prelude for doing very well on the agriculture front.

Today, India has become the world's largest producer across a range of commodities, like coconut, mango, banana, milk and dairy products, cashew nuts, pulses, ginger, turmeric and black pepper.

It is also the second largest producer of rice, wheat, sugar, cotton, fruits and vegetables. India needs to leverage the production capability for economic gains and being self sufficient to meet the domestic consumption.