Friday, January 18, 2019


J&K has three food parks, two agro-export zones, 10 industrial estates
Wednesday, 02 May, 2018, 08 : 00 AM [IST]
Kakali Majumdar and Suhasini Gupta
Food is one of the essential components for our lives. The food industry can be defined as the aggregate of all activities, ranging from the production and supply of food products to their sale and consumption. It covers areas like raising crops, using agrochemicals and farm equipment to meet the nutrient requirement of various crops, food processing, packaging, labelling, inventories, financing, marketing, research and development (R&D) on food and technology, advertisements for food products, etc.

Food World, Bunge, Nestle, Cadbury, Dole Food, Unilever and Kraft Foods are some of the major food companies across the universe. India is ranked number one in milk production in the world and is the second largest producer of fruits, vegetables and fish in the world.

The food industry in India consists of various segments like plantation, fisheries, poultry and meat, chocolates, confectionery, agriculture, etc.  The different sub-segments under these are tomato ketchup, food additives, flavours, soft drink bottling, ready-to-eat breakfast, and many more. India ranks second in terms of food production in the entire world after China. The food industry in India has witnessed huge growth during the past few decades. This is because of increased urbanisation, more participation of females in the workforce, change in food habits, etc.

Moreover, the increasing number of supermarkets another cause for growth of food industries in India. A good number of companies in India are engaged in food production or food processing. Some of them are Britannia, Cafe Coffee Day, Dabur, Parle products, Halidiram’s, ITC limited, Nestle, PepsiCO, MTR Foods, HUL. They are listed on either the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE).

Food processing
Food processing is the process of using different methods and techniques to convert raw ingredients into food for the consumption of humans and animals. The agro food processing industry is one of the largest in India, employs around 18 per cent of the country’s industrial workforce and is ranked fifth in terms of production, consumption, export and expected growth (Merchant, 2008).

Food processing activities are of two types:
    • Commodity-based: It includes primary processing of commodities like wheat, spices, rice, etc.
    • Value-added processing: It  consists of secondary and tertiary processing as carried out for honey, ready to cook food items, etc.

The ministry of food processing industries (MoFPI) is established for the formulation of policies and laws related to food processing in India. It is responsible for the development of the food processing industry in India. It is also responsible for the introduction of modern technologies in food processing industries. It also encourages research and development in this industry.

Food processing in North India
North India is a land of magnificent beauty and thrilling flora and fauna. Jammu and Kashmir (J&K), Himachal Pradesh, Uttar Pradesh, Punjab, Haryana, Uttarakhand, Delhi, Chandigarh are the northern states of India. These states have a huge potential for the development of food processing industries. The food processing industries of this region mainly consist of fruits, vegetables, ready-to-eat food items, dairy, meat, poultry, etc.

J&K is ranked first in production of apples, walnuts and cherry. There are three food parks, two agro-export zones and 10 industrial estate complexes in the state. It has been estimated that the total production of fruits in J&K during the year 2016-2017 was 19,59,351 metric tonne and the total production of dry fruits is 2,75,629 metric tonne. Apple production in the state during 2015-2016 was 16,72,000 metric tonne, while that of walnut was 206.43 thousand metric tonne and that for potato was 127.24 thousand metric tonnes. In case of livestock and fisheries, the egg production has been reported as 75,000 metric tonne, while milk production was 2.273 thousand metric tonnes.

Jammu, Kishtwar, Baramulla and Kupwara are the production clusters for paddy, whereas Anantnag, Pulwama and Shopian are known for production of walnuts and Kulgam, Badgam, Baramulla and Anantnag are best known for production of apples. Jammu, Anantnag, Rajouri and Poonch are famous for milk production. It has been reported by the Annual Survey of Industries 2016-16 that there were 162 food processing units in J&K. The major food processing clusters in J&K are located at Jammu, Budgam, Pulwama,  Kathua, Srinagar, Anantnag, etc.

Punjab is known for its high production of wheat, paddy and cotton. The state has a robust infrastructure in place for the agro and food processing sector by having a 40 per cent share of the total warehousing and storage capacity in India (according to a report by the Punjab Bureau of Investment Promotion). Punjab is known as the food bowl of India, contributing the largest share of wheat and paddy to the central pool in India. The state is one of the largest producers of a number of fruits and some vegetables in India, including peach, pear, sweet orange, musk melon, peas, radish. The state has a strong dairy industry with a large network of milk collection centres, support infrastructure and cold chain. It is also the largest producer of honey in India.

In Uttar Pradesh, Agra, Meerut and Aligarh are famous for potatoes and Lucknow and Unnao for mangoes.

Moreover, a mega food park has been set up in Haridwar in Uttarakhand under the mega food park scheme of the MoFPI.

The mega food park scheme aims at linking agricultural production to the market by bringing together farmers, processors and retailers, so as to ensure maximising value addition, minimising wastage, increasing farmers’ income and creating employment opportunities particularly in rural sector.

The mega food park scheme is based on a cluster approach. Two food parks have been established in Khunmmooh district of Srinagar. Another food park, Patanjali Food and Herbal Park, was established in Haridwar in 2010.

Problems and prospects of food processing industries
Though the food processing industry in North India has witnessed marvellous growth during the past few decades, it still lags behind other industries because of various reasons. There are certain challenges that are to be mitigated.

Some of them are highlighted as follows:
    • Poor market linkages: Majority of farmers in North India do not have the access to markets, and so, they can’t get the desired price for their produce
    • Inadequate infrastructure: The absence of adequate market and storage infrastructure and less rural road connectivity poses a constraint in growth of food processing industries in North Indian states. Inadequate linkages between research and development labs and food processing units
    • Equipment and up-to-date technology: Technological advancements are a must for the prosperity of this industry. Moreover, people working in the food industry do not have the knowledge of latest technologies and skills. This is one of the challenges being faced by food processing industry
    • Inadequate warehouses: Infrastructure is not adequate for the storage of raw food materials. The two types of storage, i e warehouse and cold storage lag in storage standards
    • Poor quality standards: The standards and control methods for implementing the quality standards for processing as well as packaging are poor. Vegetables are not properly washed before they are processed into ready-to-eat food products
    • Lack of comprehensive policy: The lack of a comprehensive policy available for addressing the needs of food processing industries is hindering its growth
    • Credit facilities: A special fund called Food Processing Fund was set up to provide direct term loans at affordable interest rates to food parks and food processing units. In spite of setting up this funds, this sector is facing a huge resource crunch

Besides these, the food processing industry faces a huge competition from global players. The non-availability of adequate land for raw materials is also a threat for this sector.

A vast variety of opportunities are there in food processing industry in North India.

Some of them are as follows:
    • The increased consciousness for health had led to a heavy demand for healthy food. The agro-processing industry could make good profit by producing quality and healthy products
    • The opening of global markets will help in increasing exports of processed food items. When there will be more demand for these items, it will lead to generation of employment opportunities, and thus, it will raise the living standard of people
    • The development of supportive industries such as material science, biotechnology, etc. offers a scope for development of the food processing sector in North Indian states
    • Establishing food parks will help in linking agricultural production to the market by bringing together farmers, processors and retailers so as to ensure maximising value addition, minimising wastage, increasing farmers’ income and creating employment opportunities, particularly in the rural sector
    • Also, the large population residing in J&K, Punjab, Haryana, Uttarakhand, etc. will create more demand for processed food products, due to which their production will increase, which will lead to prosperity of this sector

Food processing industry is of huge significance, because it connects two pillars of economy - agriculture and industry. Thus, it can be said that the development of the food processing industry is necessary, because of the increase in disposable incomes of the poor and middle class.

Moreover, the changing dietary preferences for processed foods also boosts the demand for food items of several food processing units.

A well-developed food processing sector with a higher level of processing helps in the reduction of wastage, improves value addition, promotes crop diversification, ensures a better return to the farmers, promotes employment as well as increase export earnings.

The Indian domestic food market is expected to grow by nearly 40 per cent of the current market size to $258 billion by 2015 and $344 billion by 2025 (World of Food India, 2011; Merchant, 2008).

This sector is also capable of addressing critical issues of food security, food inflation and providing wholesome, nutritious food to the masses.

Moreover, increasing growth of this industry will help India in having a favourable terms of trade. A study reports that India’s food processing sector may attract $33 billion by 2024 (Economic Times).

(Majumdar is assistant professor, and Gupta is research fellow, Department of Economics, School of Economics, Shri Mata Vaishno Devi University, Jammu and Kashmir)
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