Yojana Summary

July 2024

Chapter 1: Impact of Food Processing on Employment Generation and Skill Development

Food Processing

• Definition: Converting unprocessed agricultural and livestock items into processed, higher-value food products.
• Includes: Variety of activities, technologies, and methods to make food safer, convenient, longer-lasting, and improve taste and nutrition.
• Crucial component: Of the overall food supply chain.

Status and Role of Food Processing Sector in India

• GVA: Rs. 2.24 lakh crore in 2019-20, contributing 1.69% of total GVA.
• Growth: 8.38% average annual growth rate during 2015-22.
• Employment: 20.32 lakh in registered sector, 51.11 lakh in unregistered sector.
• FDI equity inflow: USD 709.72 million in April 2021-March 2022.
• Total FDI received: USD 11.08 billion since April 2000.

State-Wise Distribution of Registered and Unincorporated Food Processing Units in India

• Registered units: 40,579 in 2018-19.
• States with highest number of units: Andhra Pradesh (13.93%), Tamil Nadu (12.28%), Telangana (9.61%), Punjab (7.67%), Maharashtra (6.88%).

Skill Development Initiative in the Indian Food Processing Industry

• Collaborative Efforts and Course Development:
  • MoFPI and FICSI validate Qualification Packs (QPs).
  • NIFTEM develops course curricula.
  • Regular stakeholder meetings for progress and adjustments.
• Pradhan Mantri Kisan SAMPADA Yojana:
  • Develops training modules in multiple languages.
  • Creates infrastructure for skill training centers.
• National Occupational Standards Development:
  • FICSI and E&Y identify job roles and competencies.
  • Develop National Occupational Standards (NOS) across various sectors.
• Skill Development and Entrepreneurship Programs:
  • NIFTEM and IIFPT conduct regular programs.
  • MoFPI promotes entrepreneurship through these programs.

Role of NABARD in Food Processing and Storage Infrastructure

• NABARD: Apex development financial institution for agriculture and rural sectors.
• WIF and FPF: Enhances storage and processing capabilities.
• Achievements: Sanctioned ₹9,452.61 crore for 8,162 WIF projects, creating 13.74 million MT of storage capacity. Sanctioned ₹1,191.57 crore for 41 FPF projects.

Investment Potential in Food Processing Sector

• 100% FDI allowed: Under the automatic route and government approval route.
• FDI equity inflow: USD 6.18 billion from April 2014 to March 2023.

 

Chapter 2: Export Potential and Global Competitiveness of Indian Processed Foods

India’s Potential in the Global Processed Food Market

• Second largest producer of food globally: India has immense potential.
• Low processing rates: India processes only 2% of its agricultural produce, compared to the global average of 10%.
• Limited export share: India captures a mere 1.7% of the global market.
• Infrastructure bottlenecks: Inadequate cold storage and logistics networks hinder exports.
• Compliances and standards: Complex regulations and international food safety standards pose challenges.
• Brand building and marketing: Limited brand recognition and lack of targeted marketing restrict access to premium markets.

Strategies for Success

• Boosting processing capacities: Government initiatives like the “Mega Food Park Scheme” can incentivize investments.
• Focus on value addition: Producing high-value processed food items like ready-to-eat meals and organic products.
• Streamlining regulations: Simplifying compliance procedures and adopting international standards.
• Promoting Brand India: Targeted marketing campaigns to build brand recognition and consumer trust.

Import and Export of Agri-Food Products

• Agri-food exports: USD 38.32 billion in 2020-21, accounting for 13.2% of India’s total exports.
• Agri-food imports: USD 20.99 billion in 2020-21, accounting for 5.3% of India’s total imports.
• India’s share in the world: 2.31% in agri-food exports, 1.31% in agri-food imports in 2020.

Factors Driving India’s Processed Food Export Potential

• Abundant agricultural raw material supply: India is a major producer of fruits, vegetables, milk, cereals, spices, and other commodities.
• Skilled workforce and technological advancements: India has a large pool of skilled labor and is investing in food processing technology.
• Growing domestic demand: Rising middle class and changing consumer preferences are driving demand for processed and convenience food products.
• Government initiatives: Policies like the Pradhan Mantri Kisan SAMPADA Yojana promote the food processing industry and boost exports.

 

 

Chapter 3: Emerging Food Processing Technologies

Valorization

• Definition: Extracting and utilizing valuable components from food waste or by-products.
• Purpose: Converts waste streams into high-value products like food ingredients, nutraceuticals, or biofuels.
• Examples: Extracting antioxidants from fruit peels, converting whey into protein supplements, converting food waste into biofuels.
• Benefits: Reduces waste, generates additional revenue for food processing companies.

Irradiation

• Definition: Exposing food products to controlled levels of ionizing radiation.
• Purpose: Eliminates harmful pathogens, extends shelf life, reduces need for chemical preservatives.
• Approved by: World Health Organization (WHO) and International Atomic Energy Agency (IAEA).
• Benefits: Improves food safety and quality.

High Pressure Processing (HPP)

• Definition: Non-thermal food processing technique that subjects food products to extremely high levels of hydrostatic pressure.
• Purpose: Inactivates pathogenic and spoilage microorganisms without heat treatment.
• Benefits: Preserves nutritional and sensory qualities of food, extends shelf life of fresh, minimally processed, and ready-to-eat food products.

Extrusion

• Definition: Forcing a raw material mixture through a die under the influence of heat, pressure, and mechanical shear.
• Purpose: Produces a wide variety of food products like breakfast cereals, snacks, pasta, and meat analogues.
• Benefits: Enhances nutritional value, improves texture and sensory properties, utilizes food processing by-products and waste streams.

Dielectric Heating

• Definition: Heating materials by subjecting them to a high-frequency electric field.
• Purpose: Causes molecules in the material to align themselves, resulting in heat generation due to friction.
• Applications: Widely used in industrial processes like drying, curing, and cooking.

Conclusion

Emerging food processing technologies like valorization, irradiation, HPP, extrusion, and dielectric heating are transforming the food industry. These technologies enhance product quality, safety, and sustainability, while also reducing waste and improving the overall efficiency of food processing operations.

 

 

Chapter 4: Production Linked Incentives Scheme for Food Processing Industry

Overview

• Food processing sector: Crucial component of India’s economy.
• PLISFPI: Launched by Government of India to support food manufacturing entities and promote Indian brands globally.
• Objectives: Support food manufacturing entities, create global food manufacturing champions, strengthen Indian brands, increase employment opportunities, ensure remunerative prices to farmers.

Salient Features of PLISFPI Scheme

• Central sector outlay: ₹10,900 crore.
• Focus areas: RTC/RTE foods, processed fruits & vegetables, marine products, mozzarella cheese.
• Branding and marketing support: To incentivize emergence of strong Indian brands.
• Implementation period: 6 years from 2021-22 to 2026-27.

Implementation and Targets

• Rollout: All-India basis.
• Project Management Agency (PMA): Responsible for appraisal, verification, and scrutiny of claims.
• Incentive payment: For 6 years, payable in the following year.
• Targets: Expansion of processing capacity to generate ₹33,494 crore processed food output and create employment for 2.5 lakh persons by 2026-27.

Initiatives for Food Processing Sector

Pradhan Mantri Kisan SAMPADA Yojana (PMKSY)

• Objectives:
  • Create modern infrastructure with efficient supply chain management.
  • Boost growth of the food processing sector.
  • Provide better returns to farmers.
  • Double farmers’ income.
  • Create employment opportunities.
  • Reduce agricultural produce wastage.
  • Increase processing level and exports.
• Components:
  • Mega Food Parks
  • Integrated Cold Chain and Value Addition Infrastructure
  • Infrastructure for Agro-Processing Clusters
  • Creation of Backward and Forward Linkages  
  • Creation/Expansion of Food Processing & Preservation Capacities
  • Food Safety and Quality Assurance Infrastructure
  • Human Resources and Institutions  

 

• Operation Greens:
  • Integrated development of Tomato, Onion, and Potato (TOP) value chain.
  • Expanded to include 22 perishable products.
• Investment and benefits: Expected to leverage ₹11,095.93 crore, benefiting 28,49,945 farmers and generating 5,44,432 direct and indirect employment opportunities.

PM Formalization of Micro food processing Enterprises (PMFME) Scheme

• Centrally sponsored scheme: Launched in 2020.
• Operational period: 5 years from 2020-21 to 2024-25.
• Outlay: ₹10,000 crore.
• Key objectives:
  • Increase access to credit for micro food processing enterprises, FPOs, SHGs, and Co-operatives.
  • Integrate enterprises with the organized supply chain.
  • Support the transition of existing enterprises into the formal framework.
  • Increase access to common services.
  • Strengthen institutions, research, and training in the food processing sector.
  • Increase access to professional and technical support.
• Funding ratios: Vary based on regions.
• Credit-linked subsidy: 35% of eligible project cost, with a ceiling of Rs. 10 lakh.
• Seed capital: Rs. 4 lakhs per SHG for FPOs/SHGs/Cooperatives.
• Nodal ministry: Ministry of Food Processing Industries.