Food Processing Sector for National Growth through Secured Governance

April 10, 2017 | Dr. P. Sekhar

Food processing is the transformation of unprocessed ingredients, by physical or chemical means into food, or of food into other forms and employed more than 1.6 crore workers directly and 3.5 crore indirectly. It combines raw food ingredients to produce marketable food products that can be easily prepared and served by the consumer.People in various parts of the world formulated techniques for drying and smoking foods as far as 6000 BC. Micro-organism need water to carry out their metabolic processes.Early period, probably by trial and error, also started to develop basic forms of food preservation, which possible also made safer, e.g. salting, drying, fermentation.Herbs were dried and stored for use as medicines. Food was rarely sold but traded and bartered.While food processing still has the main objective of providing a safe nutritious diet in order to maintain health other aspects, particularly the generation of wealth for the producer and seller, have become increasingly important.



Last few decades agricultural production in India has consistently recorded positive output. India ranks number one in the world in the production of Milk, Ghee, Pulses, Ginger, Bananas, Guavas, Papaya and Mangoes. Further, India ranks number two in the world in the production of Rice, Wheat and several other vegetables & fruits. Despite the large production of food products in India, food inflation and food security issues are major concerns for policy makers in the country as they affect the basic need for Indian citizens – to have sufficient, healthy and affordable food.


The total food production in India is likely to double in the next ten years and there is an opportunity for large investments in food and food processing technologies, skills and equipment, especially in areas of Canning, Dairy and Food Processing, Packaging, Frozen Food/Refrigeration and Thermo-Processing. Fruits & Vegetables Processing, Fisheries, Milk & Milk Products, Meat & Poultry, Packaged/Convenience Foods, Alcoholic Beverages & Soft Drinks and Grain processing are important sub-sectors of the food processing industry.


Present status of Food Processing


The food processing sector in the country is mainly handled by the unorganized sectors. About, 42% of the output comes from the unorganized sector, 25% comes from the organized sector and the rest of it comes from the small scale players. The small-scale food processing sector is a major source of employment and adds value to crops by processing. It is a major source of food in the human diet.

The small-scale food processing sector is, however, under increasing threat and competition from the large manufacturers who, through economies of scale and better presentation and marketing. Good packaging lies at the very heart of presentation and thus customer appeal. It is an area of vital importance for small and medium food manufacturers if they are going to continue to compete and expand. With food processing, it is possible to maintain a nutritious and safe food supply for the millions of people that inhabit both urban and rural areas.  Improvement in processing efficiency, by increased yield of usable product, is a tangible means of reducing food loss and increasing food supply. Demand for increased convenience of food preparation in the home, institution and restaurant has created a need from processing industries for food ingredients as well as new food forms. There are 37,175 registered factories in food processing sector in the country.


Importance of Food Processing


All the raw food materials are processed to improve their palatability, nutritional value and shelf-life.

Foods are processed for five major reasons:

  1. Preservation for later consumption or sale to fetch better price;

  2. Removal of inedible portions;

  3. Destruction or removal of harmful substances;

  4. Conversion to forms desired by the consumer and

  5. Subdivision into food ingredients.


    Market Size of Food Processing Industry in India

The Indian food processing industry accounts for 32% of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. It contributes around 14% of manufacturing Gross Domestic Product (GDP), 13% of India’s exports and six per cent of total industrial investment. Indian food service industry is expected to reach US$ 78 billion by 2018.The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20%. The food processing sector in India has received around US$6.82 billion worth of Foreign Direct Investment (FDI) during the period April 2000-March 2016.


Key constraints for growth


Though there are many promising dynamics which support good growth of this industry, there are still some significant constraints which, if not addressed properly, can impede the growth prospects of the Food Processing Industry in India. One of the biggest constraints is that this industry is capital intensive. It creates a strong entry barrier and allows lesser number of players to enter the market. Lesser players mean lesser competition and lesser competition means reduced efforts to improve the quality standards.


There are other two major constraints which pertain to maintaining the standards of quality. First constraint is poor infrastructure for storing raw food materials. Two main types of storages – the warehouses and the cold storages, lag in storage standards. The pests infest the grains sometimes due to lack of monitoring, proper use of pesticides and proper ventilation. Similarly, the power failure result in sub-optimal function of the cold-storages and the quality of food material in the cold storages becomes unable to use. The second important aspect is having low quality standards and control methods for implementing the quality standards for processing and packaging the processed foods. For example, vegetables may not be washed properly and processed into either ‘ready to eat food’ or packaged as ‘cut and ready to cook’ vegetables.


Also, continuity of quality power, good quality of water for processing, instruments for rapid and reliable analysis, various instruments/equipment’s for multi commodity, cultivars are not suitable for specific processing, etc. are other restrictions for food processing industry.


Unless these constraints are addressed it will be difficult to break the cultural barrier where people prefer fresh food over packaged food. It will be not easy to gain customer confidence and the perceived growth of this industry may actually not be so remunerative.


Post – Harvest Losses (PHL) in India


PHL can be defined as the degradation in both quantity and quality of a foodproduction from harvest to consumption. Quality degradation include those that affect thenutrient/caloric composition, the acceptability, and the edibility of a given product. Quantity lossesrefer to those that result in the loss of the amount of a product. Loss of quantity is morecommon in developing countries.At present, interventions in PHL reduction are seen as an important component of the effortsof many agencies to reduce food insecurity. Harvest and post-harvest loss of India's major agricultural produce is estimated at `92,651 crore (US$13 billion), according to data published by the ministry of food processing industries.The loss is almost three times as high as the new budget for the agriculture sector, which has seen an increase of 44% from `24,909 crore (US$4 billion) in 2015-16 to `35,984 crore (US$5 billion) in 2016-17.


Cold Storage & Warehouse Units in India


Cold chains are absolutely necessary for extending the shelf life, avoiding over capacity,period of marketing,abridging transport bottlenecks during peak period of production and maintenance of quality of produce. The development of coldchain industry has a key role to play in reducing the wastages of the perishable food commodities and thus providinglucrative prices to the growers. A cold storage is a temperature-controlled storage space and caters toindustries such as agriculture, horticulture, fisheries and aquaculture, dairy and processed food.


The key industries served by the cold chain industry are fruits and vegetables, processed meat andpoultry, marine products, preventive medicine (mainly vaccines), ice cream, and chemicals. A strong cold chain industry ensuresimproved availability of food products as well as prevents spoilage of medicines, and therefore has a critical role to play ina country like India. The perishable food production in India is estimated at 137.70 million MT of milk (50% more than the US), 86.602 million MT offruits, 169.478 million MT of vegetables and 10.16 million MT of fish (Fisheries constitute about 1% of the GDP of the country and 5.08% of agriculture GDP). India has largest cattle and poultry population in the world. Refrigeratedwarehousing growth is linked to size of economy and population, wealth of people, food Industry and food trade, foodCulture, household consumption and export and import of food.Eleven per cent of world’s total vegetables production is accounted by India alone but India’s share in globalvegetable trade is only 1.7%. About 20%-30% of fish production is annually wasted in India.Poor post-harvest fish handling infrastructure in major maritime states is causing an annual loss of over Rs 15,000 crore to India’s marine and inland fisheries sector. There are 25,000unregistered slaughter houses in India, which generally lack chilling facilities.About 88-90% of market share is with the Temperature Controlled Warehouses which consistsof 6,500 cold storage warehouses and stores with a storage capacity of 30.4 million MT. The Remaining 10-12% comprisesof Temperature Controlled Vehicles with more than 8,000 vehicles.The Government of India recognizes that development of coldchain is an essential next step in upgrading India’s foodprocessing industry and therefore offers many incentives forpromoting growth. A huge investment required for cold godowns and warehouses infrastructure to increase the storage capacity.


Secured Governance Agriculture HUBs in India


Secured Governance HUBs with a Techno‐Economic Corridor to meet the demand. India needs to build Infrastructure & Urban development Projects under SecuredGovernance methodology to speed up the country’s developmental agenda. It offers a strategy for the government to get all the basic infrastructure development with anegligible investment, through a centralized selection process of developer or set of developers. The investors will draw returns from the project based on value created by the system which coversthe project cost and yet gives opportunity for investors to devise models to commercialize theproject and gain profits from the valuation of infrastructure.


The Nation’s health, wealth, and security rely on the production and distribution of agri – products and services. The array of physical assets, processes, and organizations across which these goodsand services move are called critical infrastructures. Be it through direct connectivity, policies andprocedures, or geospatial proximity, most critical infrastructure systems interact. Theseinteractions often create complex relationships, dependencies, and interdependencies that crossinfrastructure boundaries.


Secured Governance is a tool to utilize precious resource of the Nation. It is a holistic approachtowards infrastructure development in the country for the National Economic Growth byconsidering the interest of all stake holders i.e. Public and Private sector units, Government andmasses (who contribute towards the creation and development of society at large). A systematicimplementation of the concept of Secured Governance leads to mass employment generation,mitigation of losses of existing low performing units by utilizing their existing strength areas andimproved standard of living for the associated people along with reduction of migration of resourcerich manpower to urban areas in search of better standard of living.


Making up around 60% percent of the country’s total land area and contributing around 14% of GDP,the agriculture sector remains a cornerstone of the Indian economy. Yet the 14% that agriculturecontributes to GDP is a number that is steadily declining, having comprised 30% of GDP in 1990‐91,despite around 52% of India’s workforce still engaged in the agriculture sector. Even thoughthe decline in agriculture as a percentage of total GDP points the growth in Indian GDP contributedby other spaces, particularly the booming IT space, the high concentration of Indians in rural areasmeans that India’s poor are not experiencing a comparable increase in income.


Many social enterprises are currently concerning the agriculture sector growth, attempting to bringnew technologies to rural areas to improve the efficiency and profitability of farmers. One suchventure is Secured Governance, in that a platform need to be developed among the farmer societyto solve all the problems related to agriculture.As India’s population continues to grow, more citizens will move to cities.


Various surveys state thatabout 25‐30 people will migrate every minute to major Indian cities from rural areas in search ofbetter livelihood and better lifestyles. The country needs to find smarter ways to prevent migrationfrom rural to urban, manage complexities and improve the quality of life.


Agriculture HUBs will have state‐of‐the‐art facilities, at par with the best in contemporaryinternational scenario, duly adapted for local conditions.The project will address complete backward and forward linkages from farmers to the consumers.The HUB will be equipped with facilities for the following:

  • Warehousing;

  • Food processing;

  • Cold storages;

  • Central auctioning;

  • Ripening chambers;

  • Quality control laboratories;

  • One stop shopping for input;

  • Agri‐ clinic and extension services;

  • Information kiosk etc;

  • Erection and successful utilization of Export Facility Centers for various commodities;

  • Farmers Training Centres;

  • Agricultural Market Level Training for Farmers;

  • Farmers Information and Guidance Centres;

  • Training for farmers in Agri – product storage.


It attempts to work towards close knit growth in all sectors of the economy, without the usualfinancial constraints that hamper ongoing efforts. It will help enable all that the common manneeds to feel secure ─ a safe home and hearth with progress around him, which is what oneexpects from good governance. It facilitates an equal opportunity for Private sector and Government to work together with a single window clearance system to achieve greater results tobring National progress with profitability to the participating organizations. “Techno EconomicCorridor” defines an economic linkage between major cities or developing region, connectingvarious Secured Governance HUBs contributing to primary sector and supported by subsidiarysectors which includes many initiatives and development plans in and around the two nodalconnecting regions.


We need a system to integrate economic interdependence in today’s modern societies which notonly decreases uncertainty regarding where risks begin and end, but also help in judicious planningand development of new empowered, transparent and interdependent governance systems withhigher degree of society participation in nation building process.Secured Governance can equip to create adequate and coordinated measures to ensure the provision offinancial, human, technical, information and other capacity building resources.


This will have a spirallingeffect on Global Economy with a defined regions being developed as “HUBs” and multiple HUBsconnecting each other creating a Techno‐ Economic Corridor.


The HUBs will be spread over Rural and Semi Urban regions promoting Agro ‐ Industrialdevelopment and adoption of modern amenities and technologies to generate additionalemployment in rural and semi urban areas and pay rich dividend to elite and rich investors. SecuredGovernance addresses the problems of the agriculture sector and need of rural states of India toensure social justice & better quality of life. This will have a highest level of decentralized Growthand Rural development and employment generation in the country. Secured Governance willimplement legitimacy, enhance civic engagement, increase community approach in decision makingand bring transparency in auditing pertinent to developmental work for the global village. It ensures good policy making mechanism towards National InfrastructureDevelopment. In the 1st phase of development there are 12 agricultural HUBs need to be built in allover India.


Civil infrastructure systems represent huge public investments and are expected to provideservicesfor very long periods of time. Their use spans several generations during which society willexperience dramatic changes. This lengthy time span means that future developments in thetransport of goods and people must be assessed and planned well in advance in order to make theright choices, not only for today but also for tomorrow. Looking ahead into the future andconsidering probable developments in society enables us to search for proper solutions.



"Secured Governance advocates a pragmatic approach of taking advantage of valuation of assets created."


Featured Posts

Recent Posts


Tourism and its contribution to the Economy

Interactive Meeting with Mr. Jaykumar Rawal Hon'ble Minister for Tourism & Employment Guarantee Scheme Govt. of Maharashtra

De-coding skills-based pro-bono


Food Inflation in India: An Assessment


© Copyright 2019 MEDC, All rights reserved
Website Design and Develop By: SCI Knowledge Interlinks