ASSOCHAM Food Processing Investment Summit

AGRICULTURAL PRODUCE PROCESSING AND VALUE ADDITION

(SECONDARY AGRICULTURE) IN PRODUCTION CATCHMENTS

Pitam ChandraDirector

Central Institute of Agricultural EngineeringBhopal (MP)

January 21, 2012

PRESENT SCENARIO

• Food production in the country is adequate but it is not accessible to all.

• Inadequate income earned by about 25% population

• High post harvest losses on farm and in the supply chain linking farmers to markets (estimated annual loss of Rs. 44,000 crore)

• Inadequate livelihood opportunities in the production catchments and rural sector

PRESENT SCENARIO

• High level of women and child malnutrition• Mismatch between agri-exports and agri-

imports• Huge quantities of under-utilized crop

residues and processing by-products leading to loss of income and environmental sustainability

• Low levels of agro-processing and value addition

CROPCROP % Loss, minimum% Loss, minimum % Loss, % Loss, maximummaximum

CEREALSCEREALS 3.93.9(Sorghum)(Sorghum)

6.06.0(Wheat)(Wheat)

PULSESPULSES 4.34.3(Chickpea)(Chickpea)

6.16.1(Blackgram)(Blackgram)

OILSEEDSOILSEEDS 2.82.8(Cottonseed)(Cottonseed)

10.110.1(Groundnut)(Groundnut)

FRUITSFRUITS 5.85.8(Sapota)(Sapota)

18.018.0(Guava)(Guava)

VEGETABLESVEGETABLES 6.86.8(Cabbage)(Cabbage)

12.512.5(Tomato)(Tomato)

POST HARVEST LOSS : SUMMARYPOST HARVEST LOSS : SUMMARY

S. No

Crop

PLANTATION& SPICES

Total Loss

in Farm Operations

Farm Level Stora

ge

Godown/

warehouse/ Cold Stora

ge

Wholesale

r Level Stora

ge

Retailer

Level Stora

ge

Processing Unit

Level Stora

ge

Total Wight

ed Loss

in Stora

ge

OVERALL TOTAL LOSS

32 Arecanut 6.6 1.5 0.0 1.2 1.8 0.7 1.3 7.9

33 Cashew 0.9 0.1 0.0 0.2 0.4 0.2 0.2 1.1

34 Coconut 4.1 1.9 0.2 1.1 2.1 1.4 1.3 5.4

35 Sugarcane* 7.8 0.8 - - 0.1 1.2 0.9 8.7

36 Black Pepper

3.6 0.3 0.0 0.6 0.5 0.0 0.3 3.9

37 Chilli 3.9 0.9 0.6 1.8 2.0 1.0 1.7 5.6

38 Coriander 6.8 1.9 0.0 0.5 0.4 0.0 0.5 7.3

39 Turmeric 6.7 1.3 - 0.9 0.8 - 0.7 7.4

Loss (%) at National Level in different operations/channels

S. No

Crop

LIVESTOCK PRODUCE

Total Loss

in Farm Opera-tions

Farm Level Stor-age

God-own/ Cold Stor-age

Whol-esaler Level Stor-age

Retail-er

Level Stor-age

Processing Unit

Level Stor-age

Total Wighted Loss in Stor-

age

OVERALL TOTAL LOSS

40 Egg 4.9 0.8 - 1.7 1.7 2.1 1.7 6.6

41 Inland Fish

5.2 1.0 - 2.4 1.4 - 1.7 6.9

42 Marine Fish

1.8 - - 0.6 1.7 1.7 1.0 2.8

43 Meat 1.4 - - 1.0 0.8 - 0.9 2.3

44 Poultry Meat

2.7 - - 0.6 1.5 0.1 1.0 3.7

45 Milk 0.7 0.1 - - - 0.2 0.1 0.8

Loss (%) at National Level in different operations/channels

Global PictureHigh income countries add US$ 180 worth of value to one tonne of agricultural produce

98% of agricultural produce in high income countries undergoes industrial processing

About 30% only is processed in developing countries

Average value added per tonne in developing countries is only US$ 40

The level of processing was estimated to be

about 40%

Value Addition in Agro-processing

value addition on gross output basis 10.96 %

CRITICAL GAPS

• Agricultural produce processing and value addition technologies are financial resource and knowledge intensive leading to slow absorption of these technologies by the entrepreneurs and industries• Agro-produce processing industry is insensitive to utilizing residues and by-products for converting them into value added products

CRITICAL GAPS

• Acute shortage of trained scientific and academic manpower to propel these programmes commensurate with the country’s needs. • Agro-produce processing infrastructure needs considerable strengthening to meet the present and emerging challenges• Lack of enabling policy framework for adoption of these technologies in production catchments

To Sum Up• Reduce post harvest losses

• Enhance income and employment generation in farm and rural sectors

• Make high quality raw material available to agro-processing industries

• Make food accessible to all

• Ensure environmental sustainability

Production to consumption chain of agro-processing activities

Priorities• expanding the level of processing in the food grains, fruits &

vegetables and dairy sectors on priority,• raising the level of processing from primary/ secondary to

secondary/ tertiary for all commodities,• modernizing the food processing sectors using the efficient

equipment and processes for cost competitiveness and better quality products,

• ensuring adequate training of workers, supervisors and managers in food processing industries to ensure efficient operations and product quality,

• providing skills and knowledge to farmers for ensuring quality of produce through adoption of GAP, and

• promoting seamless value chain including post harvest management and value addition in production catchments to obviate the quantitative and qualitative losses.

Agenda of Agro-processing facilities in Production

Catchments

• Primary/ secondary processing of main produce

• By-products utilization

• Supply/cold chain management

• Custom hiring services

• Product quality and safety

• Marketing

Sourcing of Technologies

• Home grown Post Harvest Technologies

• ICAR institutes/ AICRP on PHT

• CSIR Labs

• State Agricultural Universities

Value addition to Soy, sorghum, millets and their by- products

Establishment of Commercial plant

200 (10 TPD) Bakery productsDefatted soy, sorghum and pearl millet flour

4250TOTAL

1000 (10 TPD) Dhal analogues/ Extruded snacks Defatted soy, sorghum and pearl millet flour

1000 (50 TPD) Food grade defatted soy flour Defatted soy-meal

950 (30 TPD of SPI and 70 TPD of SPC )

Soy isolates and concentrates Defatted soy-meal

400 (50TPD) Stabilized sorghum and pearl millet flour

Sorghum and pearl millet

700 (120 TPD)Defatted soymealSoybean

Cost in lakh rupeesValue added ProductPrimary produce/ product

Soy-Foods in Mid-Day Meal (MDM) Programme –

At present, the solvent extracted soy-meal is being exported. To ensure availability of defatted soy flour in enough quantity encouragement to producer/processor through financial incentives:

10% incentive to convert soy-meal into defatted soy-flour

CIAE

Soy-Foods in Mid-Day Meal (MDM) Programme –

Decision to fortify the mid-day meals with soybean defatted flour, whole soybean and other products.

Directive from the Central Ministry to State Govt. Ministry for incorporation of properly processed soybean in the mid-day-meal scheme operational in schools of different States.

CIAE