role of food processing industries in agribusiness

8/7/2019 ROLE OF FOOD PROCESSING INDUSTRIES IN AGRIBUSINESS

1/24

ROLE OF FOODPROCESSING

INDUSTRIES INAGRIBUSINESS

Presented By Sarita Das

(Lecturer)


2/24

Food Processing Sector in India

India has huge supply advantages due to diverse agro-climatic conditions and wide ranging rawmaterial base

%ab le lan d com p ared to 11 w orld av erag e

a jo r clim a te s in th e w o rld e xist in In d ia

o u t of 6 0 soiltyp e s e xist in In d ia

-2 0 a g ri clim a tic reg io n s

La rg e st live sto ck p o p u la tio n

La rg e st p rod u ce r of m ilk

La rg e st p rod u cer ce rea ls

-S e con d larg est fru it an d ve g etab le p rod u ce r

, , , , , , , .on g the top five p rod uce rs w orld w ide of rice w h ea t g rou n dn u ts tea coffee tob acco spices sug ar an d o ilsee dslen g t

h a re id e a lly su ite d fo r ro u n d th e ye a r cu ltiva tio n

ig n ifica n tO p p o rtu n ityn d ia a s a g lo b alo u rcin g h u b


3/24

Food Processing Sector in India

Huge wastage across the supply chain leads to lower level of processing and hence low valueaddition

Field Losses(Pest, Diseases, Rodentsetc))

Pre-Processing(e.g. inefficient harvesting,drying, milling)

Transport(e.g. spillage, leakage)

Storage(e.g. technical deficiencies)

Processing & Packaging(e.g. excessive peeling,washing)

Marketing

(e.g. spoilage, rotting instores)

ich C ou n tries H ig h lo sses a t a la te r sta g e in th e fo o d ch a in

Consume

r

Pro

ducer

Field

Wastage by Consumer(e.g. overeating, foodwastage)

D evelop igC o u n trieR e la tive ly

h ig hlo sse s in

the in itia l

parts ofth e v a lu ech a in

Segment India Other CountriesFruits andVegetables

2.2% US A (65 %),Philippines (78%)China (23)%;

Marine 26% 60-70% in developedcountries

Poultry 6%Buffalo Meat 20%Milk 35% 60-75% in developedcountries

evel of P rocessing acrossS e g m e n ts


4/24

Industry Growth Drivers - Demand

Urbanisation, rise in disposable incomes and changing lifestyle and aspirations are leading tosignificant demand for processed food

In cre a sin gU rb a n isa tio n

Life sty le a n dA sp ira tio n s

In cre a sin g N u cle a rFa m ilie s a n dW orkin g W om en

In cre asin g sp e n d son h ea lth foo d s

ood Processing Demand Drivers

Changing

demographics Risein disposable

incomes

Demand forFunctional Foods

OrganisedRetailand Private Label

Penetration


5/24

Industry Growth Drivers - Policy

Supportive Policy, in light of the significant employment and trade potential, to boost the quantity andquality of output in the sector is also driving growth in the sector

ood Processing IndustryInfrastructur

edevelopment

Technology

Upgradation

Quality/

ControlFood

testing

,

Laboratory

&RD

HRand

Institutional

Development

olicy SupportR and InstitutionalDevelopment

Financial assistance to

set up trainingcentres

Establishment of NIFTEM

Strengthening of StateNodal Agencies

IT

nfrastructureDevelopment Mega Food Parks Integrated Cold Chain

echnologyUpgradation %Grant of 25 of the

&cost of plantmachinery andtechnical civil

(maximum of Rs50lakhs in generalareas and Rs 75 lakhs

)in difficult areas

/ &uality Control R D Setting up a network of

laboratories

Higher level ofassistance toresearch institutes

Assistance fororganisingpromotional

activities

- %50 100 subsidy toprivate/companies state

,governments whichset up qualitytesting laboratories


6/24

SWOT ANALYSIS OF AGRO-PROCESSING INDUSTRIES

Strengths1. Round the year availability of raw

materials.

2. Social acceptability of agro-processingas important area and support from thecentral

government.3. Vast network of manufacturing facilities

all over the country.4. Vast domestic market.


7/24

Weakness

Weaknesses

1. High requirement of working capital

2. Low availability of new reliable and better

accuracy instruments and equipments3. Inadequate automation w.r.t. information

management.

4. Remuneration less attractive for talent incomparison to contemporary disciplines.

5. Inadequately developed linkages betweenR&D labs and industry


8/24

Opportunities

1. Large crop and material base in the countrydue to

agro-ecological variability offers vast potential

for agro processing activities.2. Integration of developments in

contemporary technologies such aselectronics, material science, computer, bio-

technology etc. offer vast scope for rapidimprovement and progress.

3. Opening of global markets may lead toexport of our developed technologies and

facilitate generation of additional income


9/24

Threats

1. Competition from global players2. Loss of trained manpower to other

industries and other professions due to

better working conditions prevailing theremay lead to further shortage ofmanpower.

3. Rapid developments in contemporaryand requirements of the industry maylead to fast obsolescence.


10/24

Challenges in the Sector

Challenge 1: Productivity Issues

n d ia 's o ve ra ll a g ricu ltu re p ro d u ctivity is still lo w: ,Source Innovative technology to ensure food security UNI

( ),United News of India 25 March 2009


11/24


Challenge 2: R&D

-ommodity centric&D ack of a holistic approach involving a matrix of farmnterprisesCompartmentalizatio&of R D agencies ack of effective bilateral flow of information amongst, ,esearch extension and implementation departments

oor validation andeedback mechanisms- -ack of large scale on farm validation of techniques and,eedback thereon leading to practically no scope forenhancement

&ey Problems in Indian R D

- - - -seven step mechanism is required to set up a research development technologyransfer continuum involving all stakeholders. roblem identification and prioritization

2.

. onvergence of existing technologies to match the need4.. -eneration of need based viable technologies using the holistic farming system approach6.. -n farm assessment and evaluation8.. eedback on the technologies10. .1 ,efinement of technologies if necessary12. .3 nsuring timely availability of inputs


12/24

12


Challenge 3: Human Resource Development

arehousing&Distribution

ndustrylevel

Enforcement

egulatorynd tradeissues

ood productionod safety awareness

diting and inspection skillsocess development

erial and Operational level HRD

nstitutional Development ,ocus on packaging techniques storage and safe transportation

latform to make policy decis nclusion in academic curricu

mphasize food safety in storage conditions raining in Warehousing and Distribution

/he industry is in dire need of highly skilled trained manpower across differentevels to handle various operations


13/24


Challenge 4: Supply Chain Hindrances

e ce ssity fo r a S tra te g ic fo cu s o n S u p p ly C h a in in F P I

h is situ a tio n d isco u ra g e s p ro c e ssin g u n its to re a c h o p tim u m size.n d a ch ie v e e co n o m ie s o f sca le ,d d ition ally lack of con sisten t q u ality h in d ers sm all scale u n its tou ild b ra n d e q u ity fo r th e m s e lv e s in in te rn a tio n a l a n d d o m e s tic.arkets

S ea son alityP e rish a b ilityV a ria b ility

-e a so n a l p ro d u c tio n V s Y e a r ro u n d P ro ce ssin g O p e ra tio n sig h ly p erishab le na ture of raw m aterials

ariab le q ua lity of raw m aterials d u e to cyclic variation s an dh a n g in g w e a th e r co n d itio n s


14/24


Challenge 5: Low Adherence to Quality Standards

n cre a sin g n e e d fo r fo o d p ro ce sso rs to a d h e re to q u a lity sta n d a rd s fo r b o th d o m e stics w e ll a s e xp o rt m a rk etIn cre a sin g

G lo b a lisa tio n

S trin g e n t S a fe tyN orm s

R isin g C u sto m e r a w a re n e ss o n Q u a litya n d H ea lth

- -a c k o f re q u isite co n tro ls a c ro s s th e a g ri v a lu e ch a in fro m fa rmn p u ts to sto ra g e o f p ro d u ce to fo o d p ro ce ssin g te ch n iq u e s o o r co m p lia n ce to re q u is ite fo o d s ta n d a rd s in e x p o rt co u n trie s b sen ce o f b asic stan d ard ization an d certificationin fras tructu re


15/24

Opportunities & Recommendations

Food Processing sector has strong synergies with the inclusive growth mandate of the governmentand also provides a platform to significantly transform the face of rural India

d e v e lo p e d F o o d P ro ce ssin g se cto r w ill h e lp o v e rco m e th e b ig g e st ch a lle n g e s:n fron t of In d ia o w fa rm e r in co m e a n d h ig h su b sid ie s

ig h w a sta g e a lo n g th e v alu e ch a in o o r h y g ie n e a n d sa fe ty sta n d a rd s

,iven the huge potential opportunity players should consider theonstraints as opportunities waiting to be exploited and make investments.or the overall growth of the industry


16/24

Opportunities

High domestic demand and supportive policy provides significant opportunities across the FoodProcessing value chain

eyOpportunities

ega Food Parksntegrated ColdChain

ackward andorwardIntegration

ood SafetyanagementSystemsrainingFacilities

2B Sales

uality ControlLabsoint ResearchFacilities

ustomised FarmEquipment


17/24


18/24

PLAN AND STRATEGY

The objectives of agro-processingprogrammers in India should be to:

- minimize product losses,

- add maximum value, - achieve high quality standards,

- keep processing cost low,

- ensure that a fair share of added valuegoes to the producer


19/24

To achieve the objective by thestrategy

National plan for improvement and extensionof agro-processing technology at farm,traditional small industry and modernindustry levels should be prepared. The

plan should take into account the diversityin resources and needs of different regionsin the Country. It should include program-me details and implementation schedule

for the first four or five years. The progressof plan implementation should beperiodically reviewed to allow adjustmentsand corrective measures, and to developprogramme details for the years beyond

the period under review


20/24

Emphasis should be put on theestablishment of new agro-industrialplants in the production catchments to

minimize transport cost, make uselower cost land and more abundantwater supply, create employmentopportunity in the rural sector and

utilize process waste and by-productsfor feed, irrigation and manure.


21/24

Infrastructure in the productioncatchments selected for agro-industrialdevelopment should be improved.

Because of uncertain grid power supplyto rural areas, decentralized powergeneration using locally availableresources may become an integral part

of agro-industrial development.Similarly, if the raw materials andprocessed products are perishable orsemi perishable in nature, cold chain

will have to be established


22/24

The national plan should provide formanagement of agro-industrialactivities in the catchment area, both by

private companies and individuals aswell as cooperatives.


23/24

Financial incentives and support shouldbe provided on liberal scale to promotethe modernization of agro-processing

industry and for establishing new suchindustries in production catchments.


24/24

Arrangements to supply marketinformation to the farmer and agro-processor should be put in place.

role of food processing industries in agribusiness

Documents