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7/31/2019 Food Processing Unit Problems
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PROBLEMS FACED BY
FOOD PROCESSINGUNIT
Presented by:-
Avie BrarL-2k10-BS-02-MBA(AB)
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INTRODUCTION
India is the worlds second largest producer of food next toChina, and has the potential of being the biggest with thefood and agricultural sector.
The food processing industry is one of the largest industries
in India-it is ranked fifth in terms of production,consumption, export and expected growth.
Termed as a perfect ingredient for any industry -largedisposable.
The proportionate expenditure on cereals, pulses, edible
oil, sugar, salt and spices declines as households climb theexpenditure classes in urban India while the oppositehappens in the case of milk and milk products, meat, eggand fish, fruits and beverages.
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Food processing is a large sector that covers activities such asagriculture, horticulture, plantation, animal husbandry andfisheries. It also includes other industries that use agricultureinputs for manufacturing of edible products.
The Ministry of Food Processing, Government of Indiaindicates the following segments within the Food Processingindustry:
i. Dairy, fruits & vegetable processing
ii. Grain processing
iii. Meat & poultry processing
iv. Fisheries
v. Consumer foods including packaged foods, beverages andpackaged drinking water.
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An overview of Indian Agriculture(Production side)
Comparative advantages:
Second largest arable land in the world
Diverse agro-climatic zones across the country,
Round the year sunshine
Potential to cultivate a vast range of agricultural productsLarge marketable surpluses and abundant raw material for processing
Vast pool of skilled manpower in research and extension
These advantages being leveraged, for India to be a leading food supplier to the world.
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India Indias Rank in
World ProductionArable Land (Million ha) 151 2
Irrigated Land (Million ha) 55 1
Wheat 72 2
Rice, Paddy 124 2Coarse grains (including maize) 29 3
Milk 91 1
Fruits 47 2
Vegetables 82 2Edible Oilseeds 25 3
Pulses 15 1
Sugarcane 245 2
Tea 0.85 1
Cattle (million) 186 2
Area and production of Agricultural products(Production in million tonnes)
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6
India is the front ranking producer of many perishablecommodities
India produces
41% ofworlds mango,
23% of Banana, 24 % of cashew nut,
10% of onion,
30% of cauliflower,
36% of Green Peas.
China : $195 bn; USA: $150 bn; India - $105 bn.
India has
53% of worlds buffa
and 17% of goat
And a 8000 km of coastline
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Agriculture scenario
Foodgrains production - 241 million tonnes(MT) in 2011 crop year,
Milk production in 2011- 121.7 million tonnes
Fish Production -7.8 million tonnes
Vegetable Production - 141.3 million tonnes
Fruit production - 75.7 million tonnes
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The major issues to be addressed are as under:
Large size of population is still dependent on agriculture
Lower growth in farmers income(1.5%) and higher growth in
expenditure (4-5%) Increasing indebtedness of farmers & suicidal rates
Value addition is only in 8% of total food production
Only 2.2% of the horticulture products are processed, while upto35% fruits & vegetables are spoiled.
Only few secondary agriculture industries exist and most of theagro-industries are unorganised.
Low Consumption of value added fruits & vegetables compared tofresh fruits and vegetables and the inclination towards processedfoods is mostly visible in urban centers.
f
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Existing Status of Processing inIndia
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Segmentation of different sectors in food processing industry:-
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India rising high on food demand curve
Evolution of global food demand
Africa(Sub- Saharan)
India , China,
Latin America
Eastern
Europe
Nortth America,Japan, WesternEurope, Australia
Surviving Mass
Market
Convenience
Food Service
Snacking
Quality
Hygiene
High Technolo
Diet /functional /
organic foods
Convenience
foods
Snacks /preparedmeals
Dairy, meat,fresh fruitsfruit juices,
beveragesCarbohydratestaples
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Levels of Value Addition
Level- 1 : Post Harvest level/ Primary Processing:Proper Cleaning, grading and Packaging particularly offruits and vegetables
Level-2 : Secondary processing (basic processing,packaging and branding) of post harvest producesparticularly of foodgrains (i.e. Atta. Suji, Besan, etc.) &milk produce.
Level- 3 : High- End Processing (Complex processingtechnologies, equipment finance and global innature).
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Present Scenario in Value Chain
Cost Build Up For One Kg. Basket Of Fruit
FARMER TRADER WHOLESALER RETAILER CONSUMEPRICE
3.34.1
1.72.5 11.6
Retail Markups
FARM GATE PRICES MILK FISH FRUITS &VEGETABLES
350
220160
100
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Though the industry is large in size, it is still at a nascent stage
in terms of development of the country's total agriculture and
food produce, only 2 per cent is processed. The industry size
has been estimated at US$ 70 billion by the Ministry of Food
Processing, Government of India. The food processing
industry contributed 6.3 per cent to Indias GDP in 2003 and
had a share of 6 per cent in total industrial production. The
industry employs 1.6 million workers directly.
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Value addition of food products is expected to increase from thecurrent 8 per cent to 35 per cent by the end of 2025. Fruit &
vegetable processing, which is currently around 2 per cent oftotal production will increase to 25 per cent by 2025.
The highest share of processed food is in the dairy sector, where
37 per cent of the total produce is processed, of this only 15per cent is processed by the organized sector. The foodprocessing industry in the country is on track to ensureprofitability in the coming decades. The sector is expected toattract phenomenal investments of about Rs 1,400 billion in
the next decade.
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PROBLEMS
Lack of suitable infrastructure in the shape of coldchain, packaging centres, value added centre,modernized abattoirs etc.
Partially liberalized overall policy regime, with
specific incentives for high priority food processingsector, provide a very unconducive environment forinvestments and exports in the sector
A very small percentage of raw material areprocessed into value added products.
Multiplicity of Food laws
In the dairy sector, most of the processing is done bythe unorganized sector.
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Lack of appropriate crossbreeds while conserving indigenous breeds oflivestock
Very less no. of livestock marketing system
Rural backyard poultry is not promoted in a cooperative marketingsetup
Undeveloped cooperative dairy firms
Lack of extension services
Very less no. of private veterinary clinic
There is no framework for utilizing synergy between restoration andcreation of water bodies for water harvesting and fishery
There is no provision of an insurance package to avoid distress
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Due to seasonality ,there is a non availability of raw material
in time
Deterioration of Post Harvesting
Very Less no of Domestic market esp. In rural Areas.
Poor quality standards are being practiced while procurement
of raw material which lead to rejection of order when it fails
to meet International standard.e.g. 3 exporters licenses fromAmritsar were cancelled by USA as the wheat they were
exporting were unhygienic.
Till recent times, food processing units are being neglected by
the Govt. of India
There are very less number of trained employees in food
processing units to carry out the operations
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Strengths and opportunities that
India enjoys It is the seventh largest country, with extensive administrative structure and
independent judiciary, a sound financial & infrastructural network and above all a
stable and thriving democracy
Due to its diverse agro-climatic conditions, it has a wide-ranging and large raw material
base suitable for food processing industries. Presently a very small percentage of these
are processed into value added products
It is one of the biggest emerging markets, with over 1 billion population and a 250
million strong middle class
Rapid urbanization, increased literacy and rising per capita income, have all caused
rapid growth and changes in demand patterns, leading to tremendous new
opportunities for exploiting the large latent market. An average Indian spends about 50per cent of household expenditure on food items
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Demand for processed/convenience food is constantly on the rise
India's comparatively cheaper workforce can be effectively utilized tosetup large low cost production bases for domestic and export markets
Liberalized overall policy regime, with specific incentives for high priorityfood processing sector, provide a very conducive environment forinvestments and exports in the sector
Very good investment opportunities exist in many areas of food processingindustries, the important ones being : fruit & vegetable processing, meat,fish & poultry processing, packaged, convenience food and drinks, milkproducts etc.
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SUGGESTIONS
- Linkage between Banking & Technology Providers may help in developingthe techno-economic project profiles, leading to bankable proposals forthe prospective entrepreneurs.
- SHGs may be assisted in making traditional foods as per standardized
norms, with proper training and financial back up. These groups may betrained at technology providing institutions and NABARD and FIs may beinvolved in this process.
Posting data on daily basis
Creating awareness on the information portal
Suggest user-friendly formats for data dissemination
Utilization of funds for market led extension
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Some major companies in Food
Processing are:- Dabur India Ltd
Gitz Food Products Pvt. Ltd
Godrej Industries Ltd
Haldiram Marketing Pvt. Ltd
Britannia Industries Ltd
Hindustan Unilever Limited (HUL)
Parle Agro Private Ltd
ITC Ltd.
Agro Tech Foods
PepsiCo IndiaPvt. Ltd Cadbury India Ltd
Nestle India Pvt. Ltd.
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Scope of Agro & Food Processing in PUNJAB State Processing and packing of edible oils
Fruit and vegetable processing, branding, packing and storage
e.g. Kinnow are being sorted and packed in boxes beforedelivery to urban market from Abohar
Cereals processing and micronutrient fortification
Spices processing for export.e.g turmeric are packed in plasticSachets after grinding into powder form.e.g GG foods,Rampura
Milk Processing e.g. true milk
Poultry Processing Egg powder units
Meat Processing
Processing of Medicinal and Aromatic crops
Processing of Organic Foods
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