Karnataka is poised to become the leading food processing hub in India, according to a FICCI-Yes Bank report, thanks to a strong and expanding physical infrastructure base, specific supply strengths and opportunities arising out of gaps in the food value chain.
The report, "Karnataka - An Attractive Investment Destination for the Food Processing Industry", released at the Global Investors' Meet here today, reveals that monthly per capita food expenditure trends in the state follow the same pattern as the rest of the nation.
In urban Karnataka, while monthly per capita expenditure on low value food items like cereals and pulses increased by about 73 per cent and 102 per cent between 1993-94 and 2006-07, spending on beverages and processed food has increased by a massive 144 per cent.
"Clearly, the food processing industry is on the threshold of demand-led growth in the country and within the state of Karnataka," the report said.
It says Karnataka boasts of specific supply strengths, giving the state a comparative advantage to become a leading food processing hub of the country. With 10 agro-climatic zones and land topography highly suitable for agriculture, Karnataka is one of the most agriculturally diverse states in India.
It is estimated that about 83 per cent of the geographic area of the state is suitable for agriculture, of which 64.60 per cent is under agricultural cultivation.
Consequently, Karnataka is the largest producer of ragi, sunflower, tomato, coffee and arecanut and the second largest producer of maize, safflower, grapes, pomegranate and onion.
The state is also the largest producer of spices, aromatic and medicinal plants in the country. In addition, the state has a wealth of livestock and marine resources that augur well for processing of dairy, meat, fish and shrimp.
Karnataka, the report points out, also takes pride in having a strong and expanding infrastructure base for setting up food processing facilities in the state.
Karnataka has an excellent road network of about 52,000 km, a railway network of about 3,180 km, two major and eight minor ports, five domestic airports and two international airports. The state also has very strong agri-infrastructure, including 146 main market yards, 352 sub-market yards, 138 cold storages of about 0.4 million tonnes capacity and warehousing capacity of about 1.95 million tonnes.
These strengths are further augmented by policy-makers' efforts to promote development of supporting agri-infrastructure, especially through initiatives like crop cluster development, food parks, agri-economic zones and agri-SEZs among others, it said.