Boost to food processing

Fiscal constraints should not impede the new scheme

The government’s ambitious, new scheme to promote micro enterprises to process perishable farm produce into value-added products right in their production hubs is a well-advised initiative that can serve multiple purposes. By prolonging the usable life of the spoilage-prone foods, these small agro-processors can make seasonal farm produce available round the year, reduce their price volatility, cut down post-harvest wastage, and generate additional employment and income in rural areas. Though the government has allocated Rs 10,000 crore for this scheme as part of the Rs 20-trillion post-Covid economic package, it is expected to garner an investment of Rs 35,000 crore in the micro agro-processing sector. The target is to create about 900,000 skilled and semi-skilled jobs in the new and existing mini-food processing units by providing them capital-linked subsidy and access to information, technology, training, common infrastructure, and a wider market.

The urgency of encouraging food processing can be gauged from the fact that though India is the world’s second-largest producer of vegetables and fruit, their supplies and prices keep fluctuating widely. The reason chiefly is want of preservation through shelf life-enhancing processing and inept post-harvest handling, transportation, storage, and marketing. Less than 10 per cent of this perishable produce is processed into longer-lasting products, against the needed 25 per cent at the least. Small-scale processing units merit preference because they have displayed relatively great resilience even during the current Covid-19 crisis by sustaining production and supplies regardless of shortage of workers and other glitches. These units can also help meet the growing demand for ready-to-eat variants of local foods.

A distinct feature that sets the new scheme apart from the other food-processing development programmes is its “one district, one product” approach. This game plan ideally suits the Indian conditions, in which most districts and their adjoining areas are famed for their special and often exclusive products that can be processed, branded, and marketed with advantages in the domestic and export markets. Moreover, processing units located in the commodities’ focal points do not face problems in procuring raw material of the desired quality. The scheme proposes to cover all products of agriculture and its allied sectors, including grains and millets, poultry, meat, pork, fisheries, and minor forest produce.
 

However, what can possibly be a roadblock is the mandatory sharing of expenditure with the states in the ratio of 60:40. The northeastern hilly states, too, would need to shell out 10 per cent funds. Given the dismal fiscal health of most states, especially at the time of the Covid-19 pandemic, they may find it hard to take on additional financial burden, thereby impeding the implementation of the programme. Moreover, since a scheme of this type necessarily requires research and development backing to churn out novel, nutritious, and convenient foods to woo customers, it would be advisable to tap the vast network of agricultural research centres for this purpose. Most of these institutions, including agricultural universities, have food-processing sections engaged in developing novel value-enhanced food products and new food preservation techniques which they are ready to license to industrial units for commercialisation. Besides catering to the rapidly diversifying domestic market, the availability of innovative, packaged, and branded foods at competitive rates would also help boost exports of processed agro-products.