Govt to launch scheme to promote food processing sector

Aiming to boost farm incomes, the government will launch a scheme with financial grant to set up food processing capacities and expand existing units to increase processing level and value addition.

Ministry of Food Processing Industries has issued draft operational guidelines for implementation of the proposed scheme for creation/expansion of food processing and preservation capacities.

The scheme proposes to provide financial assistance of up to Rs 5 crore for a food processing unit.

The ministry has sought comments from all the stakeholders on its draft guidelines by September 13.

Based on the guidelines, an expression of interest (EoI) will be called for inviting proposals to take up new food processing projects for grant of financial assistance, an official statement said.

"The main objective of the scheme is creation of processing and preservation capacities and modernisation/ expansion of existing food processing units which will help in increasing the level of processing, value addition and thereby lead to reduction of wastage and enhancement of farmer's income," the draft guideline said.

The scheme envisages financial assistance to food processing units in form of grant-in-aid. It proposes to provide 35 per cent of the eligible project cost subject to a maximum of Rs 5 crore in general areas and 50 per cent of the eligible project cost subject to a maximum of Rs 5 crore in north eastern states including Sikkim, Himalayan states, island areas and ITDP areas.

Areas eligible under this scheme include fruits & vegetable processing, milk processing, meat/poultry/fish processing; ready to eat/ready to cook food products, breakfast cereals, snacks and other food products; flour/pulse oil milling; rice milling only in eastern and north eastern states; other agri-horti sectors including spices, coconut, mushrooms; wines and hops and food flavors and food additives.

The activities related to manufacture of aerated water, packaged drinking water and soft drinks (carbonated) would not be considered for financial assistance under the scheme.

For giving impetus to food processing sector, government has sanctioned 37 Mega Food Parks out of which 8 have been operationalized. In the Budget 2016-17, the government has also allowed 100 per cent FDI in marketing of food products produced and manufactured in India.