India has the potential to become the food factory of the world says Hans Hannart, managing director, Rabo India Finance Ltd.
Addressing delegates at FoodPro `99 organised by the CII here yesterday, he said the country is already among the top three producers of products like tea, milk, rice, sugar, fruits and vegetables. But, except in the case of tea, the country is not a dominant force in the world for any of these or related products.
Not surprisingly, therefore, the food processing industry in the country accounts for only 18 per cent of manufacturing output and worse, only 10 per cent of value added in the manufacturing industry.
The unorganised sector accounts for 42 per cent and the small scale sector another 33 per cent of industry output. The organised sector accounts for only 25 per cent.
The food processing industry in the country is thus very small and fragmented implying it has neither the resources _ finances and human _ to make any impact on the food chain.
Access to technology and the benefits from economies of scale are also unattainable in the case of small unit, more so in the unorganised sector.
Another characteristic of the Indian food processing industry is the presence of a huge number of intermediaries which leads to low realisation for the farmer and high costs for the end consumer.
In the case of dairy products for instance, although the country is the largest producer of milk, cost of processed dairy products like cheese are very high given the lack of quick access to cold storage systems in the country.
Even a few hours delay in getting the milk to a cold storage considerabl
