Lok Sabha Question No. 4260 (UNSTARRED), answered on 2017-03-28
Subject: Loss of Farm Produce
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: HARISHCHANDRA DEORAM CHAVAN, VEENA DEVI, BHAIRON PRASAD MISHRA, BHAGWANTH KHUBA, RAKESH SINGH, SUNIL KUMAR MONDAL, JANARDAN SINGH SIGRIWAL, SUBHASH PATEL, RAVNEET SINGH, YERRAM VENKATA SUBBAREDDY, RAMCHARAN BOHARA, RAVINDRA KUMAR PANDEY, BHARATI DHIRUBHAI SHIYAL, OM BIRLA, MAULANA BADRUDDIN AJMAL

## GOVERNMENT OF INDIA MINISTRY OF FOOD PROCESSING INDUSTRIES

## LOK SABHA UNSTARRED QUESTION NO.4260

ANSWERED ON 28 TH  MARCH, 2017

## LOSS OF FARM PRODUCE

## 4260.  SHRI HARISH CHANDRA CHAVAN:

SHRIMATI VEENA DEVI:

SHRI BHAIRON PRASAD MISHRA:

SHRI BHAGWANTH KHUBA:

SHRI RAKESH SINGH:

SHRI SUNIL KUMAR MONDAL:

SHRI JANARDAN SINGH SIGRIWAL:

SHRI SUBHASH PATEL:

SHRI RAVNEET SINGH:

SHRI Y.V. SUBBA REDDY:

SHRI RAM CHARAN BOHRA:

SHRI RAVINDRA KUMAR PANDEY:

DR. BHARATIBEN D. SHYAL:

SHRI OM BIRLA:

SHRI BUDRUDDIN AJMAL:

Will the Minister of FOOD PROCESSING INDUSTRIES be pleased to state:

- (a) the details of post-harvest losses of farm produce specially high value perishable produce incurred across  the  country  due  to  lack  of  integrated  supply  chains,  cold-chains  and  food  processing industries in the country during the last three years and the current year, produce-wise;
- (b) whether Government has taken or proposes to take measures to reduce food losses and promote food processing industry in rural areas, if so, the details thereof and if not, the reasons therefor;
- (c) whether the Government has established modern supply chains for perishable food items, if so, the  details  thereof  along  with  the  benefits  accrued  on  account  of  this  and  if  not,  the  reasons therefor;
- (d) whether the Government provides incentives to entrepreneurs and investors for development of integrated supply chain including cold storage and other components and if so, the details thereof along with the total private sector investment in the sector, State-wise; and
- (e) whether  a  number  of  multinational  domestic  and  foreign  companies,  big  industrial  houses  and small  scale  industries  have  shown  keen  interest  for  setting  up  food  processing  industries  in various  parts  of  the  country  and  if  so,  the  details  thereof  and  the  response  of  the  Government thereto?

## ANSWER

## THE MINISTER OF STATE FOR FOOD PROCESSING INDUSTRIES (SADHVI NIRANJAN JYOTI)

(a) &  (b): The Government has got a study done on 'Assessment of Quantitative Harvest and PostHarvest Losses of Major Crops and Commodities in India' by ICAR - Central Institute of Post-Harvest Engineering and Technology (CIPHET), Ludhiana. The study was commissioned in 2012 and the final report submitted on 31.03.2015. The study has estimated that annual value of harvest and post-harvest losses  of  major  agricultural  produces  at  national  level  was  of  the  order  of  Rs.  92,651  crore  calculated using  production  data  of  2012-13  at  2014  wholesale  prices.  The  percentage  of  post-harvest  losses  as assessed by the study are at Annexure-I.

It has been the endeavor of the Government to promote food processing industry in the country to reduce wastage of agricultural produce and minimize post- harvest losses.  With the above in view, the Ministry  of  Food  Processing  Industries  (MoFPI)  is  implementing  inter  alia,various  Central  Sector Schemes, namely (i) Mega Food Parks. (ii) Integrated Cold Chain and Value Addition Infrastructure. The aforementioned  schemes  are  implemented  mainly  by  private  sector  &  demand  driven  and  provide flexibility to the promoters to choose the components, their capacities and location of the project as per techno  economic  feasibility  conducted  by  them  and  ensuring  the  viability  of  the  project  vis-à-vis availability of adequate infrastructure and smooth backward and forward integration.

(c ) & (d): Government does not set up supply chains for perishable food itemson its own. However, in order to arrest post-harvest losses of horticulture & non-horticulture produce and to provide integrated cold chain and preservation infrastructure facilities from the farm gate to the market, Ministry of Food Processing  Industries  is  implementing  the  Central  Sector  Scheme  of  Integrated  Cold  Chain  and  Value Addition Infrastructure. Under the scheme, financial assistance is provided in the form of grant-in-aid of maximum Rs10 crore per project for setting up of integrated cold chain and preservation infrastructure facilities. The Integrated cold chain and preservation infrastructure can be set up by individuals, groups of entrepreneurs, cooperative societies, Self Help Groups (SHGs), Farmer Producer Organizations (FPOs), NGOs, Central/State PSUs, etc. The scheme is primarily private sector driven and proposals under this scheme are invited through Expression of Interest (EOI).

In addition, Mission for Integrated Development of Horticulture (MIDH) and National Horticulture Board (NHB), under Department of Agriculture, Cooperation & Farmers Welfare, Ministry of Agriculture &  Farmers  Welfare  are  also  providing  assistance  for  setting  up  cold  storages  under  their  respective schemes. The proposals under MIDH and NHB schemes are accepted round the year. These schemes are demand driven from entrepreneurs, private companies, co-operatives, farmers groups, self-help  groups, etc for which assistance in the form of grant-in-aid/subsidy is provided by the Government. Various other incentives provided by the Government to promote creation of cold chain infrastructure are at AnnexureII. Details  of  state  wise  private  sector  investment  in  respect  of  Scheme  for  Integrated  Cold  Chain  and Value Addition Infrastructure is at Annexure-III.

(e): As  per  extant  policy,  Foreign  Direct  Investment(FDI)  up  to  100%,  under  the  automatic  route,  is allowed in food processing industries including cold chain infrastructure. As per the data provided by the Department  of  Industrial  Policy  and  Promotion(DIPP),  the  Food  processing  sector  in  the  country  has received US$ 5.67 billion worth of Foreign Direct  Investment(FDI) equity inflows from April,2013 to December, 2016.

********

ANNEXURE-I ANNEXURE  REFERRED  IN  REPLY  TO  PART  (a)  &  (b)  OF  LOK  SABHA  UNSTARRED QUESTION NO. 4260 FOR 28 th  MARCH, 2017 REGARDING LOSS OF FARM PRODUCE. Details of post-harvest losses as assessed by the study by CIPHET, Ludhiana(2015) for major produces.

| Crops               | Cumulative wastage (%)   |
|---------------------|--------------------------|
| Cereals             | 4.65 - 5.99              |
| Pulses              | 6.36 - 8.41              |
| Oil Seeds           | 3.08 - 9.96              |
| Fruits & Vegetables | 4.58 - 15.88             |
| Milk                | 0.92                     |
| Fisheries (Inland)  | 5.23                     |
| Fisheries (Marine)  | 10.52                    |
| Meat                | 2.71                     |
| Poultry             | 6.74                     |

| Horticultural crops   | Horticultural crops   | Cereal crops   | Cereal crops   |
|-----------------------|-----------------------|----------------|----------------|
| Guava                 | 15.88%                | Paddy          | 5.53%          |
| Apple                 | 10.39%                | Bajra          | 5.23%          |
| Mango                 | 9.16%                 | Wheat          | 4.93%          |
| Grapes                | 8.63%                 | Maize          | 4.65%          |
| Banana                | 7.76%                 |                |                |
| Papaya                | 6.70%                 |                |                |

## ANNEXURE  REFERRED  IN  REPLY  TO  PART  (c)  &  (d)  OF  LOK  SABHA  UNSTARRED QUESTION NO. 4260 FOR 28 th  MARCH, 2017 REGARDING LOSS OF FARM PRODUCE.

## Details of various measures taken by the Government to promote food processing sector

-  Loans  to  food  &  agro-based  processing  units  and  Cold  Chain  have  been  classified  under Agriculture activities for Priority Sector Lending (PSL) as per the revised RBI Guidelines issued on 23/04/2015.
-  In  the  Budget  2014-15,  a  special  fund  of  Rs.  2,000  crore  has  been  created  with  NABARD  to provide  affordable  credit  to  designated  Food  Parks  and  food  processing  units  to  be  setup  in these parks.
-  Refrigeration  machineries  and  parts used  for installation of  cold storage, cold  room  or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural,  dairy,  poultry,  aquatic  and  marine  produce  and  meat  are  exempted  from  Excise Duty.
-  Construction, erection, commissioning or installation of original works pertaining to post-harvest storage  infrastructure  for  agricultural  produce  including  cold  storages  for  such  purposes  are exempted from Service Tax.
-  Government has extended Project Import benefits to cold storage, cold room (including for farm level  pre-cooling)  or  industrial  projects  for  preservation,  storage  or  processing  of  agricultural, apiary,  horticultural,  dairy,  poultry,  aquatic  and  marine  produce  and  meat.  Consequently,  all goods  related  to  Food  Processing,  imported  as  part  of  the  project,  irrespective  of  their  tariff classification,  would  be  entitled  to  uniform  assessment  at  concessional  basic  customs  duty  of 5%.
-  Under Section 80(1B) (11A) of the Income Tax Act, 1961, 100 percent tax exemption is available for the first five years of operation and after that, at the rate of 25 per cent (30 per cent in case of a  company)  for  next  five  years  for  new  units  in  the  business  of  processing,  preservation  and packaging of fruits or vegetables, meat and meat products, poultry, marine or dairy products.
-  Under  Section  35-AD  of  the  Income  tax  Act  1961,  deduction  to  the  extent  of  100  per  cent  is allowed  for  expenditure  incurred  on  investment  for  (i)  setting  up  and  operating  a  cold  chain facility; and (ii) setting up and operating warehousing facility for storage of agricultural produce.
-  Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables have been exempted from Service Tax in Budget 2015-16.
-  Foreign Direct Investment (FDI) is permissible in food processing sector up to 100 per cent on automatic route.
-  In 2016, Department of Industrial Policy and Promotion (DIPP) vide press note No. 5 allowed 100 per  cent  FDI  under  Government  approval  route  for  trading,  including  through  e-commerce,  in respect of food products manufactured and / or produced in India.

## ANNEXURE  REFERRED  IN  REPLY  TO  PART  (c)  &  (d)  OF  LOK  SABHA  UNSTARRED QUESTION NO. 4260 FOR 28 th  MARCH, 2017 REGARDING LOSS OF FARM PRODUCE.

Details of state wise private sector investment in respect of Scheme for Integrated Cold Chain and Value Addition Infrastructure.

| State            |   Total private sector investment (Rs. in Crore) |
|------------------|--------------------------------------------------|
| Andhra Pradesh   |                                            61.93 |
| Assam            |                                            20.58 |
| Bihar            |                                            24.83 |
| Chhattisgarh     |                                            25.97 |
| Gujarat          |                                           257.34 |
| Haryana          |                                           154.94 |
| Himachal Pradesh |                                            78.63 |
| Jammu & Kashmir  |                                            23.51 |
| Karnataka        |                                            48.01 |
| Kerala           |                                            33.42 |
| Madhya Pradesh   |                                            70.55 |
| Maharashtra      |                                           529.94 |
| Manipur          |                                             8.53 |
| Mizoram          |                                             9.69 |
| Odisha           |                                            11.18 |
| Punjab           |                                           100.46 |
| Rajasthan        |                                            57.16 |
| Tamil Nadu       |                                            43.34 |
| Telangana        |                                            60.93 |
| Uttar Pradesh    |                                           139.86 |
| Uttarakhand      |                                           122.75 |
| West Bengal      |                                           129.88 |
| Total            |                                          2013.43 |