Lok Sabha Question No. 4134 (UNSTARRED), answered on 2018-03-20
Subject: Food Processing Level
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: RAMCHARAN BOHARA, YERRAM VENKATA SUBBAREDDY

## GOVERNMENT OF INDIA MINISTRY OF FOOD PROCESSING INDUSTRIES

## LOK SABHA UNSTARRED QUESTION NO. 4134 ANSWERED ON 20 TH  MARCH,2018

## FOOD PROCESSING LEVEL

## †4134. SHRI RAM CHARAN BOHRA: SHRI Y.V. SUBBA REDDY:

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

- (a) whether  the  current  level  of  processing  and  packaging  of  agro-products  is  low  as compared  to  that  of  developed  and  some  developing  countries  and  if  so,  the  details thereof;
- (b) the details of the main hurdles, identified in the food processing industries in the country and  the  action  plan  formulated  by  the  Government  to  remove  the  hurdles  in  the development of the food processing industry;
- (c) whether the Government had targeted earlier to double food processing levels by 2016 and if so, the details thereof;
- (d) whether the same has not been achieved and if so, the reasons therefor and whether the Government again proposes to double food processing levels from 10 per cent to 20 per cent by 2019, if so, the details thereof;
- (e) whether  the  Government  has  signed  any  agreement  with  other  countries  regarding promotion and cooperation in food processing sector and if so, the details thereof; and
- (f) whether the Foreign Direct Investment (FDI) rules have been eased to attract FDI in the food processing sectors to achieve the target of growth for doubling the food processing level by 2019 and if so, the details thereof?

## ANSWER

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

(a): As per a study, 'An assessment of the extent of food processing in various food sub-sectors' commissioned  by  Ministry  of  Agriculture  &  Farmers  Welfare  in  2014  and  conducted  by  the Institute of Economic Growth, Delhi, the level of food processing in the country in 2010-11 was estimated at 6.76 per cent.

(b)  to  (f): The  main  hurdles,  identified  in  the  food  processing  sector  are  like  inadequate  link between production and processing (lack of process able varieties), lack of product development and innovation, seasonality of operations and low capacity utilization, supply chain institutional gaps, gaps in infrastructure of supply chain etc.

For  the  overall  growth  and  development  of  the  food  processing  sector  in  the  country,  the Ministry of Food Processing Industries (MoFPI) has been implementing various Central Sector Schemes.   The MoFPI has re-structured its schemes under the new Central Sector Scheme of PRDHAN MANTRI KISAN SAMPADA YOJANA (PMKSY) with an allocation of    Rs.6,000 crore for period 2016-20 co-terminus with the 14 th Finance Commission cycle. In addition to the existing scheme components of  Mega Food Parks; Integrated Cold Chain and Value Addition Infrastructure;  Food  Safety  and  Quality  Assurance  Infrastructure;  and    Human  Resources  and Institutions,  PMKSY  encompasses  three  new  schemes  namely; Infrastructure for  AgroProcessing Clusters, Creation of Backward and Forward Linkages  and Creation/Expansion of Food  Processing  &  Preservation  Capacities with the objective to create  robust  modern infrastructure along the entire value chain in food processing with a view to, inter alia, increase the level of food processing and reduce wastage. Further, to provide impetus to the growth and development  of  food  processing  Industry  in  the  country,  Government  has  taken  a  number  of policy initiatives like permitting 100% Foreign Direct Investment (FDI) through automatic route in manufacturing of food products and 100% FDI under Government approval route for trading, including  through  e-commerce,  in  respect  of  food  products  produced  and/or  manufactured  in India; creation of a special fund of Rs.2000 crores with National Bank for Agriculture and Rural Development  (NABARD)  to  provide  affordable  credit;  classification  of  food  &  agro-based processing units and cold chain as agriculture activity for Priority Sector Lending; lower Goods & Services Tax (GST) rates for majority of food products, 100% exemption of income tax on profit for new food processing units, etc., to attract investment in the sector and boost the level of processing.

The MoFPI has entered into agreements with France and Italy for bilateral cooperation in food processing sector. In addition, MoUs have also been signed with various foreign Universities/Institutes  by  the  two  autonomous  institutions  under  the  MoFPI  like  National Institute of Food Technology Entrepreneurship and Management (NIFTEM) at Kundli, Haryana and  Indian  Institute  of  Food  Processing  Technology  (IIFPT)  at  Thanjavur,  Tamil  Nadu  for cooperation in the areas of teaching, research and skill development. Further, during the event of World  Food  India  2017  in  November  2017,  MoUs  were  signed  by  MoFPI  with  foreign companies of different countries.

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