Michel Mor is Set

8/13/2019 Michel Mor is Set

1/30

TRENDS AND PATTERN OF CONSUMPTION OFVALUE ADDED FOODS IN INDIA

Michel Morisset and Pramod K mar

Respectively, Professor, Laval University, Quebec City, Canada, and Sr Scientist, IARI, New el!i, India"

#


2/30

$!e econo%ic &rowt!, c!an&es in tastes and preferences and urbani'ation !as resulted in

c!an&in& consu%ption pattern away fro% traditional food co%%odities to processed

and !i&! value co%%odities ()urty, *+++ )eena-s!i, #../ Rao, *+++0" $!e

consu%ption of food is fallin& because of s!ift in consu%ption away fro% cereals to

!i&! calorie co%%odities suc! as %eat, %il-, fis! etc, in ot!er words fro% low value

to !i&! value co%%odities (1u%ar and 1u%ar, *++2 )eena-s!i, #../0" In rural

areas t!e s!ift in consu%ption pattern is %ore in t!ose re&ions t!at are e3periencin&

&reater i%prove%ent in infrastructure (Rao, *+++0" $!e c!an&in& consu%ption

pattern !as resulted in decline in per capita !ouse!old de%and for food&rains

(Rad!a-ris!na and Ravi, #..* 1u%ar and )at!ur, #../ )urty, #... 1u%ar and

1u%ar, *++40" 5owever, t!ere !as been little atte%pt to assess t!e c!an&es in

consu%ption pattern by value added food products" $!e analysis of foodconsu%ption in Urban India is of &reater interest" It per%its not only to understand

t!e food consu%ption pattern of an i%portant and &rowin& population but also

reveals t!e future of consu%ption !abits in India" It is considered t!at t!e c!an&es in

consu%ption are %ore li-ely to !appen in urban t!an in rural India" 6ven %ore, it is

a%on& t!e urban population t!at t!e %ost i%portant concentration of wealt!y people

are found and t!ey are considered t!e %ost auspicious to introduce t!e new trends"

An understandin& of t!e c!an&in& consu%ption pattern accordin& to t!e e3tent of

value addition would !ave i%plications not only for food&rains de%and pro7ection

but also for develop%ent policies" It is t!erefore, pertinent to understand8 w!at is t!e

e3tent of s!ift9 5as t!e consu%ption of value added products really increased, if yes,

t!en to w!at e3tent9 Is t!is s!ift observable across all t!e inco%e &roups of t!e

populationand specially in urban India9 $o find solution to t!ese, t!is study is

underta-en wit! followin& specific ob7ectives8 #0$o study t!e food consu%ption

pattern by e3penditure &roups for urban and rural India and across states for urban

India *0 $o classify t!e food ite%s in accordance wit! t!e level of processin& and to

analyse t!e trend and pattern of consu%ption of processed food and 40 $o analy'e

t!e consu%ption of t!e !i&!est inco%e &roup of urban !ouse!olds as sy%pto%atic of

future consu%ption pattern

Data and Methodology

*


3/30

The Data$!e !ouse!old level data on consu%ption of food available fro% :: t! (#...;*+++0 and

t!e /# st (*++2;+:0 rounds of t!e National Sa%ple Surveys


4/30

in&redients, flavour, and preservatives could be added" 63a%ples, biscuits, bread,&!ee, ice crea%, 7a%s etc"

:" Third processing: $!e type of food products co%in& under t!is class are ready toeat food, prepared and pac-ed %eals, ta-e out type %eals" It %ay also includeready to coo- seasoned %eat or fis! in s%all portion" $!e fa%ily can eat a w!ole

%eal wit! a %ini%u% of preparation, as in a restaurant" Suc! type of food products de%and a !i&! level of sop!istication, a very &ood cold c!ain and a retailc!ain" $!is type of food co%petes wit! w!at one can &et fro% t!e restaurant"63a%ples are ready to coo- %eals (pi''as, lasa&nes0, fro'en prepared %eals, etc"

$!e study classified t!e food ite%s accordin& to t!e &rid developed by level of processin&

and is presented in Appendi3 #"

Conceptual limitations of dataset

$!e NSS< survey data contains a few food ite%s t!at posses a certain level of

a&&re&ation enco%passin& %ore t!an one level of processin&" ?or e3a%ple, fluid %il-%ay include t!e fres! %il- @as fro% t!e cow , pasteuri'ed %il-, standardi'ed %il-,

specialty %il- wit! added vita%ins, %inerals, flavour, or&anic %il-, sterili'ed and even

%ore" $o divide %il- between @pri%ary products , @first low and @!i&! processin& is

difficult" Si%ilarly raw cas!ews, dry, roasted and salted, suc! food ite%s represent a

continuu% based on level of processin& but in t!e survey t!ese food ite%s are considered

a sin&le food ite%"

Anot!er i%portant food ite% t!at de%and clarification is @ evera&es and ot!er processed

foods " Its consu%ption increases wit! increases in inco%e durin& bot! t!e survey

periods, #...;*+++ and *++2;+:(Appendi3 *0" $!e dese&re&ated data revealed t!at t!e

%ain ite% of t!is cate&ory is @Coo-ed %eals " $!e consu%ption of @coo-ed %eals as a

proportion of @bevera&es and ot!er processed foods increased fro% /"2 per cent for t!e

low e3penditures &roup to 2*"* per cent for t!e !i&!est )PC6 &roup in *++2;+:

(Appendi3 40" $!e co%%on understandin& of @Coo-ed %eals would be t!e fro'en

andDor prepared %eals, ready to coo- or to eat" ut t!e NSS< definition of @Coo-ed

%eals 4 reveals t!at it is not a processed food ite% w!ic! is t!e focus of t!is paper" Itdoes not co%e fro% t!e food industry and is produced wit!in t!e !ouse!old -itc!en, at

t!e sa%e ti%e and in t!e sa%e pot as for all t!e fa%ily food"

$wo ot!er ite%s need to be co%%ented upon i"e", tea (cup0 and coffee (cup0" $!ese are

bevera&es consu%ed outside !o%e %ay be fro% a tea stall or a street vendor" $!ey s!ould

2


5/30

not appear 2 in !o%e consu%ption cate&ory rat!er ter%ed as @food bou&!t and consu%ed

outside !o%e " If t!e coo-ed %eals and t!ese two bevera&es were e3cluded fro% t!e

cate&ori'ation of products, t!en no ite%s would be left in t!e @t!ird processin& &roup "

An inde3 of processin& was developed usin& t!e followin& criteria8

Sl" No" Level of processin& Eei&!ta&e score (w0# Pri%ary #* ?irst processin& (Low0 *4 ?irst processin& (!i&!0 42 Second processin& 2: $!ird processin& :

$!e inde3 of processin& would !elp in better understandin& t!e re&ional variations in t!e%a&nitude of processin& FLPi7 G wiIP7 H

FLPi7

E!ere,IPH Inde3 of processin&LPH Percent e3penditure on it! level of processed product,iH Pri%ary, ?irst (Low0, ?irst (5i&!0, Second processed, $!ird processedwH wei&!ta&e score

7H states or inco%e &roup ()PC6 &roup0

RES !TS "#D D$S% SS$Evolution o' ouseholds E*penditures

$!e P (constant rate0 increased by 44"J per cent durin& t!e study period #...;*++:

and !as recorded an annual &rowt! rate ran&in& fro% 4". per cent to ="J per cent ($able

#0" $!e per capita P recorded an annual &rowt! rate ran&in& fro% #". per cent to J"+

per cent"

$able #8 )acroecono%ic indicators of Indian econo%y

Kear +rowth rate savings as , o'

+DP+DP (constant Rs) +DP per capita

#...;*+++ /"* 2"2 *#"#

:


6/30

*+++;*++# 2"+ #". *#"+

*++#;*++* /"+ 4". *#"=

*++*;*++4 4". #". **"J

*++4;*++2 ="J J"+ *4"=

*++2;*++: J"2 :"J *#"/

Source8


7/30

Source8 oI (#...;*+++0 oI (*++2;+:0

Source8 oI (#...;*+++0 oI (*++2;+:0

Fi! re " # Chan!e in e$%endit re &MPCE' d rin! the %eriod "((()** to +**,)*-./ income !ro %0 Ur.an India

-100,0

0,0

100,0

200,0

300,0

400,0

500,0

600,0

1 2 3 4 5 6 7 8 9 10 11 12

Expenditure groups

2004-05 non-food 2004-05 all

-100,0

0,0

100,0

200,0

300,0

400,0

500,0

1 2 3 4 5 6 7 8 9 10 11 12

E$%endit re !ro %

2004-05 food 2004-05 non-f ood 2004-05 all

C o n s t a n

t R s

J

C o n s t a n

t R s

2004-05 food

Fi! re + # Chan!e in e$%endit re &MPCE' d rin! the %eriod "((()** to +**,)*-./ income !ro %0 R ral India


8/30

$!e benefit of &rowt! was reaped by t!e last &roup t!at recorded an increase in

e3penditure by %ore t!an Rs 2++" 6ven in rural areas t!e e3penditure on food recorded

%ar&inal decrease across all inco%e &roups" $!ese results are contrary to e3pectations

and only !i&!er inco%e &roups of !ouse!olds !ave &ained fro% t!e econo%ic &rowt!"

It is now i%portant to -now !ow t!e increased inco%e is utili'ed" E!at are t!e c!an&es

in food consu%ption pattern9

%hanging pattern o' ousehold E*penditures$!e data of NSS< survey rounds *J t! (


9/30

$wo co%%odity &roups are observed to be &ainin& i%portance in t!e !ouse!old

consu%ption e3penditure" $!e first bein& @fuel and li&!t w!ose s!are in total !ouse!old

e3penditure increased durin& t!e period #.J*;J4 to *++2;+: fro% :"/ per cent to .". per

cent and fro% :"/ per cent to #+"* per cent for urban and rural !ouse!olds, respectively"

$!e second co%%odity &roup is @%iscellaneous &oods and services t!at covers

education, %edical care, rents and ta3es" Its s!are increased si&nificantly fro% #."* per

cent to 4J"* per cent and fro% ="J per cent to *4"2 per cent for urban and rural

!ouse!olds, respectively"

Source: GoI (2004-05)

$!e relative s!ares across ti%e period &ive t!e relative i%portance of t!e co%%odities in

total !ouse!old spendin&" 5owever, it is i%portant to -now, w!at is t!e e3penditure

pattern of !ouse!olds in real ter%s9 $!e !ouse!old e3penditures were deflated usin&

suitable inde3es / and co%pared" $!e urban !ouse!olds recorded an increase in inco%e

available for total consu%ption durin& t!e last t!ree decades (?i&ure :0" $!e over all

econo%ic &rowt! of Indian econo%y was beneficial to urban !ouse!olds" It is surprisin&

t!at in real ter%s t!e rupees spent on food did not increase"

Fi! re , # Com%osition o2 cons m%tion e$%endit re o2 R ral ho seholds d rin! the %eriod "(3+)+**-

0%

20%

40%

60%

80%

100%

27st 32nd 38th 43rd 50th 55th 61st

dura le goods!is" goods # ser$&oot'ear (lothing&uel, light)an,to , intox&ood

.


10/30

Fi! re -# Total e$%endit res0 Val es0 +3th to 4"st NSSO Ro nds0 Ur.an India

0 00

10 00

20 00

30 00

40 00

50 00

60 00

70 00

80 00

90 00


C o n s

t a n

t r % e e s

& " ( 3 + 5

" * * ' 6 1 * d a / s

6 % e r s o n

dura le goods

!is" goods # ser$

&oot'ear

(lothing

&uel, light

)an,to , intox

&ood

Source: GoI(2004-05)

Fi! re 4# Total e$%endit res0 Val es0 +3th to 4"st NSSO Ro nds0 R ral India

0 00

10 00

20 00

30 00

40 00

50 00

60 00

70 00


C o n s

t a n

t r % e e s

& " ( 3 + 5

" * * ' 6 1 * d a / s

6 % e r s o n

dura le goods!is" goods # ser$&oot'ear (lothing&uel, light)an,to , intox&ood

Source: GoI (2004-05)

#+


11/30

It &oes a&ainst t!e co%%on perception t!at t!ere is an increase in food e3penditure (in

absolute ter%s0 even t!ou&! t!ere is decrease in its relative i%portance in total

e3penditure"

$!e situation of rural India is sli&!tly better and is revealed fro% t!e inco%e and

consu%ption pattern of rural !ouse!olds" ?irstly, t!e inco%e &rowt! of rural !ouse!olds

was %ar&inally superior (4J": per cent0 to t!at of t!e urban !ouse!olds (4:"# per cent0"

Secondly, a %ar&inal increase in food e3penditure (in real ter%s0 was observed over t!e

4* years period"

$!is findin& !as an i%portant conse>uence on t!e food consu%ption analysis" $!e

develop%ent relies on t!e fact t!at t!e newly created wealt! benefits all classes of t!e

Indian society" It is also assu%ed t!at !i&! inco%e elasticity of de%and for food e3ists,

t!erefore, if t!e inco%e &rowt! is not t!ere, t!ere will be no pro&ress in de%and and no%ar-ets for food products"

Trend in Food e*penditures

$!e food e3penditures of urban !ouse!olds (in real ter%s0 decreased by 4"# per cent

durin& t!e study period #...;++ to *++2;+: ($able *0"

Table 2:Food expenditures variation 1 -2000 to 2004-05! "rban India( in per cent)

#o$$odit%

&roups

'xpenditure &roups

1 2 4 5 * + 10 11 12 ,v&

#ereals -11 5 -10 4 -12 * -12 * -11 * -10 + -12 0 - 2 - + -11 + -+ - -10 +

.ilse -12 -12 5 -12 -11 4 -10 * -14 -1 -1+ -1* 4 -1 -20 * -20 5 -1 *

/il - * 5 * + 2 + 4 + 0 -0 * - 2 1 0 -2 2 -* 0 -0 2

'dible oil 5 * 0 2 2 2 5 2 5 21 + 21 1+ 20 1 1 * 1 2 1 0 20

'&&s! is 3 $eat 10 1 + * -2 0 4 1 -10 -1 5 -11 2 -0 * -+ 5 1 4 -+ -5 5

e&etables 5 0 -1 + - -5 1 -+ * - + - 0 - 1 -10 0 -11 4 -1+ 0 -+

Fruits ( res ) 1 * * -2 10 0 14 5 12 4 5 + -1 0 1 -1 5 - 5 -10 -0

Fruits (dr%) 4 5 5 1 4 4 1 4 2* 1 2 14 * 12 5 24 + - 5 - 5 11 +

Su&ar 4 1 0 4 * 4 4 1 1 1 0 2 -2 0 -2 -0 -+ 5 0 +

Spices - 1 -* * -+ 1 -* * -10 - 2 -12 0 -12 * -12 * -14 1 -12 * -1 2 -11evera&es 14 2 10 2 2 2 4 + 14 + 10 1 + + * + 1 14 0 0

Total -2 1 -1 0 -2 + -2 1 -0 5 -2 2 - 1 - -2 + - 1 -2 * -4 0 - 1

Source: GoI (1999-2000b) & GoI (2004-05)

##


12/30

$!e decrease in food e3penditure is also observable across all e3penditure &roups" $!e

structural c!an&e in consu%ption pattern is observed durin& t!e period #...;*+++ to

*++2;+:"

ecrease in consu%ption of certain food co%%odities J is observed, t!e %ost i%portant bein& Cereals, w!ose consu%ption fell by #+"= per cent in real ter%" Pulse is anot!er

i%portant co%%odity recordin& a drop in consu%ption by #/"J per cent" $!e fall in

consu%ption is observed for t!ese two &roups of co%%odities across all t!e e3penditure

&roups" $!e decrease in ve&etables consu%ption (="4 per cent0 is also noticeable t!ou&!

an i%prove%ent was recorded for t!e lowest two &roups"

$able 48 ?ood e3penditure variation #...;*+++ to *++2;+:, Rural India

( in per cent0Co%%odity&roups

63penditure &roups

# * 4 2 : / J = . #+ ## #* Av&

Cereals ;#4"J ;#J". ;#:"J ;#/"J ;#:". ;#="# ;#:": ;#/"+ ;#:"4 ;#:"2 ;#:"J ;#+"/ ;#:"=

Pilse ;/"= ;J"2 ;#+": ;#*"2 ;#4"J ;#4"J ;#/"J ;#J"/ ;#=": ;#="2 ;*+"/ ;#:"* ;#:":

)il- ;#": *#"2 #*"* #*"J ##"= ."2 #*"# J"= ;+"2 ;*"J ;#"= ;#J"4 +"2

6dible oil 4:"# 4/". 4.". 44"J 44": 4#"= *J"+ *2"/ *2"# *+"+ **"/ *:": *J".

6&&s, fis! %eat ;4"4 ;+". 4"J +"/ ;:"= ;#"2 ;2": *"4 #+"= 2"+ ;+"2 *+": 2"#

e&etables *"* #"+ :"4 *"/ +". #"+ ;+"4 ;+"4 ;+"4 ;4"J ;:": ;:"/ ;+":

?ruits (fres!0 #+"+ **". **"J #/"# #."4 #."2 2"2 J"J ."2 ="4 J"# #+"4 #+":

?ruits (dry0 ;#+"= #=". *#". #+"= *J"J #=". #/"# *J"/ *="4 *J". *2"2 ##"= *#"#

Su&ar #2"# #*"2 #2"# #*"J #*"+ =": 4": *". ;#"+ ;*": ;+"2 ;:"+ 4"2

Spices ;##": ;##"= ;="J ;#+": ;#+"+ ;##"2 ;#4"# ;#4"/ ;#2": ;#:"2 ;#:"J ;#+": ;#*"2

evera&es 44": */"+ #="2 **"/ #J"* #/"2 ."/ 4". #+"+ ."2 ."# #2"/ #*"2

$otal ;2". ;:"= ;4": ;2"# ;4"/ ;2": ;2"+ ;2"4 ;2"# ;:"+ ;2"J ;4"2 ;2"*

Source: GoI (1999-2000b) & GoI (2004-05)

$!e ?res! fruits, )il- and su&ar recorded an increase in consu%ption %ainly by low

e3penditure &roup of !ouse!olds" $!ree co%%odity &roups recorded positive c!an&e in

t!e consu%ption pattern8 6dible oil (*+"/ per cent0, ry fruits (##"= per cent0 and

evera&es and ot!er processed foods (."+ per cent0" $!e increase in consu%ption of ry

#*


13/30

fruits is very !i&! for low e3penditures &roups" 6dible oil is recordin& a si&nificantly !i&!

increase across all inco%e &roups, si%ilar pattern is observed for evera&es and ot!er

processed food" $!e analysis of t!e rural sector reveals al%ost si%ilar pattern"

$!e food e3penditure (in real ter%s0 is observed to !ave fallen by 2"* per cent durin& t!e period #...;*+++ to *++2;+:" Cereals and Pulses recorded a drop in e3penditure by#:

per cent in t!e year *++2;+:" $!e wei&!t of t!ese two co%%odities in total food

consu%ption e3plains t!e overall fall" )il- and Su&ar record %ar&inal increase on

avera&e basis %ainly due to increase in consu%ption by t!e lower e3penditures &roups"

An increase of 2"# per cent was observed in consu%ption of 6&&s, %eat and fis! over t!e

period #...;*+++ to *++2;+:" A&ain t!e %ost i%pressive increase in consu%ption

e3penditure are observed in 6dible oils (*J". per cent0, followed by ry fruits (*#"# per

cent0, evera&es and ot!er processed food (#*"2 per cent0 and ?res! fruits (#+": per cent0"

All of t!ese four co%%odities recorded an increase in e3penditure across all t!e inco%e

&roups"

A decrease in food e3penditure in real ter%s is e3perienced in bot! t!e urban and rural

!ouse!olds" 5owever, it is acco%panied wit! s!ift in consu%ption pattern" It is now

i%portant to analyse t!e s!ift in consu%ption pattern across states for urban India as t!is

would &uide t!e future trend"

$o facilitate t!e co%parison across states an inde3 of per capita food consu%ption of

food ite%s is co%puted usin& t!e value for Urban India as #++" $!e variation in

consu%ption of food a%on& t!e ten states, wit! t!e %ost i%portant urban population, and

all Urban India are presented in $able 2" ?or cereals, t!e inde3 of consu%ption ran&es

fro% =2": in )ad!ya Prades! to #*+"# in Eest en&al" Cereals !as t!e lowest standard

deviation (stdH#*"2#0 of all food cate&ories revealin& lower inter state variation in its

consu%ption"

$!e consu%ption inde3 for pulses ran&es fro% :/"# in Ra7ast!an to #*2"= in $a%il Nadu"

In %il- and %il- products so%e i%portant variations (std"H4="2/0 are observed t!e ran&e

varies fro% ::"+ in Eest en&al to #J."/ in el!i" $!e State wit! lowest consu%ption

inde3 is Uttar Prades! (=+"#0 and t!e !i&!est is for u7arat (#:.":0 far %ore t!an t!at for

Urban India" $!us, u7arat is an e3ception, wit! all ot!er States bein& closer to all Urban

#4


14/30

India" $!e consu%ption of 6&&s, fis! and %eat reveals wide inter state variations

(std"HJ*"#*0, wit! t!e consu%ption inde3 varyin& fro% a very low of *="* in u7arat to a

!i&! of *=/": in Eest en&al" $wo factors !eavily influence t!e consu%ption pattern

across states8 one is t!e ve&etarianis% of a lar&e part of t!e population in certain States

and t!e ot!er bein& !i&! fis! consu%ption in coastal States" ?or e&etables, t!e

consu%ption inde3 ran&es fro% /J"# in )ad!ya Prades! to #/:"# in el!i" $!e

consu%ption of fres! fruits varied fro% //": ()ad!ya Prades!0 to #2/"J ( el!i0" ry

fruits is a %inor ite% t!at s!ows i%portant variation (std"H:="4J0" Local production

see%s to be an i%portant factor influencin& its consu%ption" Su&ar consu%ption varies

fro% /*"+ (And!ra Prades!0 to #24"2 (1arnata-a0" Spices offers less variation e3ceptin& a

very !i&! consu%ption observed in $a%il Nadu (#=4":0" ?inally, evera&es and ot!er

processed food t!at is t!ou&!t to be associated wit! %odern consu%ption !abits variesfro% :.": ()ad!ya Prades!0 to #4/"J ($a%il Nadu0"

$able 28 Avera&e ?ood e3penditures, Urban, States and India, *++2;+:, inde3 Urban India H #++M P T# -. "P + / 0#0 MP R"/ Delhi $ndia Std dev "v1

Cereal .4"+ .#"= #+2"= #*+"# ##J": =:"# #+="+ =2": =J"* ./": #++"+ #*"2# .="=

Pulse Pulse products ##4"* .J"/ #*2"= J:"/ .J"2 ###"* #+2"/ .2"/ :/"# ##2"* #++"+ #."*# .=".

)il- %il- products .*"J #++"* J."J ::"+ J#"/ #:*"4 J=": =J"+ #22"# #J."/ #++"+ 4="2/ #+2"#

6dible oil #*#"/ =+"# =J"* ##*": =="* #:.": =*"2 =/"/ =:". #*+"/ #++"+ *2"4# #+*":

6&&s, fis! %eat .4": :#"* ##J"+ *=/": ###"+ *="* #+:"/ 4:"4 4*": /."4 #++"+ J*"#* .4"+

e&etable #++"J .:"2 #4=". #*.". J."/ #4#"* J#"4 /J"# =.": #/:"# #++"+ 4+".= #+/".

?ruits (fres!0 #*J"2 J*". #+/"= =4"= .#"4 #+2"/ #*+"+ //": J+"= #2/"J #++"+ *:"4= .."#

?ruits (dry0 *#/"4 .."J 44"+ 4:"4 #*J". #2/": .#". .:"/ .."= *+:": #++"+ :="4J ##:"#

Su&ar ##+"= ###"= //". J2": /*"+ #42"+ #24"2 ##4"J ##J"= #+="4 #++"+ */"** #+2"4

Spices ##*". =2": #=4": ###"2 #+."# #+#". #++"4 =4"# .:"2 ./"/ #++"+ *J"++ #+J".

evera&es etc ##/"= /J"/ #4/"J #+/"4 #+/"# #+*"J #+.". :.": /4"= ##2"4 #++"+ *2"2= .="2

$otal #+2". =/"J #+."J ##+"# ./"* ##*"/ .J". JJ": .+"4 #*/": #++"+ #4"// #+#"*

Note8#0S!adowed over #+: and under .:" *0)5H )a!arast!ra UPHUttar Prades! $NH$a%il Nadu E HEest en&al APH And!ra Prades! UMH u7arat 1N1H

1arnata-a )PH )ad!ya Prades! RAMHRa7ast!anSource8 NSS


15/30

%etro" $!e t!ree lowest consu%in& states are )ad!ya Prades! (JJ":0, Uttar Prades!

(=/"J0 and Ra7ast!an (.+"40 none is includin& a %a7or %etro" If we ta-e t!e nu%ber of

food cate&ories wit! t!e inde3 %ore t!an #+:, el!i ran-s first, recordin& inde3 of %ore

t!an #+: in = food cate&ories and is followed by )a!aras!tra (J0, $a%il Nadu (/0 and

Eest en&al (/0" $!us, t!e 2 Indian %etropolises appear a%on& t!e top consu%in& states"

At t!e ot!er end, are concentrated Uttar Prades! (#0, )ad!ya Prades! (#0 and Ra7ast!an

(*0"

It is now i%portant to analyse t!e co%position of consu%ption by level of processin& in

order to deter%ine w!et!er t!e s!ift in consu%ption pattern is %ore towards value added

food co%%odities"

%omposition o' 2alue added products in 'ood consumption$!e trend in consu%ption of various &roups of co%%odities by levels of processin& alon&

t!e e3penditure &roups for urban India is presented in ?i&ure =" $!e proportion of

@pri%ary products consu%ed does not s!ow %uc! increase wit! increase in inco%e" $!e

@first (low0 processed products as a proportion of total food consu%ed recorded

si&nificant decrease wit! t!e increase in inco%e"


16/30

Source8 GoI (1999-2000b) & GoI (2004-05)

Source8 GoI (1999-2000b) & GoI (2004-05) ,

Fi! re 7# Food e$%endit res &corr8' accordin! to the le9el o2 %rocessin!0 Ur.an India0 +**,)*-

0,0

10,0

20,0

30,0

40,0

50,0

60,0

1 2 3 4 5 6 7 8 9 10 11 12

E$%endit res !ro %

:

)ri*ar+ produ"t&irst pro"essing lo'&irst pro"essing high.e"ond pro"essing

Fi! re ( # Food e$%endit res &corr8' accordin! to the le9el o2 %rocessin!0 R ral India0 +**,)*-0&2l id mil; is classi2ied as First &hi!h'%rocessin!'

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

1 2 3 4 5 6 7 8 9 10 11 12

E$%endit res !ro %

:

)ri*ar+ produ"t

&irst /o' pro"essing

&irst igh pro"essing

.e"ond pro"essing

#/


17/30

$!e $able : presents t!e co%parative picture of t!e pro&ress of processed food

consu%ption between t!e two surveys" A decrease of t!e i%portance of @pri%ary

products and of @first (low0 processed products in t!e food bas-et and a rise in t!e @first

(!i&!0 and @second processed products is observed" $!e @second processed products

consist of less t!an #+ per cent of t!e avera&e urban food bas-et"

Ta3le 4: Food e*penditure pattern according to the level o' processing5 Rural and r3an $ndia(in Percent0

Level of processin&

Urban Rural Rural (%il-8 pri%ary product0

#...;*+++

*++2;+: #...;*+++

*++2;+: #...;*+++

*++2;+:

Pri%ary products #J"2 #/"= #2"/ #:"4 *="2 4+"*

?irst processin&(Low0 4J". 42"= 2.". 24". 2.". 24".

?irst processin&(5i&!0 4:": 4="* 4#": 4:"# #J"J *+"4

Second Processin& ."* #+"* 2"+ :"J 2"+ :"JSource: GoI (1999-2000b) & GoI (2004-05)

$a-in& into account t!e level of e3penditures and t!e availability of processed food, t!e

rural !ouse!olds are not e3pected to !ave t!e sa%e e3penditure pattern" As can be seen,

t!e consu%ption of @pri%ary products occupies a relatively %inor place co%pared to

t!at for urban !ouse!olds" ?or t!e @first (low0 processin& , we observe t!at t!e rural

!ouse!olds are dedicatin& %ore inco%e but t!e relative decrease between t!e two surveys

is %ore i%portant for rural t!an for urban !ouse!olds" $!e relative s!are of @first (!i&!0

processed food is lower in t!e rural area and even %ore, t!is affir%ation !as to be

wei&!ted by t!e fact t!at t!e fluid %il- is classified as for urban !ouse!olds as a @first

(!i&!0 processed product " In t!e urban center t!e %il- is %ostly, pasteuri'ed,

standardi'ed and pac-ed" It is w!at 7ustifies its classification" In t!e rural area t!e fluid

%il- is %ostly consu%ed as a raw product involvin& little processin& and s!ould in

conse>uence be classified as @pri%ary product " If t!is is done, @pri%ary products and

@first (!i&!0 processed products are re;balanced in favour of t!e @pri%ary products t!at

#J


18/30

are still increasin& t!eir s!are in *++2;+:" $!e place occupied by @second processed

products in t!e rural area is around : per cent of food e3penditures"

5avin& observed t!e proportions of value added food ite%s in t!e total it is also

i%portant to -now w!at is t!e situation in real ter%s, !ow %any rupees %ore or less werespent on t!e different cate&ories of processed products9

$able / presents t!e difference in consu%ption e3penditure by !ouse!olds between t!e

two survey periods i"e", #...;*+++ and *++2;+:"

Ta3le 6: Processed 'ood consumption pattern5 variation in 7889 84 to ;


19/30

processed products of Rs 2"* per person per 4+ days" $!ese incre%ents are, !owever,

very s%all for a five years period"

Ta3le >: Processed 'ood consumption pattern5 variation 'rom ;


20/30

Source8 NSS


21/30

It &oes fro% *"*2 in $a%il Nadu to *":# in Ra7ast!an" el!i (*"2:0 and u7arat (*"2/0 are

in t!e !i&!est position and it is felt t!at %il- (wei&!t 40 is a %a7or e3planation"

Ta3le ;8: !evel o' processing $nde*5 r3an5 selected States5 $ndia5 7889 84M P T# -. "P + / 0#0 MP R"/ Delhi $ndia

Avera&e *"4=

*"24 *"*2 *"4. *"4/ *"2/ *"2+ *"22 *":# *"2: *"2*

$op : B *"2J

*"/: *":+ *":. *"2: *"/+ *"2= *":= *"/# *"// *":/

ariation(B0

4".+

."4+ ##":+ ="*+ :"4+ :":+ 4"4+ :"=+ 2"#+ ="/+ /"#+

Note8 )5H )a!arast!ra UPHUttar Prades! $NH$a%il Nadu E HEest en&al APH And!ra Prades! UMH u7arat 1N1H1arnata-a )PH )ad!ya Prades! RAMHRa7ast!an

Source8 NSS


22/30

Source8 NSSuence be

**


23/30

reduced" Actually, it is reduced by 4"# per cent in Urban India for t!e top #+ and by *"+

per cent for t!e top *:" ?or t!e States wit! t!e %a7or %etro, t!e trends are reversed" $!e

proportion of bud&et devoted to top #+ food ite%s is increasin& for )a!aras!tra, $a%il

Nadu, and also for t!e top *: food ite%s for 1arnata-a and el!i" It is now i%portant to

!ave a closer loo- at t!e constituents of t!e top #+ food ite%s"

Ta3le ;=: Top ;8 'ood items consumed5 r3an5 selected States5 $ndia5 7889 845 RsApersonA=8 daysMaharashtra E*pend

iture(Rs)

ttar Pradesh E*penditure(Rs)

Tamil #adu E*penditure(Rs)

-est .engal E*penditure(Rs)

)il-8 li>uid J#":# )il-8 li>uid J2"+/ Rice ot!ers ==".4 Rice ot!er .+"::E!eat atta 4."4. E!eat atta /+"/= )il-8 li>uid /*"24 ?is!, Prawn :#"J2Rice ot!ers 4="++ Rice ot!ers *."2: 6dible oil8 ot!er *4"4= )il-8 li>uid 4/"#2

round nut oil *#"## )ustard oil *#"#+ oat %eatD%utton #4"/# )ustard oil 4:"#*6dible oil8 ot!er *+"** Su&ar #/"J2 Ar!ar" $ur #*"4# E!eat atta *#":+Su&ar #/":/ Potato #*"*# uid #+J"+. Rice ot!ers //"2: )il-8 li>uid /#"J*)il-8 li>uid :/"*+ E!eat atta 2."*. )il-8 li>uid /+"4+ E!eat atta ::":*6dible oil8 ot!er #="2/ round nut oil 4/"*2 Su&ar #="#: Rice ot!ers *4"=+uid .2":= )il-8 li>uid #*."// )il-8 li>uid J4"4+E!eat atta J/".* E!eat atta /*"4= Rice ot!ers :4"4=

!ee *2"#* Rice ot!ers 4*":2 E!eat atta 4J".2Su&ar #J"/4 )ustard oil #="+= Su&ar #2"+J)ustard oil #+"22 Su&ar #/"4: 6dible oil8 ot!er #4"4#6dible oil8 ot!er #+"4/ 6dible oil8 ot!er #:".= )ustard oil #+"J4$ea8 leaf #+"42 $ea8 leaf #4"4/ ?is!, prawn .":#

round nut oil ."/J !ee #*"4= $ea8 Leaf ."*+Rice ot!ers ="/* Potato ##"2+ Ar!ar, tur ."++

oat %eatD%utton J"4/ anaspati,%ar&arine

.":= round nut oil =".2

Note8 Public istribution Syste% (P S0 only w!en indicated"

$!e ten %ost i%portant food ite%s consu%ed by t!e avera&e urban !ouse!old of selectedstates and of India are presented in $able #4" $!e ite%s t!at are %ore particular to a

sin&le or a few States were s!adowed" $!e consu%ption pattern s!ows a lot of

si%ilarities revealin& t!e constitution of t!e basic Indian diet wit! so%e variation fro%

State to State" In si%ple ter%s it could be stated t!at t!e basic diet is %ade of fluid %il-,

rice, w!eat, pi&eon peas (ar!ar0, so%e oil, su&ar and %eat or fis! and tea" $!ere are so%e

*4


24/30

re&ional variations8 rice will ta-e over w!eat c!ic-en will be %ore i%portant t!an

&oatD%utton fis! will do%inate in Eest en&al oil will vary or be replaced by &!ee or

vanaspati potato will appear in t!e top #+" ut t!e avera&e picture re%ains %ore or less

t!e sa%e" A few ot!er food ite%s %a-es a rare appearance li-e ot!er processed food

(includes %any unidentified products0, vanaspati, 7owar or salted refres!%ent" $!us,

about ::;/: per cent of t!e bud&et is spent on t!ese basic ite%s"

Ta3le ;9: Top 74 'ood items consumed5 r3an $ndia5 7889 845 RsAPersonA=8 daysAvera&e 5i&! inco%e Ran- c!an&e Avera&eH#++)il-8 li>uid J4"4 )il-8 li>uid #J."* *22Rice ot!ers :4"2 Rice ot!ers /."J #4+E!eat atta;ot!ersources

4J". E!eat atta;ot!ersources

2:": #*+

Su&ar;ot!er sources #2"#


25/30

In ter%s of e3penditures, t!e !i&!est inco%e &roup is spendin& %ore t!an twice (inde3

*+:0 t!e a%ount spent by t!e avera&e urban !ouse!olds on top *: food ite%s" So%e

products are evidently recordin& a %a7or increase8 cold bevera&es (/:20, apple (2==0,

prepared sweet (4.40, ot!er processed food (4.#0, &!ee (44*0, bread (4*=0, fis! (*=:0,

banana (*J.0, biscuits (*J=0, salted refres!%ent (*:/0, c!ic-en (*:/0, fluid %il- (*220"

$!ese are t!e i%portant product t!at can be associated wit! t!e &rowt! of inco%e in

Urban India" 5owever, a %ar- of caution is put as far as t!e rate of increase is concerned"

$!e startin& point is also i%portant, fluid %il- wit! an inde3 of *22 is t!e %ost increasin&

ite% in rupee ter%s, recordin& an increase of %ore t!an Rs #++"

$!e products t!at !ave recorded a fall in t!eir ran-in& are8 %ustard oil (###0, w!eat;atta

(#*+0, rice (#4+0, potato (#420, ar!ar (#4.0, &round nut oil (#240, su&ar (#220, onion

(#:20, ot!er spices (#J*0, &oatD%utton (#=+0, to%ato (#=*0, tea (leaf0 (#==0" All t!ese products !ave an inco%e elasticity of de%and lower t!an #" )any of t!ese products are

considered as part of t!e basic Indian diet"

$!e portrait c!an&es pretty %uc! w!en t!e c!an&es in co%position of food bas-et are

e3pressed in rupee ter%s ($able #:0" $!e first *: ite%s secured J*"/ per cent of t!e rise,

%il- alone bein& responsible for *2"# per cent"

Ta3le ;4: %hange in consumption5 highest income group vs average household5 r3an$ndia5 7889 84

igh income %hange Rs)il-8 Li>uid #+:".


26/30


27/30

ite%s of t!e total food bas-et of t!e !i&! inco%e !ouse!olds in co%parison wit! t!at oft!e avera&e !ouse!olds includes only * new ite%s t!at is contrary to t!e e3pectation"

$!e ite%s recordin& %a7or increases are cold bevera&es (/:20, apple(2==0, prepared sweet (4.40, ot!er processed food (4.#0, &!ee (44*0, bread (4*=0, fis!(*=:0, banana (*J.0, biscuits (*J=0, salted refres!%ent (*:/0, c!ic-en (*:/0 and fluid

%il- (*220" $!ese are t!e products t!at can be associated wit! t!e &rowt! of inco%e inUrban India" $!ese !ave i%plications for t!e retail sector and food processin& industryto tar&et for suc! products"

It also !as i%plications for t!e policy %a-ers and ad%inistrators to pro%ote t!e food processin& industry caterin& to suc! co%%odities so t!at t!e &rowin&de%and for suc! products is %et wit!"

Endnotes1 Scrutini'in& t!e dese&re&ated data per%itted to find t!ree errors t!at were corrected in t!e #...;*+++ survey" In eac!

case an individual !ouse!old !ad astrono%ical e3penditures fi&ures for one ite%" $!is result was reflected in t!e)PC6 and t!e avera&e (all0 result" Ee deleted t!e erroneous sin&le fi&ure and recalculate t!e correspondin& results"$!e c!an&es are si&nificant for Spices and evera&es and ot!er processed products (Appendi3 20"

* ?or an analysis of value addition in t!e Indian food processin& industry see )orisset )"and P" 1u%ar, Structure and perfor%ance of food processin& industry in India, Journal of Indian School of Political cono!" , (?ort!co%in&0"

4 @Coo-ed %eal refers to %eals prepared in t!e !ouse!old -itc!en and provided to t!e e%ployees and D or ot!ers wouldauto%atically &et included in do%estic consu%ption of e%ployer (payer0 !ouse!old" $!ere is a practical difficulty ofesti%atin& t!e >uantities and values of individuals ite%s used for preparin& t!e %eals served to e%ployees or ot!ers"$!us to avoid double countin&, coo-ed %eals received as per>uisites fro% e%ployer !ouse!old or as &ift or c!arity arenot recorded in t!e recipient !ouse!old" As a &eneral principle, coo-ed %eals purc!ased fro% t!e %ar-et forconsu%ption of t!e %e%bers and for &uests and e%ployees will also be recorded in t!e purc!aser !ouse!old"

$!is procedure of recordin& coo-ed %eals served to ot!ers in t!e e3penditures of t!e servin& !ouse!olds leads to bias;free esti%ates of avera&e per capita consu%ption as well as total consu%er e3penditure" 5owever, donors of freecoo-ed %eals are li-ely to be concentrated at t!e upper end of t!e per capita e3penditure ran&e and t!e correspondin&recipients at t!e lower end of t!e sa%e scale "NSS


28/30

1u%ar, Pradu%an and Pra%od 1u%ar (*++40, e%and supply and trade perspective ofve&etables and fruits in India" Indian Journal of #$ricultural ar'etin$ , #J(408#*#;#4+"

1u%ar, Pradu%an and Pra%od 1u%ar (*++20" ?ood Production and e%and by Stateand Re&ions in India, National A&ricultural $ec!nolo&y Pro7ect, ICAR, New el!i)eena-s!i, M" " (#../0" 5ow i%portant are C!an&es in $aste9 A State;Level Analysis of

e%and" cono!ic and Political ee'l" , ece%ber #2, #../")urty, 1"N" (*+++0" C!an&es in $aste and e%and Patten for Cereals8 I%plication for?ood Security in Se%i;Arid $ropical India, #$ricultural cono!ic e%earch e*ie+ , ol#4(#08*:;:#"

)urt!y, 1"N" (*+++0" C!an&es in $aste and e%and Pattern for Cereals8 I%plication for?ood Security in Se%i;Arid $ropical India, #$ricultural cono!ic% e%earch e*ie+ ,

ol #4(#08Pp*:;:#"

Rad!a-ris!na, R and C" Ravi (#..*0, 6ffect of rowt!, Relative Price and Preferences of?ood and Nutrition, ,he Indian cono!ic% e*ie+ , Special Nu%ber in %e%ory ofSu-!a%oy C!a-ravarty, ol *J, pp4+;2#"

Rao, C"5"5" (*+++0, eclinin& e%and for ?ood&rains in Rural India8 Causes andI%plications, cono!ic and Political ee'l" , Manuary **, Pa&es;*+#;*+/"

*=


29/30

Appendi3 #8 Classification of co%%odities accordin& to t!e level of processin&Sl"

No" Pri%ary product?irst processed products(Low0

?irst Processed Products(5i&!0

Second ProcessedProducts Unclassified

# Eggs no i"e ) . *il li uid litre read, a er+ ea "ups o* )otato i"e others (urd a + food (offee "ups no

4 nion (hira utter *il "ondensed

po'der

(oo ed *ealsno

2 adish :hoi, la'a !ustard oil ;hee: (arrot !uri ;round nut oil atta-) . Edi le oil other ?anaspati, *argarine

= . eet potato =heat atta-other soure"s &ish, pra'n (and+, *isri. @ru* !aida ;oat *eat> *utton (urr+ po'der g*

#+ )u**p in .uAi, ra'a eaf> uffalo *eat (old e$eragesottles>"anned liter

## ;ourd .e'ai noodles )or &ruit Aui"e and sha elitre

#* itter gourd ther 'heat produ"ts (hi" en ther e$erages"o"oa, (ho"olate, et"#4 (u"u* er Bo'ar # produ"ts thers irds, "ra s, o+ster is"uits#2 )ar'al aAra # produ"ts .ugar ) . .alted refresh*ents#: BhingaC torai !aiDe # produ"ts .ugar-oterh sour"es )repared s'eets#/ .na e gourd arle+ # produ"ts ;ur (a e, pastr+#J )apa+aCgreen .*all *illets and produ"ts one+ )i" les g*#= (auliflo'er agi # produ"ts ea /eaf g* .au"e g*#. (a age ther "ereals (offee po'der g* Ba*, Aell+ g*

*+ rinAal (ereal su stiture tapio"a, Aa" fruit,et" ther pro"essed food

*# /ad+ s finger @rhar, tur

** )ala > other leaf+$egeta les ;ra*, split

*4 &ren"h eans ;ra*, 'hole*2 o*ato !oong*: )eas !asur */ (hillies, green Frd*J (apsi"u* )eas*= )laintain green .o+ ean*. Ba" fruit green :hesari4+ /e*on no ther peas4# ther $egeta les ;ra* produ"ts4* anana esan44 Ba" fruit green ther pulse produ"ts42 =ater*elon (o"onut "opra4: )ineapple o ;roundnut4/ (o"onut no ates4J ;ua$a (ashe'nut4= .ingara =alnut

4. range, *ausa*ino ther nuts

2+ )apa+aCgreen aisin, is*is, *ona""a,et"2# !ango ther dr+ fruits2* :har ooDa .alt24 )ears, naspati ur*eri" g*22 erries la" pepper g*2: /ee"hi r+ "hillies g*2/ @pple a*arind g*2J ;rapes ilseeds g*2= ther f resh fruits ther spi"es g*

2. ;arli" g* i"e

:+ ;inger g*

:#(o"onut green

no

*.


30/30

Appendi3 *8 evera&es and ot!er processed foods in total food e3penditures, Urban India, #...;*+++,*++2;+: (in 6upees)

#o$$odit% 7ear'xpenditure &roup

1 2 4 5 * + 10 11 12 ,v&

evera&esand ot erprocessedproducts

2004-05

12 5 1* 4 21 4 2* 40 4 + 42 40 50 42 0 1 * 2 111 4 14 2 2*4 5 1

(* 14) (* 5+) (+ 15) (+ ) (10 02) (11 04) (11 1)(12 *4

) (14 1) (1* 4 ) (1 5 ) (2* 40) (14 1)

1-

2000

10 0+ 14 11 1+ 22 +* 2+ 0 2 +0 40 + 4 11 1 4 121 5 21 ** 5 1

( 12) ( +1) (* * ) (+ 24) ( 0 ) ( 41) (10 4+)(11 2+

) (1 2) (15 *) (1* 42) (2 0+) (1 00)

Total oodexpenditure

2004-05 1+1

2 04 2 2 +1 05 + 45 1 + +* 42 25 4*2 1* 544 ++ 5 * 1+ 1001 5 445

1-

20001 4 20+ 240 2 2** 5 0+ * 4+ 5 ++ 21 4 5 20 4 + 10 5+ +4 *2 2 40 40+ 4

ote: .i$ure% in /arenthe%e% are /er cent to the total Source : SS 55th and 1%t ound

,ppendix : #oo ed $eals in evera&es and ot er processed ood! "rban India! 1 -2000!2004-05

(in 6upees)

7ear'xpenditure &roup

1 2 4 5 * + 10 11 12 ,v&

2004-05

0 + 1 *2 1 1 1 ++ 4 5 2 * 12 02 1 45 2 42 4* 115 15

( 4) ( +) ( 1) ( ) (10 0) (1 ) (14 1) (15 0) (20 *) (2 *) (2+ 4) (42 2) (2 5)

1 -2000

0 55 1 12 1 ++ 2 44 1 *2 5 54 * 0 1 4 24 41 4 50 * 4 11 +5

(5 4) (* ) (10 1) (10 *) (11 1) (11 ) (1 ) (14 ) (20 ) (2 *) (2+ 4) ( 5 ) (22 )

ote: .i$ure% in /arenthe%e% are /er cent to the total Source: SS 55th and 1%t ound

Appendi3 28 $!e specific cases appearin& to be outliers in t!e :: t! Round data NSS

Documents

Michel Mor is Set