Presented by:

Shiva Naga Raju(10034)

Sruthi(10036)

Manogna(10035)

contents

Introduction

Food processing is the transformation of raw ingredients into food, or of food into other forms.

The food processing industry in India is a sunrise sector serves as a vital link between the agriculture and industrial

segments of the economy Objective:

Preserving food substances in an effective manner, improve quality as well as make them functionally more useful.

To produce attractive, marketable and often long shelf-life food products.

Constraints of growth:

Growing urbanization. increasing disposable income. emergence of organised food retail. changing lifestyles and food consumption patterns.

Segments in food processing industry: meat poultry and sea food. Milk and allied products. Fruits and vegetables. Grain pulses and oil seads. Packaged food. Beverages. Bakery and confectionary.

Segment wise attractiveness:

fruits and vegetables sector in India: attractive market size and growth. India is a significant producer of fruits in the world. contributes to 10 per cent of global production. healthy growth rate of 20 per cent per annum. It is however weak, with penetration level of about 10 per cent. These factors indicate the high growth potential in the sector. highly unorganized at 48 per cent share, indicating the scope for

organised players to make an impact.

Meat, Poultry and Fisheries Segment another high potential area that has the advantage of several

favorable factor conditions. In terms of raw material, India has the best supply of livestock in

the world, accounting for 50 per cent of buffaloes and 16 per cent of the goat population.

India also ranks third in the world in production of fisheries. There is a large potential for setting up modern slaughter

facilities and development of cold chains in meat and poultry processing sector. In the fisheries segment also,

India’s long coastline and network of inland waterways and lakes, offers plentiful availability of different types of fishes.

Fishery resources in India are seriously under-utilised.

Dairy and bakery: India is the world’s largest milk producer and dairy is the

one of the most promising segments of food processing. Healthy growth rate of 15 to 20 per cent over the next

five years. At the same time the share of organised players is still

small, at 15 per cent, indicating the potential for growth for organised players.

Bakery products is a related segment that has also been growing strongly, at about 7.5 per cent.

The segment is still highly fragmented, though organised players have nearly 55 per cent share of output.

Product wise statistics:

2008-9 2009-10 2010-11 2011-12 2012-13100

105

110

115

120

125

130

135

2008-09….1142009-10….1222010-11….1242011-12….1312012-13….133

milk in (million tons)

Source: Department of Animal Husbandry, Dairying & Fisheries.

Production Statistics of Raw Material for Food Processing Industries: Fruits & Vegetables (In 000' MT)  

2008-9 2009-10 2010-11 2011-12 2012-130

20000

40000

60000

80000

100000

120000

140000

160000

180000

Chart Title

vegetables fruits

Source: National Horticulture Board

 Meat Producton in India (Million Tonnes)  

2008-9 2009-10 2010-11 2011-12 2012-130

1

2

3

4

5

6

7

Chart Title

Source: Department of Animal Husbandry, Dairying & Fisheries.

Egg Producton in India (Billion Numbers)

2008-9 2009-10 2010-11 2011-12 2012-130

10

20

30

40

50

60

70

80

Chart Title

egg

Source: Department of Animal Husbandry, Dairying & Fisheries

Types of food processing:

Primary processing

of food

Secondary Processing

of Food

Tertiary Processing of

Food (or) Value Added

Food Segment

Industry dominant economic traits:

Market size: stood around Rs 247,680 crore (US$ 39.03 billion) in 2013

Growth rate shown: 6.3% Expected turnover by 2018: Rs 408,040 crore (US$ 64.31

billion). Expected growth rate by 2018: 11% Number of sellers: Selr  concetraion  refrs  to  the  number  and  size  distrbution 

of irms competing withna market very high

Role of government:

 Ministry of Food Processing Industries (MOFPI)

The Ministry of Food Processing Industries (MOFPI) is a ministry of the Government of India responsible for formulation and administration of the rules and regulations and laws relating to food processing in India  The ministry was set up in the year 1988 It is set up with a view to develop a strong and vibrant food

processing industry, to create increased employment in rural sector and enable farmers to reap the benefits of modern technology and to create a surplus for exports and stimulating demand for processed food.

The ministry is currently headed by Harsimrat Kaur Badal, a Cabinet Minister

Goals of MOFPI:

Better utilization and value addition of agricultural produce for enhancement of income of farmers.

Minimizing wastage at all stages in the food processing chain by the development of infrastructure for storage, transportation and processing of agro-food produce.

Induction of modern technology into the food processing industries from both domestic and external sources.

Maximum utilization of agricultural residues and by-products of the primary agricultural produce as also of the processed industry.

To encourage R&D in food processing for product and process development and improved packaging.

To provide policy support, promotional initiatives and physical facilities to promote value added exports

Roles of MOFPI:

The strategic role and functions of the Ministry fall under three categories - Policy support developmental & promotional Technical & advisory Regulatory.

Policy support:

Formulation and implementation of policies for food processing industries within overall national priorities and objectives.

Facilitating the creation of a conducive policy environment for healthy growth of the food-processing sector.

Promoting rationalization of tariffs and duties relating to food processing sector.

Developmental:

Assistance under various plan schemes

Widening the R&D base in food processing by involvement of various R&D institutes and support to various R&D activities relating to development of product, process and packaging with special emphasis on traditional technologies.

Human resource development both for entrepreneurs as well as workers engaged in the food processing industry by up gradation of their skills.

Assistance for setting up analytical and testing laboratories, active participation in the laying down of food standards as well as their harmonization with international standards.

Promotional:

Assistance for organization of workshops, seminars, exhibitions and fairs etc.

Assistance for studies / surveys etc.

Publications and films.

Regulatory:

Earlier the regulatory responsibilities of MOFPI were to implement Fruit Products Order (FPO), However by the enactment of Food Safety and Standards Act, 2006, these regulatory responsibilities are transferred to Food Safety Authority of India, New Delhi which is under control of Ministry of Health and Family Welfare.

Functions of MOFPI:

Better utilization and value addition of agricultural produce for enhancement of income of farmers

Minimizing wastage at all stages in the food processing chain by the development of infrastructure for storage, transportation and processing of agro-food produce;

Induction of modern technology into the food processing industries from both domestic and external sources;

Encourage R&D in food processing for product and process development and improved packaging;

Schemes by government:

Mega food parks Cold chains Modernization of abattoirs R&D, QA, CODEX and promotional activities National mission on food processing

Mega food parks:

Cold chain operational model:

Persons employed in Registered FP units

2008-9 2009-10 2010-11 2011-12 2012-1313.5

14

14.5

15

15.5

16

16.5

17

17.5

18

persons

Segment wise government incentives and initiatives:

Fruits and Vegetables Segment:

• Foreign equity participation up to 51 per cent allowed.

Initiatives like post-harvest management, logistics given

priority in attracting FDI

• Complete exemption from excise duty

• Income tax rebate of nearly 100 per cent of profits for new

industries in fruits and vegetables sector

• Many fruits and vegetables processing industries eligible

for automatic approval of technology upgradation

Meat, Poultry and Fisheries Segment:

The Government has also taken up several initiatives to encourage investment and growth in this segment. These include:

• Foreign Equity participation allowed in the fisheries sector subject to approval. Foreign investment proposals on nearly US$ 210 million have been approved in the sector

• Financial assistance given for setting up of processing infrastructure like IQF plants, refrigerating transport equipment, freezing plants

• Excise duty on meat poultry and fisheries reduced from 16 per cent to 8 per cent

Mass Market Value-Added Products- Dairy, Bakery: Foreign equity participation permitted to the extent of 51 per

cent in dairy processing sector De-reservation of many segments like ice-cream and ghee from

small-scale industries Excise duty of 16 per cent on dairy processing machinery fully

waived for promotion of dairy processing Subsequent to decanalisation, exports of some milk based

products are freely allowed provided these units comply with the compulsory inspection requirements of concerned agencies like the National Dairy Development Board, Export Inspection Council, etc

Niche Market Foods - Snack Foods, Ready-to-Make Foods, Packaged Foods:

The Government has been supporting this segment through policy initiatives such as:

• Automatic approval of foreign equity participation up to 51 per cent

• Income tax rebate of 100 per cent of profit for five years and 25 per cent of profits for the next year for packaging of foods

Backward Integration - EmergingBusiness Model

Traditionally, different players across the value chain played the different roles and worked more or less independently

Recently, the trend has been towards increasing integration and collaboration across players in the value chain, to garner mutual benefits

establish linkages with both raw material producers (farmers) and aggregators/logistics providers.

These links have led to two new models emerging in the sector

Contract Farming and Terminal Markets

Contract farming: agreement between the food processor (contractor),

who is typically a large organized player the farmer is contracted to plant the contractor’s crop

on his land.. The food processor provides inputs in terms of

technology and training to the farmer, to improve the yield and quality of the produce.

This results in a win-win situation that generates a steady source of income for the farmer and eliminates supply shocks and assures good quality farm inputs which are crucial for the processor.

A Terminal market is a central site, that serves as an assembly and trading place for agricultural commodities.

offers different options to farmers under a single roof. terminal markets operate on a hub and spoke model the markets form the hubs, and are linked to different

collection centres (spokes) that are located close to the production centres.