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S.No.	Topic	Notes Link
1.	Food processing and related industries in India	Read Now
2.	Benefits of Food Processing	Read Now
3.	Major areas	Read Now
4.	Global Food Processing Industry	Read Now
5.	Indian Food Processing Industry	Read Now
6.	India has the following advantages in the food processing Sector	Read Now
7.	Key growth drivers of food processing sector in india	Read Now
8.	Scope and significance	Read Now
9.	Location of food processing industry	Read Now
10.	Supply Chain Management	Read Now
11.	From “Farm to fork”	Read Now
12.	Elements of the supply chain	Read Now
13.	Upstream and Downstream Requirements	Read Now
14.	The vision 2015 of the Government of India	Read Now
15.	Food Processing in India – Constraints and Strategies	Read Now
16.	FOOD STANDARDS - Bureau of Indian Standards (BIS)	Read Now
17.	FOOD STANDARDS - AGMARK	Read Now
18.	FOOD STANDARDS - CODEX	Read Now
19.	National Mission on Food Processing (NMFP)	Read Now
20.	Government Schemes/ Policies for development of Food Processing Industry Scheme / Policies related to Infrastructure	Read Now
21.	Scheme / policies related to Quality Control & Testing laboratories	Read Now
22.	Schemes / Policies related to Research & Development	Read Now

Food Processing

It is a technique of manufacturing and preserving food substances in an effective manner with a view to enhance their shelf life; improve quality as well as make them functionally more useful. It covers spectrum of products from sub-sectors comprising agriculture, horticulture, plantation, animal husbandry and fisheries. According to Food and Agriculture Organization (FAO), processed foods can be classified into three types
1. primary
2. Secondary and
3. Tertiary.
The primary processing includes basic cleaning, grading and packaging as in case of Fruits and vegetables. Secondary processing includes alternation of the basic product to a stage just before the final preparation as in case of milling of paddy to rice. Tertiary processing leads to a high value – added ready – to eat food like bakery products, instant foods, health drinks, etc.
Modern food processing has three major aims:

1. The make food safe (microbiologically, chemically).
2. To provide products of the highest quality (flavor, color , texture).
3. To make food into form that are convenient (ease of use).

Benefits of Food Processing

• Convert raw food and other farm produce into edible, usable and palatable form
• Help to store perishable and semi- perishable agricultural commodities , avoid glut in the market , check post harvest losses and make the product available during off – season.
• Generates employment
• Development of ready –to – consume products, hence saves time for cooking
• Help in improving palatability and quality of the product by value addition
• Help in easing marketing and distribution tasks
• Increases seasonal availability of many foods.
• Enables transportation of delicate perishable foods across long distances
• makes food safe for consumption by checking of pathogenic microorganisms
• Provides potential for export to fetch foreign exchange
• Help in Toxin removal
• Modern food processing also improves the quality of life for people with allergies, diabetics, and other people who cannot consume some common food elements.
• Food processing can also add extra nutrients such as vitamins.
• The significant benefits for different stakeholders involved in food processing are :
  1. Farmer – higher yield, better farm realization, lower risk
  2. Consumer – higher variety , lower prices, new products
  3. Companies – new business opportunities , demand growth
  4. Economy / Government – Employment generation, reduced rural migration

Major areas

The Sector comprises of the following major areas -

Segment	Products
Dairy	Pasteurized and packed milk, whole milk powder, skimmed milk powder, Condensed milk, Ice cream, Butter , Ghee and Cheese etc
Fruits and vegetable	Beverages , Juices, concentrates, Pulps, Slices, Frozen  and Dehydrated products, Potato Wafers/ Chips, etc.
Grains and Cereals	Flour, Bakeries, Starch , Glucose, Cornflakes, Malted Foods, Vermicelli , Beer, Grain based alcohol
Fisheries	Frozen  and canned products mainly in fresh form
Meat and Poultry	Frozen and packed – mainly fresh form
Consumer Foods	Snack food, Namkeens , Biscuits Ready to eat food, alcoholic and non – alcoholic beverage

Global Food Processing Industry

The Global Processed Food Industry is valued at US $ 3.2 trillion and account for over 3/4th of global food sales. Despite the large size of the industry , only 6% of the processed food is traded the world over as compared to bulk agricultural commodities where 16% of produce is traded . Growth of the sector has been the highest in developed economies, especially across Western Europe, North America, Japan and Australia. USA is the single largest consumer of processed food and accounts for 31% of global sales. The food processing sector has seen substantial Growth in developing economic with increase in GDP, per capita income and the resultant changes in lifestyle. Organized retailing and availability of better processing technologies too have contributed to the accelerated growth of the sector.

Indian Food Processing Industry

The Indian food processing industry stands at $135 billion and is estimated to grow with a CAGR of 10 per cent to reach $200 billion by 2015. The food processing industry employs around 13 million workers directly and about 35 Million indirectly.

India ranks No. One in the world in production of Milk (Fresh, whole, buffalo), Pulses, Ginger , Chick Peas, Bananas Guavas, Papaya and Mangoes. Further, India ranks No. 2 in the world in production of Rice, Wheat , potatoes , Garlic , Cashew Nuts, Groundnuts, Dry Onion, Green Peas, Pumpkins, Gourds, and cauliflowers. With the huge production base India can easily become the leading food supplier to the world and at the same time serving its vast growing domestic market with over a billion people.

Investments in the registered food processing units have been growing in the recent years. Food processing industry in India is increasingly seen as a potential source for driving rural economy as it brings synergy between industry and agriculture. A developed food processing industry is expected to lead increase in farm gate prices translating into increased rural incomes, reduce wastages, ensure value addition, promote crop diversification, generate employment opportunities as well as export earnings. With such a large and diversified production base coupled with low manpower cost and modern technology , the Indian food processing sector is poised for growth, if the advantages are leveraged optimally.
The growth is driven by the fact that the central government has given a priority status to all agro – processing businesses. Government incentives in the field of mega food parks, cold chain and exports benefits are also playing an important role in promoting food processing.

The major Challenges are investments at different points of the supply and value chain , proper research , farm and lab connectivity, upgradation of technology , increase in Farm holding , skill and manpower training , backend and front – end integration and cold chain integration.

India has the following advantages in the food processing Sector

• India is one of the largest food producers in the world.
• India has diverse agro – climatic conditions and has a large and diverse raw material base suitable for food processing companies.
• India is looking for investment in infrastructure, packaging and marketing.
• Well developed infrastructure and distribution network.
• Rapid urbanization, increased literacy, changing life style, increased number of women in workforce, rising per capita income leading to rapid growth and new opportunities in food and beverages sector.
• 50 per cent of household expenditure by Indians is on food items.
• Strategic geographic location ( proximity of India of markets in Europe and far East, South East and West Asia ).

Key growth drivers of food processing sector in india

• Increasing spending on health and nutritional foods.
• Increasing number of nuclear families and working women.
• Changing lifestyle
• Functional foods, fresh or processed foods.
• Organized retail and private label penetration
• Changing demographics and rising disposable incomes

Scope and significance

1. Vast source of raw material

• India is one of the largest producers of wheat and rice.
• Coconuts, cashew nuts, ginger, turmeric and black pepper is widely grown in some parts of the country.
• India is the second largest producer of groundnuts, fruits and vegetables. That it accounts for about 10 per cent of the world’s fruits production with the country topping in the production of mangoes and bananas.
• Due to the high processing levels milk products offer a significant opportunity in India. India is the world’s largest producer of milk owing to the strong business models formed through cooperative movements in the country.
• Milk and related products account for 17% of India's total expenditure on food. This segment enjoys liberal regulations as all milk products except malted foods are automatically allowed 51% foreign equity participation and all exports of dairy products are freely allowed.
• Alcoholic beverage have been categorised as the new high opportunity sector in India. Liquor manufactured in India is categorised as Indian Made Foreign Liquor (IMFL) . The sector is still barred from the import of potable alcohol as it is subject to government licensing. In the meanwhile , India has recently started producing wine for domestic consumption.
• Meat and poultry has also gained popularity due to the emergence of producers that have integrated breeding, feed milling, contract growing and marketing facilities for improved productivity. Meat, Fish, and poultry are in rural areas as they are easily affordable and provide necessary nutrients. India has the potential to be a leading global food supplier if it employs the right marketing strategies and creates an efficient supply chain.

2. Conventional farming to commercial farming

In recent years, there has been a shift form conventional farming of food grains to horticulture which include fruits, vegetables, ornamental crops, medicinal and aromatic plants, spices, plantation crops which include coconut, cashew nuts and cocoa and allied activities.

3. Market in the form of large urban middle class

With a huge population of 1.21 billion and population growth of about 1.6% per annum, India is a large and growing market for food products. Its 350 million strong Urban middle class with its changing food habits poses a huge market for agricultural products and processed food.

4. Low production cost

The relatively low – cost but skilled work force can be effectively utilised to set large, low – cost production bases for domestic and export markets.

5. Change in consumption patterns

Increasing incomes are always accompanied by a change in the food habits. Over the last three decades in India a shift. In food habits have been observed . The report observes that the proportionate expenditure on cereals, pulses, edible oil, sugar, salt and spices declines as households climb the expenditure classes in urban India while the opposite happens in the case of milk and milk products , meat , egg and fish, fruits and beverages.

6. Government Assistance

The Government has introduced several schemes to provide financial assistance for setting up and modernizing of food processing units, creation of infrastructure , support For research and development and human resource development in addition to other promotional measures to encourage the growth of the processed food sector.

7. Foreign Direct Investment

Foreign direct investment (FDI) in the country’s food sector is poised to hit the US$ 3- billion mark in coming years. FDI approvals in food processing have doubled in last one year alone.

8. Food parks

In an effort to boost the food sector, the Government is working on agri zones and the concept of mega food parks. Twenty such mega parks will come are proposed across the country in various cities to attract Foreign Direct Investment (FDI) in the food – processing sector.

9. Conducive food processing policy environment

The national policy on food processing aims at increasing the level of food processing from the present 2 per cent to 10 per cent by 2025 . The government has allowed 100 per cent FDI in processing sector.

Location of food processing industry

The following are some of the basic factors that must be considered in the establishment of a food processing business:

• Available raw materials – Primary food processing plants are generally located in areas of the production of the individual fruit or vegetable crop. Production applies sufficient yields to attract growers to produce a crop that meet specific quality standards. Adequate quantities of right type of horticultural produce from contract farming should be readily available in the locality, as horticultural Crops are highly perishable and deteriorate in long distance transport.
• Handling , storage and transportation facilities – There should exist proper handling , storage and transport facilities for the safe and easy movement of raw material and finished product.
• Adequate water supply - there should be continuous potable water and electricity supply . The water must be potable and low in mineral salts such as calcium, magnesium , sulphur and iron.
• Clean environment – The environment should be clean And free from debris, dust and disagreeable odours
• Sewage disposal facility – Wastes from fruit and vegetable processing facilities are high in organic matter, consequently the BOD is high and this must be lowered before discharging into the municipal systems. Proper waste disposal mechanism should be there to prevent environmental pollution.
• For frozen products, cold chain facility should be available.
• Adequate labour supply – Ample labour should be available at all times for efficient working of the plant
• Adequate markets – The processing industry should look beyond the borders of its own local area and think globally and it may require good transportation facilities. There should be scope for future orderly expansion of the factory.

Supply Chain Management

Supply chain management is the term given to the system and inter – connections of organisations, people , activities, technologies, information and resources involved in production and distribution of a food product.
It encompasses many different disciplines and logistical steps from sourcing the right raw material and ingredients through to on – time delivery to the consumer. The supply chain can be quite complex when dealing with food products.

From “Farm to fork”

These terms refers to the supply chain within the food industry in an easy to visualize way. Take a minute to imagine all of the people and organisation that might have been involved in getting and Producers – wheat farmers if you had toast or weetabix, dairy farmers if you had milk of yogurt and even banana growers

Elements of the supply chain

The stages of the supply chain are now briefly outlined below in a simplified form. It can be far more complicated in reality with many inter- dependencies and steps-

• Input production
• Procurement & Storage
• Primary Processing
• Secondary Processing
• Retailing

1. Food Ingredients and raw materials

The supply chain in the food industry starts with ingredients or raw materials. Selection of the appropriate raw materials is needed to achieve the desired end product. Suppliers and contracted to supply materials that meet the requirements outlined on the raw material specification sheet. There may be a number of concurrent supplies of the some ingredient To ensure availability is always guaranteed , especially for high volume businesses, such as in fast food restaurants.
A traceability system allows manufacturers to trace the source and path of each ingredient or raw material throughout the production process. This is very important if any incidences of contamination or allergens come to light after a product has been placed on the market. Having such safeguards in place can prevent or minimize any widespread risks to consumers.

2. Transport and storage

A product may be a key ingredient for another product and thus is transported to a manufacturing site elsewhere by road, rail, sea or air. This procedure can be repeated before it is finally sold as a finished product, which again requires transport to get it to the point of sale. Transportation of foods results in what it termed “food miles” and its economic and environment impacts are debated today.
Commodity products, such as grains, can be bulk or container shipped around the world in huge transporter ships. In bulk shipping the grain goes straight into the hold of the ship instead of being transported in containers on Board the ship. Some countries are major commodity exporters to other parts of the world, such as Australia and Canada for wheat export and pulses.
The storage , packaging and transport steps of the supply chain can involve many technologies, needed to maintain product quality. Chilled or frozen distribution “Cold chain” and modified atmosphere environments are used for many products.

3. Food Production

Ingredients are combined or transformed in some way during the manufacturing stage to produce the final food product. Production can be thought in terms of the input of raw materials that undergo a process of transformation to production an output , the product.

4. Safety in the supply chain

Safety is vitally important in food production. The result of a supply chain should be a product that should be safe to eat. Manufacturers are forced by law to make sure of this. Risk assessment and hazard analysis schemes are used in industry to assess potential problems before they arise.

Upstream and Downstream Requirements

1. Upstream

The upstream stage of the production process involves searching for and extracting raw materials. The upstream part of the production process does not do anything with the material itself, such as processing the material . This part of the processing the material . Thus, any indusry that relies on the extraction of raw materials commonly has an upstream stage in its production process. In a more general sense, “ upstream” can also refer to any part of the production process relating to the extraction stages. Requirement for food processing industry

• Linkage between the farmers and the processors
• Scientific storage facility
• Low cost pre – cooling facilities near farms,
• cold stores and grading, sorting , packing facilities to reduce wastage,
• Better quality and shelf life of products

2. Downstream

The downstream stage in the production process involves processing the materials collected during the upstream stage further includes the actual sale of that product to other businesses, governments or private individuals. The type of end user will vary depending on the finished product. Regardless of the industry involved, the downstream process has direct contact with customers through the finished product. Requirements for food processing industry

• Strong linkage between the processor and the market
• Establishment of marketing network
• Value addition to unprocessed categories of food

The vision 2015 of the Government of India for the food – processing sector aims at:

• Enhancing and stabilizing the income level of the farmers.
• Providing choice to consumers in terms of wide variety and taste including traditional ethnic food.
• Providing greater assurance in terms of safety and quality of food to consumers
• Promoting a dynamic food processing industry
• Enhancing the competitiveness of food processing industry in both domestic as well as international markets.
• Making the food processing sector processing infrastructure from farm to market
• Having a transparent and industry friendly regulatory regime
• Putting in place a transparent system of standards based on science .
• The following specific targets would be to increase:
  • The level of processing of perishables from 6% to 20%
  • Value addition from 20% to 35%
  • Share in global food trade from 1.5% to 3% , by the year 2015

Food Processing in India – Constraints and Strategies

a. Demand side constraints

1. Price of Processed Products:

in the developed countries processed food and fresh food prices are usually with in a reasonable comparative range. At times processed foods are even cheaper than fresh food. In India, affordability is the key issue. Price differential between fresh and processed food in India is very high relative to the convenience , hygiene and health value of the processed food. Low income Indians are very price sensitive since food accounts for over 50% of the family budget

2. Low customer awareness of the processed products:

Food habits are generally culturally driven , deeply ingrained in the psyche of people , therefore , quite difficult to change or influence in the short term. A visible change in food habits usually indicates much deeper changes at work in the society’s lifestyles, attitudes and aspirations.

3. Export Markets:

The issues in exports are quality conforming to international standards, continuous product innovation, brand and market building on global scale, ability to deal in volumes and consistency in supply. These require global scale of operations and deep pockets which Indian companies presently lack . Morever, exports are inextricably linked to the local production system, and cannot be sustained without systematic and qualitative expansion for the domestic industry and market . Further, domestic support and export subsidies provided in developed countries (estimated at about $ 400 billions) And occasional resort to non-tariff barriers have also retarded Indian exports. The developing countries have to face the Sanitary and Phyto Sanitary (SPS) measures adopted by the developed countries. These measures are increasingly used by the developed countries in agro and food products to impede trade.

b. Supply Side Constraints

1. Production Constraints:

A. Suitability of varieties:

linked with the issue of fostering relationship between processors and farmers is the possibilities of varietal relevance and productivity increases. Agriculture often suffers from varietal constraints. Oranges in Nagpur and Mangoes in Malihabad (UP) are instances where though there the gluts at harvest time processing has not taken off due to want of processable varieties. The solution lies in research and development of varieties suitable for processing by agricultural universities. Further, research is needed in development of technologies or processes where the existing varieties can be processes where the existing institutions like CFTRI and DFRL can play a major role.

B. Awareness of Quality at farm level:

High quality product can be produced only at farm level. Once the product is harvested even the best food processing technologies can only maintain or preserve the quality of the product. Indian agriculture system suffers with high cost and low quality of farm produce because of tiny and fragmented holdings, low technology, inferior agri – inputs, inappropriate variety , uncertain market, risk aversion and inefficient farm management . Increasingly , the world market is demanding for high quality traceable product which need information linkages at farm level.

C. Extension machinery:

The traditional extension machinery has not been able to deliver on varied demands and requirements of farmers. There has been a failure in connecting the lab with the land and product with the plate. Some states have fostered public – private relationships in this regard. Others have partnered with company led initiatives like e – choupal and the encouragement of contract farming , however the results are far from desired.

c. Post harvest and Supply chain constraints:

Post harvest Handling:

Various estimates put post harvest handling losses around Rs. 1 lakh crores, with fruits and vegetables accounting for over Rs. 50000 crores of losses. The losses In post harvest handling are both qualitative and quantitative in nature. Though the post harvest losses are primarily due to lack of infrastructure , the associated knowledge with respect to protocols in post harvest handling are also missing apart from development of infrastructure, post harvest handling, cleaning , grading , packaging and storage protocols need to be developed and promoted in a big way by the government.

b. Multiplicity in supply chain :

Indian food chain is very long and fragmented chain, in the process; there is mismatch between demand and supply , limited choice to the consumers, unacceptable wastage, poor hygiene, avoidable cost addition and opportunistic profiteering . The chain today leads up to aggregation at the mandi level and then segregation to the consumer. Certain time her number of intermediaries can be as high as 6 to 7.

c. Distribution and marketing chain :

Marketing and distribution , except by big companies , is largely unorganised and fragmented. Sales through large organized formats constitute 72% of food consumption across the world but its share is about 1% in India. About 5 million outlets are engaged in the retailing of food. While such outlets have the advantage of proximity to consumers, these are associated with low product quality , lack of variety and low hygiene and cannot provide shopping experience. Fragmented retail structure also results in inefficient storage , transportation and distribution, wastages and value loss.
Organized retailing reduces the number of intermediaries and transaction costs thus making products and services cheaper for consumer. It enables processors to test markets their products effectively. Current distribution structure is risk averse and hence inhibits stocking new products.

Infrastructure Constraints:

Post harvest infrastructure :

Acute need is most felt for post harvest infrastructure for Perishable products. Deficiencies exist for grading and packing besides pre – cooling at farm site which could feed a cold chain . The cold storage capacity today caters to less than 10% of the produce, this too is of rudimentary nature with over 80% designed to handle only potatoes. A paucity of chilling infrastructure for milk and a lack of modern abattoirs for the meat processing sector is seen. Fish processing more specifically for exports requires a major step up in infrastructure availability.

b. Logistics:

Inspite of the importance of logistics and its Size (INR 4 trillion), logistics has traditionally not been accorded the attention it deserves as a separate sector in itself. The level of inefficiency in logistics activities in the country has been very high across all modes. For example, the cost of surface transportation in India is estimated at 7 cents per km against 3 cents per km in canada , 5.5 cents in Europe. Poorly developed roads add to the woes of high turn around time, high taxation, and low skilled manpower in the logistics sector. Further, availability of reefer trucks to provide continuous cold chain has been a constraint because of high operation costs, low capacity utilisation . Poor logistics infrastructure is affecting the industry by both adding cost and reducing value because of wastages.

c. Processing Infrastructure :

the small scale and unorganised sector which constitutes sector and where the bulk of employment lies, suffers from low efficiency due to the lack of access to credit, managerial knowledge , efficient tools and technology, marketing network etc. Technology , marketing network etc. Intense competitions from large scale players have also affected it Food Processing is characterized by a high degree of fragmentation and low capacity utilization. The single largest issue with the processing sector is the lack of scale in most units, which in turn is linked to absence of backward and forward linkages.

FOOD STANDARDS - Bureau of Indian Standards (BIS)

The Bureau of Indian Standards (BIS) is the national Standards Body of India working under the aegis of Ministry of Consumer Affairs , Food & Public Distribution, and Government of India. It is established by the Bureau of Indian Standards Act, 1986 which came into effect on 23 December 1986.
One of the major functions of the Bureau is the formulation, recognition and promotion of the Indian Standards. Product certifications are to be obtained voluntarily . For, some of the products like Milk powder, Milk – Cereal based weaning foods, Processed cereal based complementary foods for infants, sweetened condensed milk, packaged, infant milk substitutes, Drinking Water , etc., Certification is mandatory because these products are Concerned with health and safety.
International Organization for standardization (ISO)
As published ISO 22000 : 2005 . Food Safety Management systems - Requirement for any Organization in the Food Chain, with a view to provide framework for internationally harmonized requirements for systematically managing safety in food supply chains. Consequent to publication of ISO 22000 , BIS has adopted this International Standard as IS/ISO 22000: 2005 . This standard integrates the principles of Hazard Analysis and Critical Control Point (HACCP) System developed by Codex Alimentarius Commission and combines the HACCP plan with Prerequisite Programmes (PRPs) and is fully compatible with Quality Management Systems (QMS) as per ISO 9001 : 2000. BIS has launched Food Safety Management Systems (FSMS) Certification IS/ISO 22000 : 2005 scheme which envisages grant of FSMS Certification license to organizations according to IS/ISO 22000.

FOOD STANDARDS - AGMARK

The word Agmark is derived from Agricultural Marketing. The Agmark standard was set up by the Directorate of Marketing & Inspection (DMI), ministry of Agriculture , Government of India by introducing an agricultural produce Act in 1937 . The word Agmark seal ensures about quality and purity of the food Products. The quality of the product is determined with reference to the size, variety, weight, colour, moisture, fat content and other factors are taken in to account. It covers quality assurances of unprocessed. Semi processed and processed agricultural commodities. It lays down the specifications for various adulteration prone commodities viz. Butter, ghee, vegetable oil, ground spices, Honey , Wheat etc.

FOOD STANDARDS - CODEX

Codex Alimentarius Commission is an international body constituted by Food and Agriculture Organisation (FAO) and World Health Organisation (WHO) of the United Nations with an objective to protect health of consumers and to ensure fair practices of consumers and to ensure fair practices in the food trade. Codex prescribes international Standards for safety and quality of food as well as codes of good manufacturing practices, guidelines to protect health Of the customers. These standards, guidelines and recommendations are recognized worldwide for international trade and negotiations and also for setting of disputes by WTO. There are Codex standards for fruits and vegetables, meat and poultry products, pulses and cereals.

National Mission on Food Processing (NMFP)

Ministry of Food Processing Industries (MFPI) has launched a new Centrally Sponsored Scheme (CSS) – National Mission on food Processing (NMFP) during 12th plan (2012 -13) for implementation through States /Uts. The basic Objective of NMFP is decentralization of implementation of Ministry’s schemes, which will lead to substantial participation of state Governments / Uts. The NMFP contemplates establishment of a National mission as well as corresponding Missions in the State and District level. NMFP is likely improve significantly the Ministry’s outreach in terms of planning , supervision and monitoring of various schemes.
objectives.

1. To augment the capacity of food processors working to upscale their operations through capital infusion, Technology transfer, skill Upgradation and hand holding support.
2. To support established self help groups working in food processing sector to facilitate them to achieve SME status.
3. Capacity development and skill upgradation through institutional training to ensure sustainable employment opportunities to the people and also to reduce the gap in requirement and availability of skilled manpower in food processing sector.
4. To raise the standards of food safety and hygiene to the globally accepted norms.
5. To facilitate food processing industries to adopt HACCP and ISO certification norms To augment farm gate infrastructure, supply chain logistic , storage and processing capacity.
6. To provide better support system to organized food processing sector.

Government Schemes/ Policies for development of Food Processing Industry
Scheme / Policies related to Infrastructure

1. Mega Food Parks Scheme (MFPS) – MoFPI

The primary objective of the MFPS is to provide excellent infrastructure facilities for food processing along the value chain form farm to market. It includes creation of infrastructure near the farm, transportation , logistics and central processing centre. The salient Features of the scheme are:

• The scheme aims of facilitate the establishment of a strong food processing industry backed by an efficient supply chain, which would include collection centers, and cold chain infrastructure.
• The food processing units , under the scheme , would be located at a Central Processing Centre (CPC) with need based common infrastructure required for processing, packaging, environmental protection systems, quality control labs, trade facilitation centers, etc.
• It is expected that on an average each project will have around 30-35 food processing units with a collective investment of Rs 250 crores that would eventually lead to annual turnover of about Rs 450 – 500 crore and creation of direct and indirect employment to the extent of about 30,000.

2. Scheme for cold chain , Value Addition and Preservation Infrastructure – MoFPI:

Salient features of the scheme are:

• To provide integrated and complete cold chain and preservation infrastructure facilities without and break , from the farm gate to the consumer.
• Pre cooling facilities at production sites, reefer vans and mobile cooling units also need to be assisted under the integrated cold chain projects.
• Integrated cold chain and preservation infrastructure can be set up by individual or by groups of enterpreneurs withBusiness interest in cold chain solutions and also by those who manage supply chain.
• Financial assistance (grant – in – aid ) of 50% of the total cost of plant and machinery and technical civil works in general areas and 75% for NE region and difficult areas (North East including Sikkim and J&k , Himachal Pradesh and UttaraKhand) subject to maximum of Rs. 10 crore.

3. Capital Investment subsidy for construction / Expansion / Modernization of cold storages/ Storages of Horticulture Product – National Horticulture Board (NHB)

Salient features of the scheme are:

• To promote setting up cold storages/ other storages in the country for reducing post harvest losses.
• Creation of 12 lakh tonnes and modernization / rehabilitation of 8 lakh tonnes of fruits and vegetable and addition of 4.5 lakh tonnes onion storages.
• 50% term loan by banks at PLR + 1% through NABARD refinance . NABARD would provide refinance to Commercial Banks/ RRBs/ ADFCs/ SCBs / SCARDBs @ 90% to the amount financed by the banks for which the interest will be charged to financing banks at 8.5% p.a. (however, quantum of refinance is 95% in the case of SCARDBs in North – Eastern Region and Sikkim);
• 25% back – ended capital investment subsidy by NHB; the cost of 5000 MT capacity for new cold storage and expansion of existing capacity would not exceed to Rs. 2.00 crore. Subsidy @ 25% would not exceed Rs. 50.00 lakh per project , including CA/MA stores and projects of higher capacity.

4. Scheme For Development / Strengthening of agriculture Marketing infrastructure grading and standardization – ministry of agriculture :

salient features of the scheme are :

• To provide additional agricultural marketing infrastructure to cope up with the large expected marketable surpluses of agricultural and allied commodities including dairy, poultry, fishery , livestock and minor forest produce.
• To promote competitive alternative agricultural marketing infrastructure by inducement of private and cooperative sector investments that sustain incentives for quality and enhanced productivity thereby improving farmers income.
• To strengthen existing agriculture marketing infrastructure of enhance efficiency.
• To provide infrastructure facilities for grading, standardization and quality certification of agricultural produce so as to ensure price to the farmers commensurate with the quality of the produce.
• Investment subsidy ; 25% of the capital cost up to Rs. 50 lakh in each project providing Direct service delivery to producers / farming community in post harvest management / marketing of their produce. However, the enterpreneurs may also have an opportunity to use the Infrastructure for their own purpose during the lean period.

5. Scheme for setting up of Agri clinic and Agribusiness centers - NABARD : Salient features of the scheme are:

• Agri clinics and Agri business centers will provide input facilities, consultancy and other services to strengthen agriculture practice.
• They will strengthen transfer of technology and extension services and also provide self employment opportunities to technically trained persons.
• MANAGE (National Institute of agriculture Extension Management) is the nodal agency for imparting training under the scheme. List of trained graduates is sent to various banks in the region for financial assistance.
• Margin Money / collateral requirement has been waived for loans up to rs. 5 lakhs.
• Refinance support under ARF is being allowed. Shortfall in margin money/ down payment by the borrower can be supported out of soft loan margin money assistance fund of NABARD subject to a maximum of 50% of margine Prescribed by banks. Such soft loan assistance for margin money from NABARD to banks would be without interest , but the banks may levy service charge which is 2% p.a.

6. Scheme for Infrastructure Development APEDA

This scheme extends support for creation of transport facility ,mechanization of harvest, operation setting up of sheds for storage / grading cleaning operation, precooling and handling systems and setting up of integrated post handling systems.

Scheme / policies related to Quality Control & Testing laboratories

1. Implementation of HACCP / ISO 22000 , ISO 14000 / GHP / GMP Quality/ Safety Management System – Mo FPI:

Salient features of the scheme are :

• To Motivate the food processing industries for adoption of food safety and quality assurance mechanisms such as TQM including ISO14000 , ISO 22000 , HACCP, GMP , GHP.
• To prepare them to face global competition in post WTO regime.
• To enable adherence to stringent quality and hygiene norms.
• To enhance product acceptance by overseas buyers.
• To keep Indian industry technologically abreast of international best practices.
• All Implementing units will be eligible for reimbursement of 50% of cost of consultant fee, fee charged by certification Agency , plant and machinery , technical civil works, and other expenditure towards implementation of Total Quality Management System including ISO 14000 , ISO 22000 , HACCP, GMP and GHP in general areas subject to maximum limit of Rs. 15 lakh and 75% in difficult areas subject to a maximum of Rs. 20 lakh.

2. Scheme for Quality Development – APEDA :

Salient feature of the scheme are :

• Assistance for setting up / strengthening laboratories, 25% of the cost.
• Assistance of installing quality management, quality assurance and quality control systems , 50% of the cost subject to a ceiling of Rs. 5 lakh per beneficiary.
• Testing of water, fruits and vegetables, processed fruits and vegetables, other processed foods, 50% of the total cost subject to a ceiling of Rs 5000 /- per sample .

3. Setting up / up gradation of Food Testing laboratories - Mo FPI :

Salient features of the scheme are :

• To establish a surveillance system for monitoring the quality and composition of food.
• To analyse the samples received from food processing industries, and other stakeholders.
• To reduce the time of analysis of samples by reducing transportation time of samples.
• To ensure compliance of International standards on food in case of exports and imports.
• Central / State Government and its organizations/ Universities will be eligible for grant – in – aid of entire cost Of laboratory equipments required for labs. In addition, they would also be eligible for 25% of the cost of technical civil works to house the equipments and furniture and the fixtures associated with the equipments for general areas and 33 % for difficult areas.
• other implementing agencies/ private sector organisations will be eligible for grant – in – aid of 50% of cost of laboratory equipments and 25% of the cost of technical civil works to house the equipments and furniture and fixtures associated with the equipments of general areas and 70% of cost of lab equipment and 33% of technical civil works for difficult areas.
• The food testing facilities so created will be accessible to public and will be made available to the food processing units for testing their products in and around the area at specified rates.

Schemes / Policies related to Research & Development

1. Research & Development (R&D) – MFPI :

Salient features of the scheme are :

• objective of the scheme is that and product / outcome / finding of R&D work to benefit Food Processing Industries in terms of product and process development, improved packaging, value addition and leading to innovative products and processes , with commercial value .
• For The Government organization, grant to the tune of 100% of equipment cost plus cost of consumables and expenditure related to JRF / SRF , specific to the project of specified duration for maximum two years. No assistance will be provided for already existing equipments.
• For private organizations , grant to the tune of 50% of equipment cost in general areas and 70% in the difficult areas.
• 100% Grant will be provided for the Ministry’s sponsored projects, restricted only to public funded organizations of repute, in cases of cutting edge areas of research leading to development of innovative products, processes and manufacturing practices.