Food Processing Unit Problems

7/31/2019 Food Processing Unit Problems

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PROBLEMS FACED BY

FOOD PROCESSINGUNIT

Presented by:-

Avie BrarL-2k10-BS-02-MBA(AB)


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INTRODUCTION

India is the worlds second largest producer of food next toChina, and has the potential of being the biggest with thefood and agricultural sector.

The food processing industry is one of the largest industries

in India-it is ranked fifth in terms of production,consumption, export and expected growth.

Termed as a perfect ingredient for any industry -largedisposable.

The proportionate expenditure on cereals, pulses, edible

oil, sugar, salt and spices declines as households climb theexpenditure classes in urban India while the oppositehappens in the case of milk and milk products, meat, eggand fish, fruits and beverages.


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Food processing is a large sector that covers activities such asagriculture, horticulture, plantation, animal husbandry andfisheries. It also includes other industries that use agricultureinputs for manufacturing of edible products.

The Ministry of Food Processing, Government of Indiaindicates the following segments within the Food Processingindustry:

i. Dairy, fruits & vegetable processing

ii. Grain processing

iii. Meat & poultry processing

iv. Fisheries

v. Consumer foods including packaged foods, beverages andpackaged drinking water.


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An overview of Indian Agriculture(Production side)

Comparative advantages:

Second largest arable land in the world

Diverse agro-climatic zones across the country,

Round the year sunshine

Potential to cultivate a vast range of agricultural productsLarge marketable surpluses and abundant raw material for processing

Vast pool of skilled manpower in research and extension

These advantages being leveraged, for India to be a leading food supplier to the world.


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India Indias Rank in

World ProductionArable Land (Million ha) 151 2

Irrigated Land (Million ha) 55 1

Wheat 72 2

Rice, Paddy 124 2Coarse grains (including maize) 29 3

Milk 91 1

Fruits 47 2

Vegetables 82 2Edible Oilseeds 25 3

Pulses 15 1

Sugarcane 245 2

Tea 0.85 1

Cattle (million) 186 2

Area and production of Agricultural products(Production in million tonnes)


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6

India is the front ranking producer of many perishablecommodities

India produces

41% ofworlds mango,

23% of Banana, 24 % of cashew nut,

10% of onion,

30% of cauliflower,

36% of Green Peas.

China : $195 bn; USA: $150 bn; India - $105 bn.

India has

53% of worlds buffa

and 17% of goat

And a 8000 km of coastline


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Agriculture scenario

Foodgrains production - 241 million tonnes(MT) in 2011 crop year,

Milk production in 2011- 121.7 million tonnes

Fish Production -7.8 million tonnes

Vegetable Production - 141.3 million tonnes

Fruit production - 75.7 million tonnes


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The major issues to be addressed are as under:

Large size of population is still dependent on agriculture

Lower growth in farmers income(1.5%) and higher growth in

expenditure (4-5%) Increasing indebtedness of farmers & suicidal rates

Value addition is only in 8% of total food production

Only 2.2% of the horticulture products are processed, while upto35% fruits & vegetables are spoiled.

Only few secondary agriculture industries exist and most of theagro-industries are unorganised.

Low Consumption of value added fruits & vegetables compared tofresh fruits and vegetables and the inclination towards processedfoods is mostly visible in urban centers.

f


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Existing Status of Processing inIndia


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Segmentation of different sectors in food processing industry:-


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India rising high on food demand curve

Evolution of global food demand

Africa(Sub- Saharan)

India , China,

Latin America

Eastern

Europe

Nortth America,Japan, WesternEurope, Australia

Surviving Mass

Market

Convenience

Food Service

Snacking

Quality

Hygiene

High Technolo

Diet /functional /

organic foods

Convenience

foods

Snacks /preparedmeals

Dairy, meat,fresh fruitsfruit juices,

beveragesCarbohydratestaples


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Levels of Value Addition

Level- 1 : Post Harvest level/ Primary Processing:Proper Cleaning, grading and Packaging particularly offruits and vegetables

Level-2 : Secondary processing (basic processing,packaging and branding) of post harvest producesparticularly of foodgrains (i.e. Atta. Suji, Besan, etc.) &milk produce.

Level- 3 : High- End Processing (Complex processingtechnologies, equipment finance and global innature).


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Present Scenario in Value Chain

Cost Build Up For One Kg. Basket Of Fruit

FARMER TRADER WHOLESALER RETAILER CONSUMEPRICE

3.34.1

1.72.5 11.6

Retail Markups

FARM GATE PRICES MILK FISH FRUITS &VEGETABLES

350

220160

100


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Though the industry is large in size, it is still at a nascent stage

in terms of development of the country's total agriculture and

food produce, only 2 per cent is processed. The industry size

has been estimated at US$ 70 billion by the Ministry of Food

Processing, Government of India. The food processing

industry contributed 6.3 per cent to Indias GDP in 2003 and

had a share of 6 per cent in total industrial production. The

industry employs 1.6 million workers directly.


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Value addition of food products is expected to increase from thecurrent 8 per cent to 35 per cent by the end of 2025. Fruit &

vegetable processing, which is currently around 2 per cent oftotal production will increase to 25 per cent by 2025.

The highest share of processed food is in the dairy sector, where

37 per cent of the total produce is processed, of this only 15per cent is processed by the organized sector. The foodprocessing industry in the country is on track to ensureprofitability in the coming decades. The sector is expected toattract phenomenal investments of about Rs 1,400 billion in

the next decade.


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PROBLEMS

Lack of suitable infrastructure in the shape of coldchain, packaging centres, value added centre,modernized abattoirs etc.

Partially liberalized overall policy regime, with

specific incentives for high priority food processingsector, provide a very unconducive environment forinvestments and exports in the sector

A very small percentage of raw material areprocessed into value added products.

Multiplicity of Food laws

In the dairy sector, most of the processing is done bythe unorganized sector.


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Lack of appropriate crossbreeds while conserving indigenous breeds oflivestock

Very less no. of livestock marketing system

Rural backyard poultry is not promoted in a cooperative marketingsetup

Undeveloped cooperative dairy firms

Lack of extension services

Very less no. of private veterinary clinic

There is no framework for utilizing synergy between restoration andcreation of water bodies for water harvesting and fishery

There is no provision of an insurance package to avoid distress


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Due to seasonality ,there is a non availability of raw material

in time

Deterioration of Post Harvesting

Very Less no of Domestic market esp. In rural Areas.

Poor quality standards are being practiced while procurement

of raw material which lead to rejection of order when it fails

to meet International standard.e.g. 3 exporters licenses fromAmritsar were cancelled by USA as the wheat they were

exporting were unhygienic.

Till recent times, food processing units are being neglected by

the Govt. of India

There are very less number of trained employees in food

processing units to carry out the operations


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Strengths and opportunities that

India enjoys It is the seventh largest country, with extensive administrative structure and

independent judiciary, a sound financial & infrastructural network and above all a

stable and thriving democracy

Due to its diverse agro-climatic conditions, it has a wide-ranging and large raw material

base suitable for food processing industries. Presently a very small percentage of these

are processed into value added products

It is one of the biggest emerging markets, with over 1 billion population and a 250

million strong middle class

Rapid urbanization, increased literacy and rising per capita income, have all caused

rapid growth and changes in demand patterns, leading to tremendous new

opportunities for exploiting the large latent market. An average Indian spends about 50per cent of household expenditure on food items


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Demand for processed/convenience food is constantly on the rise

India's comparatively cheaper workforce can be effectively utilized tosetup large low cost production bases for domestic and export markets

Liberalized overall policy regime, with specific incentives for high priorityfood processing sector, provide a very conducive environment forinvestments and exports in the sector

Very good investment opportunities exist in many areas of food processingindustries, the important ones being : fruit & vegetable processing, meat,fish & poultry processing, packaged, convenience food and drinks, milkproducts etc.


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SUGGESTIONS

- Linkage between Banking & Technology Providers may help in developingthe techno-economic project profiles, leading to bankable proposals forthe prospective entrepreneurs.

- SHGs may be assisted in making traditional foods as per standardized

norms, with proper training and financial back up. These groups may betrained at technology providing institutions and NABARD and FIs may beinvolved in this process.

Posting data on daily basis

Creating awareness on the information portal

Suggest user-friendly formats for data dissemination

Utilization of funds for market led extension


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Some major companies in Food

Processing are:- Dabur India Ltd

Gitz Food Products Pvt. Ltd

Godrej Industries Ltd

Haldiram Marketing Pvt. Ltd

Britannia Industries Ltd

Hindustan Unilever Limited (HUL)

Parle Agro Private Ltd

ITC Ltd.

Agro Tech Foods

PepsiCo IndiaPvt. Ltd Cadbury India Ltd

Nestle India Pvt. Ltd.


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Scope of Agro & Food Processing in PUNJAB State Processing and packing of edible oils

Fruit and vegetable processing, branding, packing and storage

e.g. Kinnow are being sorted and packed in boxes beforedelivery to urban market from Abohar

Cereals processing and micronutrient fortification

Spices processing for export.e.g turmeric are packed in plasticSachets after grinding into powder form.e.g GG foods,Rampura

Milk Processing e.g. true milk

Poultry Processing Egg powder units

Meat Processing

Processing of Medicinal and Aromatic crops

Processing of Organic Foods


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Documents

Food Processing Unit Problems