MINI PROJECT REPORT

Paper No. M- 209

“ VALUE ADDITION TO FOOD PROCESSING INDUSTRY ”

SUBMITTED BY: SUBMITTED TO:

Surbhi Bhandari Dr. Pragya Sharma

Roll No: 94 Asst. Prof

MBA SEMESTER II

S. S. JAIN SUBODH MANAGEMENT INSTITUTE

Jaipur, (Rajasthan)
2023-2024
 CERTIFICATE OF GUIDE

This is to state that Surbhi Bhandari, student of MBA, 2nd Semester (2023- 24) of S.S. Jain Subodh Management
Institute, Jaipur has completed and submitted the Mini- Project Report title Value addition to Food Processing
Industry under my guidance. The work presented by him/ her is his/her own to the best of my knowledge.

Signature:

Name of faculty: Dr. Pragya Sharma

Designation: Asst. Prof

Date: 11May2024

Place: Jaipur
 STUDENT’S DECLARATION

This is to declare that I Surbhi Bhandari student of MBA semester 2, (2023-24 batch) of S.S. Jain
Subodh Management Institute, have submitted the mini project report titled Value addition to Food
Processing Industry as part of the curriculum and syllabus of paper M-209. The information and
data presented in the report has been gathered from various sources by me and is my own work. I
have not submitted this report partially or fully to any other university or for any other course. Any
mistakes made in the report are mine alone and I take full responsibility for the same

Signature of student:

Name of Student: Surbhi Bhandari

Date: 11 May 2024

Place: Jaipur
 ACKNOWLEDGEMENT

I would like to express gratitude to my guide Dr. Pragya Sharma, who guided and supported me in my academic
endeavor. I would also like to thank the Director of Institute, Prof. (Dr.) Raju Agrawal who has given me the
opportunity to undertake this academic effort.

The Institute has always supported our research efforts. The well-stocked library, the excellent computer
laboratory and supportive management and faculty, helped me in carrying out my research and preparing the
report. In the course of my research I learnt a multitude of technical and report writing skills and developed a
deeper perspective of the topic selected for research. I am truly grateful for the learning.

Name: Surbhi Bhandari Roll no: 94

Date: 11 May 2024

 PREFACE

Food processing is mainly as a process of value addition to the agricultural or horticultural produce like
grading, sorting and packaging. In others words, it is a technique of manufacturing and preserving food
substance in an effective manners with a view to enhance their shelf lifer; improve quality as well as
make them functionally more useful. It covers spectrum of products from fisheries. Food processing
industry is one of the largest industry in India and is ranked 5th in terms of production , consumption
and export.

Earlier, food processing was largely confined to the food preservation, packing, and transportation,
which mainly involved salting, curdling, drying, etc. However, over the years, with emerging new
markets and technologies, the sector has widened its scope. It has started producing many new items
like ready to eat food, beverages, etc. it also includes establishment of post harvests, intrastructure for
processing of various food in terms like cold storage facilities, food parks, packaging centers, value
Added centers, irradiation facilities and modernized abattoir.
 INDEX

Sr. no. Topic Page no.

1 Chapter 1: Introduction 1-3
2 Chapter 2: 2.1 History of food processing 3-5

2.2 History of food laws

3 Chapter 3 : 3.1 Parts of the food 5-16
industry in India
3.2 Scope and significance
3.3 Food processing industry in
India
3.4 Food industry current trends
3.5 Investment prospects for food
processing in India
4 Chapter 4: 4.1 Processing Technologies 16-23
4.2 Preservations Technologies
4.3 Packaging Technologies
4.4 Automation and Robotics Technologies
4.5 Emerging Technologies
4.6 Corporate Data Analysis

5 Chapter 5 : 5.1 Challenges faced by the 23-26

Industry
5.2 Pollution from food processing
Factories
5.3 Obstacles in the growth of food
processing industries
6 Chapter 6 : 6.1 FDI in food processing 27-35
6.2 Supply chain management
6.3 Major schemes by Government
include
6.4 Effects of pandemic on food
supply chain
6.5 Effects of pandemic on consumer
behavior
6.6 Suggestions for government and
business

7 Chapter 7 : Conclusion 35-36

8 References 36-38
 Chapter 1

INTRODUCTION

Food processing sector is indispensable for the overall development of an economy as it provides a vital
linkage and synergy between the agriculture and industry.

Food processing industries are major industries in developed countries. In developing countries, it is in
growing stage. The food processing industries include cereals, pulses, oilseeds, bakery, horticultural
crops, livestock and aqua cultural produce etc. Now food is a global commodity and hence its processing
industries will play important role in economy of any country. The food processing in India is mainly
done by unorganized sectors.
Food industry is expected to be worth $ 10 trillion by 2028 and most of this growth will come from
developing world. The direct impact of the sub sector on growth and indirect stimulus to other type of
economic activity carry important implications for employment, exports, food security and living
standards
On an average, agro-industries accounts for about 2% of GDP in developing countries but 9% in
developed countries. The value of agro-processing is about three to four times that of agriculture in
developed world, while it is typically a fraction of the value of agriculture in developing world.

Through the presence of such industries, a wider range of food products could be sold and distributed
to the distant locations.

The term 'food processing' is mainly defined as a process of value addition to the agricultural or
horticultural produce by various methods like grading, sorting and packaging. In other words, 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. Earlier, food processing was largely confined to the food preservation,
packaging and transportation, which mainly involved salting, curdling, drying, pickling, etc. However,
over the years, with emerging new markets and technologies, the sector has widened its scope. It has
started producing many new items like ready to eat food, beverages, processed and frozen fruit and
vegetable products, marine and meat products, etc. It also includes

1
establishment of post harvest infrastructure for processing of various food in terms like cold storage
facilities, food parks, packaging centers, value added centers, irradiation facilities and modernized
abattoir.
The food processing sector comprises of two segments

Primary processed food and Value added food.

Primary segment comprises of packaged fruit and vegetables, milk, flour, rice, spices etc and constitutes
around 62% in value terms of the processed foods. Value added segment includes processed fruits and
vegetables, juices, jam & jelly etc and holds around 38 % share in the total processed food.

In an emerging country like India, where growth with equity is a primary policy thrust, the optimum
development of the food processing sector will contribute significantly in tackling several
developmental concerns such as disguised unemployment in agriculture, rural poverty, food security,
food inflation, improved nutrition, prevention of wastage of food etc. By serving as a bridge between
agriculture and manufacturing and by dealing with a basic need of all Indian citizens the assured supply
of healthy and affordable food at all locations in the country, this sector has the potential to be a major
driver in India‘s growth in the coming years. In fact the food processing sector has been growing faster
than the agriculture sector .The food processing industry includes a diverse group of companies involved
in the processing of products like fish, meat, milk, crops and water. It includes millions of Small &
Medium Enterprises (SMEs) worldwide and also some of the largest companies in the world. Many of
these companies deliver products directly to consumers, while others specialize in Business to-Business
activities (ingredients, commodity markets). Some companies directly participate in all areas of food
production, from farming activities through to final production and retail. Others are concentrated more
at the top end of the production chain or buy through commodity markets. In fact, Food processing is
one of the world‘s largest industries from the perspective of the number of companies involved in the
sector, as well as in terms of its total economic value .
The sector comprises of the following major areas

• Fruits & Vegetables

Beverages, Juices, Concentrates, Pulps, Slices, Frozen & Dehydrated products,

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Wine Potato Wafers/Chips etc.

• Fisheries

Frozen & Canned products mainly in fresh form

• Meat & Poultry

Frozen and packed mainly in fresh form, Egg Powder

• Milk & Dairy

Whole Milk Powder, Skimmed milk powder, Condensed milk, Ice cream, Butter
and Ghee

• Grain and Cereals

Flour, Bakeries, Biscuits, Starch Glucose, Cornflakes, Malted Foods, Vermicelli,

Pasta Foods, Beer and Malt extracts, Grain based Alcohol.

• Consumer Industry
Chocolates, Confectionery, Soft/Aerated Beverages/Drinks

• Plantation

Tea, coffee, cashew, cocoa, coconut

Chapter 2

2.1 HISTORY OF FOOD PROCESSING

Food processing dates back to the prehistoric ages when crude processing incorporated slaughtering,
fermenting, sun drying, preserving with salt, and various types of cooking (such as roasting, smoking,
steaming, and oven baking).. Evidence for the existence of these methods can be found in the writings
of the ancient Greek, Chaldean, Egyptian and Roman
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civilizations as well as archaeological evidence from Europe, North and South America and Asia. These
tried and tested processing techniques remained essentially the same until the advent of the industrial
revolution. Examples of ready meals also exist from preindustrial revolution times such as the Cornish
pastyand Haggis. During ancient times and today these are considered processing foods. Food processing
has also helped create quick, nutritious meals to give to busy families. Modern food processing technology
in the 19th and 20th century was largely developed to serve military needs. In 1809 Nicolas Appert invented
a vacuum bottling technique that would supply food for French troops, and this contributed to the
development of tinning and then canning by Peter Durand in 1810. Although initially expensive and
somewhat hazardous due to the lead used in cans, canned goods would later become a staple around the
world. Pasteurization, discovered by Louis Pasteurin 1862, was a significant advance in ensuring the micro
biological safety of food.

In the 20th century, World War II, thes pace race and the rising consumer society in developed countries
(including the United States) contributed to the growth of food processing with such advances as spray
drying, juice concentrates, freeze drying and the introduction of artificial sweeteners, colouring agents,
and preservatives such as sodium benzoate. In the late 20th century products such as dried instant soups,
reconstituted fruits and juices, and self cooking meals such as MRE food ration were developed.
In Western Europe and North America, the second half of the 20th century witnessed a rise in the pursuit
of convenience. Food processing companies marketed their products especially towards middle class
working wives and mothers. Frozen foods (often credited to Clarence Birdseye) found their success in
sales of juice concentrates and "TV dinners".Processorsutilised the perceived value of time to appeal to
the postwar population, and this same appeal contributes to the success of convenience foods today.

2.2 History of Food laws

Food laws were among the earliest of enactments known to man. Governments over many centuries
have endeavored to provide for the safety and wholesomeness of man‘s food by legal provisions and
appropriate punitive action. Over the years also, rude forms of fraud, such as adding worthless
substances to food or extracting valuable constituents from it, have been followed by sophisticated
methods of adulteration more difficult to detect. The birth of modern chemistry in the early nineteenth
century made possible the production of materials possessing properties similar to normal foods

4
which, when fraudulently used, did not readily attract the attention of the unsuspecting purchaser. Later,
better analytical methods were used in food control work to detect adulterants. When scientists
demonstrated that some adulterants were dangerous to health, the aroused public demanded laws that
would both protect their health and prevent fraud.
Food Laws in one form or another, such as religious tenets or prohibitions, were inherent in all ancient
civilizations and have come down to us from early times. It was not until the late nineteenth and early
twentieth century with the urbanization of societies and the depopulation of rural areas that food laws,
as understood today, were prepared. This process was hastened by pressure that developed as the public
rebelled against the generally unhygienic conditions of the period.
Since the end of World War II, there have been major changes in the food industry, and this development
continues today; at the same time, our knowledge of the risks, actual and potential, has considerably
increased. Reorientation and further consolidation of food laws have therefore become necessary to
protect the health of the consumer from the many new risks to which he has become exposed and over
which he has little personal control.

Chapter 3

3.1 PARTS OF THE FOOD INDUSTRY

The food industry is divided into four major segments:

i) Production
ii) Manufacturing/processing
iii) Distribution
iv) Marketing

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Production: Production includes such activities as farming, ranching, orchard management, fishing and
aquaculture. Technologies involved in production of the raw materials include the selection of plant and
animal varieties, cultivation, growth, harvest, slaughter, and the storage and handling of the raw
materials.
Manufacturing/processing: Manufacturing converts raw agricultural products to more refined or
finished products. Manufacturing requires many unit operations and processes that are at the core of
food sector.
Distribution: Distribution deals with those aspects conducive to product sales, including: product form,
weight and bulk, transportation, storage requirements and storage stability.

3.2 Scope and Significance of Food Processing in India

What is the scope of India in the food processing industry? (Have you ever wondered why UPSC
specially mentioned food processing as a topic in Mains syllabus? – Because it is a sector which has
huge potential for growth in future!)

1. India’s position as a major food producer: India ranks 1st in the production of – milk, ginger,
banana, guava, papaya, mango etc. It ranks 2nd in the production of rice, wheat, potato, sugarcane,
cashew nut, tea etc. It is among the top 5 countries in the production of coffee,

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 tobacco, spices, seeds etc. With such a huge raw material base, we can easily become the leading
supplier of food items in the world.
2. Resource advantage of India: Different soil types and different climate types for the cultivation
of diverse food crops, long coastal line suitable for fishing, a huge resource of domestic animals
etc.
3. Increasing employment: Expected to create more than 10 lakh new jobs.
4. Curbing Migration: Provides employment in rural areas, hence reduces migration from rural
to urban. Resolves issues of urbanization.
5. Curbing food inflation: Removes issues of wastage or middle man. Curbs food inflation.
Indirect relief on non-food inflation too.
6. Crop Diversification: Because of long shelf life, farmers can diversify their products.
7. The demand potential: Expected to reach 250b$ turnout by 2015 and 350b$ by 2020. Youth
population, middle class, rising income, nuclear families, media penetration etc cited as positive
factors.
8. Government initiatives to boost food processing: Various government initiatives like attracting
FDI, reduction in excise duties etc have boosted food processing.
9. The future driver of Indian growth: Food processing corresponds to around 10% of GDP in
the agriculture-manufacturing sector. It has potential for more.

3.3 Food Processing Industry in India

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 2021. The food processing industry contributed 7% to India‘s GDP.
The industry employs around 13 million workers directly and about 35 million indirectly. The industry
is segmented into sectors namely, milk and allied products (dairy), meat and poultry, seafood, bakery
and confectionery, fruit and vegetables, grain, pulses and oilseeds (staple) products alcoholic and non-
alcoholic products (beverages), and packed foods. The classification is not distinct as many processed
products overlap different segments. India ranks No. 1 in the world in production of Milk (Fresh, whole,
buffalo), Pulses, Ginger, Chick Peas, Bananas Guavas, Papayas and Mangoes. Further, India ranks No.
2 in the world in production of Rice, Wheat, Potatoes, Garlic, Cashew Nuts,

7
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. In 2007-08
the fixed capital of registered food processing units have increased by 18.93% over the previous year.
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, upgradetion of technology, increase in farm holding, skill and manpower training,
backend and front-end integration and cold chain integration. The opportunities in the food processing
industry are vast. However, there is a need to improve technology and productivity to be competitive
globally. As the economy grows, the food processing industry will offer bigger opportunities to the new
as well as the existing players. India has the second largest arable land of 161 million hectares and has
the highest acreage under irrigation. Next to China, India ranks second largest food producer in the
world and has the potential to immerge the biggest with its food and agricultural sector. India accounts
for less than 1.5% of international food trade despite being one of the world‘s major food producers,
which indicates huge potential for both investors and exporters.

The food processing industry in India is at a nascent stage, accounting for less than 10 per cent of total
food in India (Government of India, 2016). It is expected that improvement in food processing would
reduce wastages in agricultural produce. At present food wastages are very high. According to the report
of Central Institute of Post-Harvest Engineering and Technology (CIPHET), wastages in major crops,
in general, remained at high level during 2010-2015

8
Wastages in Key Horticulture and Cereal Crops

9
The FPI accounts for a prominent place among sectors in terms of share in employment in the
manufacturing sector and because of its labour-intensive nature it has higher multiplier effect on the
overall economy. As per ASI data, FPI has emerged as the highest employment provider among the
industry groups2. However, its share in manufacturing and total GVA declined reflecting slower growth
compared with other sectors of the economy. The exports of processed food in proportion to exports of
raw food, on the other hand, has significantly increased during this period.
There is no common data set available for comparing FPI units in organised and unorganised sectors.
However, a comparison can be made using ASI data, which provide information on the organised sector
and National Sample Survey Organisation’s Unincorporated Non-Agricultural Enterprises Survey data
provide information on the unorganised sector. A comparison of these two data sets for 2016-17 and
2015-16, respectively, showed abysmally low percentage of FPI enterprises in organised sector, even
though the organised sector accounts for more than 80 per cent of gross value added in
10
overall FPI. As per ASI data, there were 39,748 food processing enterprises in the organised sector in
2016-17 while the number of unincorporated enterprises as per NSSO data stood at 24,59,929 in 2015-
16. Nearly half of organised enterprises were in three states - Andhra Pradesh, Tamil Nadu and
Telangana - while Uttar Pradesh and West Bengal had the highest number of unincorporated food
processing units. In terms of employment also, the unorganised sector dominates. As per ASI 2017- 18,
total number of persons engaged in registered food processing entities was 17.7 lakhs

Status of Food Processing Sector

State wise Share in FPI in Organised Sector

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accounting for 11.4 per cent of total employment generated in the registered manufacturing sector. The
unorganised food processing sector, in turn, provided employment to 51.1 lakh workers in 2015- 16 (as
per the NSSO 73rd Round) constituting 14.2 per cent of employment in the unregistered manufacturing
sector. In terms of value generated in the organised sector, three states, Maharashtra (17.3 per cent),
Uttar Pradesh (11.6 per cent) and Karnataka (11.3 per cent) together contributed around 40 per cent .
Annual growth in processed food GVA has been more volatile than agricultural GVA . Inflation
measured in terms of the year-on-year changes in Wholesale Price Index shows co-movement in
processed food inflation and primary food inflation, though, in the recent period, former has remained
higher than later . The coefficient of variation of processed food inflation was higher than that of primary
food inflation during the

Growth in Processed Food GVA and Agriculture Value Added Inflation- Primary Food and Processed
Food

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Status of Food Processing Industry in India (Average of 2000-01 to 2016-17)

The value-added content in the FPI sector when compared with output is low (in 2016-17 at 10.2 per cent). The
share of high value-added items like ready to eat items in total output of the sector is very low . Grain mill

13
products have emerged as the major export item in India’s processed food products in recent years. Among the
various food products exported, processed fish and meat products had the highest per unit value.The analysis so
far shows that the FPI has huge untapped potential as except for milk, meat and fish, the extent of processing in
the other agri-food commodities remains low at less than 10 per cent. The overall share of processed food in total
produce was 10 per cent in 2017-18. The Government has set the target for raising the share of processed food
to 25 per cent of the total agricultural produce by 2025.

3.4 FOOD INDUSTRY CURRENT TRENDS

The global food retail sales generate over $4 trillion per year. The food industry encompasses several
categories of food including: dairy, seafood, eggs, fruit and vegetables, luxury foods, organic food,
meat, packaged food, condiments, and cereal-based products. There is the spotlight on sustainability
efforts, but the focus has shifted toward food loss and waste. Many consumers are continuously looking
at how they can derive ingredients from their waste streams, while food waste at the consumer and
retailer end of the food chain is also set for increased scrutiny. And when negative impacting issues
such as the horse meat scandal that kept the food industry in the news for all the wrong reasons in 2012,
and food and out of stock scares take their toll on consumer confidence, lately companies have finally
understood and worked a cut out in order to regain consumer trust. And as a result, more manufacturers
are looking to highlight the origins of their products and ingredients. Therefore, in 2014, consumers can
expect to see manufacturers begin to incorporate foraged, hyper- local ingredients into accessible
formats and recognizable products.
There is a reason why consumers of late are looking at back to basics pleasures, pleasures such as home-
cooked food. To tap into this trend, manufacturers are adapting what is known as value packaging, and
good value claims on the products. An increasing global population and a shift towards convenience
food has continued to push the industry forward and that is why changing habits in food culture have
come to mean varied tastes while increasing demand for ethnic foods and newer formats, newer formats
such as microwaveable food products. More than anything, convenience is a key as consumers have
started to demand and started to focus on processed, ready-to-eat, packaged goods, that is the reason
demand has exceeded supply in certain food markets.

According to Market Line, the world fruit and vegetables market is predicted to reach in excess of
$736 billion by the end of 2015, which will record a massive 25% growth by the end of 2018.
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Vegetables lead the segment at almost 64%. The Asia-Pacific region accounts for over 45% of the
overall market. Meat leads the segment at over 40% of overall market value. The EU holds close to
38% of the market. Brazil Foods is the world leader in the frozen foods market, accounting for 5% of
overall market share. According to Global Industry Analysts, the world market for muscle food
packaging, which encompasses meat, seafood and poultry packaging, is expected to exceed $31 billion
by 2017. Technological advances, better packaging practices and packaging facilitating smaller portions
are fueling the market.

3.5 Investment prospects for food processing in India

Despite its strong agricultural production base, a significant amount of food produce gets wasted in
India due to inadequate infrastructure such as packaging facilities, storage, transportation, cold chain,
and low levels of processing. According to the Ministry of Food Processing Industry (MoFPI), post-
harvest losses account for US$1.5 billion (Rs 92,000 crores) annually.

Overall, less than 10 percent of the total food produced is processed into value added products in India.
In comparison, the US and China process 65 percent and 23 percent of their produce, respectively.
Similarly, other developing countries such as Thailand, Philippines, and Brazil process as high as 30,
78, and 70 percent of their produce, respectively.

India’s vast agricultural resources alone creates huge potential for investments in its food processing
and equipment industry. Major areas holding scope for value added processing are in the canning,
packaging, dairy and food processing, frozen food, and thermo-processing industrie.

Currently, food processing accounts for almost one-third of the total food market in India. The food
processing industry is valued at US$258 billion, and is the fifth largest industry domestically in terms
of production, consumption, export, and expected growth in the country. It contributes to around 14
percent of manufacturing Gross Domestic Product (GDP) and 13 percent of India’s total food exports.

According to a 2017 report by the Associated Chambers of Commerce and Industry of India
(ASSOCHAM), the country’s food processing industry is expected to reach US$482 billion by 2020,

15
 driven by growth in organized retail, changing consumer behaviour, and increasing consumerism in
tier II and tier III cities.

Key players in India’s food processing industry are PepsiCo, Glaxo-SmithKline (GSK), Mapro Foods,
Dabur, Parle, Nestlé, Frito-Lay, and Haldiram’s.

As in other countries, India’s food processing is categorized into six major segments as shown in the
table below.

Chapter 4
Technologies for Value Addition:

4.1 Processing Technologies:

In this subsection, explore various processing technologies that enhance the value of food products:

16
 • Thermal Processing: Discuss the use of technologies such as pasteurization, sterilization, and thermal
cooking to extend the shelf life of food products while retaining nutritional value.

• Fermentation: Explain how fermentation processes, aided by technology, are utilized to add flavor,
improve texture, and enhance the nutritional profile of foods like dairy products, bread, and beverages.

4.2 Preservation Technologies:

This subsection should delve into technologies employed for preserving the quality and freshness of food
products:

• Canning: Describe how canning technology seals food in airtight containers, preventing spoilage and
extending shelf life, thereby adding value to perishable goods.

• Freezing: Discuss the role of freezing technology in preserving foods' nutritional content and texture,
making them available year-round and expanding market reach.

• Drying: Explain the process of food dehydration using technology, which removes moisture to inhibit
microbial growth and prolong shelf life, offering convenience and portability.

4.3 Packaging Technologies:

Highlight advancements in packaging technology that enhance product safety, attractiveness, and convenience:

• Modified Atmosphere Packaging (MAP): Discuss how MAP technology alters the atmosphere within
packaging to extend product freshness, inhibit microbial growth, and maintain color and texture.

• Active Packaging: Explain the incorporation of active agents (e.g., oxygen scavengers, antimicrobials)
into packaging materials to actively interact with the food, preserving quality and enhancing safety.

• Intelligent Packaging: Introduce smart packaging solutions equipped with sensors and indicators to
monitor factors such as temperature, freshness, and tampering, ensuring product integrity and enhancing
consumer trust.

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 4.4Automation and Robotics:

Explore the role of automation and robotics in streamlining food processing operations and improving efficiency:

• Automated Sorting and Grading: Discuss how automated systems utilize sensors and imaging
technology to sort and grade raw materials and finished products based on quality parameters, reducing
labor costs and enhancing consistency.

• Robotic Food Handling: Explain the use of robots for tasks such as picking, packing, and palletizing,
increasing throughput, reducing errors, and ensuring food safety.

4.5 Emerging Technologies:

Lastly, highlight promising emerging technologies poised to revolutionize value addition in the food processing
industry:

• Nanotechnology Applications: Discuss the potential of nanotechnology in food packaging, ingredient

delivery, and food safety, offering opportunities for targeted nutrient delivery and enhanced functionality.

• 3D Food Printing: Introduce 3D food printing technology, which allows precise layer-by-layer
construction of food products, enabling customization, novel shapes, and texture.

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 4.6 Corporate Data Analysis

The relevance of such an analysis is supported by the fact that more than 80 per cent of output and
value added in the FPI sector is generated from the organised sector. Further, in terms of ownership
structure, firms are divided as public limited and private limited firms. Key aggregated performance
indicators for food processing firms are compared with those of all non-governmentand non-financial
firms.
It can be observed that annual growth numbers for key parameters, viz., sales, profit before tax (PBT),
gross value added and gross fixed assets, of FPI have been volatile. Private limited firms have displayed
higher growth volatility as compared with public limited firms. This indicates that smaller firms face
higher uncertainty. Nominal sales growth of public limited firms declined significantly after 2013-14
while that of private limited firms remained stable. Unlike sales growth, profit and GVA growth of FPI
firms, however, remained buoyant, indicating that probably these firms would have benefitted from
softening of global commodity prices after 2013-14.

The average leverage of FPI firms, measured as debt to equity ratio, has increased significantly after
2012-13, specifically for private limited firms, possibly a sign of financial distress in medium and small
enterprises. The ratio of exports to sales and the ratio of GVA to gross fixed assets of FPI firms are
found to be generally lower than those for the overall non-financial corporate sector (Annex I, Table
A2). This is a sign of weaker participation of the Indian FPI sector in the global value chains and their
lower ability to make higher value addition to overall sectoral output. This is also not surprising as
majority of FPI firms are involved in primary or secondary processing activity and largely cater to
domestic demand. It may be added that the ratio of sales to assets, i.e., the asset turnover ratio [a measure
of efficient exploitation of physical investment by firms] of FPI firms is significantly higher than that
for the overall industry, which, nevertheless is more an indication of lower value addition in the sector
than greater efficiency.

Credit

Ensuring availability of adequate credit to the food processing industries is given utmost importance by
the Reserve Bank of India. Accordingly, the Reserve Bank has accorded priority sector status to food
processing industry. Loans to food and agro-based processing units and cold chain have been classified
under agricultural activities for priority sector lending. Loans for food and agro-processing up to an
aggregate sanctioned limit of `100 crore per borrower from the banking system is considered as priority

19
sector. Apart from this, credit for developing agricultural infrastructure is also categorised under priority
sector lending. Accordingly, loans provided for construction of storage facilities

(warehouse, market yards, godowns and silos), including cold storage units / cold storage chains
designed to store agricultural produce/products comes under the priority sector lending, as also loans to
MSMEs involved in food processing.

The share of the food processing sector in total credit to industry has moved in a narrow range, at less
than 10 per cent since 1990 which is consistent with the share of FPI in manufacturing GVA .

To examine the importance of credit in promoting investment and output in the food processing sector,
we attempt a panel data analysis using ASI industry level data. ASI is the principal source of industrial
statistics in India which provides industry wise annual data on major characteristics at various levels
based on National Industrial Classification (NIC). In the present study, ASI data till level (4 digit) have
been considered, which provide sufficient information regarding the major sub sectors of the food
processing industries. The data are annual and correspond to the period 1993-94 to 2015-16.

ASI provides industry level data on output, fixed investment, profit and credit outstanding. This
provides an opportunity to assess, the impact of credit on gross output and capital expenditure
controlling for urbanisation. Capital expenditure is taken as the one period difference in fixed
investment. Panel unit root test reveals the variables to be I (1) (Table 7).
Panel co-integration using Westerlund (2007) test is run for the following two equations separately to
examine the effect of credit on output and capital

20
Share of Food Processing in Total Credit to Industry

21
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 Key opportunities in Food Processing Sector

• Processable varieties of crop

• Contract farming

• Investments in infrastructure through Public Private partnership (PPP

• Mega Food parks

• Logistics and cold chain infrastructure

• Food safety Management Systems

• Machinery and packaging

22
 Advantage of India

• 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.

• India has huge scientific and research talent pool.

• 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.

Chapter 5

5.1Challenges faced by the industry

High level of wastage of agricultural produces is primarily on account of the inherent disadvantages
faced by the sector. This sector is characterized by preponderance of small farmers, small scale & tiny
processors, outdated technology, poor infrastructure and a maze of middle men. Therefore, this sector
needs support in terms of creation and strengthening of infrastructure which individual farmers and
processors will not be in a position to create and sustain. Further, there is also a need for strengthening
R&D activities in food processing sector for innovation of technology which suits local needs,

23
popularization of appropriate technology, skill development and creation of AN institutional
framework supportive of the industry.

5.2 POLLUTION FROM FOOD PROCESSING FACTORIES

The food industry is now facing increasing pressure to ensure that their company's activities are
environmentally sensitive, but there is also increased internal pressure to maintain or increase
profitability in the face of fierce competition. The food-processing industry has special concerns about
the health and safety of the consumer. Key resources used by the food-processing industry include the
water, raw materials and energy. Traditionally, the food-processing industry has been a large water user.
Water is used as an ingredient, an initial and intermediate cleaning source, an efficient transportation
conveyor of raw materials, and the principal agent used in sanitizing plant machinery and areas.
Although water use will always be a part of the food-processing industry, it has become the principal
target for pollution prevention, source reduction practices. The key environmental issues for the food
industry include the following:

24
Wastewater.Primary issues of concern are biochemical oxygen demand (BOD); total suspended solids
(TSS); excessive nutrient loading, namely nitrogen and phosphorus compounds; pathogenic organisms,
which are a result of animal processing; and residual chlorine and pesticide levels.

Solid Waste. Primary issues of concern include both organic and packaging waste. Organic waste, that
is, the rinds, seeds, skin, and bones from raw materials, results from processing operations. Inorganic
wastes typically include excessive packaging items that are, plastic, glass, and metal. Organic wastes
are finding ever-increasing markets for resale, and companies are slowly switching to more
biodegradable and recyclable products for packaging. Excessive packaging has been reduced and
recyclable products such as aluminum, glass, and high-density polyethylene (HDPE) are being used
where applicable. The food processing factories should follow the major technological innovations in
the industry, including those in clean technologies and processes.

Clean technologies include:

A. Advanced Wastewater Treatment Practices. Use of wastewater technologies beyond

conventional secondary treatment.
B. Improved Packaging. Use of less excessive and more environmentally friendly packaging
products.
C. Improved Sensors and Process Control. Use of advanced techniques to control specific portions
of the manufacturing process to reduce wastes and increase productivity.
D. Food Irradiation. Use of radiation to kill pathogenic microorganisms.
E. Water and Wastewater Reduction (Closed Loop/Zero Emission Systems).
Reduction or total elimination of effluent from the manufacturing process

Importance of Supply Chain Management in Food Processing

Industry: If there are good Supply Chain Management practices in a country, then it will boost
the economy as a whole. Good supply chain links help farmers, manufactures, wholesalers, retailers

25
and consumers. Everyone in the supply chain link will get inputs at a faster rate, at the right time and
at a cheaper cost.

5.3 Obstacles in the growth of food processing

Industries

Food Processing Industry: Image Courtesy: The Hindu

1. Small size companies: Indian food processing companies are small and can’t compete with
global giants which invest heavily on R & D.
2. Lack of good laboratories in India: Food export to US and EU demands high-quality standards.
India lacks good laboratories to check heavy metal and other toxic contamination in food.
3. Lack of skilled workforce. We have only a few graduates in Food Technology.

4. Lack of right vision and support from the government at the right time.

5. Lack of good transportation facilities. Roads are overburdened.

6. Lack of storage facilities and good production techniques.

7. Lack of organised retail.

8. Limitations in supply chains.

26
9. Limitations in the quality.

10. Lack of modern regulations

27
 Chapter 6

6.1 FDI in Food Processing

The food processing sector was opened to 100 per cent foreign direct investment in 2016 under the
automatic route. Further, in 2017, 100 per cent FDI under the Government route for retail trading,
including through e-commerce, is permitted in respect of food products manufactured and/or produced
in India.
Over the years, India has been able to attract investment from food and beverages companies like Nestle,
Cargill, McCain, Mondelez, Pepsi, Coco cola etc., and also from retail trade companies like Amazon,
Walmart, etc. (Government of India, 2017). In 2018, Mondolez International invested US$15 million
in India for research after investing US $190 million in a green field project in Andhra Pradesh.
Similarly,

FDI Inflows in Indian Food Processing

Industry (US $ million)

Cargill, agro-food company based in USA invested in

various supply chain nodes like cold storage facility in
Karnataka and aqua feed project in Andhra Pradesh.
Further, Amazon and Walmart’s entry into Indian food
retail sector is expected to bring in more investment in this
sector .

28
 6.2 Supply Chain Management

Supply chain management (SCM) is the management of the flow of goods. It includes the movement
and storage of raw materials, inventory and finished goods from point of origin to point of
consumption.Let’s analyse the case of Supply Chain Management for Food Processing Industry. Raw
materials like grains, raw meat, fish etc are collected by different sources. These sources may do
preliminary processing of these to make components of a food product before passing over them to
the main manufacturer through many middlemen. The manufacturer does the final processing of these
components to make the food product. This completes only the first stage of supply management.

Now the finished product has to be delivered to the consumer. Here also there will be a number of
middlemen and stages. The manufacturer normally hands over the food product to a wholesale dealer.
The wholesaler passes the product to a retailer from where the consumer buys the processed food item
for his personal use.

Thus, Supply Chain Management is the management of the upstream and downstream value-added flow
of materials from suppliers→ company→ retailer→ final consumers.

29
 6.3 Major Schemes by Government include

1. Vision 2015 for food processing: The Ministry of Food Processing Industries (FPI) has
sponsored a study to suggest a roadmap for the growth of the food processing sector. M/S Rabo
Bank has conducted a study and submitted a Vision Document suggesting strategy & action plan
for food processing sector in India namely Vision 2015. Vision Document suggested strategy to
ensure faster growth of the sector. The adopted Vision 2015 provides for enhancing the level of
processing of perishables from 6% to 20%, enhancing value addition from 20% to 35% and
increasing India’s share in global food trade from 1.5% to 3% by the year 2015. To achieve these
targets, investment of Rs.100 thousand crores was estimated by the year 2015, out of which
Rs.10,000 crores was to come from the Government. Accordingly, Ministry of FPI formulated its
11th Plan schemes to attract the required investment in the sector.
2. National Mission on food processing: Ministry of Food Processing Industries (MOFPI)
launched a new Centrally Sponsored Scheme(CSS) – National Mission- on Food Processing
(NMFP) on 1st April 2012 for implementation through States/UTs. The NMFP envisages the
establishment of a National Mission as well as corresponding Missions in the State and District
level. The basic objective of NMFP is the decentralization of implementation of food processing
related schemes for ensuring substantial participation of State Governments/UTs. The mission is
expected to improve the Ministry’s outreach significantly in terms of planning, supervision,
monitoring of various schemes apart from playing a more meaningful role in policy formation.
3. Mega food parks: The Scheme of Mega Food Park aims at providing a mechanism to link
agricultural production to the market by bringing together farmers, processors and retailers so as
to ensure maximizing value addition, minimizing wastages, increasing farmers’ income and
creating employment opportunities particularly in the rural sector. The Mega Food Park Scheme
is based on the “Cluster” approach and envisages a well-defined Agri/ horticultural-processing
zone containing state-of-the-art processing facilities with support infrastructure and well-
established supply chain.
4. Modernization of abattoirs: The scheme aims at providing facilities for scientific and less
painful slaughtering, chilling, effluent treatment plant, by-product utilization, water and power

30
 with required sanitary/phytosanitary conditions for modernization of abattoirs. Modernization of
abattoirs will also augment the essential supply base of hygienic raw material to the meat
processing industry, both for domestic consumption and exports, besides discouraging
unauthorized slaughtering. Scheme of Setting up/ Modernization of Abattoirs provides for
induction of private capital, better technology, backward and forward linkages. The scheme also
provides for the implementation of projects preferably under PPP mode with the involvement of
local bodies and has the flexibility for the involvement of private investors/exporters on a
BOO/BOT/JV basis.
5. Cold Chain Infrastructure: Scheme for Integrated Cold Chain, Value Addition and Preservation
Infrastructure aim to encourage setting up of cold chain facilities to provide integrated cold chain
and preservation infrastructure facilities without break from the farm gate to the consumer.
6. R&D, QA, Codex and Promotion: Scheme for Quality Assurance, Codex, R&D and Other
Promotional Activities is being implemented to create an infrastructure of food testing
laboratories in the country to establish a quality monitoring system for food processing,
implement HACCP/ISO22000, ISO14000/GHP/GMP and other quality management systems
and to promote research and development for innovative products and process etc.

6.4 Effects of pandemic on food supply chain

The Food supply chain can be divided into five stages, including agricultural production, postharvest
handling, processing, distribution/retail/service, and consumption. Two systems are being used in the
food supply chain regarding food quality and safety. The First one is based on regulations and laws
that use mandatory standards which are inspected by state agencies. The Second one is relying on
voluntary standards which are defined by market laws or international associations (Bendekovic ,
2015). Safety measures to ensure the continuity of food flow in each stage can be grouped as food
employee’s health issues, personal hygiene, using personal protective equipments such as helmets and
glove, sanitization of surfaces and working environments, safe handling/preparation/delivery of food,
and maintenance of social distance. Protective measures in the last stages of the food supply chain are
critical since more people can be potentially affected as moved towards the last stages (Rizou ., 2020).

Unlike foot and mouth disease, bird flu, Escherichia coli (E. coli), or Listeria, the COVID-19
pandemic does not directly affect production, as it does not spread directly through livestock or

31
agricultural products (FAO, 2020a). However, due to the pandemic, governments around the world have
made significant restrictions in the transportation (land, water, and air transport) of goods, as well as in
the migration of labour. Reports showed that using the trucks for food distribution was declined to 60%
since the restrictions in France which was 30% before the pandemic (FAO, 2020j; Bakalis ., 2020).
In developing and underdeveloped countries, temporary or seasonal employment is common, especially
for planting, sorting, harvesting, processing, or transporting crops to markets. Therefore, the supply
chain is significantly affected as a result of the absence of local or migrant workers due to sickness or
travel restrictions imposed by lockdown. It also weakens not only production abilities for others, but
also their own food safety, in cases where the disease directly affects their health or movement (FAO,
2020k). Especially, labour shortage due to COVID-19 crisis caused severe disruptions in some sectors
such as livestock production, horticulture, planting, harvesting, and crop processing which are relatively
labour intensive (Stephens., 2020). However, shortage of farm workers was a major issue well before
the COVID-19 outbreak, too (Richards and Rickard, 2020).
Due to the fact that many skilled workers in the harvest could not access various countries because of
the border controls, a call has been made to the unemployed persons to work in the fields in France. In
Britain, ‘Pick for Britain’ campaign was aimed to find 70 000 British to work in the field and during the
harvest (Nature Plants, 2020). However, due to the shortage of workforce as a result of illness and
physical distance to be maintained during production, the crisis undermines the ability of farms and
agricultural businesses to work. These conditions retarded the delivery of food and agricultural inputs
and created problems in providing continuous food supply to markets (ILO, 2020). Although many
manufacturers rely on their core inputs, most are more susceptible to disruptions, as they must obtain
their requirements from domestic markets. Logistics barriers that disrupt food supply chains further
weaken high-value goods due to their short shelf life (Shahidi, 2020; FAO, 2020j, FAO, 2020k).
Most agricultural activities depend on the season and weather, and therefore, activities need to follow a
fine-tuned schedule with flexibility so that immediate actions can be performed when needed. Since all
processes and stages in a supply chain are strongly connected to each other, a slight delay or glitch can
trigger a butterfly effect resulting in a big loss in the yield and output (FAO, 2020k). Actually, there are
many reports that farmers were forced to destroy their products by burning or leaving them to spoil
because of the restrictions. Dairy Farmers in America Co-operative consider 14 million litres of milk
are being dumped every day due to interrupted supply chain. In England, chair of dairy farmers reported
that approximately 5 million litres of milk are at risk in one week. Also, It was reported that tea plants
were being lost because of the logistical challenges in India (BBC, 2020a). Therefore, maintaining
logistical efficiency is a key factor for the food industry, especially in global

32
crisis. The biggest issues in the food supply chain are obtaining raw materials from suppliers and
ensuring the continuity of food flow from manufacturers to end users (Alonso., 2007).The problems are
jeopardizing the ability of agricultural businesses to continue their business as usual, and may have
negative effects on food quality, freshness, and food safety, and hinder access to markets and
affordability (FAO, 2020k). As countries struggle with that pandemic, they must make every effort to
move the gears of the food supply chains. The impact of pandemic problems on agricultural systems
largely depends on the intensity and composition of agricultural inputs and varies depending on the
product produced and the country. Capital-intensive techniques are usually used in high-income
countries for agricultural production, whereas production is mostly labour dependent in low-income
countries. Thus, the supply chain should be kept running with a particular focus on the basics of logistic
challenges (FAO, 2020j).

6.5 Effects of pandemic on consumer behavior

When the issue of how the COVID-19 pandemic affects consumers’ food demand is examined, it is
seen that the demand varies depending on the price of foodstuffs, income level of consumers, socio-
demographic situation, consumption, and shopping preferences and time constraints. In addition, the
number of visits to food store and spending money on food in per visit changed (Bakalis,
2020; Cranfield, 2020).
COVID-19 outbreak interrupted the daily routine and resulted in boredom which can be defined as
high energy intake by the consumption of high amount of fat, carbohydrate, and proteins. In addition,
quarantine caused stress in people and pushed them toward sugary foods for feeling positive, because
carbohydrate-rich foods can be used as self-medicating components due to their ability to encourage
serotonin production. However, these unhealthy eating habits may contribute to the development of
obesity linked to the chronic inflammation and serious complications of COVID-19 (Muscogiuri.,
2020).
The closure of restaurants and limited service eating places affected the eating/purchasing habits and
resulted in an unusual demand shift from food service to retail. Reports showed that purchasing food
from supermarkets and using food services had the same ratio as 50% before the outbreak; however, it
is almost 100% for supermarkets. The number of visits to food store was decreased whilst spending
money on food was raised per visit. Consumers experienced reduced availability of certain types of
foods during the COVID-19 lockdown. In European countries, flour which is a staple product received
more attention and not found on food store shelves due to the interest in home-baking as a
33
family activity. Interestingly, bread and baked products kept their place on the supermarket shelves.
Consumers have focused on the products with long shelf life such as dried or canned foods, pasta, milk,
or milk substitutes, and frozen foods due to convenience and daily cooking at home. People stocked
these foods at home because of the turn to home baking and believing rumours or getting false
information. Consumers preferred takeaway and home delivery options as a result of social distance and
closure of restaurants (Bakalis 2020; Shahidi, 2020). Indeed, it was interesting to note that the shortage
of eggs was not only due to increased demand but also lack of packaging for retail. Household egg
consumption increased 40% since March 20 in Argentina and sales of eggs rose by 44% compared to
last year in the USA. The U.S. Food and Drug Administration provided flexibility related to the
packaging and labelling of eggs due to the insufficient availability of appropriately labelled retail
packages to fulfill the demand and facilitate the distribution of eggs during COVID-19 pandemic (FDA,
2020; Mazili, 2020; Reiley, 2020).

6.6 Suggestions for government and business

First of all, a crisis committee should be established to focus on the effect of COVID-19 during food
value chain without waiting too long for the implementation of certain strategies and interventions.
This committee should become a key actor to observe the progress and recommend actions to reduce
the effects of COVID-19 on agricultural production and food supply cuts. In order to ensure adequate
and full implementation of the strategies, it is important that the committee should collaborate with
the private sector (FAO, 2020k). In Turkey, the Ministry of Agriculture and Forestry has formed the
COVID-19 Commission consisting of seven academicians and two members from the Ministry of
Agriculture and Forestry for measures and recommendations to be taken in the field of agriculture and
food within the scope of the pandemic (MAF, 2020).

In the aftermath of the pandemic, governments around the world announced response plans to help the
agriculture industry for reducing the effect of COVID-19 outbreak. In Turkey, Ministry of Agricultural
and Forestry announced the precautions and funding assistance programs for farmers and
manufacturing facilities/stores such as slaughterhouses, greenhouses, and bakery stores. In addition,
Ministry of Internal Affairs issued the lockdown guidelines that allow the farmers and food production
plants to continue their operations during lockdown (MAF, 2020; MIA, 2020). In Canada, Agriculture
Response Program was designed for 50–75% funding assistance which do not have to be paid back
regarding health protocol, marketing and product movement, distribution,
34
strategic projects, abattoir efficiency, and development (Novascatia, 2020). In the USA, Department
of Agriculture committed programs and flexibilities such as food assistance, dumped milk, crop
insurance, farm loan, commodity loan, crop acreage, animal mortality, paycheck protection, and
economic injury disaster loan to help agricultural producers are related to the COVID-19 outbreak
(USDA, 2020).

Governments also should establish and operate emergency provisioning strategies to support
production. The regions most affected by the outbreak should be protected by temporary input
subsidies programs. Timely support is essential for planting season for the next spring (FAO, 2020d).
Data collection and assessment programs for migrants should be used to determine when and where
the migrants are needed (Martin, 2016). Facilitating the cross-border movement of migrant workers is
important because movement restrictions and border closures have a strong negative influence on
agricultural labour supply. In Canada, government announced a US$50 million financial aid program
for small farmers who hired temporary foreign employees through the COVID-19 outbreak. Program
allowed employers to receive US$1,500 per foreign worker who has to self-isolate for 14 days upon
their entry into Canada (Ker, 2020). The resulting shortage of labour can be reduced by policies that
classify agricultural workers as critical persons and exempt them from travel limitations. In the USA,
government highlighted the importance of people employed in agricultural production and considered
them as ‘critical infrastructure worker’ (FAO, 2020f; CDC, 2020). It should also be focused on giving
longer stay permits by changing the visa and residence regulations for seasonal workers in the country.
In some countries such as Canada and Belgium, governments allowed employers to postpone the
recruitment or offer long-term contracts (OECD, 2020c). Commission of European Union (EU)
introduced ‘the green lanes’ for vehicles carrying agri-food products to ensure free and fast movement
on borders. EU measures also highlighted the free movement of agri-food and seasonal workers for
enabling them to reach their workplace and exercise their activities. In addition, the commission
extended the farmers’ application deadline to receive income support known as Common Agricultural
Policy (CAP) payments. Temporary framework for state aid measures was approved to support
farmers and agri-food business to ensure liquidity (Rossi, 2020). However, it is necessary to encourage
the local population to become agricultural workers. Local populations and unemployed people can
be trained to work in farming practices like sowing, weeding, or harvesting to minimize the effect of
the restriction on migrant workers. Online platforms should be used to facilitate connections between
local residents and agriculture sector (FAO, 2020d). Unemployed people or local worker should be
encouraged for being agricultural labour by adding premiums to wages since local workers do not
want to work in

35
farming due to the possibilities to find better non-agricultural alternatives (Martin, 2016). COVID- 19
outbreak showed that labour-replacing mechanization policy is the best way to solve the labour
shortage over the medium to longer term (Troskie, 2020).

Employment contracts that made between the actors in the food value chain should be fair to all parties
and should be clear about the rights and responsibilities of the parties since public and private standards
are used to define the minimum requirements in food safety and quality. However, private standards
involve more stringent regulations than public standards and affect the prices that producers receive
and the quantity of produces they sell. In addition, these standards make significant impacts on their
income and market access (Mohan, 2020). In addition, the rights of producers and vulnerable groups
affected by changes in supply and demand and the need to adapt in accordance with these changes can
be regulated by legal frameworks. Regulations to be enacted in emergencies such as the COVID-19
outbreak can contribute to the safe and problem-free operation of transactions. Moreover, it is
necessary to strengthen the capacities of legal regulations, including ensuring the proportionality and
necessity of restrictive measures and providing flexibility in the implementation of certain
administrative requirements to face the challenges posed by the new situation. Providing flexibility in
licensing requirements for direct selling, e-commerce, and food transport can also help small producers
and agricultural businesses to find alternative market opportunities (FAO, 2020i) since flexibility is
relatively associated with weak/strong position of farmers and presence of long/short food supply
chains. Customers sometimes believe that food choice is imposed by supply chain challenges (Petetin,
2020).

Timely support is essential for planting season for the next spring (FAO, 2020d). Data collection and
assessment programs for migrants should be used to determine when and where the migrants are
needed (Martin, 2016). Facilitating the cross-border movement of migrant workers is important
because movement restrictions and border closures have a strong negative influence on agricultural
labour supply. In Canada, government announced a US$50 million financial aid program for small
farmers who hired temporary foreign employees through the COVID-19 outbreak. Program allowed
employers to receive US$1,500 per foreign worker who has to self-isolate for 14 days upon their entry
into Canada (Ker, 2020). The resulting shortage of labour can be reduced by policies that classify
agricultural workers as critical persons and exempt them from travel limitations. In the USA,
government highlighted the importance of people employed in agricultural production and considered
them as ‘critical infrastructure worker’ (FAO, 2020f; CDC, 2020). It should also be focused on giving
longer stay permits by changing the visa and residence regulations for seasonal workers in the country.

36
 In some countries such as Canada and Belgium, governments allowed employers to postpone the
recruitment or offer long-term contracts (OECD, 2020c). Commission of European Union (EU)
introduced ‘the green lanes’ for vehicles carrying agri-food products to ensure free and fast movement
on borders. EU measures also highlighted the free movement of agri-food and seasonal workers for
enabling them to reach their workplace and exercise their activities. In addition, the commission
extended the farmers’ application deadline to receive income support known as Common Agricultural
Policy (CAP) payments.

Investments in the registered food processing units have been growing in the recent years. In 2007-
08 the fixed capital of registered food processing units have increased by 18.93% over the previous
year. 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, upgradetion of technology, increase in farm holding, skill and manpower training,
backend and front-end integration and cold chain integration. The opportunities in the food processing
industry are vast. However, there is a need to improve technology and productivity to be competitive
globally. As the economy grows, the food processing industry will offer bigger opportunities to the new
as well as the existing players. India has the second largest arable land of 161 million hectares and has
the highest acreage under irrigation. Next to China, India ranks second largest food producer in the
world and has the potential to immerge the biggest with its food and agricultural sector. India accounts
for less than 1.5% of international food trade despite being one of the world‘s major food producers,
which indicates huge potential for both investors and exporters.

37
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.

38
 Chapter 7

CONCLUSION

Thereby we conclude up this topic with a quick review about . The food processing industry. The
productive enterprises concerned with food processing is know as . The food processing industry . The
food processing is the process of transforming food into other form the consumption either by humans
or animals or the food processing industry . the origin of food processing goes all the way back to
ancient Egypt, yet the period of those devolved seems to symbolize the history of the culture of marking
and as man evoclved from its ancient time, the processing of food has also entered a new era.

As every possible things has some merits, it shows some demerits too. Like wise, preservation of food
shows some merits like it minimize the risk of toxins and its doesn’t gets spoiled easily like fresh foods.
On the other hand its harmful on some nutritional basis too.

39
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