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"In 3-4 years, we expect total of US$90 bn investment"
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Monday, 19 March, 2018, 08 : 00 AM [IST]
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 The ministry of food processing industries (MoFPI), in recent times, has emerged as a focus area for the government, be it doubling the farmers’ income or increasing employment opportunities. Also the sector has serious role in mitigating the food wastage problem. Last year, the food processing sector signed MoUs worth US$14 billion with global food companies and out of them the ministry has already started grounding projects worth US$4 billion.
Ashwani Maindola in a conversation with J P Meena, secretary, MoFPI, delves deeper into the issues that the food processing sector has been facing in recent times and past. Excerpts:
How and what role your ministry has been playing in doubling the farmers’ income and increasing food security and safety? Elaborate.
The farmers have done remarkably well in contributing to the growth of Indian economy and has provided us food security. The farmers now have taken the challenge of nutritional security as well. If we see the trend in production, horticulture has taken over the food grains production. At the same time, animal husbandry sector is growing faster than all other sectors within the agri business. That shows the consumption basket is diversifying and the Indian food intake is becoming more nutritious. Despite all this there is a concern that economic condition of farmers is not improving commensurately. The government is very serious about it.
One of the ways to increase farmers’ income is to prepare farmer as entrepreneurs and incentivise value addition of their produce, so that they can avail the benefit of market demand without having middle men.
Food processing is one of the important ways to ensure steady and increasing income to the farmers. This will also lead to development of supply chain infrastructure, storage, and technologies to value addition in the agriculture produce. We’re focussing on creating infrastructure and developing value chain from farm gate to retail end.
So what has been the progress in FDI in food retail, as government now allows 100% FDI in food retail?
A well-developed food processing sector requires adequate and appropriate infrastructure in the front end, which will ensure delivering processed food to the consumers. For that it is important to have organised retailing that can invest and develop front-end infrastructure. Government is aware of the fact and that’s why food retail policy has been liberalised. Now 100% FDI is permitted in food trade including e-commerce of the food produced and manufactured in India. This policy has positive impact and an FDI of about US$800 million has already been committed by investors. If the policy is further liberalise to allow Indian manufactured non-food items also, this has potential of attracting huge investment. Particularly from major retail chains Amazon, Big Basket, Grofers proposal in this regards has been accepted. These projects are in the initial stages of the implementation.
What happened to the investment pledged at World Food India wherein US$14 billion worth MoUs were signed?
During the WFI, 75,000 business delegation from 61 countries participated. They committed US$14 billion worth investment in the food processing sector. Majority of the investing is coming from the MNCs in form of FDI and also major players in the country. In that plans worth US$4 billion have already started grounding. The process has started across sectors right from infrastructure, fruits and vegetable processing, poultry, fish, dairy, bakery and ready-to-eat segments. The companies have stared initiating the projects.
Share the details of developments in the New Central Sector Scheme - Pradhan Mantri Kisan Sampada Yojana.
Pradhan Mantri Kisan Sampada Yojana has been envisaged with an objective to develop infrastructure for food processing through entire value chain right from farm gate to retail. We’re developing major projects like Mega Parks on one side. On the other hand, farm gate infrastructure is also being encouraged to develop backward linkages with the production system of the processors. There is a programme to create cold chain infrastructure in the country and develop small agro clusters near the production centres. At the same time, food testing infrastructure is also being created in the country. Skill development and human resource development is also being attended to under PMKSY. Under this yojna, there are number of scheme attending various needs of the sector comprising new and ongoing schemes. And all these schemes are under implementation.
There are different targets for each scheme as we propose to establish 100 agro processing clusters under the PMKSY, along with 60 cold chain projects. In total 400 processing and preserving units primarily in mega parks, food parks, agro clusters and designated food parks will come up.
We will also be incentivising many projects for backward and forward linkages. And additional 60 more cold chain projects will be taken under the scheme totaling 300 across the country.
PMKSY will leverage an investment of about Rs 31,000 crore or US$5 billion in these clusters.
In next 3-4 years we expect a total of US$90 billion investment coming to the sector.
MoFPI was to finalise the National Food Processing Policy. What is the update on this? What will be its focus on and how are you planning to include initiatives like National Food Grid and National Cold Chain Grid and linking it with market?
We have drafted a food processing policy. This has been placed before the Cabinet for approval and at appropriate time the policy will be considered by the Cabinet. We have been advising the states to have their independent food processing policy, as in most of the cases food processing policy forms part of general industrial policy. Many states have now come up with separate food processing policy. 10-12 states have already announced their food processing policy.
The Cabinet minister for MoFPI has been talking about creating a national food grid and cold chain grid authority which may be given task of assessing demands of various agri commodities in various regions and suggest the need for creating infrastructure and logistics for seamless movement of the food products across the country. The idea is at the discussion stage and it is yet to take a concrete form.
India was showcased as the preferred investment destination in the food processing sector at World Food India. How it helped strengthen India’s position as a global food factory, what further plans are being devised by your ministry in order to cement the position?
Food processing has now emerged as major focus area for the government because it has immense potential not only to contribute in doubling the farmers’ income but also creating jobs and in rural areas. It was a historic decision where 100% increment was made for Budget of a ministry in a single year. And various new programmes were launched for making interventions to promote this sector.
Government has decided to create a special financial institution focussed on the sector and of course Operations Green will attend to the problems of price fluctuation in three very volatile commodities, Tomato, Onion and Potato.
There is an interest of the world in Indian processing sector as corroborated by the World Food India summit.
Further we have created a specific investment portal Nivesh Bandhu, that will have information right up to district level - production data of the crop, availability of infrastructure etc. Besides a special cell has been created at the Invest India to monitor the progress of each project on weekly basis. We also look into if there is a need to talk to the concerned authorities for smooth grounding of the plan. Our ministry is focussing completely on the ease of doing business.
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