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AIFPA promotes food processing industry in a seminar at Aahar
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Saturday, 13 March, 2010, 08 : 00 AM [IST]
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Irum Khan in New Delhi
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On the third day of Aahar International Food Fair, All India Food Processor's Association organised a seminar on " Speedy and Inclusive Growth of Food Processing Industries," jointly with the Indian Trade Promotion Organisation. MA Tejani, vice president, AIFPA and MD Gits Food, Piruz Khambatta, president, AIFPA, and CMD Rasna Pvt. Ltd, Bijay Kumar, managing director, National Horticulture Board, Asit Tripathy, chairman, Apeda, and Amit Dhanuka, vice-president, AIFPA, and MD Kejriwal Bee Care India Pvt. Ltd, were the speakers at the event.
In the president's address, Piruz Khambatta said that India had all the resources needed for food processing like the largest irrigated area and animal consumption, vegetables and fruits, 26 types of climatic condition and food industry worth $181 billion. The food and groceries formed 31% of a consumer's total expenditure. It was leading on number 3 position in agri-produce and the economy too was scaling. The government was supportive in the way of export extension given, schemes developed, APMC reformed in most of the states, mega food parks and lower tax slabs in most of the food items.
However, the logistics cost was huge. It formed 13% of the GDP (gross domestic produce). The government should work on bringing down the logistics cost. Second problem for India was the fragmentation of land that prevented production of larger volumes. India needed to encourage corporate farming and contract farming as private participation could revolutionalise the agriculture sector. There was a huge escalation between producer to consumer price. If the farm gate price was 10, price to the consumer was 18, thus 80% increase in the price.
Another area that India needed attention was collaboration of R&D institutions and education institutions with the industry. VAT (Value added tax) rate being arbitrarily laid was another big challenge that the country was facing. "All states should agree to 4%tax, " Khambatta said. Also India's cold chain was not in place and a big revolution was poised to come in the cold chain industry with more and more women working. Steps needed to be taken in that direction.
Khambatta appreciated the changes in food regulation coming up and said it was positive to be aligned with international standards. He called upon processors to make India an outsourcing destination for food processing. He said AIFPA could play a major role in this as it was one of the biggest names in the industry with in-depth resources and known strength in regulatory issues, fiscal reforms and QIC upgradation. On GST, Khambatta said that it would be great for the industry, however it should not be levied at high level for the benefit of the consumer who was already the victim of a number of taxes.
Tejani called upon food manufacturers to integrate under the AIFPA. He said though the AIFPA had come into existence as early as 1943, it was still not able to bring all the food processors under one umbrella leading to fragmentation of the industry. He said every food manufacturing unit should become a member of the AIFPA to make the representation of the industry as one.
Tripathy of Apeda echoed Khambatta's views on the structural problem of land size, i.e., fragmentation impacting scale. He said that if the industry did not produce on a large scale then there would be no investment, no technology upgradation and low exports. Tripathy too advocated for contract farming to improve the scale of production. He said that exporters needed to have full control over pre-harvest and harvest procedures. Right structural reforms were needed. Farmers had to deal with 17-19 intermediaries to make their products reach the consumers.
On mandi fee, Tripathy said the fee had become sort of a tax with no service rendered. He supported the coming of GST and said it was a welcome move by the government. " We need more reforms in agriculture than industry because large population depends on it," Tripathy concluded.
Bijay Kumar said it was important to understand the needs of the country's agricultural sector before moving towards new technology. The solutions provided by technology should be able to connect with ground situation to save time. For example the critical storage conditions needed for fresh produce. Most of the storage for fresh produce is designed copying the western technology. However, one needed to understand that the west had a cold climate, whereas India was a hot country. Kumar advocated the need for growing processed variety of fruits, giving procurement rates to the farmers and public-private partnership in food processing. He said though India had all the resources there was still a viability gap due lack of infrastructure. The viability gap should be filled with innovative ideas.
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