FNB News - Inflow of FDI for the year 2012-13 was Rs2887.03 crore – Siraj Hussain

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POLICY & REGULATIONS

Inflow of FDI for the year 2012-13 was Rs2887.03 crore – Siraj Hussain

Thursday, 08 August, 2013, 08 : 00 AM [IST]

With the new FDI in retail policy currently underway and implementation of the National Mission on Food Processing under the 12th Five Year Plan across the country, the food processing industry is upbeat about the future. Siraj Hussain, who took over as secretary, ministry of food processing industries, in an email interview with Ashwani Maindola gives details on these two areas and more. Excerpts:

How FDI is helping the food processing sector?
Foreign Direct Investment (FDI) complements and supplements domestic investment. FDI brings in, apart from capital, state-of-art technology and best managerial practice, thereby providing better access to foreign technology by the domestic food processing industry. The inflow of FDI for the last three years during 2010-11, 2011-12 and 2012-13 (April to Feb) is Rs 5,796.22 crore, Rs 7,677.74 crore and Rs 2887.03 crore respectively.

What is the implementation status of National Mission on Food Processing across the country, challenges, and success stories?
Components of the mission proposed to be implemented during 2013-17
The major programmes / schemes covered under NMFP during 2012-13 of 12th Plan are - Scheme for Technology ‘Upgradation’ / Establishment / Modernisation of Food Processing Industries; Scheme for Cold Chain, Value Addition and Preservation Infrastructure for Non- Horticultural Products; and Scheme for Human Resource Development (HRD).
   New schemes proposed to be implemented during 2013-17: Scheme for Creating Primary Processing Centres / Collection Centres in Rural Areas; Modernisation of Meat Shops; Reefer Vehicles; and Old Food Parks.

No physical and financial targets have been kept for the scheme for abattoirs during 2012-13 and 2013-14. The Abattoir Scheme would be subsumed in NMFP for implementation by the states with effect from 2014-17. During 2012-13 and 2013-14, the Abattoir Scheme would be implemented by MoFPI and 50 projects recommended by EFC dated Feb 28, 2012.

The mission has just been launched in middle 2012-13 and as such there was hardly any time to narrate success stories. However, there will be more challenges to make the mission successful in 12th Plan.

What is the future prospect of the mission and thrust for the 12th Plan?
New schemes proposed to be implemented during 2013-17 under NMFP: Scheme for Creating Primary Processing Centres / Collection Centres in Rural Areas; Modernisation of Meat Shops; Reefer Vehicles; and Old Food Parks.

The government has recently approved the upscaling of the 11th Plan scheme to complete eight approved ongoing projects and to take up setting up of 25 new abattoirs and modernisation of 25 existing abattoirs involving an estimated expenditure of Rs 330.84 crore.

Flexibility to the states: To give states / UTs flexibility for any deviation from guidelines / taking up of new schemes, if any, as per their local requirements. 20% of the respective state allocation could be utilised.

What is the infrastructure that has come up since the implementation of the Plan and expected to come up?
The Scheme for Infrastructure Development has following three components: Mega Food Park; Scheme of Cold Chain Value Addition and Preservation Infrastructure; and Modernisation of Abattoirs.
(a)   Mega Food Park
Under Mega Food Park Scheme during 11th Plan, 30 projects were approved of which 14 finally approved and 16 ‘in principle’ approved. The expenditure during 11th Plan was Rs 217.28 crore and during 2012-13 the expenditure was Rs 93.117 crore. Ten Mega Food Parks are in the pipeline and are yet to be approved by the competent authority.
(b)   Scheme of Cold Chain Value Addition and Preservation Infrastructure
     The ministry has so far approved 74 cold chain projects for financial support. In the first phase, 10 projects were approved during 2008-09. Another 39 projects were approved in the second phase during 2011-12; out of which 11 projects were cancelled later on for various reasons such as not meeting the scheme guidelines, misrepresentation of the facts, etc. Thus, 28 projects are under various stages of implementation under the second phase of the scheme. In the third phase, 25 projects were approved during 2012-13. Thus, a total of 63 projects are under various stages of implementation. Out of 63 projects approved so far, 24 projects have reported commercial operations. The remaining projects are at various stages of implementation. During the 11th Plan, an expenditure of Rs 156.02 was incurred. During the year 2012-13 an amount of Rs 81.13 crore was released under this scheme.

(c)   Modernisation of Abattoirs
       CCEA had approved the scheme of setting up / Modernisation of Abattoirs in its meeting held on Feb 28, 2009. The ministry had taken up modernisation of 10 projects in the 11th Plan. Two projects at Dimapur, Nagaland and Ahmednagar, Maharashtra have been completed. The remaining 8 projects are at various stages of implementation.
       Government has recently approved to upscale the 11th Plan scheme to complete          eight approved ongoing projects and take up setting up of 25 new abattoirs and modernisation of 25 existing abattoirs involving an estimated expenditure of Rs 330.84 crore.
       During the 11th Plan, an amount of Rs 40.93 crore has been released. During the year 2012-13 an amount of Rs 9.34 crore was released.

What are the various schemes run and offered by the MoFPI for the processing industry and their status?
MoFPI is implementing the following schemes to strengthen the food processing industries:
Scheme for Infrastructure Development

a.   Mega Food Parks
The scheme provides for creation of State of the art infrastructural facilities for food processing sector. The scheme envisages financial assistance in the form of grant-in-aid @ 50% of the project cost excluding land component in general areas and @ 75% in North-East Region and difficult areas subject to a maximum of Rs 50 crore per project. The tentative 12th Plan allocation for the scheme is kept at Rs 1800 crore.
b.   Integrated Cold Chains
Financial assistance is provided in the form of grant-in-aid @ 50% of the total cost of Plant & Machinery and Technical Civil Works in general areas and @ 75 % in North-East Region and difficult areas subject to a maximum of Rs 10 crore per project. The tentative 12th Plan allocation for the scheme is kept at Rs 700 crore.
c.         Setting up / Modernisation of Abattoirs
Financial assistance is provided in the form of grant-in-aid @ 50% of the total cost of Plant & Machinery and Technical Civil Works in general areas and @ 75% in North-East Region and difficult areas subject to a maximum of Rs 15 crore per project. The tentative 12th Plan allocation for the scheme is kept at Rs 300 crore.
National Mission on Food Processing (NMFP)

The ministry has launched a new Centrally-Sponsored Scheme namely NMFP during 12th Plan to be implemented through state governments. Some of the ongoing schemes of the ministry have been subsumed in the NMFP in addition to the newlyproposed components. This will not only provide better outreach for the schemes of the ministry but also allow the ministry to focus on policy issues relating to food processing sector. The tentative 12th Plan allocation for the scheme is kept at Rs 1850 crore.

Technology ‘Upgradation’ / Establishment / Modernisation of Food Processing Industries

Financial assistance is provided in the form of grant-in-aid @ 25% of the total cost of plant & machinery and technical civil works subject to a maximum of Rs 50 lakh in general areas and @ 33.33% in North-East Region and difficult areas subject to a maximum of Rs 75 lakh per project. The scheme has been subsumed in the NMFP with effect from April 1, 2013. The tentative 12th Plan allocation for the scheme is kept at Rs 750 crore including HRD for spill over requirement.
Scheme for Quality Assurance, Codex, R&D and Other Promotional Activities

Food Testing Laboratories

   Financial assistance is provided to Central / state governments, its organisations /universities, including deemed universities for entire cost of the laboratory equipment. They are also eligible for @ 25% of the cost of Technical Civil Works to house the equipment and furniture and the fixtures associated with the equipment in general areas and @ 33% in difficult areas including NER. All other implementing agencies/private sector organisations will be eligible for grant-in-aid @ 50% of the cost of laboratory equipment and @ 25% of the cost of technical civil works.

Implementation of HACCP

   Financial assistance is provided in the form of reimbursement of expenditure to Central / state government organisations, IITs & universities and private sector @ 50% of the cost of consultant fee, Plant & Machinery, Technical Civil Works and other expenditure towards implementation of total quality management system in general areas subject to a maximum of Rs 15 lakh and @ 75% in difficult areas including NER subject to a maximum of Rs 20 lakh.

Research & Development

Financial assistance is provided to Central / state government organisations/ IITs / universities @ 100% of the equipment cost/ consumables/ JRD/SRF.
The 12th Plan allocation for the scheme is kept at Rs 290 crore.

   Scheme for Human Resource Development

The scheme envisages financial assistance by way of grant to
I.   Food Processing Training Centre (FPTC).
II.   Creation of infrastructure for running degree/diploma courses in food processing in universities.
III.   Entrepreneurship Development Programmes (EDPs)
IV.   Training programmes sponsored by MoFPI. The scheme has been subsumed in NMFP w.e.f. April 1, 2013.

   Strengthening of Institutions
(a)   Indian Institute of Crop Processing Technology (IICPT)

    IICPT is a world-class R&D and educational institutes under the MoFPI, Government of India. The mandatory activities of IICPT are teaching, research and outreach activities in post-harvest processing, preservation and value addition of agriculture and horticulture produces. IICPT and its scientists are experts in their own fields of research. IICPT has created in its main campus at Thanjavur world-class research laboratories for conducting research in different areas of food processing technologies. The project for ‘upgradation’ to a national institute is under implementation since 2007-08 at a cost of Rs 88.48 crore. The institute is offering course in B. Tech (Food Process Equipment), M. Tech & Phd.
(b)   National Meat and Poultry Processing Board

The Government of India established the National Meat and Poultry Processing Board on Feb 19, 2009.
The Board is an autonomous body and would initially be funded by the Government of India for 3 years and would be managed by the industry itself. The Board has 19 members including CEO of the Board. The chairman is from the industry.
This industry-driven institution has been launched to work as a national hub for addressing all key issues related to Meat and Poultry Processing Sector for the systematic and proper development of this sector. The Board serves as a single-window service provider for producers/manufacturers and exporters of meat and meat products, for promoting the meat industry as a whole and it would result in large number of employment opportunities.
(c)   Indian Grape Processing Board
The Union Government in 2009 gave its approval for the establishment of the Indian Grape Processing Board (IGPB) at Pune, Maharashtra, which is close to the principal grape growing/processing areas in the country. The 15-member Board that is led by an eminent professional from the industry has been registered under the Societies Registration Act, 1860, at Pune.

The important functions and objectives of the Board are as under:
?   To focus on Research & Development, Extension, and Quality Up-gradation, market research and information, domestic and international promotion Indian wine.
?   To foster sustainable development of Indian Wine Industry.
?   To formulate a vision and action plan for the growth of Indian Wine Sector including research and development for quality upgradation in new technologies/processes.

(d)   National Institute of Food Technology, Entrepreneurship & Management (NIFTEM)
The Government in 2006 approved setting up of NIFTEM at an estimated cost of Rs. 244.60 crore including foreign exchange component of US$8.1 million. Further, Government in April 2011, approved revision of the estimated cost for setting up of NIFTEM from Rs 244.60 crore to Rs 479.94 crore.

The institute has been granted the Status of “Deemed to be University” under de-novo Category by Ministry of Human Resource Development on May 8, 2012, and the academic session comments from August 16, 2012, for B. Tech (Food Technology and Management) and M. Tech courses.

Do our processed foods match up to international standards? And, how does MoFPI plan to improve their quality?
As per the provisions of the Food Safety and Standards Act, 2006, the Central Government has constituted Food Safety and Standards Authority of India FSSAI). Its mandate inter alia, includes promoting consistency between international technical standards and domestic food standards, while ensuring that the level of protection adopted in the country is not reduced. Every Food Business Operator in the country (including Food Processing Companies) has to follow and comply with Food Safety and Standards Act, 2006, and Rules & Regulations, 2011, made thereunder. As per Section 29 of FSS Act, 2006, the Food Authority and the State Food Safety Authorities shall monitor and verify that the relevant requirements of law are fulfilled by food business operators at all stages of food business.

   The MoFPI is providing financial assistance for implementation of Total Quality Management system in the processed food sector. Under the Quality Assurance Scheme of the Ministry, one of the components provides for reimbursement of 50% of eligible expenditure towards implementation of ISO 14000, ISO 22000, HACCP, GMP/GHP in a unit subject to maximum limit of Rs 15 lakh in general areas and reimbursement of 75% of eligible expenditure subject to a maximum of Rs 20 lakh in difficult areas.

In addition, other organisations like Agricultural and Processed Food Products Export Development Authority (APEDA) under ministry of commerce, and development commissioner, small scale industries, DC (SSI) under ministry of micro, small and medium enterprises are also providing assistance under their schemes for quality development.

How dairy industry in India is doing, what are the innovations, challenges, success stories and future offering?
Dairy sector in India has acquired substantial growth momentum from 9th Plan onwards as a result of which we now rank first among the world’s milk producing nations, achieving an annual output of about 127.3 (anticipated) million tonnes of milk during 2011-12 compared to 121.8 million tonnes in 2010-11. This represents sustained growth in the availability of milk and milk products for our growing population. Dairying has become an important secondary source of income for millions of rural families and has assumed the most important role in providing employment and income generating opportunities particularly for marginal and women farmers. The per capita availability of the milk has reached a level of 281 gram per day during year 2010-11, but it is still lower than the world average of 284 gram per day. Most of the milk is produced by small, marginal farmers and landless labourers. About 14.46 million farmers have been brought under the ambit of 1, 44,168 village level dairy corporative societies up to March 2011.

Government of India is making efforts for strengthening the dairy sector through various development schemes like Intensive Dairy Development Programme, Strengthening Infrastructure for Quality & Clean Milk Production, Assistance to Cooperatives and Dairy Entrepreneurship Development Scheme.

In order to meet the rapidly growing demand for milk with a focus to improve milch animal productivity and increase milk production, the Government has approved National Dairy Plan Phase-I (NDP-I) in February 2012 with a total investment of about Rs 2,242 crore to be implemented from 2011-12 to 2016-17. NDP-I will help to meet the projected national demand of 150 million tonnes of milk by 2016-17 from domestic production through productivity enhancement, strengthening and expanding village level infrastructure for milk procurement and provide producers with greater access to markets. The strategy involves improving genetic potential of bovines, producing required number of quality bulls, and superior quality frozen semen and adopting adequate bio-security measures etc. The scheme will be implemented by NDDB through end implementing agencies like Dairy Cooperative Federations/Unions. NDP-I would focus on 14 major milk producing States - Uttar Pradesh, Punjab, Haryana, Gujarat, Rajasthan, Madhya Pradesh, Bihar, West Bengal, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Orissa and Kerala which account for over 90% of the country’s milk production. Coverage of NDP- I will however be across the country in terms of benefits accruing from the scheme.
    Grants in aid released under the Scheme for Technology ‘Upgradation’/Establishment/ Modernisation of Food Processing Industries during last five years is as below:

Year	Number of Units	Grants-in-aid (Rs in lakh)
2009-10	42	487.98
2010-11	67	1424.21
2011-12	55	1091.07
2012-13	26	448.17
2013-14*	20	457.46

What do you think is the role of MoFPI in developing the processing machinery and equipment industry and subsequently adding to the employment in the country?
The Ministry of Food Processing Industries is implementing schemes, which are aimed at developing the food processing industries by improving machinery and equipment under the latest technology. This would obviously enable the sector to develop, thereby generating employment.

Recently the ministry has constituted the Food Processing Education Council. What does the ministry think about academic opportunities in the food processing sector?
Food Processing Education Council (FPEC)
In order to give boost to the growth of Food Processing Industries in the country, to promote skill development in the food processing sector and to advice the Ministry of Food Processing Industries on academic and other issues concerning, National Institute of Food Technology Entrepreneurship and Management (NIFTEM) Kundli Distt - (Haryana) & Indian Institute of Crop Processing Technology (IICPT), Thanjavur, Tamil Naidu. It has been decided to constitute a “Food Processing Education Council”.
Purpose of FPEC
a)   Lay down broad policy objectives and strategies for skill development initiatives by NIFTEM & IICPT.
b)   To advice on matters relating to the duration of the courses, the degrees and other academic distinctions to be conferred by NIFTEM / IICPT , admission standards and other academic matters;
c)   To examine the development plans of NIFTEM / IICPT and to approve such of them as are considered necessary and also to indicate broadly the financial implications of such approved plans.
d)   To examine the annual budget estimates of NFTEM / IICPT, and to recommend to the Central Government the allocation of funds for the institutes.
e)   To lay down policy regarding cadres, methods of recruitment and conditions of service of employees, institution of scholarships and freeships, levying of fees and other matters of common interest concerning NIFTEM / IICPT.
f)   Any other function as may be assigned by the Central Government.
There was a debate on use of pesticides in agriculture. How your ministry is planning to minimise the risk of pesticide residue in processed foods?
   FSSAI is the authority which is mandated to monitor and verify that the relevant requirements of the FSS Act are fulfilled by every Food Business Operator (including Food Processing Companies) at all stages of Food Business.