Transcript Ministry of Food Process Industries THE SUNRISE SECTOR

Ministry of Food Process Industries
THE SUNRISE
SECTOR
GOALS / OBJECTIVES OF MFPI
Promotion of FPIs resulting in :Reduction in wastages
Value / quality addition
Employment generation
Remunerative income for farmers
STATUS OF FOOD PROCESSING INDUSTRIES
 Size of food market in India - Rs. 8,60,000 Crores
 Primarily processed food market – Rs. 2,80,000 crore
 Value added processed food market – Rs. 1,80,000 crore
 Investment during the 10th plan is estimated at Rs. 62,105
Crores
 Industry growth rate during the last five years is estimated
at 7.14% against GDP of 6.2%
 Investment required during next ten years – Rs. 1,10,000
crore
Status of Food Processing
Industry
• Low level of processing –
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2% in the case of fruits and vegetables
14%in milk
4% in fisheries
1% in meat and poultry products
• India’s share in world’s processed food
production-1%
• Value addition 20% against 45% in Philippines
Status of Food Processing
Industry
• India’s share in global agricultural export is 1.6%
of $520 billion
• Exports have stagnated during the last five years
• Unorganised marketing and distribution of food
items
– 72% of food consumption in the world is through
organised set up whereas it is 1% in India
– Fragmented retailing results in high cost due to
inefficiency ,wastage
• Estimated wastage fruits & vegetables in India35%
Processing of Fruits and
Vegetables
80
70
percentage
60
50
40
30
20
10
0
USA
Brazil
China
Thailand
India
Why increased focus on Food
processing?
The second Green Revolution will be
centered around the concept of ‘farm to plate’.
Low share of processed foods in the country will
open doors to other countries to tap the emerging
market for processed food triggered by a
burgeoning middle class with increased purchasing
power.
Why increased focus on Agroprocessing?
 The Horticulture Mission targets to increase
the production of fruits and vegetables to
260MT from the current 140 MT through
several interventions.
 The current wastage is 35% in fruits and
vegetables a
and in certain cases as high as
60%
Why increased focus on Agroprocessing?
• Vision 2015 of Govt of India is to raise
agro/food processing from 6% to 20%,
value addition from 20% to 35% and the
global trade from 1.5% to 3 % .
• The estimated requirement of funds for
achieving this being Rs.100,000 Crore.
(source-GOI)
Reasons for Sub Optimal Growth of Food
Processing
• Lack of infrastructure
• Inadequate investment
• Agricultural development programmes focused
generally on production
– Post harvest handling including agri/food processing
was not a priority agenda under agricultural extension
• Lack of access to world class technology
• Lack of processing varieties
Reasons for Sub Optimal Growth of Food
Processing
• APMC Act , high taxation etc did not offer
incentives for investment
• Multiplicity of agencies-absence of single window
service
• Fragmented schemes
• 70% of food processing sector dominated by small
scale and unorganised sector
• Limited access to credit
• Absence of an efficient supply chain
Supply Chain in Food Processing –
Weak Link
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Production sector unorganised
Bulk of production in small & marginal holdings
Producers getting only 30 % of produce value
Trade intermediaries getting rest 70 % without
any value addition
Supply line unreliable
Lack of infrastructure at the production sites
Absence of credible institutions to streamline
supply chain
Producers not linked to the processors
ROLE OF MFPI
(a) Policy support
(i) FPI sector delicensed except alcoholic beverages
(ii) Excise duty waived on F&VP (from 2000 – 01)
(iii) Income tax holiday for F&VP (from 2004 – 05)
(iv) Customs duty reduced on freezer van from 20 to 10% (from
2005 – 06)
Contd
Budget 2006-07 Announcements
1. Food Processing identified as industry with employment potential
2. Food Processing to be a priority sector for bank credit
NABARD- a refinancing window corpus of Rs 1,000 crore
for agro processing
infrastructure and market development
3. NIFTEM to be setup; Paddy Processing Research Center
Thanjavur a National level institute
4. Rs 150 Crore earmarked for NHM for terminal markets
Continued…
5. Custom Duty on packaging machines to be reduced from
15 % to
5%
6. Excise on condensed milk ,icecream, preparation of
meat,fish
& poultry ,pectins,pasta and yeast to be
fully exempt
7. Excise on ready-to-eat packaged foods and instant food
mixes like dosa & idli mixes reduced from 16% to 8 %
8. Excise on aerated drinks has reduced from 24 % to 16%
9. Excise on packaging paper reduced from 16% to 12%
10. Custom Duty on Vanaspati increased to 80%
Major initiatives of last two years
•Vision Document release April 2005
•GOM on Vision strategy & Action Plan
•Food Safety & Standard Bill 2005
•NIFTEM Cleared by EFC
•PPRC under progress
•Expenditure by Ministry picking up 60 crores, 80 crores
119 crores in 06-07 .
(d) Developmental / financial support under
various schemes under 10th Plan:-
• Scheme for infrastructure development
• Scheme of technology upgradation / establishment /
modernization of food processing industries.
• Scheme for human resource development
• Schemes for quality assurance, R&D, codex, bar coding
and establishment of labs.
MoFPI Schemes
Food Park
25% of the project cost upto a maximum of
Rs.4 crore (NE region assistance is 33.3%
Grant covers common facilities like
common processing/packaging, cold
storage, food testing and analysis lab,
effluent treatment plant, power, water etc
Packaging centres
25% of the total cost of plant upto a maximum
of Rs.2 crore (NE region assistance is 33.3.%)
Integrated cold chain
facility
25% of the total cost of plant upto a maximum
of Rs.75lakhs (NE region assistance is
33.3.%)-cold storage for non horticulture
produce,Spl.CS with Controlled and Modified
atmosphere facility
MoFPI Schemes
Value added centre
25% of the total cost of plant upto a maximum of
Rs.75 lacs (NE region assistance is 33.3.%)
enhancing the shelf life,documentationetc
Radiation facilities
25% of the total cost of plant upto a maximum of
Rs.5 crore (NE region assistance is 33.3.%)
preservation, prevent infestation,sprouting etc
Modernized
Abattoir
25% of the total cost of plant upto a maximum of
Rs.4 crore (NE region assistance is 33.3.%)
Gaps in the Present Scheme
• The schemes mentioned are basically stand alone,
though these are all components of food
processing
• Lack of integration leads to under utilization of
infrastructure created
– Case in point is that of cold storage (in spite of huge
wastages the cold storage facilities are under utilised)
• Duplication/overlapping of schemes
• Financial support inadequate for attracting
investment in a sector which has to deal with
several uncertainties
Gaps in the Present
Scheme..
• Lack of comprehensive project appraisal
ensuring backward and forward linkages
• Lack of stakeholder participation
Gaps in the Present Scheme
• Food park
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Formulated like other industrial parks-supply driven
Not pre-marketed
Not location specific
Absence of backward linkages
Inadequate financial assistance - Rs.4 Crore does not
commensurate with the investment
– Insistence of a minimum number of 20 units will not
attract medium and big investors
Contd…
Gaps in the Present Scheme
• Food park
– Modification during the Tenth Plan insisting on
investors’ share of 75% made it more rigid
– Lack of a sustainable management arrangement
from it’s inception to commissioning
– No arrangements to harness resources available
else where for complementary activities and
channelise to the project to make it more viable
Current Status of Food
Parks
• So far 51 Food Parks approved under the
scheme
• Most of them are yet to be commissioned
• Those commissioned facing issues of capacity
utilisation
• Low level of occupancy in the park
Approach to Agro/food Parks: Comparison
• Existing scheme
– Targeting small & medium
enterprises with a minimum
of 20 units for a 30 acre
park
– Activities confined to Park
alone
– No stake holder
participation
• Suggested framework
– May not restrict the number of
units-restriction can be on the
quantity of material to be
handled
– Complementary activities can
take place outside the Park
– To be implemented on a PPP
format
 SPV to manage the park
 51% equity in the SPV to be
with private entrepreneurs
– Inadequate financial
assistance-25% or Rs.4
Crores per park
– Financial assistance to be 50%
subject to maximum of Rs.50
Crores per park
Approach to Agro/food Parks: Comparison
• Existing scheme
– Supply driven
– Posr marketed
– Stand-alone (no backward
and forward linkages)
– No project development
agency
– No financial closure
• Suggested framework
– Demand driven
– Pre-marketed
– Strong ’backward &
forward integration and
sustainable supply chain
management
– Project manager (to
handhold from concept
to commission)
– Financial closure
Proposed Scheme
• Features
– Objective
• Build common infrastructure – Weigh Bridge,Pack House,
Cold Storage, Cold Chain, Irradiation facilities,Marketing
infrastructure, common facilities and management service
centre, etc.,
• R&D support, Quality Control and certification infrastructure
• Ensure backward and forward linkages
– Implementation strategy
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Facilitate convergence of services
Scheme to be in PPP mode
To be operated by SPV
Involve stakeholders (GoI, State Govts, Entrepreneurs,
Farmers)
• Facilitated by Project Management Agency (PMA)
The Way Forward
• The integrated food parks to be set up in a
minimum area of about 75 acres –150 acres (need
not be restricted by geographical boundaries)
• The basic infrastructure cost , investment for
common facilities, infrastructure at collection
points etc will amount to Rs 45 to 100 crore
The Way Forward
• There should be no restriction on the
number of units-emphasis should be on
economic viability
• Efforts to be directed for supply chain
vendor development involving farmers
organisations –this helps to benefit a large
number of farmers besides facilitating
creation of basic infrastructure in rural areas
Why Cluster Based Approach?
• Offers critical mass for customization of
interventions
• Economies of scale in operation
• Better access to technology, information
• Greater access to customers, channels and better
value realisation
• Cheaper access to inputs, raw materials
Methodology
Handholding from “concept to commissioning”
Concept
Need Assessment
Capacity Building
Project Development
Project Financing
Commissioning
Project Execution
Model Structure of SPV
Government
of India
State Govt/ State agencies
PMA
State support
under identified
schemes
Project
Management
ConsultantAgency
Shareholders
Shareholders
Agreements
SPV
Construction/
O&M
Contract
Construction
agencies
Support under identified.
Schemes
Financing
Agreements
Contracts
for
technical
studies/
services
Consultants
Lenders
Service
/Supply
Agreements
User Units
STATES INITIATIVES REQUESTED
•Amendment to APMC Acts
•Lowering of VAT rates
•Intergrate promotional infrastructure
Project profile
Model Food Park
Ideal Park Layout- Two
Parallel Lines
• First line: fresh food market
– Primary processing of fruits and vegetables
– Sorting, grading, cleaning and packing by
adopting modern technology
– Aimed at increasing the shelf-life by 7-10 days
– Facilitating access of products to all the major
markets
– Increasing value realization for the producers
Ideal Park Layout- Two
Parallel Lines
• Second line: processed food market
– Units engaged in secondary processing
– Producing products like ready to eat vegetables, juice,
jam, jelly, pickles, paste ,wine etc
– Raw materials from the first line of units as well as
direct sourcing of appropriate varieties
– Product range can be expanded based on the location
– A separate area for meat products/fisheries /diary can
be earmarked on a need basis
Supply Chain Management Strategy ….
Primary
processing units
Collection Yard-1
Sorting
Grading
Cleaning
Fresh food
supermarket
Collection Yard-2
Packing
Collection Yard-3
Secondary
processing units
Collection Yard-4
Jam/
jelly
Juice
Paste
pickles
Processed
food
supermarket
Proposed Common Facilities Production
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Weigh Bridge
Pack House
Cold Storage
Food Testing & Analysis Lab
Product-cum-Display Centre
Modernisation of Abattoirs
•Largest livestock population (485 mm)
•Market potential of INR 200 bn
•3000 Slaughter Houses & 255 licenced units
•Lack of infrastructure
•100 cities to be targeted for modernisation
•Constitution of Meat Board
Existing Scheme
Suggested framework
* Only local bodies eligible
• Local bodies, or through JV, or
BOO/BOT basis green initiatives
•25% or 33.33% of the cost of Plant
& Machinery/TCW in general areas
and difficult areas respectively with
ceiling of Rs.4.00 crores.
•
75% and 90% of the cost of
Plant & Machinery/TCW in
general areas and difficult areas
respectively with ceiling of
Rs.10.00 crores.
• No project development agency
•
Project management agency to
handhold from concept to
commissioning.
Business Development
Programme for
Street Food Vendors
Background
• Street vending is an important economic activity
in the informal economy
• It has to be accepted that street food vending is a
reality and it impacts the livelihood of a large
number of people
• Beneficiaries of street vending,besides the
vendor’s themselves, are the low income group
customers
• A host of problems confront this segment ranging
from food safety to social and legal issues
Street vendors in some cities
City
Ahmedabad
Bangalore
Bhubaneswar
Kolkotta
Mumbai
Patna
Number of vendors
100000
30,000
30,000
150,000
200,000
80,000
Bringing street vendors to mainstream –
short term intervention
• Sensitisation of the local bodies
• Capacity building among all stake holders
Training on health and hygiene standards
• Financial support for infrastructure
• Establish simple standards for safety and
hygiene
• Involve NGOs and other civic bodies
Opportunities
• Can be a major income generating activity
for land less
• A sizeable portion of low income people
can have access to safe food
• Can be linked to tourism and promote
ethnic food items
• Can be a vocation for women with reduced
drudgery
The way forward
• Implement a pilot scheme covering 10 cities
• Work shop on the theme to be conducted for street
vendor’s association
• Identify areas with in the city which has potential
for street food vending –to be done through a
consultation process
• Evolve food sanitation standards for street food
• Certification agencies including non governmental
to be identified
The way forward
• Identify vendors with preference to women
• Form SHGs wherever feasible
• Training the selected vendors with the active
involvement of vendor’s association and local
administration
• Issue a permit in the name of the vendor with a
provision of an alternate member also
• Provide designed carts free of cost to the vendor’s
in the cities selected
The way forward
• At least 1000 carts per city to be given to provide
an impact
• In 15 cities 15,000 carts to be supplied
• Approximate expenditure –Rs.30 Crore
• Evolving standards,Training and capacity
building-Rs.1.5 Crore
• The implementation process from a baseline
survey ,capacity building ,evolving
standards,distribution of carts etc would require a
professional project manager