GS Paper III Mains 2019 Analysis
- Elaborate the policy taken by the Government of India to meet the challenges of Food Processing Sector.
Mains Assignment Question
Elaborate the policy taken by the Government of India to meet the challenges of Food Processing Sector. (250 Words)
Subjects : Economic-Social Development
- Introduction: Highlight the significance and challenges of Food Processing Sector
- Body: Breakdown the challenges into different stages of supply chain management and highlight policy initiatives to address those challenges.
- Conclusion: Link the Food Processing sector and Government’s vision of doubling Farmers’ income; Also suggest some measures to stream the Policy initiatives
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The Food Processing Sector has emerged as a sunrise sector by consisting posting an average annual growth rate of more than 8%. However, the sector faces a number of structural bottlenecks such as availability of quality raw materials, lack of integrated domestic market due to restrictive state APMC acts, inefficient supply chain management etc.
The Government of India has taken a number of policy initiatives to address the various bottlenecks of the sector.
Quality Raw Materials: The availability of good quality raw materials round the year is considered as the major problem of the sector. In order to address this problem, the Government has taken number of policy initiatives such as setting up of farmer cooperatives and FPCs, TOP, NFSM, NHM, National Livestock Mission etc.
Procurement: The state APMC acts have prevented the Industry from procuring the agricultural produce directly from the farmers leading to inefficiencies in the supply chain. Further, lack of cold chain infrastructure has led to 20% post-harvest losses amounting to Rs 44,000 crores annually. In order to solve this problem, the policy initiatives include- Model APMC Act, Model Contract Farming Act, Allowing FDI in setting up Cold chain Infrastructure.
Processing: The Challenges faced here include lack of backward-forward linkages, higher capital requirements, obsolete technology, lack of skilled human resources, lack of focus on quality, lower investment in R&D leading to poor product innovation.
To solve these problems, the Government has launched umbrella scheme known as PM Kisan Sampada Yojana for the creation of modern infrastructure and efficient supply chain. Some of the components of the scheme include- Mega Food Park, Creation of Backward-forward linkages, Cold Chain Infrastructure, Food safety and quality assurance etc.
Other important initiatives include- 100% tax exemption for first 5 years, lower GST on the processed food products, setting up of National level organisations such as NIFTEM etc.
The Food Processing sector has the capability to reduce post-harvest losses and ensure better return to the farmers leading to the doubling of their income. The Various policy initiatives of the Government need to be further streamlined such as addressing the land acquisition for the mega food parks, faster implementation of model APMC act and Model Contract Farming act.