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With fruits, sugarcane, milk, Maharashtra leading food processing state
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Prabodh Halde
January 30 , 2015
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Maharashtra covers an area of approximately three lakh sq km and its
population exceeds 15 crore. The state’s contribution to the Indian food
processing industry is about 13 per cent, and with a focussed approach,
it can increase to 25 per cent. The state produces various cereals,
fruit, vegetables, dairy and fishery products.
Though
Maharashtra is a leading producer of agricultural, horticultural and
marine products, it is poor as far as their processing is concerned.
As
per my estimates, the state’s overall processing rate - excluding
those of dairy and foodgrains - is about seven per cent. It certainly
can increase its value addition to 25 per cent over the next 10 years
with better focus and implementation policies.
Major processing
sectors in MaharashtraMaharashtra accounts for about 90 per cent of
India’s wine production, and is a leading processor of mangoes and
onions. Oil is another commodity in which the state’s processing
industry has a major share.
It is also known for processing of
grapes, bananas, oranges, pomegranate, cashewnuts, strawberries,
tomatoes, sugarcane, milk and milk products and fish. There is a good
scope for the processing of all the aforementioned commodities, as there
is a huge production base.
I see huge potential in the post-harvest
treatment of fruit and vegetables in the coming days. Due to the changes
in lifestyles and urbanisation, the demand for quality fruit and
vegetables is increasing. Even the demand for ready-to-use fruit and
vegetables is increasing. The scope for cut vegetables is also high due
to the growing demand.
Apart from traditional food processing
(viz. the processing of mangoes, bananas, grapes, sugarcane, and dairy
products), the sector needs value-addition to be able to pay back higher
returns to the farming community and have inclusive growth.
Maharashtra
is seeing a paradigm shift, and sectors such as nutraceuticals, wine
processing, pre- and probiotics, packaged water, ready-to-eat foods,
traditional foods, cut vegetables, fruit treated post-harvest, exports,
food additives and manufactured food processing equipment could fuel the
growth of food processing and be game-changers for the state.
Advantages over other states
For
the last 40 years, Maharashtra has been a leader in food processing,
owing to many advantages, such as political stability; friendly
government policies (particularly from MoFPI); good work in basic
agricultural research and hybridisation; forward-thinking farmers and
good production supply; a good industry base; closeness to the market (a
result of growing urbanisation); and high export potential.
Challenges
For the growth of the food processing industry, many inputs (including raw material) are required.
The
biggest challenge faced by the food processing sector is that it is
dominated by unorganised players, who contribute to 80 per cent of the
industry’s volume. There is a conversion of unorganised players to
organised ones, but a fair distance still needs to be crossed.
The
main challenges are the unavailability of a processable quality and
quantity of fruit and vegetables; the low productivity of agri products;
the small landholdings of farmers; the poor processing conversion; the
low technology base and low automation; labour-intensive operations,
the high degree of seasonality and erratic input availability; the high
operating costs due to small-scale operations; the fact that it is a
less competitive sector and so on.
These challenges could be overcome by proper planning and focus.
Potential
The
Indian food processing sector has been called a sunrise industry due to
its inherent potential. Maharashtra’s food processing sector has such
advantages as urbanisation; high consumer purchasing power; growing
market potential; rising domestic demand; new food safety regulations
(for instance, the clubbing of the nutraceutical sector with the food
processing sector); high agricultural production, development of
infrastructure and great investment potential.
Maharashtra has a
family base of about three crore, taking into account an average family
size of four. If each family spends Rs 2,500 on foods (such as milk,
oil, grains, vegetables and fruit), the state’s monthly expenditure on
food is Rs 7,500 crore. This works out to an annual food expenditure of
Rs 90,000 crore.
Now the questions are (a) Is the state able to
cater to a market of that size; (b) Are its resources being utilised
fully to cater to this market; (c) Does it have adequate facilities to
fulfil the demand, and (d) Is it dependent on imports from other states
or countries?
Considering its adequacy of infrastructure and
facilities and its closeness to big markets, Maharashtra has larger
potential in value addition processing than traditional commodity base
processing.
Position on India’s food processing map
Maharashtra’s
share in Indian food processing, as stated earlier, is about 13 per
cent, and its overall growth is about 12 per cent. Its gross state
domestic product (GSDP) is Rs 11,99,548 crore. Of this, only 15 per cent
is contributed by the agriculture and food processing sectors. However,
55 per cent of the population is dependent on the agri and food
processing sectors. This is mainly due to the lack of value addition by
the processing sector. This scenario needs to be changed and the money
should be repaid to the farmers as per their value addition. The agri
and food processng sectors should contribute equally to the GSDP, which
is possible in Maharashtra because of the aforementioned advantages.
However, focus is a must.
Some ideas to newly formed government
A focus on market – Build quality brands at low-cost product development
Today
India is a big village. Recently the government has announced removal
of the APMC Act and this will certainly fuel the trade from farmers to
consumers. For exports, we need to work on supply quality.
Government
and industry should focus on market needs and try to meet the demand
rather than putting our own production in the market with low
realisation.
The focus should be market backward rather than
production forward. If the market needs seedless guavas or oranges we
should supply the same (I know it’s a long process and will take time,
but the government, agriculture universities and companies should focus
on this) rather than supplying normal guavas and fetching a lesser
price. The best example is of Punjabi dhabas – just because of market
demand, today we see the success of the dhaba model all across India
without any intervention from the government. Similarly, a product like
paneer makhani has travelled from Punjab to South India. Idlis have
travelled from the south to the north. Dhokla has travelled from Gujarat
to Kolkata and Rasagulla has travelled from West Bengal to all over
India. But we need standardisation of the processes and some help in
developing products and brands.
There are some success stories like
grapes (seeded to seedless) and banana (normal to tissue culture) which
have changed the complete economics of the trade. We should follow the
same route for other fruits and vegetables. In short the mantra is ‘meet
the market demand.’
B Focus on traditional food processing and technology
India
has a great food map which is spread all across India. Every state has
its own food culture and we need to cultivate and nurture this culture
to maintain our long heritage. Why not invest R&D efforts to make
the traditional food sector more modern with high science? Academia
should be given priorities on traditional food R&D and some good
innovative techniques should cater to the market. There are many market
problems which can be solved by R&D efforts. In Maharashtra we have
over 30 food technology colleges and over 4 food / agri universities.
They should fuel innovation in the area of traditional food and bring
some economical solutions so that the common man / housewife will get
the benefit of such innovation.
Some examples where small ideas can bring big impact
- Roti-making technology: Roti in pre-packed condition with high quality / long shelf life / low prize and hygiene
- Idli / dosa batter which can stay for 7 days at room temperature
- Dehydration technology at very low cost - This will make ‘Ready-to-serve’ products at low cost
- Freezing / cold storage technology at low cost – This will change the face of farming
- Focus
on food equipment design and R&D – Today we have to import most of
the equipment. Even for samosa making, we import the technology from
abroad
- Use of traditional packaging materials to balance the environment impact
C Focus on agriculture universities to develop high yielding varieties and processable varieties
Today
India is No. 1 in production in many agricultural commodities still our
average yield per acre is the lowest in the world. There are many
reasons for this and one of the reasons is inappropriate varieties.
There
should be a focus on high-yielding varieties and though it is a
long-term project, it should start with a definite objective and it can
be made successful through the PPP model.
D Use of self-help group infrastructure to meet the local demand
Today
our main objective is to increase the processing percentages and it can
be achieved by setting up low-cost processing centres all across India
through use of the vast infrastructure of self-help groups. Even if we
pack grain / fruits / vegetables in these centres in a kind of ‘Amma
model’ of Tamil Nadu, it can be a huge success. In countries like South
Korea, the entire electronic industry has been spread across self-help
groups. Big industries outsource the routine / low technology jobs to
different households and literally every house becomes part of the
industry. If it can happen for high-tech sectors like electronics, why
not for food processing? Lijjat / Amul model is based on the same
principle. We should tap the opportunities of big retailers and let them
work with self-help groups on win-win terms.
E Special focus on nutraceutical industry to reduce the burden on the healthcare industry
It
is said that ‘Anna he Purna Brahma.’ Today food can be the best of
healthcare remedies and we can let medicine be the ‘sick care’ industry.
Preventive healthcare is a big industry and food could be the best
solution through nutraceutical and Ayuceutical solutions. Food
processing ministry can encourage this sector to bring in some low-cost
nutraceutical solutions to take care of some basic healthcare problems
like in the areas of heart / sugar / eye care / kidney care and so on.
There are enough bio-active agents which are known in these areas. We
should recognise the nutraceutical industry as a special industry under
food processing and this will reduce the burden of the healthcare
budget. India has a 5,000 years old tradition of Ayurvedic ingredients /
botanicals which can be tapped for better use but what we need is
low-cost models with effective results.
F Special focus on post-harvest technology with practical solutions
Post-harvest
is a typical topic on the radar of the ministry for the last 10 years,
but what we need again is low-cost technologies and easy practical
solutions. E.g., today calcium carbide is banned for mangoes, but we
should have technology as simple as calcium carbide to offer to farmers
or traders so they also can use the same for fruit ripening. The same is
true for cold storage and de-greening chambers. We need a local model
of success and it could be a non-electricity dependent model. Recently
someone has innovated a ‘matka fridge’ to help farmers in Punjab keep
their produce for 4-5 days in this structure without addition of extra
cost. We need focus on such low-cost post-harvest solutions so farmers
can use it effectively.
G Brand Maharashtra - Quality
Maharashtra
can develop quality brands in ‘organic’ sector. We have mangoes /
oranges / grapes / bananas – can we make quality brand and organic brand
which can fetch higher value in international market? Can we have
organic milk / ghee / butter? Add value and pass more money to farmers.
Also we can focus on miner millets like rai / jawar / bajara / bhagar.
These are very essential grains and very nutritive. But today we have
lost focus on these. We also need to make careers in food processing
more attractive and lucrative and there should be a good talent pool
coming into this sector.
H Encourage big industries to invest in Maharashtra
As
a state what we are offering to big industries? Why they will invest in
Maharashtra? We should give them good package for investment. Today to
start industry we need nearly 20 licences. Can we club all these under
one window system? It is possible. If Gujarat can do, certainly
Maharashtra can do it. Today the condition of government sector has
really deteriorated and needs urgent rectification.
Big
industries can generate good employment and it will definitely help
Maharashtra. Taxation can be worked out as per policies. Encourage low
pollution base industry to invest in Maharashtra. Some labour laws need
urgent amendments. Earlier Maharashtra was No. 1 in drug industry, today
it is No. 6 in India. (The author is vice-president, AFST Mumbai / head
regulatory Marico Ltd)
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