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Prologue

In the new Mains syllabus, UPSC has included: Food processing and related industries in
India

their Scope, significance, Location


Supply chain management (SCM)

Upstream and downstream requirements

But ^thats not the end. Food processing topic also overlaps with
1.
GS2

GS3

Ministries and Departments of the Government

2.
Government policies and interventions for development in various sectors and issues arising
out of their design and implementation.
1.

storage, transport and marketing of agricultural produce and issues and related constraints;

1.

Sci-Tech research e.g. Food irradiation, developing new crop hybrids, animal-breeds etc.

+ same food processing points can be selectively used for discussing ruralunemployment, food inflation, general inflation, FDI in multi-brand retail; even current
account deficit and rupee depreciation: whether its essay / interview or group discussion
(in case of SBI/CAT) hell even RBI Officer phase II descriptive papers.
Structure of the [Food processing] Article series:
1.
We get basic overview of significance-scope-potential-obstacles
2.
Truckload of Government schemes related to post-harvest management, Mega
Food parks etc.
3.

Model APMC acts, the direct cooperative marketing etc.

4.

Finance, taxation, FDI, export related issues

5.
Then we start basic theory of supply chain management (SCM), and upstream
downstream issues of individual food processing sub-sectors viz. Dairy, Fruit and
Veggies, Egg-Meat-Fishes, Confectionary, Wine, Edible oil etc.
References used for this article series
Source

Books

Title

comment

1.
A Manual for
Entrepreneurs: Food
Processing Industry (Tata
McGraw-Hill Publication)

Initial chapters provide the


challenges/problems with food processing
industry. Rest goes into actual management,
accounting, sales, marketing strategy for a
food entrepreneur=useless from UPSC point of
view.

1.
Food
processing:
Opportunities and
Challenges (ICFAI
university press)

1.
IGNOU MBA
booklets (Coursecode:
MS-55)

Some chapters deal with food industries in


China, Australia etc but hardly any good fodder
points
Some chapters provide details of individual
food processing sector but mere copy paste job
from Vision 2015 PDF document.

for theory on supply chain management,


upstream-downstream requirements

State of Indian agriculture


2012-13 (By Agricultural
Ministry)
Vision 2015 for food
industries: part 1 and 2
Flavors of Incredible
India: A report by Ernst
& Young and FICCI

for agro-livestock-fish-production information


and schemes
for opportunities and obstacles in individual
sector: dairy, meat, wine etc.
for supply chain diagrams of individual food
processing sector
+ Additional points for opportunities, obstacles.

PDFs
Planning commissions
report on Encouraging
Investments In Supply
Chains and cold storages

Web

plenty of fodder on

supply chain,

opportunities, obstacles

various schemes

12th FYP documents

doesnt have much specific fodder points for


food processing though.

IBEF report on Food


processing industry

some fancy charts, numbers.

pib.nic.in, Indian express

for government schemes, salient features,


export/dumping issues.

Note: All those Food processing related PDFs have been uploaded
onhttps://files.secureserver.net/0sL2N0Ej5XwsWc
12th Five year plan uploaded on https://files.secureserver.net/0sLrYY0FFJRric
Indian food processing industry: Significance

size

Has more than 35000 registered units

Output of ~5-6 lakh crores

Food processing contributes about 9-10% of GPD, in Agro-Mfg.


sector.
Location wise: Maximum factories in (ie. more than 1000 in given state)
Coastal states: Andhra, Maharashtra, Karnataka, Kerala, Gujarat, Punjab, WB
location

Non-coastal States: UP, Punjab


Observe majorities of the food processing factories are concentrated in the
coastal states.
Increasing Employment

Food processing industry provides plenty of direct and indirect employment


opportunities, because it acts as bridge between Agriculture and Manufacturing

As per ASI survey in 2010, Food processing industry generated highest


employment among all industry. Giving employment to almost 17 lakh people.

12th Five year plan (FYP) wants to create more than 50 million jobs. Out of that,
Food processing sector is to create one million jobs.
Curbing Migration
When food processing plants are setup near agro/rural regions, they reduce:

1.
2.

Poverty among villagers,


disguised unemployment

3.

exploitation of farmers

4.

rural-urban migration

1.

unplanned urbanization,

2.

slums/hygiene/social problems in cities


Curbing Food Inflation

In the last few years Food inflation has been a major problem. Food inflation is
eventually passed through into manufactured goods through higher money wages.

Therefore persistent high food inflation= bad for general macroeconomic


stability.

via:

well-developed food industry + compact supply chain=reduces food inflation

1.

Disintermediation (meaning no middlemen/commission agents)

2.

less wastage/spoilage of perishable products

Thus food industry is significant for reducing food inflation.


Crop-diversification

Indian villagers are away from market= have to grow cereals. (as we learned
in Von Thunen model)

In recent years, Government increased Minimum support prices for rice and
wheat.

That leads to surplus grain production=>Pvt. Players give less price to


farmer=>government has to buy wheat @Minimum support price (MSP) but FCI didnt
have enough storage capacity

Result: Wheat gets rotten @godowns and railway stations.

On the other hand, weve to rely on imported oilseeds because of higher MSP,
farmers prefer to grow rice/wheat than oilseeds=> higher oilseed import adds to
Current account deficit and leads to 1$=62 rupees=>crude oil expensive=petrol
expensive=everything transported through petrol/diesel gets expensive=thus the cycle
of middle class exploitation is complete.

Coming to the original point: we need crop diversification, all farmers shouldnt
be growing just rice and wheat. But if want to seduce the farmers into growing other
crops, then following must be done
1.
Promote food industry with backward linkages to farmers growing fruits,
vegetables, milk, fish, meat, poultry, grain, etc.
2.

Aggressively market the processed food in India + Abroad

once weve done #1 + #2=> then even the farmers away from market area will see
good income opportunity in growing non-cereal crops => crop diversification => the
excessive rotting-wheat surplus problem is solved.
Some filler significance points: food processing
1. Increases shelf life: milk vs butter
2. Increase value: milk vs butter
Scope/Potential

Abundant Raw Material


Indias world
Rank

in production of

milk, ginger, chickpea, banana, guava, papaya, mango, buffalo meat

rice, wheat, potato, garlic, cashew nut, groundnut, dry onion, green
peas, pumpkin, gourds, cauliflowers, sugarcane, tea

among top
five

coffee, tobacco, spices, oilseeds

With such a huge raw material base, we can easily become leading food supplier in the
world. (But we havent, because of the obstacles discussed later).
Geographical advantages
1.
46 out of 60 soil types are present in India.
2.
More than 26 types of climatic conditions= can cultivate large variety of fruits,
crops, vegetables.
3.
Large coastline, villagers in 13 states engaged in fishing as their secondary
activity.
4.

Variety domestic animals such as cows, buffaloes, goats, chicken, lamb, sheep.

5.
Large irrigated area under cultivation. Ample supply of fresh water for human,
plant and animals.
New Demand

In the upcoming years, there will be good demand for healthy, modern food products
due to following reasons:
1.
Youth population (age group 15 25): doesnt shy away from trying new food
products.
2.
More Nuclear families: usually working couple => less cooking time +
expensive maids=need ready to eat / ready to cook food.
3.

Rising incomes, middle class and rich families=can afford processed food.

4.

Emergence of Tier 1 and Tier 2 cities, shopping mall culture.

5.
Growing migration from rural to urban India + rising income = demand for
bread, butter etc.
6.
Media penetration, advertisements=> demand is created for health-drinks,
noodles, cream-biscuits, cornflakes etc.
7.
Celebrity chefs, cookery channels= new dishes, international cuisines
introduced=>demand for their ingredients, vegetables in India.
8.
food.

Diabetes, obesity, Blood pressure, lifestyle diseases =>demand for healthy

As a result, food processing industry is expected to reach


year

turnover USD

2015

>250 billion

2020

>300 billion
Government Initiatives

Many food processing sectors that were earlier reserved for small scale
industries (SSI) have been de-reserved

FDI limits have been relaxed, Excise duties have been reduced, export subsidies
given

National mission on food processing, Vision2015 for food processing,

New schemes for mega food parks, cold chain etc.

Many states have reformed their outdated APMC laws.

and so on (^all these elaborated in later articles.) Together they facilitate the
expansion of food processing industry in India. More scope points, specific to individual
sector (i.e. Dairy, meat, fish etc) later articles.
so far everything sounds hunky dory but if our food processing industry was so
awesome, then UPSC wouldnt have included it in the syllabus. Then, what are the.
Obstacles to food processing?
country

__ % of total fruits/vegetables processed

India

barely 6-7

China

>20

USA

>60

So, why low level of food processing in India?


Economies of scale
When you produce something on large scale, the unit production cost decreases. How /
Why?
1.
When you purchase raw material in large bulk, you negotiate/bargain with
supplier.
2.
Fixed cost remains same (building rent, cost of lights, initial cost of buying
machinery etc.) e.g. you bought a ice cream machine for 10 lakh- whether you make
100 liters ice cream or 1000 liters ice-cream per day- its upto you but the more ice
cream you produce, the average unit cost decreases. (think of 100/5 vs. 100/50)=
hence bigger the plant, cheaper to produce.
Most of Indian food processing units/companies/enterprises/factories are small sized
meaning = poor economies of scale. It leads to following problems:
Aspect

problems of small company / poor economies of scale

Pricing

Since unit production cost is high, he cant sell his products cheap unlike a big MNC, and
Indian consumers are price sensitive.

BrandBuilding

Small players=small profit, seasonal business. In global market they cant establish
themselves as a long-term player they only do opportunistic businesses, undercut each
other.

Low
Technology

Marketing

Cant invest in R&D to develop new products (e.g. chilli chewing gum or tomato
cream biscuit!)

Cant do marketing research / survey to find out what consumers want?

Cant invest in advertisement campaigns to create new demand.

e.g. Kellogs is aggressively advertising its cornflakes in India, highlighting weightloss


benefits.

but on the other hand, an Indian Halwai (sweet maker) cant do same level of
marketing in USA to create demand for jalebi or peda.

cant do backward linkage e.g. contract farming: giving seeds/fertilizer/pesticide to


farmer.

Un-Export
Quality

Instead small company relies on multiple small supplier hence Raw material=nonuniform in quality.

Then their products are rejected in US/EU market for not meeting the Codex/HACCP
standards. (e.g. mango juice rejected for stone weevil, buffalo meat rejected for food-nmouth disease, fish rejected for heavy metal contamination and so on.)

retailing

Cant do forward linkage e.g opening its own factory retail outlet like Nike, Adidas
or Apple => small company has to rely on third party retailers and need to give them margin
from sales= profit decrease and poor economies of scale continues.

But why do we have this poor economies of scale?

1.
For long, many food processing items were reserved for Small scale industries
only.
2.
High input costs due to multiple taxes, middle men. Profit level is low=cant
expand.
3.
Government schemes, subsidies, grants have low-ceilings =Individual person
cant setup big plants
4.

Hard to get bank loans. (more elaboration in later article)

5.
Bigger the plant, bigger the headache in terms of tax-liabilities. Creative Indian
entrepreneurs rather setup multiple small plants to get subsidies/tax benefits of MSMEindustries, and sell unbranded food products.
Anyways, some more obstacles for Indian food processing industry:

Price Sensitivity

Indian public=Low per capita income = higher price sensitivity


and higher income elasticity in relation to food expenditure.

Preference For
Fresh Food

Indians prefer freshly cooked products as compared to packaged


products. Traditional mindset: fresh = nutritious.
truckload of agri-problem. Well see the individual problems in
later articles. for the overview:

Agri Problems

Agriculture/Dairy production yield levels are among the


lowest amongst the BRIC countries.

Land holdings=small, fragmented.

Area under cultivation is decreasing due to urbanization,


real-estate development, industrialization and ofcourse thanks to
totally awesome people like Raabert Vadhera.

there is no common policy on contract farming


throughout India

high cost of raw material (driven by low productivity and


poor agronomic practices)

Supply Chain
Problems

Presence of intermediaries thanks to Nuisance called


APMC acts.

high cost of packaging, finance, transport and distribution

lack of organized retail

Logistics cost= transportation, warehousing, material


handling etc.
Logistics

In India, Logistics accounts for about 13% of GDP, which


translates to over USD130 billion.

This cost is significantly higher as compared most


developed countries.

Inadequate infrastructure of storage, sorting, grading and


post-harvest management.

Infrastructure

Private sector unwilling to invest in logistic or


infrastructure under prevailing economic conditions and policy
paralysis.

Finance

hard to get loans (for both farmers and foodentrepreneurs)

food industry subjected to variety of taxes.

Taxes on processed food in India are among the highest


in the world.
Taxation

Except India, No country distinguishes between branded


and unbranded food sectors for taxation.

Multiple and complicated tax regimes have rendered the


food industry uncompetitive

Schemes

Plethora of government schemes: overlapping,


ambiguous, low ceilings. e.g. you need crore rupee worth
machine, they barely give few lakhs- that too after months of
visits to various offices.

Laws

Food laws are often inconsistent and overlapping.

The Food Inspectors cause of harassment and bribedemands in terms of pulling up entrepreneurs under the Weights
and Measures Act, ingredient content and mix, labelling norms,
etc.

While the various acts are necessary, court cases turn out
to be expensive for small-entrepreneurs- especially if involved in
inter-state trade.

Market
Information

Small players cannot buy international


journals/magazines to find the latest trends in
demand/innovation. Most of them also dont know how to use
internet for business/marketing.

Manpower

Packaging

Market information not easily accessible

Lack of trained manpower.

Very few universities offer special courses for food


processing and entrepreneurship.

Since Indian consumers= price sensitive, most of the


food products are sold in small packages (Rs.5 noodles, biscuits
etc)=more plastic required= higher share of packaging costs as a
proportion of total costs.*
*High packaging cost

Packaging cost is ___ % of total production cost


Potato Chips

20%

Fruit Juice

19%

Jam

12%

Chicken Nuggets

8%

Branded Atta

6%

A recent ICAR study on Status of Post-Harvest losses

type

post-harvest % loss

cereal

wheat

pulses

blackgram

oilseed

groundnut

10

fruits

guava

18

veggies

tomato

12

spices

turmeric

marine

inland-fish

moving to more problems faced by Food processing industry:


Lack of organized retail
In USA there are two types of retailers
1.
2.

Big malls: Walmart etc.


small kirana walla known as mom and pop shops

But both of them have cold-storage facilities, hence they sell l both dry and wet/fresh
food products
dry

fresh

bakery items, noodles, pasta, flour, cheeze


etc.

fruits, milk, veggies, meat, chicken, fish

But in India, kirana stores dont have cold storage facilities=> they only sell dry
food products.

and fresh produce is sold through vendors with push-carts=>wastage because


they dont have cold storage.

Meat, poultry and marine products are primarily sold in separate markets but
they too dont have cold storage=>wastage.
Thus, lack of organized retail, leads to
1.

low product quality

2.

lack of variety, choice

3.
poor shopping
experience

1.

low hygiene levels

1.

low value for money

1.

high cost of product

Lack of Food testing facilities


1.
The number of laboratories in the country is insufficient. Most of these
laboratories lack world-class facilities and infrastructure. Equipment, Testing manuals
outdated
2.
Many laboratories are not equipped with basic facilities such as for testing
antibiotic residues, heavy metal contamination and other toxic contaminants in the food
items.
3.
Very slow response time of Government controlled food laboratories is long,
extending to upto 5 years.
4.
Most laboratories at sea ports are not fully equipped to handle testing of
imported products, organic foods, residual radioactive matter, new toxins and allergens,
textural analysis, residues of veterinary drugs, enzymes and hormones etc. these tests
are necessary for complying with Codex, HACCP , GMP , GHP etc before exporting to in
US/EU markets.
Lack of Skilled Manpower
A food processing unit requires skilled manpower, including

Production Managers or
Supervisors

Product Development
Technologists

Food Engineers

Food Microbiologists

Quality Control Scientists

Research Technicians

Technical Representatives

machine operators, assistants

Problems
Lack Of Men

As per a study by National Skill Development Corporation:


the annual human resource requirement in food processing

industry is estimated at about 5 lakh persons including about one


lakh persons in the organized sector.

But right now, every year, barely ~5000 graduates and


postgraduates pass out from in different disciplines of Food science
and technology.

very few universities offer graduation/PG courses,


entrepreneurship courses for food science and technology

youth.
Lack Of Courses

Need short-term, diploma/certificate type courses for rural

need to introduce courses for small scale players such as


retailers, halwais

Need specialized institutes for training/R&D in bakery,


confectionery, wine making.

Outdated
Syllabus And
Professors

Inspectors

Engineering

Syllabus/courses in university departments are not being


updated regularly and are in most cases, outdated with respect to
the present trends and food industry requirement.

The teaching faculty in most of the Indian academic


institutions studied has limited industry experience / exposure.

Food inspectors unaware of GMP, GHP & HACCP standards,


latest developments in food standards, new products, and
laboratory network

Engineering curriculum does not equip graduate engineers


with the skill of designing cold chain infrastructures. Fresh
graduates find it difficult to make heat load calculation and
configure the plant & machineries in energy-efficient manner.

There is urgent need to upgrade the syllabus accordingly.


Lack of R&D

Indian food processing industry is mainly madeup


of small scale players= they cant invest money in R&D=>
becomes governments responsibility to do the R&D.

1.

Sarkari Domain

But Sarkari Research objectives are outdated,


food market requirements keep changing frequently given
the new product launches by MNCs.

Multinational Food companies typically have an inhouse global network of R&D professionals.

1.
Baba Adams
Mindset

Although theyre willing to work with Indian


institutions for developing India-specific products and
processes.

But the quality of R&D currently undertaken by


existing Indian institutions is not in line with their
requirements.

1.

Manpower

The chairmanship of public research institutes


usually given to (retired) IAS or politicians=> lack of
dynamism/market-orientation of the hardcore
professionals in food-MNCs.


Many students prefer alternate careers which are
found to be more fulfilling and remunerative. There has
been a significant drop in the quality of people entering
the R&D field
1.
n

Indian Government recently introduced a variety


of kiwifruit in North India, but could not provide adequate
support/advice on cultivation practices. Result= domestic
kiwi produce is much smaller in size than imported kiwi.

Implementatio

1.
There is a huge opportunity for developing and commercializing desi foods for
export e.g. ethnic beverages such as kokum, coconut water and ethnic food such as
khakra, amla preserve etc. But, to make them appealing to foreign consumers, R&D
required for product development, food-texture, rheology, mouth-feel, smell, color,
packaging etc.
1.
Internationally, following research-developments are ongoing, while we are
generations behind in research:

area

What foreign players are doing in R&D?

Non-thermal food processing technologies to preserve the


nutrients in milk, fruit juices and also for killing microorganisms in eggs.

processing

Role of ozone in fresh food sterilization

Calcium treatment to extend the shelf life of melons

Packaging films that offer optimal barrier properties to extend


shelf life.

packaging

Biodegradable films made from pectin and starch

Silicon oxide films that improve oxygen and moisture barriers.

Use of natural antioxidants in packaging materials for shelf life


extension of combat rations for soldiers.

Active and intelligent packaging systems To monitor product


quality and trace a products history through critical points in the food
supply chain.
Transport problems

Transport capacity

India

developed countries

Normal distance covered by


trucks/trailers

250 -300km / day

600- 800 km/day

roads capacity to handle maximum


weight

16 tonnes

36 tonnes (USA)

Indian national highways account for only 2% of the total road network but
carry 40% of all cargo.

This puts a high pressure on the highways due to the high traffic volumes =>
delays in transit + damage to perishable products

Though highways are well-spread, theyre yet to connect all 550,000+ villages
in India


Railway is cheaper than road transportation but railways
currently contribute barely ~25% of the total cargo transported

Last mile connectivity from rail transporters =absent.

Inefficiencies associated with a government monopoly. (timingschedules, technology upgrades etc)


Railway
problems

Lack of wagons with cold storage facilities.

Congested rail stations, lack of sorting, grading, warehousing


facilities nearby.

Road transport operators provide more flexibility.

Although The Dedicated Freight Corridors are expected to


improve the connectivity of the railways, increase carrying capacity and
reduce the transit time.

Environmental and social hurdles in land acquisition= hard to


get setup new port / expand the existing port.
Ports

High dependence on manual labor + low technology usage=


increases the turnaround, loading/unloading times at ports, thus impacts
entire supply chain lead time and increases cost For e.g. the cost of an
import container in India=~$500, elsewhere ~350 in foreign ports.
Export Problems

Although India is the second largest producer of food in the world but its share in
worlds exports is very low despite its inherent strength in tea, spices and rice. Why?

expensive
Raw Material

Fragmented base of suppliers=uniform quality not available

Lot of intermediaries=raw material cost increased.

etc.

High duties on imported raw material: additives/flavorings

As a result input cost =high, hence pricewise, we cannot


compete with other exporters.

low
processing

Our processing has largely remained in primary forms like


pickling, sun drying and/or making preserves. Sometimes we just
export intermediate product to second country theyll further
process it and sell to third country @even higher price. (e.g our
shrimps to Japan, Japan selling them to US)

low quality

Often our products rejected from US/EU markets for not


meeting Codex, HACCP quality standards

Branding

yet to Build global brands on the back of Indias strengths


(Darjeeling tea, Basmati rice, Durum wheat, Alphonso mango,
Tamilnadu Banana or Kashmiri Apples)

Developed countries view India as an unpredictable and


unreliable source of food and agro products.

transport

Poor cargo facilities at airports and ports are other


bottlenecks discussed earlier

Packaging

yet to develop packaging technologies for Indian food


products to make them more acceptable to foreign consumers.

Dumping

Devaluating

Desi shrimps face Anti-dumping duties in USA.

1$=~60 Indian rupees while 1$=~100 Paki rupees

Given these exchange rates and local prices of Basmati in


India vs Pakistan. From an American/Europeans point of view, it is
cheaper to import Basmati from Pakistan than from India.

^these are just few of the many problems/obstacles faced by Indian food industry. In
the next article, we see various government schemes related to post-harvest
management, food processing industries and agro-export.
Food processing topic also overlaps with
1.
GS2

GS3

Ministries and Departments of the Government

2.
Government policies and interventions for development in various sectors and issues arising
out of their design and implementation.
1.

storage, transport and marketing of agricultural produce and issues and related constraints;

1.

Sci-Tech research e.g. Food irradiation, developing new crop hybrids, animal-breeds etc.

+ same food processing points can be selectively used for discussing ruralunemployment, food inflation, general inflation, FDI in multi-brand retail; even current
account deficit and rupee depreciation: whether its essay / interview or group discussion
(in case of SBI/CAT) hell even RBI Officer phase II descriptive papers.
Structure of the [Food processing] Article series:
1.
We get basic overview of significance-scope-potential-obstacles
2.
Truckload of Government schemes related to post-harvest management, Mega
Food parks etc.
3.

Model APMC acts, the direct cooperative marketing etc.

4.

Finance, taxation, FDI, export related issues

5.
Then we start basic theory of supply chain management (SCM), and upstream
downstream issues of individual food processing sub-sectors viz. Dairy, Fruit and
Veggies, Egg-Meat-Fishes, Confectionary, Wine, Edible oil etc.
References used for this article series
Source
Books

Title

comment

1.
A Manual for
Entrepreneurs: Food
Processing Industry (Tata
McGraw-Hill Publication)

Initial chapters provide the


challenges/problems with food processing
industry. Rest goes into actual management,
accounting, sales, marketing strategy for a
food entrepreneur=useless from UPSC point of
view.

1.
Food
processing:
Opportunities and
Challenges (ICFAI
university press)

1.

IGNOU MBA

Some chapters deal with food industries in


China, Australia etc but hardly any good fodder
points
Some chapters provide details of individual
food processing sector but mere copy paste job
from Vision 2015 PDF document.
for theory on supply chain management,

booklets (Coursecode:
MS-55)

upstream-downstream requirements

State of Indian agriculture


2012-13 (By Agricultural
Ministry)
Vision 2015 for food
industries: part 1 and 2
Flavors of Incredible
India: A report by Ernst
& Young and FICCI

for agro-livestock-fish-production information


and schemes
for opportunities and obstacles in individual
sector: dairy, meat, wine etc.
for supply chain diagrams of individual food
processing sector
+ Additional points for opportunities, obstacles.

PDFs
Planning commissions
report on Encouraging
Investments In Supply
Chains and cold storages

Web

plenty of fodder on

supply chain,

opportunities, obstacles

various schemes

12th FYP documents

doesnt have much specific fodder points for


food processing though.

IBEF report on Food


processing industry

some fancy charts, numbers.

pib.nic.in, Indian express

for government schemes, salient features,


export/dumping issues.

Note: All those Food processing related PDFs have been uploaded
on https://files.secureserver.net/0sL2N0Ej5XwsWc
12th Five year plan uploaded on https://files.secureserver.net/0sLrYY0FFJRric
Indian food processing industry: Significance

size

Has more than 35000 registered units

Output of ~5-6 lakh crores

Food processing contributes about 9-10% of GPD, in Agro-Mfg.


sector.
Location wise: Maximum factories in (ie. more than 1000 in given state)
Coastal states: Andhra, Maharashtra, Karnataka, Kerala, Gujarat, Punjab, WB
location

Non-coastal States: UP, Punjab


Observe majorities of the food processing factories are concentrated in the
coastal states.
Increasing Employment

Food processing industry provides plenty of direct and indirect employment


opportunities, because it acts as bridge between Agriculture and Manufacturing

As per ASI survey in 2010, Food processing industry generated highest


employment among all industry. Giving employment to almost 17 lakh people.

12th Five year plan (FYP) wants to create more than 50 million jobs. Out of that,
Food processing sector is to create one million jobs.
Curbing Migration

When food processing plants are setup near agro/rural regions, they reduce:
1.
2.

Poverty among villagers,


disguised unemployment

3.

exploitation of farmers

4.

rural-urban migration

1.

unplanned urbanization,

2.

slums/hygiene/social problems in cities


Curbing Food Inflation

In the last few years Food inflation has been a major problem. Food inflation is
eventually passed through into manufactured goods through higher money wages.

Therefore persistent high food inflation= bad for general macroeconomic


stability.

via:

well-developed food industry + compact supply chain=reduces food inflation

1.

Disintermediation (meaning no middlemen/commission agents)

2.

less wastage/spoilage of perishable products

Thus food industry is significant for reducing food inflation.


Crop-diversification

Indian villagers are away from market= have to grow cereals. (as we learned
in Von Thunen model)

In recent years, Government increased Minimum support prices for rice and
wheat.

That leads to surplus grain production=>Pvt. Players give less price to


farmer=>government has to buy wheat @Minimum support price (MSP) but FCI didnt
have enough storage capacity

Result: Wheat gets rotten @godowns and railway stations.

On the other hand, weve to rely on imported oilseeds because of higher MSP,
farmers prefer to grow rice/wheat than oilseeds=> higher oilseed import adds to
Current account deficit and leads to 1$=62 rupees=>crude oil expensive=petrol
expensive=everything transported through petrol/diesel gets expensive=thus the cycle
of middle class exploitation is complete.

Coming to the original point: we need crop diversification, all farmers shouldnt
be growing just rice and wheat. But if want to seduce the farmers into growing other
crops, then following must be done
1.
Promote food industry with backward linkages to farmers growing fruits,
vegetables, milk, fish, meat, poultry, grain, etc.
2.

Aggressively market the processed food in India + Abroad

once weve done #1 + #2=> then even the farmers away from market area will see
good income opportunity in growing non-cereal crops => crop diversification => the
excessive rotting-wheat surplus problem is solved.
Some filler significance points: food processing
1. Increases shelf life: milk vs butter
2. Increase value: milk vs butter
moveing to.

Scope/Potential

Abundant Raw Material


Indias world
Rank

in production of

milk, ginger, chickpea, banana, guava, papaya, mango, buffalo meat

rice, wheat, potato, garlic, cashew nut, groundnut, dry onion, green
peas, pumpkin, gourds, cauliflowers, sugarcane, tea

among top
five

coffee, tobacco, spices, oilseeds

With such a huge raw material base, we can easily become leading food supplier in the
world. (But we havent, because of the obstacles discussed later).
Geographical advantages
1.
46 out of 60 soil types are present in India.
2.
More than 26 types of climatic conditions= can cultivate large variety of fruits,
crops, vegetables.
3.
Large coastline, villagers in 13 states engaged in fishing as their secondary
activity.
4.

Variety domestic animals such as cows, buffaloes, goats, chicken, lamb, sheep.

5.
Large irrigated area under cultivation. Ample supply of fresh water for human,
plant and animals.
New Demand

In the upcoming years, there will be good demand for healthy, modern food products
due to following reasons:
1.
Youth population (age group 15 25): doesnt shy away from trying new food
products.
2.
More Nuclear families: usually working couple => less cooking time +
expensive maids=need ready to eat / ready to cook food.
3.

Rising incomes, middle class and rich families=can afford processed food.

4.

Emergence of Tier 1 and Tier 2 cities, shopping mall culture.

5.
Growing migration from rural to urban India + rising income = demand for
bread, butter etc.
6.
Media penetration, advertisements=> demand is created for health-drinks,
noodles, cream-biscuits, cornflakes etc.
7.
Celebrity chefs, cookery channels= new dishes, international cuisines
introduced=>demand for their ingredients, vegetables in India.
8.
food.

Diabetes, obesity, Blood pressure, lifestyle diseases =>demand for healthy

As a result, food processing industry is expected to reach


year

turnover USD

2015

>250 billion

2020

>300 billion
Government Initiatives

Many food processing sectors that were earlier reserved for small scale
industries (SSI) have been de-reserved

FDI limits have been relaxed, Excise duties have been reduced, export subsidies
given

National mission on food processing, Vision2015 for food processing,

New schemes for mega food parks, cold chain etc.

Many states have reformed their outdated APMC laws.

and so on (^all these elaborated in later articles.) Together they facilitate the
expansion of food processing industry in India. More scope points, specific to individual
sector (i.e. Dairy, meat, fish etc) later articles.
so far everything sounds hunky dory but if our food processing industry was so
awesome, then UPSC wouldnt have included it in the syllabus. Then, what are the.
Obstacles to food processing?
country

__ % of total fruits/vegetables processed

India

barely 6-7

China

>20

USA

>60

So, why low level of food processing in India?


Economies of scale
When you produce something on large scale, the unit production cost decreases. How /
Why?
1.
When you purchase raw material in large bulk, you negotiate/bargain with
supplier.
2.
Fixed cost remains same (building rent, cost of lights, initial cost of buying
machinery etc.) e.g. you bought a ice cream machine for 10 lakh- whether you make
100 liters ice cream or 1000 liters ice-cream per day- its upto you but the more ice
cream you produce, the average unit cost decreases. (think of 100/5 vs. 100/50)=
hence bigger the plant, cheaper to produce.
Most of Indian food processing units/companies/enterprises/factories are small sized
meaning = poor economies of scale. It leads to following problems:
Aspect

problems of small company / poor economies of scale

Pricing

Since unit production cost is high, he cant sell his products cheap unlike a big MNC, and
Indian consumers are price sensitive.

BrandBuilding

Small players=small profit, seasonal business. In global market they cant establish
themselves as a long-term player they only do opportunistic businesses, undercut each
other.

Low
Technology

Marketing

Cant invest in R&D to develop new products (e.g. chilli chewing gum or tomato
cream biscuit!)

Cant do marketing research / survey to find out what consumers want?

Cant invest in advertisement campaigns to create new demand.

e.g. Kellogs is aggressively advertising its cornflakes in India, highlighting weight


benefits.

but on the other hand, an Indian Halwai (sweet maker) cant do same level of
marketing in USA to create demand for jalebi or peda.

cant do backward linkage e.g. contract farming: giving seeds/fertilizer/pesticid


farmer.
Un-Export
Quality

Instead small company relies on multiple small supplier hence Raw material=nonuniform in quality.

Then their products are rejected in US/EU market for not meeting the Codex/HAC
standards. (e.g. mango juice rejected for stone weevil, buffalo meat rejected for food-nmouth disease, fish rejected for heavy metal contamination and so on.)
retailing

Cant do forward linkage e.g opening its own factory retail outlet like Nike, Adid
or Apple => small company has to rely on third party retailers and need to give them mar
from sales= profit decrease and poor economies of scale continues.

But why do we have this poor economies of scale?

1.
For long, many food processing items were reserved for Small scale industries
only.
2.
High input costs due to multiple taxes, middle men. Profit level is low=cant
expand.
3.
Government schemes, subsidies, grants have low-ceilings =Individual person
cant setup big plants
4.

Hard to get bank loans. (more elaboration in later article)

5.
Bigger the plant, bigger the headache in terms of tax-liabilities. Creative Indian
entrepreneurs rather setup multiple small plants to get subsidies/tax benefits of MSMEindustries, and sell unbranded food products.
Anyways, some more obstacles for Indian food processing industry:

Price Sensitivity

Indian public=Low per capita income = higher price sensitivity


and higher income elasticity in relation to food expenditure.

Preference For
Fresh Food

Indians prefer freshly cooked products as compared to packaged


products. Traditional mindset: fresh = nutritious.
truckload of agri-problem. Well see the individual problems in
later articles. for the overview:

Agri Problems

Agriculture/Dairy production yield levels are among the


lowest amongst the BRIC countries.

Land holdings=small, fragmented.

Area under cultivation is decreasing due to urbanization,


real-estate development, industrialization and ofcourse thanks to
totally awesome people like Raabert Vadhera.

there is no common policy on contract farming


throughout India

high cost of raw material (driven by low productivity and


poor agronomic practices)

Supply Chain
Problems

Presence of intermediaries thanks to Nuisance called


APMC acts.

high cost of packaging, finance, transport and distribution

lack of organized retail

Logistics cost= transportation, warehousing, material


handling etc.
Logistics

In India, Logistics accounts for about 13% of GDP, which


translates to over USD130 billion.

This cost is significantly higher as compared most


developed countries.

Inadequate infrastructure of storage, sorting, grading and


post-harvest management.

Infrastructure

Private sector unwilling to invest in logistic or


infrastructure under prevailing economic conditions and policy
paralysis.

Finance

hard to get loans (for both farmers and foodentrepreneurs)

food industry subjected to variety of taxes.

Taxes on processed food in India are among the highest


in the world.
Taxation

Except India, No country distinguishes between branded


and unbranded food sectors for taxation.

Multiple and complicated tax regimes have rendered the


food industry uncompetitive

Schemes

Plethora of government schemes: overlapping,


ambiguous, low ceilings. e.g. you need crore rupee worth
machine, they barely give few lakhs- that too after months of
visits to various offices.

Laws

Food laws are often inconsistent and overlapping.

The Food Inspectors cause of harassment and bribedemands in terms of pulling up entrepreneurs under the Weights
and Measures Act, ingredient content and mix, labelling norms,
etc.

While the various acts are necessary, court cases turn out
to be expensive for small-entrepreneurs- especially if involved in
inter-state trade.

Market
Information

Small players cannot buy international


journals/magazines to find the latest trends in
demand/innovation. Most of them also dont know how to use
internet for business/marketing.

Manpower

Packaging

Market information not easily accessible

Lack of trained manpower.

Very few universities offer special courses for food


processing and entrepreneurship.

Since Indian consumers= price sensitive, most of the


food products are sold in small packages (Rs.5 noodles, biscuits
etc)=more plastic required= higher share of packaging costs as a
proportion of total costs.*
*High packaging cost

Packaging cost is ___ % of total production cost


Potato Chips

20%

Fruit Juice

19%

Jam

12%

Chicken Nuggets

8%

Branded Atta

6%

A recent ICAR study on Status of Post-Harvest losses

type

post-harvest % loss

cereal

wheat

pulses

blackgram

oilseed

groundnut

10

fruits

guava

18

veggies

tomato

12

spices

turmeric

marine

inland-fish

moving to more problems faced by Food processing industry:


Lack of organized retail
In USA there are two types of retailers
1.
2.

Big malls: Walmart etc.


small kirana walla known as mom and pop shops

But both of them have cold-storage facilities, hence they sell l both dry and wet/fresh
food products
dry

fresh

bakery items, noodles, pasta, flour, cheeze


etc.

fruits, milk, veggies, meat, chicken, fish

But in India, kirana stores dont have cold storage facilities=> they only sell dry
food products.

and fresh produce is sold through vendors with push-carts=>wastage because


they dont have cold storage.

Meat, poultry and marine products are primarily sold in separate markets but
they too dont have cold storage=>wastage.
Thus, lack of organized retail, leads to
1.

low product quality

2.

lack of variety, choice

3.
poor shopping
experience

1.

low hygiene levels

1.

low value for money

1.

high cost of product

Lack of Food testing facilities


1.
The number of laboratories in the country is insufficient. Most of these
laboratories lack world-class facilities and infrastructure. Equipment, Testing manuals
outdated
2.
Many laboratories are not equipped with basic facilities such as for testing
antibiotic residues, heavy metal contamination and other toxic contaminants in the food
items.
3.
Very slow response time of Government controlled food laboratories is long,
extending to upto 5 years.
4.
Most laboratories at sea ports are not fully equipped to handle testing of
imported products, organic foods, residual radioactive matter, new toxins and allergens,
textural analysis, residues of veterinary drugs, enzymes and hormones etc. these tests
are necessary for complying with Codex, HACCP , GMP , GHP etc before exporting to in
US/EU markets.
Lack of Skilled Manpower
A food processing unit requires skilled manpower, including

Production Managers or
Supervisors

Product Development
Technologists

Food Engineers

Food Microbiologists

Quality Control Scientists

Research Technicians

Technical Representatives

machine operators, assistants

Problems
Lack Of Men

As per a study by National Skill Development Corporation:


the annual human resource requirement in food processing

industry is estimated at about 5 lakh persons including about one


lakh persons in the organized sector.

But right now, every year, barely ~5000 graduates and


postgraduates pass out from in different disciplines of Food science
and technology.

very few universities offer graduation/PG courses,


entrepreneurship courses for food science and technology

youth.
Lack Of Courses

Need short-term, diploma/certificate type courses for rural

need to introduce courses for small scale players such as


retailers, halwais

Need specialized institutes for training/R&D in bakery,


confectionery, wine making.

Outdated
Syllabus And
Professors

Inspectors

Engineering

Syllabus/courses in university departments are not being


updated regularly and are in most cases, outdated with respect to
the present trends and food industry requirement.

The teaching faculty in most of the Indian academic


institutions studied has limited industry experience / exposure.

Food inspectors unaware of GMP, GHP & HACCP standards,


latest developments in food standards, new products, and
laboratory network

Engineering curriculum does not equip graduate engineers


with the skill of designing cold chain infrastructures. Fresh
graduates find it difficult to make heat load calculation and
configure the plant & machineries in energy-efficient manner.

There is urgent need to upgrade the syllabus accordingly.


Lack of R&D

Indian food processing industry is mainly madeup


of small scale players= they cant invest money in R&D=>
becomes governments responsibility to do the R&D.

1.

Sarkari Domain

But Sarkari Research objectives are outdated,


food market requirements keep changing frequently given
the new product launches by MNCs.

Multinational Food companies typically have an inhouse global network of R&D professionals.

1.
Baba Adams
Mindset

Although theyre willing to work with Indian


institutions for developing India-specific products and
processes.

But the quality of R&D currently undertaken by


existing Indian institutions is not in line with their
requirements.

1.

Manpower

The chairmanship of public research institutes


usually given to (retired) IAS or politicians=> lack of
dynamism/market-orientation of the hardcore
professionals in food-MNCs.


Many students prefer alternate careers which are
found to be more fulfilling and remunerative. There has
been a significant drop in the quality of people entering
the R&D field
1.
n

Indian Government recently introduced a variety


of kiwifruit in North India, but could not provide adequate
support/advice on cultivation practices. Result= domestic
kiwi produce is much smaller in size than imported kiwi.

Implementatio

1.
There is a huge opportunity for developing and commercializing desi foods for
export e.g. ethnic beverages such as kokum, coconut water and ethnic food such as
khakra, amla preserve etc. But, to make them appealing to foreign consumers, R&D
required for product development, food-texture, rheology, mouth-feel, smell, color,
packaging etc.
1.
Internationally, following research-developments are ongoing, while we are
generations behind in research:

area

What foreign players are doing in R&D?

Non-thermal food processing technologies to preserve the


nutrients in milk, fruit juices and also for killing microorganisms in eggs.

processing

Role of ozone in fresh food sterilization

Calcium treatment to extend the shelf life of melons

Packaging films that offer optimal barrier properties to extend


shelf life.

packaging

Biodegradable films made from pectin and starch

Silicon oxide films that improve oxygen and moisture barriers.

Use of natural antioxidants in packaging materials for shelf life


extension of combat rations for soldiers.

Active and intelligent packaging systems To monitor product


quality and trace a products history through critical points in the food
supply chain.
Transport problems

Transport capacity

India

developed countries

Normal distance covered by


trucks/trailers

250 -300km / day

600- 800 km/day

roads capacity to handle maximum


weight

16 tonnes

36 tonnes (USA)

Indian national highways account for only 2% of the total road network but
carry 40% of all cargo.

This puts a high pressure on the highways due to the high traffic volumes =>
delays in transit + damage to perishable products

Though highways are well-spread, theyre yet to connect all 550,000+ villages
in India


Railway is cheaper than road transportation but railways
currently contribute barely ~25% of the total cargo transported

Last mile connectivity from rail transporters =absent.

Inefficiencies associated with a government monopoly. (timingschedules, technology upgrades etc)


Railway
problems

Lack of wagons with cold storage facilities.

Congested rail stations, lack of sorting, grading, warehousing


facilities nearby.

Road transport operators provide more flexibility.

Although The Dedicated Freight Corridors are expected to


improve the connectivity of the railways, increase carrying capacity and
reduce the transit time.

Environmental and social hurdles in land acquisition= hard to


get setup new port / expand the existing port.
Ports

High dependence on manual labor + low technology usage=


increases the turnaround, loading/unloading times at ports, thus impacts
entire supply chain lead time and increases cost For e.g. the cost of an
import container in India=~$500, elsewhere ~350 in foreign ports.
Export Problems

Although India is the second largest producer of food in the world but its share in
worlds exports is very low despite its inherent strength in tea, spices and rice. Why?

expensive
Raw Material

Fragmented base of suppliers=uniform quality not available

Lot of intermediaries=raw material cost increased.

etc.

High duties on imported raw material: additives/flavorings

As a result input cost =high, hence pricewise, we cannot


compete with other exporters.

low
processing

Our processing has largely remained in primary forms like


pickling, sun drying and/or making preserves. Sometimes we just
export intermediate product to second country theyll further
process it and sell to third country @even higher price. (e.g our
shrimps to Japan, Japan selling them to US)

low quality

Often our products rejected from US/EU markets for not


meeting Codex, HACCP quality standards

Branding

yet to Build global brands on the back of Indias strengths


(Darjeeling tea, Basmati rice, Durum wheat, Alphonso mango,
Tamilnadu Banana or Kashmiri Apples)

Developed countries view India as an unpredictable and


unreliable source of food and agro products.

transport

Poor cargo facilities at airports and ports are other


bottlenecks discussed earlier

Packaging

yet to develop packaging technologies for Indian food


products to make them more acceptable to foreign consumers.

Dumping

Devaluating

Desi shrimps face Anti-dumping duties in USA.

1$=~60 Indian rupees while 1$=~100 Paki rupees

Given these exchange rates and local prices of Basmati in


India vs Pakistan. From an American/Europeans point of view, it is
cheaper to import Basmati from Pakistan than from India.

^these are just few of the many problems/obstacles faced by Indian food industry. In
the next article, we see various government schemes related to post-harvest
management, food processing industries and agro-export.
Problems with government schemes
1.
Agriculture is a State subject. No scheme can be successful without coherence
between the Centre and States in policies and strategies. But we have plethora of bodies
and departments @center and state level=empires within empires. Even Left hand
doesnt know what right hand is doing. Problem is compounded when ruling parties are
different at state and center level.
2.
Most schemes have Low ceiling (they just give a few lakh rupees) + as plant
size increases, the MSME tax benefits decrease. So, food-entrepreneur setups two small
plants using money two schemes, rather than one big plant. Smaller the plant=>poor
economies of scale=>high production cost, cant invest in marketing-research,
innovation, export quality products.
3.
These Subsidies/grants are back-ended (meaning ca$H is not given before
you start the project, but only after the project is completed or in final stage)
4.
But Parameters of project approval/ file-Processing= non-transparent (just like
our UPSC). Timely clearance of project files=nope. Sometimes they dont even give
reasons for rejecting project. Food-Entrepreneur is unsure whether bureaucrats will
approve his file or not (+bribe demand)
5.
Significant time lags from the date of application for financial assistance, to
release of funds= affects the project schedule= cost overruns for the investor.
6.
Most schemes seek to get investors to pump money in certain infrastructure
without providing the necessary support for the utilization of the infrastructure. (e.g.
asking pvt player to setup cold storage, without guaranteeing continuous electricity
supply).
7.
Overenthusiasm =Excess capacity. Example: many tax-benefits given to
groundnut oil refining industry=new units keep popping up even when groundnut
cultivation is not sufficient to provide raw material to all refineries. Result: No unit runs
on full capacity, industrial sickness, loan defaults, NPA.
8.
Inputs of Panchayati raj institution, cottage industries, local entrepreneurs are
considered irrelevant in scheme design.
9.
Lack of focus/financing for freezer cabinets in retail outlets/kirana stores,
vending machines for tea/coffee/beverages.
10.
Working capital requirements are high for food processing industry (thanks so
many intermediaries, electricity, high duties on imported chemicals etc.) But these
schemes only give money for initial project/machines. Dont provide support for working
capital (i.e. cost of day to day operations, buying raw material, electricity-utility bills
etc.)
Solution: Integrate all schemes offered by various Ministries and allied agencies.
After years of stupidity and badass thuggary, finally they woke up during 12th Five year
plan drafting. Now theyre converging various schemes of Horticulture board, Agriculture
ministry, Food processing ministry and Commerce ministry under the National Mission
on food processing. ok, better late than never but even small time players like Thailand

and Vietnam have reformed before we did. So theyre already ahead in the race of
capturing export market. Anyways, lets check various plans, missions, schemes.
12th FYP: food processing
Starting with some (stupid) numbers:
work

12th FYP projection (crores)

Horticulture development

more than 50,000 cr.

post-harvest management + cold


storages

more than 7000 cr.

food processing

more than 15000 cr. (in 11th FYP this was barely
4000 crores)

12th FYP wants following:


1.
Develop the food processing sector to reduce food inflation
and food wastage
overall
2.
Create 1 million additional jobs during the Twelfth plan period
in the food processing sector
1.
Set up National Mission on Food Processing with State
governments involvement
1.
Integrate of various ongoing schemes for horticulture
development (NHM, HMNEHA, NHB, CDB, NMMI and NBM) into
one Integrated National Horticulture Mission
Schemes

1.
Setup 120 integrated cold chain projects, of which 20 projects
would be of irradiation facilities.
1.
Existing infrastructure development schemes Mega Food
Parks Scheme, Integrated Cold Chain Scheme= Expand and modify
them.

Finance

1.

Setup of Innovation Fund and Venture Capital Fund to


promote innovations and technology development in Food Processing.
1.

Fancy
Things

a.
National Institute of Food
Technology Entrepreneurship and Management (NIFTEM),
b.

Export

Knowledge sharing and HRD via

Central Food Technology Research Institute (CFTRI)

1.

Harmonise Indian Food Standards with International Codex


standards.
Ministry of Food Processing Industries (MoFPI)

Side note: The new Mains syllabus contains Ministries and Departments of the
Government so, in that context, while were doing the food processing, better prepare
this ministrys functions as well:
Functions of MoFPI
1.

Launch National Mission on Food Processing

2.
R&D in food processing, Specialized packaging for food processing industries,
Technical assistance and advice to food processing industry
3.

Enhance Processing level and reduction in wastages

4.

Food Safety & Quality assurance

5.

Financial assistance, grant-in-aids, tariff issues related to

Fruits and vegetable, Food grain milling industry,

Dairy products, poultry, eggs, meat, Fish processing

o
Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery,
other ready to eat food products
o
foods
6.

Alcoholic drinks, beer, Aerated waters / soft drinks and other processed
strengthen institutions such as

o
National Institute for Food Technology and Entrepreneurship
Management (NIFTEM)
o

Indian Institute of Crop Processing Technology (IICPT)

Indian Grape Processing Board (IGPB)

National Meat & Poultry Processing Board (NMPPB)

MoFPI is responsible to 2 fancy missions +3 (bogus) schemes & given ~700 crores in
2013s budget.
2 fancy missions

3 schemes
1.

mega food parks

1.
Vision 2015 for food
processing

2.
modernization of abattoirs
(slaughterhouses)

2.
National Mision on food
processing

3.

cold chain infrastructure

+ some chillar schemes for HRD, R&D.

Lets see their salient features:


Vision 2015 Food processing

by Ministry of Food processing


adopted In 2005

What?

targets by 2015

processing perishable food produce

20%

value addition to food produce

35

Indias share in global food trade

3%

investment

100 thousand crore

This vision2015 document was prepared by Rabo India Finance ltd. It talks about
individual sectors (dairy, meat, tea, coffee etc.) Well see those points later during
articles on individual sector.
National Mission on Food Processing (NMFP)

Launched under 12th Five year plan.

for decentralized implementation of various schemes under Ministry of Food


processing with help of state governments.
Contribution ratio:
Centre

state

North East

90

10

Except North East

75

25

Will do following:
1.
2.

increase agricultural productivity


increase farmers income

3.
Help state governments to create synergy between their agricultural plans vs.
food processing sector.
4.

Help state governments in institutional and infrastructural gaps

5.

Create efficient Supply Chains for agricultural produces.

6.
Skill development, training and entrepreneurship for both post-harvest
management and food processing industry.
7.
Give capital/technology/skill to MSMEs so they can setup/modernize food
processing units
8.
Help food processing industry to meet quality /food safety standards for both
desi and foreign markets.
This national food processing mission has following schemes:
1.
Technology Up-gradation / Setting up / Modernization / Expansion of Food
Processing Industries
2.
cold chain facilities for Non-Horticultural produces and Reefer Vehicles
3.

Primary Processing Centres/Collection Centres in rural areas

4.

Modernization of Abattoirs

5.

Modernization of Meat Shops

6.

Human Resource Development (HRD)

7.

Promotional Activities

8.

Up-gradation of Quality of Street Food


National Food Processing Development Council (NFPDC)

provide guidance to all schemes of Ministry of Food Processing including


above national mission on food processing.

function

Chairman: Sharad Pawar, the b0$$ of both Agri and Food


processing ministries.
composition

representatives of State Governments

related Govt. departments

Industry associations

^this is ~200 words. From UPSC point of view, the Aukaat of NMFP is not beyond 15
marks questions on salient features. Hence not covering any further. Moving to the
three schemes
#1: Mega Food Parks:
Mega food parks will be setup in 12th Five year plan. Government allotted more than
1700 crores for it.

First, a Special Purpose Vehicle (SPV) will be created to setup the Mega Food
Park.

So, What is this special purpose vehicle, does it look like Tata Sumo or Tata
safari? Long thing cut short: youre aware of debt vs equity. SPV = a limited company
setup with money from farmers associations, private players, financial institutions, state
level agencies etc. (meaning theyre are equity holders)

Then Government will give them grant to cover **% of project cost. Thus Food
Park is setup and everyone benefits.
Financial assistance for mega Food Park:

Area

Government gives grant: __ % of the


project cost

General

50

North East, Hill area, areas under integrated


Tribal development plan

75

Maximum of Rs 50 crore per project.


Land cost not included in project cost.
Facilities @Mega Food park

Core Infrastructure
Facilities

Weighing bridge, cleaning,

grading, sorting, packing,

dry and temperature controlled warehouses,


ripening chambers, reefer vans etc.
Non-Core Facilities

administrative buildings, conference room

internet-wifi connectivity for download mp3, movies


and games.

training centres,


trade centre/display centres, marketing support
system etc

workers hostels, canteen, guesthouses

bore well, overhead tank, water treatment plant

sorting, grading, packing, specialized and dry


warehouses,
Common Facilities

irradiation facilities

testing laboratory, stems sterilization units, food


incubation cum development centers

Basic Infrastructure

Services

Post office, ATM, Bank branches

road-road connectivity

drainage, sewage, water supply, effluent treatment

electricity, telecom-internet

parking bays

DPRs,

hiring of domain consultants for preparation of

supply chain management, logistics


Hub and Spoke Model

Mega food parks are based on the hub and spoke model. So what is this Hub and
Spoke model?

Imagine a bicycle wheel: it has a strong central hub with a series of connecting spokes.
Thus we have

One Central Processing Centre (CPC) as the hub


Multiple Primary Processing Centres (PPC) that supply raw material to the hub

Three Tiers:

What?

SHG

They aggregate fruits/veggies produced by memberfarmers @village level.

Field collection
Center

A self-help Group of 10-20 farmers.

Society or association of 10-20 self-help groups (SHG)

They provide basic minimum facilities for post-harvest


management= washing, fumigation.

Supply of inputs: seeds, fertilizers etc and information via


internet kiosks.

Primary
Processing
Center (PPC)

made up of 10-20 field collection centers.

These PPCs do the primary processing viz. sorting,


grading, packing of raw material and ensure regular supply of raw
materials to the food industries in the central processing center
(CPC) of the Mega Food park.

^ Similar concept for eggs and milk. click the following diagram and concept will become
clear:

Mega Food Park (Click to Enlarge)

Here, each tier is viable, independent and linked with higher players in the
market.

This way thousands of farmers directly connected to food industries located in


the Mega food park, without any commission agents= Small, marginal, poor farmers will
get more money.
Location Factors: Bhagalpur and Chittor
Details

Srini Mega Food park, Andhra

Bhagalpur Mega food Park, Bihar

Central
Processing
Center (CPC)

Mogili Village in Chittoor


District

Kahalgaon in Bhagalpur district

Primary
Processing
Centers
(PPC)

Location
Advantages

1.

Nuzvid,

2.

Tirupati,

3.

Madanapalle

4.

Mogilli

1.
Chittoor already an
Agro-export processing zone,
leading producer of mangoes.
2.
only 120 kms from
Tirupati, a pilgrim center with

1.

Purnea

2.

Katihar

3.

Khagaria

4.

Samastipur

5.

Banka

1.
This region is second most
productive zone in Bihar in terms of
total production of fruit and
vegetables
2.

The cluster is very close to

more than 150,000 floating


population per day=plenty of
demand for processed food.
3.
on the National
Highway connecting Bangalore
and Chennai

Sidenotes

Begusarai (about 100 kms) that is


a transport hub and provides good
support for transportation of
products. NH-31 (Barhi to
Guwahati) and NH-28 (Lucknow to
Barauni) meet at Zero Mile near
Barauni in Begusarai district.

4.
equi-distant from two
major metros in India, a major
port (Chennai) and two
international airports (Chennai
and Bengaluru) and one
domestic airport (Tirupati)

3.
It is also the gateway to
Northeast for goods transportation,
being a zone heavy surface traffic
movement.

Countrys first Mega food


park launched in 2012

#Epicfail. Few days back, main


promoter company (Kevantar Ltd)
left the project because of land
acquisition problem.

back to the mega-food park topic:


Benefits of Each Mega Food park
1.
will benefit 6000 farmers / producers directly and 25000-30000 farmers
indirectly.
2.
will generate ~40,000 direct and indirect jobs.
3.

New employment opportunities created within rural areas= Itll reduce

rural-urban migration,

unplanned urbanization,

slums/social problems in cities

4.

will accommodate 30-40 Food Processing Industries in it.

5.

will have annual turnover of ~500 crore.

6.

will provide efficient supply chain management from farm gate to retail outlet.

7.

common facilities=reduces operational cost

8.
farmers can utilize the Cold Storages, Ripening Chambers, and Ware houses =
less wastage, no distress sales
9.

good transportation facilities viz reefer trucks and vans

10.
Food entrepreneur can establish backward linkages (with farmers) and forward
linkage (with retailers) = compact supply chain=more profits.
#2: Cold Chain infra
Full name of scheme: Establishment of Cold Chain, Value addition and
Preservation Infrastructure
Looks like FoodPRO ministry doesnt have any intelligent babu to comeup with a fancy
name/abbreviation for this scheme. Atleast they could have named it after you know
who. But alas $harad Pawar is the b0$$ of Foodpro ministry, perhaps thats why
schemes are not allowed to be named after you know who.
Anyways what does this cold storage scheme do?

Helps creating integrated cold chain and preservation infrastructure facilities without any
break from farm to consumer. Under this scheme, following facilities created:
1.
Minimal processing centre at the farm gate level having facilities like weighing,
sorting, grading, pre-cooling, cold storage and normal storage facilities;
2.
Mobile pre- cooling vans and reefer trucks;
3.
Distribution hubs having facilities such as multi-purpose cold stores, variable
humidity stores, blast freezing etc.
4.

food irradiation plants

Financial assistance

Area

Government gives grant: __ % of the


project cost

General

50

North East, Hill area, areas under integrated


Tribal development plan

75

Maximum grant: Rs.10 crore per project.


Well see more details on cold storage with respect to fruit-veggies processing in
separate article later.
#3: Abattoir modernization
Abattoir= slaughterhouse/ butcher house. Food processing ministry runs a scheme for
them. This scheme Under PPP mode with involvement of local bodies (Panchayats or
municipalities) via
1.
2.

build-own-operate (BOO)
build-operate-transfer (BOT)

3.

Joint venture(JV) basis.

Features:
1.
2.

establish new modern abattoirs


modernize existing abattoirs

3.

promote scientific and hygienic slaughtering.

4.

Modern technology for waste management.

5.

better by product utilization (bones, skin etc.)

6.

provide chilling facility, retail cold chain management etc.

Financial assistance

area

grant for __ % of the project


cost

General

50

North East, Hill area, areas under integrated Tribal

75

development plan
Maximum grant: Rs.15 crore per project.
Ten slaughterhouse projects ongoing:
1.

Dimapur (Nagaland)

2.

Kolkata (West Bengal)

3.

Ranchi (Jharkhand)

4.

Shimla (Himachal Pradesh)

5.
Hyderabad (Andhra
Pradesh)

1.

Patna (Bihar)

1.

Ahmednagar (Maharashtra)

1.

Jammu (Jammu & Kashmir)

1.

Srinagar (Jammu & Kashmir)

1.

Shillong ( Meghalaya)

So, these three were the main schemes of Food processing ministry.
1.
2.

mega food park


cold chain infra

3.

slaughterhouse modernization.

Now lets look @some chillar schemes of this MoFPI (Ministry of food processing
industries)
MoFPI: Misc. Schemes

Name: Technology Mission for Integrated Development of


Horticulture in NE States + Himalayan States

North
East

it has four mini-mission

mini-mission #3 To create post-harvest management, marketing


and export facilities (by ICAR+Department of Agri research and Education)

Mini-Mission #4: To Process horticulture produces (by Food


processing Ministry)
#1 Institutes
MoFPI has two institutes to offer B.Tech, M.Tech, Ph.D level programs in
food processing

HRD

1.
National Institute of Food Technology Entrepreneurship &
Management (NIFTEM) at Kundli, Sonepat, Haryana
2.
Indian Institute of Crop Processing Technology (IICPT) at
Thanjavur, Tamil Nadu
#2 Grant to Other universities
1.
all recognized universities- public / private can get funding upto 75
lakhs for starting food processing related courses, buying books, ejournals, magazines, teaching infrastructure etc.
2.
funding is given for training centers, entrepreneurship
development program for food processing.

Quality

To export in developed countries, your food processing plant would require


HACCP, GMP, GHP certificates. Ministry gives financial assistance for it.

testing
labs

scheme for Setting up/Upgradation of Food Testing Laboratories

Enough of Food processing Ministry. Lets look at the schemes by other


departments/ministries. (Here, Im only focusing on schemes related to post-harvest
management, storage, food processing and Agro-export, otherwise there are dozens of
schemes related to agriculture, public procurements etc. but theyre ignored here.) First
the food grains
National Policy on Handling and Storage of Foodgrains
Launched in 2000.
1.
To Minimize storage and transit losses in foodgrain.
2.
Declaration of foodgrains storage as infrastructure (meaning it can get various
tax benefits for investment)
3.

Encourage mechanical harvesting, cleaning and drying at farm and market level

4.

transport of grains from farm to silos by specially designed trucks

5.

Construct chain silos.

6.

private sector participation via Build-Own-Operate (BOO)

7.

encourage private sector to

a.
building storage capacities in which grains procured by Government
agencies would be stored on payment of storage charge
b.
create infrastructure for the integrated bulk handling, storage and
transportation of foodgrains
PEG scheme

By Whom? = Department of Food & Public Distribution (DFPD)

In recent times, Government has increased the Minimum Support Price (MSP)
for wheat and rice. Result? high procurement but FCIs storage capacity =limited=rotten
grains.

In 2008, new scheme was made Private Entrepreneurs Godowns (PEG-2008).

To increase grain storage capacity with help of Private sector.

Government

FCI

gives grants to private players, for constructing godowns

gives a business guarantee of ten years for assured hiring.

meaning FCI will hire that private godown to store publicprocured food grain and pay for service
FCI reforms

Initiates to prevent rotten grain in godowns, FCI will be doing following:


1.
Dunnage materials: wooden crates, bamboo mats, polythene sheets to prevent
moisture from floor to the foodgrains.
2.
fumigation, insecticides to control pests and rats.
3.

Regular periodic inspections of the stocks/godowns by senior officers.

4.
The principle of First in First Out (FIFO) to avoid longer storage of foodgrains
in godowns.

5.

To avoid damage during transit:

a.

Only covered rail wagons will be used to transporting grain

b.

use of tarpaulins (waterproof canvas) on trucks during road movement.


Gramin Bhandaran Yojana

By Department of Agriculture & Cooperation


1.
Create scientific storage capacity and allied facilities in rural areas
2.
grading, standardization and quality control of agricultural produce to improve
their marketability;
3.
Provide pledge finance and marketing credit to farmers, so they dont have to
distress sale immediately after harvest.
National Horticulture Mission (NHM)

By Whom? = Department of Agriculture and Cooperation

To increase production of all horticultural products (Fruits, Vegetables, Flowers,


Plantation crops, Spices, Medicinal Aromatic plants) in the states.

Provides funding for various activities (R&D, nurseries etc) including funds for
post-harvest management, supply chain infrastructure, cold storages.
Terminal market complexes (TMC)

scheme is being implemented under National Horticulture Mission

These Terminal market complexes will establish forward linkages with


wholesalers, distribution centres, retail cash and carry stores, processing units and
exporters.

via PPP model under 12th Five year plan.

Maximum subsidy Rs. 50 crore to the Projects based on competitive bidding.

Some Terminal market complexs (TMC) projects:


1.

Patna, Pothai (Bihar)

2.
(TN)

Perundurai and Madura

1.

Babangaon, Thane, Nasik (MH)

1.

Sambalpur (Odisha)

National Horticulture Board (NHB)

Autonomous society (falls under Department of Agriculture & Co-operation,


Ministry of Agriculture)

For food processing, NHB runs following schemes

Commercial
Horti

Full name: Development of Commercial Horticulture


through Production and Post Harvest Management of Horticulture
Crops

long name for scheme without catchy abbreviation!

but In short, they give subsidy for setting pack house, precooling unit, cold storage, controlled atmosphere (CA) storage, refer
transport, ripening chambers etc.

More subsidy is given for North East, Hill states and


scheduled areas.

NABARD provides financing

Technology Development and Transfer for promotion of Horticulture


1.
Introduce of New Technology
2.
Visit of progressive farmers to other states / abroad.

Tech Dvlp

market
information

3.

Technical know-how from India/Abroad

4.

Technology Awareness

5.

Organising/participation in seminars/symposia/exhibitions

6.

Udyan Pandit award to farmers

7.

Publicity and Films

8.

money to scientists for effective transfer of technology

9.

Accreditation and Rating of Horticulture Nurseries

10.

Mother Plant Nurseries

nation-wide communication network for speedy collection and


dissemination of market information including:
1.
wholesale prices, arrivals and trends in various markets of
the country for important fruits, vegetables & flowers etc.
2.
retail prices in selected markets/cities
3.

international prices for potential export items

4.

horticulture database, production trends

then NHB issues farmers advisory using above reports.


1.

Specialized studies and surveys for targeted beneficiaries.

2.

Technical laboratories and consultancy services.

3.
Review the present situation of horticulture development in
particular area/ State
4.
Identify constraints in horticulture development and
suggest remedial measures
Horticulture
Promotion
Service

5.
Develop short term and long term strategies for systematic
development of horticulture,
6.
Develop primary/secondary data of various aspects on
horticulture
7.
Provide consultancy services, expert services & establishing
labs etc
8.
Conduct technical scrutiny and certification of cold chain
infrastructure
9.
Preparing reports relating to export competitiveness in the
area of fresh horticulture produce
National Centre for Cold Chain Development (NCCD)

Setup during 11th FYP, under Societies Registration Act, to do following


1.
2.

Create an enabling environment for the cold chain sector


help private sector involvement in cold chain sector

3.
Financial assistance upto 90% to State Governments to
setup/modernize/expand cold storages and ice plants via cooperatives.
4.
establish standards and protocols related to cold chain testing, verification,
certification and accreditation as per international standards
5.
Provide technical assistance to Financial Institutions, Government Departments/
agencies, and industry for selecting cold chain component e.g. refrigeration units,
refrigerated transport equipment, display cabinets, milk tanker etc.
6.

HRD and technical advisory.


Scheme for Agri Market

Full name: Scheme for Development/Strengthening of Agricultural Marketing


Infrastructure, Grading and Standardization (Again too bad no fancy abbreviation.)
By Ministry of Agriculture.
1.
To Develop and Strengthen agricultural marketing infrastructure.
2.
Facilitate private and cooperative sector investments in marketing
infrastructure.
3.
Provide additional agricultural marketing infrastructure to agriculture, dairy,
poultry, fishery, livestock and minor forest produce.
4.
facilities for grading, standardization and quality certification of agricultural
produce so farmers can get money commensurate with the quality of their produce;
5.

Introduce Negotiable warehousing receipt system

6.

promote forward and future markets

7.
To create general awareness and provide education and training to farmers,
entrepreneurs and market functionaries.
Agmarknet

Agricultural marketing information network (http://agmarknet.nic.in/)


by Directorate of Marketing & Inspection (DMI) under Agro ministry.

it is an online portal that provides information on following

Prices

daily prices of various commodities

Movement

information on the type of goods that have arrived across the


various wholesale markets Commodity

Farmers
Advisory

A comprehensive database 300 commodities and 2,000


varieties

Appropriate farming practices which can be adopted by


the farmer

Weather

All India weather conditions and weather forecasts and


their impact on the agri-production levels

Commodity
Exchange

information on various commodity exchanges in India and abroad


along with

Research

higher institutes for agricultural research, international agencies


like the Food and Agriculture Organization

ok so far we saw the schemes associated with Agro+Horti+Marketing. Now moving to


Dairy
Dairy Schemes
By Department of Animal Husbandry, Dairying & Fisheries
They run following schemes:
1.
2.

install Bulk Milk Coolers at village level close to the area of milk production
for installation of bulk milk cooler

Intensive Dairy Development


Scheme (IDDS)

Dairy Entrepreneurship
Development Scheme (DEDS)

100 per cent grants in aid for

Dairy processing and marketing

milk equipment for bulk milk coolers,


chilling centers, refrigerated tankers and cold
storage

to encourage entrepreneurs in setting up


modern dairy infrastructure for clean milk
production

helps in bulk milk coolers, transportation


facilities including refrigerated vans, cold storage
facility

National Dairy Plan (NDP)


by National dairy development board (NDDB), with support from International
Development Association (IDA)

Phase-1 (2012-17) was launched at Anand, Gujarat.

Scheme will run in 14 states Uttar Pradesh, Punjab, Haryana, Gujarat,


Rajasthan, Madhya Pradesh, Bihar, West Bengal, Maharashtra, Karnataka, Tamil Nadu,
Andhra Pradesh, Orissa and Kerala.

^These states collectively account for over 90% of countrys milk production.

National Dairy plan will do following:


1.
Breed improvement + animal nutrition=> increase milk production, reduce
methane emission.
2.
Strengthen of village based milk procurement system= Rural milk producers to
get greater access to the organized dairy sector.
3.

HRD, management, knowledge sharing, R&D and other fancy stuff

Funding pattern

ca$h comes
from

1.
Bank

International Development Association (IDA) of the World

2.
Central government (Department of Animal Husbandry,
Dairying and Fisheries)

to

NDDB: National Dairy Development Board (a statutory body)

ultimately to

End Implementing Agencies (EIAs):

State Government

Cooperative dairy federations

Milk Producers Unions

ICAR institutes, and veterinary/dairy institutes and


universities
^Exactly 159 words. Again aukaat of National dairy plan cannot be beyond 12-15 marks
from UPSC point of view, hence not going into further details. Besides, well look more
into Dairy sector in separate article later. Time to move on to Agro-Export related
schemes
Agri Export zones (AEZ)

In 2001, By Commerce Ministry.


Total 60 AEZs in 20 states.

To converge the efforts of central and state governments to increase agroexports

AEZ concentrates on a particular produce/ product located in a geographically


contiguous area (e.g. Mango in Chittur District of Andhra) and coordinates the ongoing
Central-State schemes to cover the entire value chain from farm to the foreign
consumer, including sorting, grading, packaging, processing, exporting.

Agri Export Zones in India (Click to Enlarge)


AEZ: Problems
1.
Government Agencies dont take ownership or responsibility.
2.
Villagers and field officers are unaware about the scheme and its conceptual
framework
3.

The Design of AEZ itself doesnt have project orientation.

4.

Lack of coordination/ monitoring system in AEZs

5.
The investment made by central and state government have not materialized
into real-useful assets on the ground.
6.
Indiscreet proliferation of AEZs in certain states. WB, Maharashtra have multiple
Agro export zones while Odisha barely got one AEZ and that too in 2013= More than a
decade after the scheme was launched in 2001!
Export credit schemes
1.

Focus Product

get duty credit for exporting food products

Scheme (FPS)

1.

Focus Market
Scheme (FMS)

1.

Market Linked
Focus Product Scheme
(MLFPS)

1.

Vishesh Krishi

1.
And Gram
Udyog Yojana

Export to Europe, Latin America block, African block, or


Commonwealth Independent States (CIS) block are entitled
for duty credit.
duty credit for exports to countries NOT included in
above FMS list e.g. Thailand, Taiwan and the Czech Republic.
(ok then when next: another scheme for countries not
included in MLFPS list?)
duty credit for exporting following
1.
Agricultural Produce and their value added products;
2.
Minor Forest Produce and their value added
variants;
3.

Gram Udyog Products;

4.

Forest Based Products; and

5.

Other Products, as notified from time to time.

Doubt: what is duty credit?


Without going into all technical correctness:

You exported xyz worth Rs.100 then Director General of Foreign trade will give
you a scrip (piece of paper) worth Rs. 2 to 5 (or whatever % credit is decided in the
scheme)

When you import capital goods, youve to pay custom duty. But you can use
these credit scrip to pay for that custom duty.
Another doubt: Why does or why should government give duty credit?
Ans. Because other (stupid) schemes have failed to improve the rural infrastructure,
hence it is difficult to transport/market these products from India to abroad. Therefore
duty credit is given to offset infrastructure inefficiencies and other associated costs
involved in marketing of these products.
Misc. Bodies
List is not exhaustive (and that is the criticism: too many bodies=lack of coordination.)
Export related

Agricultural and Processed Food Products Export Development


Authority (APEDA)

APEDA

Statutory body under commerce ministry

provides financial assistance to food exporters.

bears the cost for doing analysis of peanuts, grapes for meeting
HACCP/Codex standards.

Gives money to State Government, Public Sector Undertakings for


conducting surveys, feasibility studies etc.
MFEDA

Marine Products Export Development Authority (MPEDA)

Ministry of Commerce, Government of India

acts as a coordinating agency with different Central and State

Government

For Fishery production and allied activities.

Export Inspection Council of India (EIC)

statutory body under Commerce Ministry

For inspection- certification for marine, milk, meat, poultry, marine


and egg products, and honey for export units.
EIC

EIC approved units have to implement following

international standards of CODEX laid down by FAO and WHO,

Good Management Practices (GMP)

Good Hygiene Practices (GHP)


Boards

Coffe
e Board

Spice
s Board

Tea
Board

bodies under commerce ministry

offers various schemes, services to growers and exporters

R&D, HRD

maintains database, runs newsletters

Promotes Indian products international food fairs

Indian Grape Processing Board (IGPB)

Under Ministry of Food processing Industries (if tea, coffee


and spices boards were setup under Commerce ministry then why did
they setup grapes board under Food processing ministry? Ans. so
they can confuse aspirants to ask a stupid MCQ in some exam.)
Grapes

Promote cooperative efforts, backward and forward linkages


between growers and wine industry in general.

set up facilities for wine analysis, testing, standards,


certification of wine and promoting Good Manufacturing Practices
(GMP)/ Hazard Analysis and Critical Control Points (HACCP)

Nddb

Meat +
Poultry

National Dairy Development Board

Statutory body

To promote, finance and support dairy cooperatives.

National Meat and Poultry Processing Board (NMPPB)

Under Ministry of Food Processing Industries

a single window service provider for


producers/manufacturers and exporters of meat and meat products,

For analyzing various microbiological and physico-chemical


parameters related to various food and food products.

Training meat workers


Research/Education related


Indian Council of Agricultural Research (ICAR) is an
autonomous organisation under the Department of Agricultural
Research and Education (DARE), Ministry of Agriculture, Government
of India.
ICAR

ICAR is the apex body for co-ordination, research n


development (R&D) and education in agriculture including
horticulture, fisheries and animal sciences in the entire country.
HQ=Delhi

Central Food Technological Research Institute(CFTRI),


Mysore (part of CSIR)
CFTRI

Crop
processing

etc.

R&D in food science, food safety, low-cost food processing

Indian Institute of Crop Processing Technology (IICPT)

under the Ministry of Food Processing Industries,

Teaching, research, labs and extension services in food


processing

National Institute of Food Technology, Entrepreneurship and


Management (NIFTEM)

NIFTEM

Deemed to be University

Under Ministry of Food Processing Industries

high quality educational and research programme

support the regulatory authority through referral advice on


food standards.

Developing world class managerial talent with advanced


know how in food science and technology.

Nutrition

Horticulture
research

National Institute of Nutrition under Ministry of Health and


Family Welfare

for R&D on food-nutrition-toxicology studies.

Indian Institute of Horticulture Research, Banglore

developing new hybrids, pest-disease-nutrient management


etc. for fruits, vegetables, ornamentals, medicinal and aromatic
plants and mushrooms

Previous article was on fisheries, now comes meat/poultry.


UPSC syllabus

topics in this article

prelims

GS2: Statutory, regulatory


and various quasi-judicial
bodies.

Veterinary council of India

avian influenza related MCQ under sci-tech

GS2: Government policies


and interventions for
development in various
sectors

fodder points that


1.
lack of clear policy on buffalo meat hampers
the growth of meat industries..
2.
Non implementation of GST hurts Keralas
poultry sector.

GS2: Bilateral agreements


involving India and/or
affecting Indias interests.

fodder point that China has agreed to allow meat import


from India. (earlier it was banned because of diseases)

GS2: Effect of policies and


politics of developing
countries on Indias interests

fodder point that Omans ban on Indian poultry has


badly affected our business.

GS3: economics of animalrearing

Plenty of fodder points on poultry and buffalo meat.

GS3: Changes in industrial


policy and their effects on
industrial growth.

fodder point that Meat processing industry was delicensed in the 90s and as a result, now India is
6th largest exporter of bovine meat, produces meat
worth >Rs.60,000 crores.

GS3: Food processing and


related industries in India

for poultry and buffalo meat

After this, only one and last article remains in [Food processing]: tea, coffee, wine,
edible oil and confectionary.
Poultry: Scope/significance
Poultry business has potential to grow because:
1.
There is no religious sentiment associated with poultry.(unlike beef or pork)
2.
It takes far less feed to produce a kilo of chicken than the equivalent amount of
pork or beef.
3.
Many youngsters becoming non-vegetarian under the influence of
advertisements e.g. KFC, McDonalds etc.
4.
Consumer studies from other countries say when vegetarians choose to
convert to non-vegetarianism, they first experiment with poultry before trying other
meat products.
5.
Increasing prosperity in emerging markets= people can afford to put more
meat on the table.
Contribution to economy:
1.
2.

Meat: more than Rs.80,000 cr


Eggs/Poultry: more than Rs.17,000 cr (and export ~450 crore)

3.
Backyard poultry provides cheap protein nutrition and side income to poor
families.
4.

Per capita availability of eggs = ~ 55 per year


Locations- Poultry Business

REGION
SOUTH

Characteristic

Contract farming for poultry= well-developed

Production concentrated around Coimbatore.

Fully integrated/organized players control over 95% market

Namakkal District in TN:

NORTH

EAST

Largest egg production zone in the country


accounts for more than 95% egg exports from India

produces more than 3 crore eggs daily

(but recently hit hard by ban from Oman.)

Contract farming for poultry= under-developed

Mostly unorganized players.

No concentration of production.

No full integrators.

No concentration of production

Only 1 integrated player- Arambagh

High cost of maize feed, transport problems =hampered the growth


of organized poultry farming.

Production concentrated around Pune. E.g Venkys

few integrated and semi integrated players

WEST
Poultry Supply chain & Backward Integration

click to enlarge
Big poultry companies have backward integration. Lets observe the case study of
Saguna Foods
UPSTREAM

Contract farming agreement with more than 20000


farmers in 16 states.

1.
E

Company has its own pharma division in TN. They


provide are anti-bacterial, antibiotics, vitamins, mineral
supplements etc. to those contract farmers.

MEDICIN

1.

FEED

1.
G

TRAININ

Company has Indias largest feedmill near Bangalore.


They supply their own scientifically manufactured feed to those
contract farmers.

Sagunas experts make regular field trips and train the


farmers on how to raise poultry in a scientific-efficient manner.

As a result of 1+2+3, all chicken/eggs are uniform in size, shape and quality.

HACCP certified, Good Manufacturing Practice (GMP)


certified processing plant at Coimbatore.
1.
G

PROCESSIN

Can process >35000 birds per day and export >1500


metric tonnes chicken per month.

Company has implemented Enterprise Resource


Planning (ERP) system, entire plan can be monitored from a
single computer.

Another big player with similar backward integration is Venkys (Pune based
company): supplies Chicken to Indian outlets of McDonalds, KFC, Pizza Hut, and
Dominos.

But just two Cinderella stories doesnt mean everything is well and good with
Indian Poultry business. Lets observe the constrainsPoultry@Upstream
Maize (Poultry-Feed)

Poultry Feed constitutes almost 60-70% of the total broiler cost.

Therefore, fluctuations in the prices of maize, soybeans/oilmeals significantly


affect input cost in poultry business.

Maize consumption by the animal feed sector (which accounts for almost 50%
of maize consumption) has been growing much faster than maize production.

Maize is primarily a rain-fed crop, the annual production level is dependent on


monsoons= fluctuations in production level (and therefore fluctuation in price level).

Government offers better MSP for rice and wheat. Hence farmers prefer
rice/wheat over Maize cultivation.

December-April period, maize is grown only in a small region in Eastern India =


high feed prices for North East poultry business.

Adding insult to the injury: Indian exports of maize to Bangladesh, Nepal and
other countries have been rising exponentially. These countries do not have significant
domestic maize production, yet their poultry industry is growing rapidly. (Meaning,
Bangleshi and Nepali are using Indian maize to improve their poultry business, while
Indian poultry farmers are struggling.)

After the outbreak of bird flu, (+ inflation), desi customers decreased


egg/chicken consumptions and foreign countries also imposed ban on Indian poultry. As
a result, most poultry farmers are making losses.
Government needs to address this inconsistency in its policy on maize and poultry
rearing.
Avian Influenza

Outbreak of Avian influence (commonly known as bird flu)= culling of poultry +


fall in demand= hurt the business.

Since many poor families raise poultry in backyard dont maintain hygiene
standards=flu outbreak.


This not only hurts the family but also commercial players, because foreign
countries will impose ban on import of Indian egg/chicken because of the bird flu news.
Influenza virus has two components
Haemagglutinin
(H)

Protein found on the surface of influenza viruses.which is


responsible for binding the virus to the victim-cell

Neuraminidase
(N)

Enzyme found on the surface of influenza viruses.

There are multiple varieties of (H) and (N), and based on their combination in
the given virus, scientists name it H5N1, H5N2 etc.

Avian flu

Swine Flu

Bird

Pigs

H5N1

h2N1

Two types of Avian influenza


LPAI

HPAI

low capacity for causing disease (low


pathogenic avian influenza or LPAI)

causes disease very easily (highly


pathogenic avian influenza or HPAI)

Species affected

Migratory water
fowl

One type of wild ducks constitute the natural reservoir of


the virus. Wild birds may carry H5N1 from one area to
another through the process of migration.

virus can spread rapidly through contact between a


sick bird and a healthy bird.

Poultry flocks
(chickens, ducks,
turkeys, geese)

Unhygienic conditions at poultry-farms, rice paddy


fields = mixing of sick and healthy birds=disease transfer.

this virus causes a high mortality rate. Even healthy


birds have to be culled to prevent further spread of virus.

Over the years, H5N1 virus has infected numerous


birds in Asia, Europe, America and Africa.

Cats, tigers,
leopards

found to be affected by Avian influenza, after eating raw


infected birds

Human

Disease can also affect humans but only after eating poultry
meat that has not been cooked properly or after very close
contact between a person and an affected animal.first
outbreak: Hongkong97

Steps taken by our government so far:

1.
The Action Plan to combat Avian Influenza was revised in 2012 and circulated to
the State/UT Governments for implementation.
2.
About 90% veterinary workforce of India has been trained to combat bird flu.
3.

Culling of entire poultry population in the affected zone of 0-1 Km

4.

Upgraded laboratories, stockpiled materials, medicines etc.

5.

Bio-Safety labs setup @Jalandhar, Kolkata, Bangalore & Bareilly.

6.

Education and Communication (IEC) campaigns to sensitize general public

7.
All the state governments have been alerted to be vigilant about the outbreak
of the disease.
8.
Government has banned imports of poultry from bird flu positive countries. (and
Oman banned our poultry exports, so tit for tat, the circle of karma is complete.)
9.
Government has alerted Border check posts with neighboring countries to stop
transport of live-birds/eggs/chicken.
Contract Farming

Contract Farming prevalent in Southern India for poultry business. eg. Saguna
Foods and Venkys.

Farmers provided with feed, medicines and bird growing fee. Some companies
have state of the art processing plants located close to cities.

But this contract farming model has still under developed in the remaining parts
of India.
@Processing

Poultry processing capacity India ~ 25,000 birds per hour BUT, Average
utilization is barely 30%. Because Several of the operating units are run by small and
unorganized players.

The only big players in Indian Chicken business= Venkys, Godrej, Arambagh
and Suguna.
@Downstream
Poultry Hygiene
At Retail level, chicken are slaughtered on street side shops/hotels by untrained
people. Result?
1.
Clean water not used for washing= contamination
2.
Poor hygiene practices in defeathering, chopping, removal of viscera etc.
=contamination.
3.

Lack of chilling facilities= immediate bacterial attack.

4.
Lengthy farm-to-slaughter time + no cold storage= dehydration= shriveled/bad
quality meat.
5.
Improper ventilation and space for storing live chicken = droppings / feed /
feathers spread bacteria.
Slaughter waste generated per day in Mumbai alone is about 150 tons.
Solution= ban street side slaughter of all animals + rigorous food inspection of all such
shops, just like in developed countries.
Taxation and Smuggling

Kerala imposes ~13% VAT on chicken


On the other hand Tamilnadu has exempted Meat, fish eggs, poultry and
livestock from VAT.

Result: Smuggling of chicken from Tamilnadu to Kerala = revenue loss to


government

Solution: uniform GST all over India.


Export

OCT
12

WHO confirms bird flu outbreak in government-run turkey farm at Hesaraghatta, Karnataka,

NOV
12

Oman, the biggest egg export market for India, bans import of eggs and chicken from India becaus
bird flu news.

JUN
13

Oman has lifted the ban on importing poultry products from India, but with condition that an Indian
company must get its premises and husbandry procedures verified by Omani officials first.But in du
this ban time, the Omani hotels, businessmen made import-contracts with Brazil and Holland for
supply of eggs and chicken. So, even after the ban is lifted, we are not seeing much high demand f
Oman.
Demand

High cost of feed, high food inflation, ban by Oman= Poultry business is deeply affected,
Most poultry farmers are selling below production cost and making losses.
Govt. schemes for poultry
#1: Poultry Development Scheme

100% centrally sponsored.

By Department of Animal Husbandry Dairying & Fisheries (DADF) under Agro


Ministry.

Has three components

1.
Assistance to
State Poultry Farms

One time assistance is provided to strengthen poultry


farms.e.g. for buying/upgrading hatchery, brooding and
rearing houses, laying houses for birds, in-house disease
diagnostic facilities and feed analysis laboratory.

1.
Rural
Backyard Poultry
Development

Poultry given to BPL families= supplementary income +


nutritional support.

1.
Poultry
Estates

In these poultry estates, entrepreneurship skills given to


educated, unemployed youth and small farmers, so they
start poultry related business-activities.
#2: Poultry Venture Capital Fund

Scheme provides finance through NABARD.

To setup poultry breeding farms, feed godown, feed mill, marketing of poultry
products, egg grading, packing and storage houses for export, egg and broiler carts for
sale of poultry products etc.

Additional finance for SC/ST/North Eastern state.


#3: Central Poultry Development organizations

REGION

org. located @

NORTH

Chandigarh

EAST

Bhubaneswar

WEST

Mumbai

SOUTH

Bangalore

They help farmers diversify poultry rearing by adding new species:


REGION

poultry species introduced

SOUTH

Duck, Emu, Turkey

NORTH, WEST

Japanese Quail

EAST

Guinea Fowl

They train farmers, women beneficiaries, various public and private sector poultry
organizations, NGOs, Cooperatives and foreign trainees etc.
National Livestock Mission (NLM)

in the Union Budget 2013-14.


To support poultry, dairy farming and fisheries.

Itll have sub-missions for

increasing availability of feed + fodder

Improving animal breeds to raise milk yields.


Misc.

Athulya chick

Kalamasi Fowls

Heat tolerant hen breed by ICAR, Kerala.

Gives larger sized eggs

Bird is heat tolerant=mortality rate is low.

Already covered under Hindu Sci-tech compilation. click me

Enough of eggs, chicken and poultry. Lets move to


Meat: Scope/Significance
Indian buffalo meat is witnessing strong demand in international markets because
1.
Our main competitors (Aus+US) are on decline. (more under
downstream=>Export )
2.
Indian buffalos have near organic nature (i.e. grown without use of
drugs/antibiotics unlike American cattle=less harmful effect on human health).

Indias world ranking

In

Livestock

Goats

Sheep

Bovine meat export.

Weve export demand in


BOVINE
MEAT

Saudi Arabia, Vietnam, Malaysia, Angola, Kuwait, Egypt, UAE, Jordan,


Iran

SHEEP

UAE, Saudi Arabia, Vietnam, Qatar , USA

CHICKEN

Oman, Afghanistan, Sri Lanka, Kuwait


Meat SCM@Upstream
#1: Livestock markets

Livestock market = where buying selling of animals done for dairy/meat.

Supervision falls within the purview of the local bodies (panchayats,


municipalities or corporations).
Problems of Livestock markets:
1.
Markets are primitive in functioning. No facilities for weighbridges, ramp
facilities for loading and unloading, feeding and watering animals.
2.
No veterinary doctors available in market to certify animal health before sale.
3.

No separate markets for different species of animals.

4.
No licensing/registration of merchants, brokers or suppliers= non-transparent
pricing, margins/commissions almost 30% of the consumer prices.
#2: Buffalo Slaughter Policy

The global trend is Contract farming For animal rearing.

Meaning, the meat-processing companies pay advance money, veterinary


services, fodder to the farmers and ask them to raise buffalos/sheep/pigs for
slaughtering.

But in India, buffalo slaughter is allowed only when the buffalo outlives their
useful life as a dairy or a draught animal.
Result:
1.
Male buffalo calves often slaughtered illegally (=revenue loss for government)
2.
Theyre starved when farmers do not find them useful for draught purpose.
(=resource loss, animal cruelty)
3.
Meat processing companies find it difficult to do contract farming for
buffalo/sheep etc. Hind Agro is the only Indian player which has backward linkages with
male buffalo calf rearing.

4.
No control over animal feed =meat quality is not uniform = doesnt commend
high prices abroad.
5.

inadequate veterinary care = various diseases= export rejected from US/EU

Jafarabadi breed in Gujarat and Maharashtra = known to be


one of the heaviest buffalo breeds in the world but its meat yield is
low.

Meat yield

yields.

Need for crossbreeding for buffalos that have higher meat

Need to educate farmers on modern scientific methods to


fatten male buffalo calves.

Some countries have banned Indian buffalo meat due to Foot


and Mouth Disease (FMD). We already discussed FMD in the dairy
article click me

Disease

Lack infrastructure/facilities for disease diagnosis, reporting,


epidemiology, surveillance and forecasting.
veterinary
services

same like previous article on milk/dairy business.

fodder

same like previous article on milk/dairy business.


@Processing Level

There are two types of slaughter houses in India:


#1: MUNICIPAL SLAUGHTER HOUSES

Municipal slaughter houses are owned and operated by local and state
governments.

Their infrastructure + facilities are (as you can guess) inadequate and outdated.

They charge fees but often money is not used for upgrading the infra/facility.

The animals are often kept in poor conditions (due to lack of adequate
infrastructure)=unhygienic meat.
#2: PRIVATE SLAUGHTER HOUSES

meat processing was delicensed in 1991

Meat-export companies need to have private slaughter houses to meet the


quality standards of US/EU.

But since meat is a highly controversial subject involving religious, social


angles=> local authorities are reluctant to give land allocation for new private slaughter
houses.

Result: Plenty unauthorized slaughterhouses: almost 50 percent of animals


slaughtered here => unhygienic meat + revenue loss to government.

Since many of the slaughterhouses are unorganized and illegal- the byproducts
of livestock slaughter are not utilized for additional income e.g. Meat-cum-Bone Meal
(MBM), tallow, Bone Chips etc. could be sold as pet food. Viscera, waste could used for
methane generation etc.
Since 9th Five year plan, Central government had come up with a scheme to upgrade
municipal slaughter houses, but progress is unsatisfactory. Why?

Under this scheme, center: state will share cost burden equally (50:50) but state
governments are reluctant to pay their 50% money, because of following reasons
1.
Frequent interference by animal rights activists
2.
Negative perception of meat eating and therefore limited proactive action by all
concerned authorities.
Solution: Privatize the Municipal slaughter houses.
Notable private players in Meat industry
COMPANY

BRAND

PRODUCT

Hind Agro
Industries Ltd

Fast Prax (fast food


outlets)

Buffalo, sheep and goat meats

Allana sons Ltd

Premier, Saffa

Premier (fruits and vegetables) Saffa (meat)

Al Kabeer

Al Kabeer

Vegetables and fruits, snacks, meat and


poultry, ready meals and sea food
@Downstream

PRICE

Indian consumer = price sensitive. Chicken and Buffalo meat are


more consumed than other varieties.

Currently , there are no taxes levied on wet market sales


(i.e. fresh meat)

TAXATION

But branded/sealed meat attracts VAT/sales tax.

This creates a non-level playing field between wet markets


and packaged meats.

We need zero excise and state-level taxes on value added


and branded meat products.

SELF-BAN

Even non-vegetarian refrain from consuming meat on certain


religious festivals

REGIONAL
PREFERENCE

Eastern India and Coastal regions prefer marine products over


poultry/animal.

FRESH

Indian consumers prefer to buy freshly cut meat from the wet
market, rather than processed or frozen meats. Health concerns
associated with red meats leading to preference for poultry.
Meat Export

Potential market in China

Till now, China did not allow import of Indian meat because of concerns about
Rinderpest and foot & mouth disease.

But in May 2013, India-China made agreement thatll help in export of buffalo
meat, fishery products and poultry feeds from India to China.
Decline of competitors
Indian buffalo meat exports =potential to grow, because some of our competitors are on
decline:

COMPETITOR

WHY DECLINING?

AUSTRALIA

Significant exporter of bovine meat.

But its production level has been affected by ongoing


drought.

Export capabilities have been affected by occurrences of BSE


disease (Bovine Spongiform Encephalopathy).

USA

US meat industry uses too much antibiotics, some health


conscious elite customers from US/EU prefer Indian buffalo meat for
its organic nature.
Government Schemes for meat/livestock
Conservation of Threatened Breeds of Livestock

covers all livestock species except cattle and buffalo

To protecting threatened breeds of livestock whose population is about of


10,000 (for animal)) and 1000 (for poultry)

Example of breeds covered under this program

state

Bonpala sheep

Sikkim

Black Bengal goat+Haringhata Black Fowl

West Bengal

Yak

Jammu and Kashmir

Kachchhi camel

Gujarat

Chegu goat

Himachal

Nilgiri sheep

Tamil Nadu

Muzzafarnagari sheep

Uttar Pradesh

Berari Goat

Maharashtra
Abattoir modernization

(copy pasting from earlier article)


Scheme by Ministry of food processing industries.
Abattoir= slaughterhouse/ butcher house. Food processing ministry runs a scheme for
them. This scheme Under PPP mode with involvement of local bodies (Panchayats or
municipalities) via
1.
2.

build-own-operate (BOO)
build-operate-transfer (BOT)

3.

Joint venture(JV) basis.

Features:

1.
2.

establish new modern abattoirs


modernize existing abattoirs

3.

promote scientific and hygienic slaughtering.

4.

Modern technology for waste management.

5.

better by product utilization (bones, skin etc.)

6.

provide chilling facility, retail cold chain management etc.

Financial assistance

Area

grant for __ % of the project


cost

General

50

North East, Hill area, areas under integrated Tribal


development plan

75

Maximum grant: Rs.15 crore per project.


Ten slaughterhouse projects ongoing:
1.

Dimapur (Nagaland)

2.

Kolkata (West Bengal)

3.

Ranchi (Jharkhand)

4.

Shimla (Himachal Pradesh)

5.
Hyderabad (Andhra
Pradesh)

1.

Patna (Bihar)

1.

Ahmednagar (Maharashtra)

1.

Jammu (Jammu & Kashmir)

2.

Srinagar (Jammu & Kashmir)

3.

Shillong ( Meghalaya)

National Mission for Protein Supplement (NMPS)

Component of Rashtriya Krishi Vikas Yojana.

to promote production of animal based protein through livestock development,


dairy farming, pig and goat rearing and fisheries
Disease eradication schemes
by Department of Animal Husbandry, Dairying & Fisheries

Rinderpest: viral disease, regularly devastated


buffalo and cattle herds in Asia and Europe.
National Project on
Rinderpest
Eradication

Recovery from rinderpest disease confers lifelong


immunity, but only a few animals are known to survive. Most
animals collapse and die within a few days after this viral
fever.

2011 FAO conference declared that Rinderpest


eradicated from the world.

Foot & Mouth


Disease Control
Programme

viral disease, already covered under previous [Food


processing] Article on milk/dairy.

National Control
Programme of Peste
des Petits

goats.

National Control
Programme on
Brucellosis

Brucellosis, bacterial disease, causes abortions and


infertility in animals=decline in milk production

is a viral disease, causes mortality in sheep and

Token Schemes by NABARD


The limitation of each of the following 3 schemes= government has allotted a token
sum of only Rs.1 lakh for the given year.
#1: Salvaging and rearing of male buffalo calves

to rear male buffalo calves for meat production

to develop linkages with export oriented slaughterhouses in Andhra Pradesh,


Bihar, Chhattisgarh, Jharkhand, Kerala, Madhya Pradesh, Maharashtra, Orissa,
Rajasthan, Uttar Pradesh, Punjab and West Bengal.

is expected to generate substantial quantity of meat, hides and by-products

also provide direct part employment and indirect employment to people in feed,
fodder, meat leather and various input services.
#2: Slaughterhouses @small towns

to be establish/ modernize slaughterhouses in rural areas and smaller towns


to produce wholesome and hygienic meat for supplying to the cities/towns.

This way, the loss in the meat sector due to transportation of live animals,
shrinkage of meat and environmental pollution in the cities will be prevented

fresh hides and skins in the tanneries in vicinity of the slaughterhouses will
boost production of quality leather.

pilot implementation in three states: Uttar Pradesh, Andhra Pradesh and


Meghalaya
#3: Utilization of Fallen Animals
More than Rs.900 cr are lost per year, due to non-recovery/ partial recovery of
hides/skins and other by-products from the fallen animals. Hence this scheme was
launched with following objectives
1.
Provide opportunity of employment to rural poor engaged in carcass collection,
flaying and by-product processing
2.
Produce better quality hides and skins through timely recovery, better handling
and transport
3.

Prevent bird-hit hazards to civil and defence aircrafts


Misc. Schemes

rabbits

Livestock
Insurance

Integrated Development of Small Ruminants & RabbitsNABARD.


The scheme is aimed for women beneficiaries, poor and
marginal farmers

To protect farmers against eventual loss of their


animals due to death.

Farmer pays 50% of the insurance premium, remaining

50% by Central government.

Benefit of subsidy is to be restricted to two animals per


beneficiary per household.

first Livestock census was conducted during 1919-20


and since then it is being conducted quinquennially by all
States/UTs in India
Livestock Census

Animal Quarantine
and Certification
Service

19th Livestock census was done in 2012.

100% cost bourne by Central government

under Directorate of Animal Health

to prevent ingress of livestock diseases into India by


regulating the import of livestock and livestock related
products, and providing export certification of International
Standards for livestock and livestock products which are
exported from India.

Quarantine stations in the country out of which four


located at New Delhi, Chennai, Mumbai and Kolkata

The scheme helped to prevent the entry of exotic


diseases like Mad-cow disease (BSE), African swine fever and
contagious equine metritis.

Livestock Health &


Disease Control
program

supports the state Governments for animal immunization,


strengthening of existing Laboratories and in-service training to
Veterinarians

Pig Development

Particularly in North-Eastern States by rearing pigs

Encourage commercial rearing of pigs by adopting


scientific methods and creation of infrastructure

Create supply chain for the meat industry


Misc.Org

Statuary body constituted under the provision


of Indian Veterinary Council Act.

Veterinary Council of
India

Regulates veterinary practices (just like MCI


for doctors.)

maintains uniform standard of veterinary


education across the country

National Institute of
Animal Health

at Baghpat, Uttar Pradesh to undertake the testing of


animal vaccines and drugs.

Central Sheep Breeding


Farm

Hissar (Haryana). as the name suggests: sheep


breeding research.

Central/Regional Disease
Diagnostic Laboratories

Izatnagar is functioning as Central Laboratory for


surveillance and diagnosis of various livestock and
poultry diseases including Avian Influenz
Mock Questions

MCQS
1.

Which of the following is a part of concurrent list under 7th Schedule?

a.

prevention of cattle trespass

b.

prevention of animal diseases

c.

infectious or contagious diseases or pests affecting animals or plants

d.

None of above

2.

Correct statement about Avian influenza

a.

It is caused by H1N1 virus

b.

Migratory water fowl is the natural reservoir of the virus

c.
influenza.

Carnivore animals such as Cats, tigers, leopards are immune to avian

d.

None of Above

3.

Poultry Venture Capital Fund provides financial assistance through

a.

Central Poultry development Organization

b.

NABARD

c.

Department of Animal husbandry

d.

Ministry of food processing industries

4.

Find odd term

a.

Rinder pest

b.

Brucellosis

c.

Foot and mouth disease

d.

Peste des Petits

5.

Find correct match

a.

Chegu Goat: Kerala

b.

Haringhata Black Fowl: MP

c.

Bonpala Sheep: Sikkim

d.

None of above

Descriptive

1.

2 marks
Veterinary Council of India

2.

Livestock Insurance

3.

Livestock Census

4.

National Project on Rinderpest Eradication

5.

Abattoir modernization scheme

15 marks

1.
Discuss the negative impact of Avian influenza on Indian poultry
business. Enumerate the steps taken by Indian government to combat this disease.
2.
Discuss the Upstream issues affecting Indian poultry business and
suggest remedies.

3.
Lack of backward integration in the buffalo meat supply chain, has
hampered the growth of meat processing industry in India. comment
4.
List the initiates taken by Department of Animal Husbandry, Dairying &
Fisheries for promotion of meat and poultry industry.
5.
Innovations that are guided by smallholder farmers, adapted to local
circumstances, and sustainable for the economy and environment will be necessary to
ensure food security in the future. Comment
6.
Factory farming is one of the biggest contributors to the most serious
environmental problems. comment

Essay

1.
higher.

Physical bravery is merely an animal instinct; moral bravery is much

2.

Throughout the history, evil has survived through concealment.

3.
Man is the only animal for whom his own existence is a problem which
he has to solve.
4.

Man-The only animal in the world to fear.