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Food Processing Industry: Scope and Challenges

In original form, an agriculture product is not suitable for consumption and hence it is necessary for a particular agriculture product to be processed for final consumption.  Thus, an agriculture product goes through various stages , in fact a chain of value additions, right from the cultivator who produces it to the wholesaler and then to the retailer and finally ending its journey with the consumer. At every stage there is value addition to the product in form of sorting, grading, packaging and branding in order to make the product usable, fascinating and attractive to the consumer. The packaging and branding of a product not only makes the product more valuable among the targeted consumers but also increases its utility and shelf-life.


Though India produces 17-18%of total vegetables of the world and around 15%of total fruits of the worlds but the value addition of these products is very low. As India could not develop adequate and viable infrastructure for preserving and processing these products much of the agriculture products due to short shelf-life are perished. For example, India is a big producer of mangoes and if mangoes are processed to mango juice it will result in more value addition as well as create more jobs and employment. Similar is the case with other fruits like bananas and apples.

India grievously lack in the facilities and infrastructure for sorting, grading, packaging, storage, transportation and cold chains which are required to preserve agricultural produce so that they can be sold in the international market at better prices which in turn can help in increase of foreign exchange reserves. If India wishes to spread the taste and aroma of its food, the food processing industry should be developed by putting in place strong supply of chain and hence the wastage of thousands of tonnes of cereals and grains due to deficient infrastructure of cold storage or warehouses and other perishable food preserving mechanism will be avoided.

As per the data made available by the ministry of food processing, Government of India, the food processing sector is estimated to be valued at around 135 billion dollar. It is developing at a pace of 8 % annual rate which is double of the annual growth rate of agriculture growing at 4%, thanks to the utmost importance the government of India is attaching to the sector, sensing the huge potential that has been lying untapped in this sector for so many years.

If we go by the gross domestic figures of our economy the share of food processing industry in the whole of agriculture sector stands at 10%, nevertheless, given the vastness of our agriculture sector, it is less than desirable and dampens our zeal of transforming agriculture into an engine of growth.

The food processing industry is the bye-product of agriculture industry. However, it has assumed so much importance in modern technology-driven world that it has come to be treated as separate industry which can survive and flourish on its own by drawing investment and capital into its fold. The recent decision of the government of India in January 2018 of opening the   automatic route for single brand retail trading for 100%t FDI is premised on the vision of strengthening food processing industry also and making it the vehicle of economic growth. If the agro-industry is the backbone of our economy then food processing industry is the backbone of the agro- industry.

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