Chennai: India suffers an estimated food grain and agriculture produce loss of Rs 50,000 crore every year due to the lack of adequate post harvest infrastructure and inefficient supply chain management by the country's farmers.

According to the country's Ministry of Food Processing Industries Secretary P I Suvrathan, one of the biggest challenges for India is to find ways to organise farmers who may not have any idea about supply chain management and to create institutional mechanisms to empower them.

Pointing out that Rs 50,000 crore is the estimated annual physical and value loss the farmers occur due to the lack of post harvest infrastructure, the Secretary said that, "Opportunities given to farmers to run post-harvest facilities all by themselves in a professional way will empower them, as farmers can hold on to their harvest more than 24 hours and have a say in fixing price for their produce."

Suvrathan further said that it was a top priority for the Government to create market interfaces to keep the country's 300-million farming community posted about the requirements of consumers in 60 Indian towns with high purchasing power and a population of over 10 lakh.

The secretary observed that the new focus of creating mega food parks—industry estates with common infrastructure created exclusively for food processing industry—is to ensure proper supply chain of agricultural produce.

Delivering the inaugural address at the two-day conference on "Driving the Next Agri Revolution" organised by Confederation of Indian Industry (CII) here recently, Suvrathan said that though the annual growth of Indian agriculture sector was a dismal two per cent, the growth rate of the processed food industry had shown substantial increase, up from eight per cent in 2004 to 18 per cent in 2006.

The rapid, Suvrathan poined out, was equivalent to that of the revolution witnessed by the telecom industry, which added 200 million mobile phones from four millions just in four years.

However, the potential unleashed by the processed food industry in terms of employment and revenue generation in rural India is yet to be widely known, the Secretary said.

He pointed out that quite silently the supply chain and post harvest infrastructure of southern districts of Tamil Nadu and many parts of Andhra Pradesh, Karnataka and Madhya Pradesh are getting effectively streamlined with setting up of modern pack houses, automated grading systems and cold stores by farmers.

Speaking on the occasion, Tamil Nadu Industry Secretary M F Farooqui said that enhanced productivity, better post harvest infrastructure and massive value addition, are the pre-conditions for the agriculture sector to grow beyond four per cent.

Stressing that these were also the drivers of next generation agriculture revolution, Farooqui said that the changing consumer patterns and raising disposable income levels present excellent business opportunities for the pre-prepared food industry.

He emphasised on the need for a paradigm shift in thinking on the part of key stakeholders—farming community, industry and government.

"The traditionally risk-averse Indian farmers should not think they are mere producers and depend solely on the government for selling their produce," he said adding that the private industry should take up the role of development of farmers and purchase from them at a rate to encourage farmers to continue to produce.

According to Foodpro 2007 Chairman and Aditya Birla Retail CEO Sumant Sinha, barely two per cent of fruits and vegetables grown in India are processed as against 80 per cent in the US.

India's share in international food trade is still as low as 1.5 per cent and the rate of value addition to foods by processing is just 8 per cent.

"Considering the fact that India has a market of one billion, who spend over 50 per cent of their household expenditure on food, and has a 30 million upper and middle class population that is expected to increase to 200 millions by 2010 thanks to rapid urbanization, there is a huge scope for branded food industry, which at present, grows at 10-15 per cent," Sinha said.

He said that the bottlenecks are low value addition of produce for exports and inadequate storage cold chains and increasing cost of packaging which accounts for between 10 to 64 per cent of product cost.
—iGovernment Bureau