1. A Presentation On
“Opportunities in Agro-Processing
Sector in India ”
By
Prof. Vinod Malkar
Sanjivani Rural Education Society,
College of Engineering, Dept. of MBA,
Kopargaon, Dist: Ahmednagar,
Maharashtra, India 1

2. Introduction
• India is one of the biggest emerging markets, with over 1.2
billion population and a 300 million strong middle class.
• India with a land area of 2.97 million sq. km., 180 million
hectares of arable land (one tenth of the world), 56 million
hectares irrigated land.
• India is the second largest food producer in the world and
having potential to become first.
• But fruits and vegetables just about 2.2 per cent of the
production is processed compared to 30 per cent in
Thailand and close to 80 per cent in Philippines and
Malaysia.
• It is estimated that a one per cent growth in food processing
has the potential to generate an additional direct
employment for five lakh people, and indirect employment
for 15 lakh individuals (Rana kapoor 2010)
• This Research will give roadmap for development of food

3. 3
Milk
Largest Producer
91 Mn T
F & V
#2 in the world
151 Mn T
Food Grains
#2 in the world
(220 Mn T)
Cattle / buffaloes
Largest in the world
283 million
Tea
Largest Producer
(0.85 Mn T)Sugarcane
# 2 in the world
(245 Mn T) Goat & Sheep
182 million
Fisheries
Marine: 2.7 Mn T
Inland : 3.1 Mn T
India is the front ranking producer of many perishable commodities

4. 4
Food Processing Sector in India
India has huge supply advantages due to diverse agro-climatic
conditions and wide ranging raw material base…
• 52% cultivable
land compared to
11% world
average
• All 15 major
climates in the
world exist in India
• 46 out of 60 soil
types exist in India
• 20 agri-climatic
regions
• Among the top five producers
worldwide of rice, wheat, groundnuts,
tea, coffee, tobacco, spices, sugar and
oilseeds.
• Sunshine hours
and day length are
ideally suited for
round the year
cultivation
Significant Opportunity
India as a global sourcing
hub

5. 5
Food Processing Sector in India
Huge wastage across the supply chain leads to lower level of
processing and hence low value addition…
Field Losses
(Pest, Diseases, Rodents etc))
Pre-Processing
(e.g. inefficient harvesting, drying, milling)
Transport
(e.g. spillage, leakage)
Storage
(e.g. technical deficiencies)
Processing & Packaging
(e.g. excessive peeling, washing)
Marketing
(e.g. spoilage, rotting in stores)
Rich
Countrie
s – High
losses at
a later
stage in
the food
chain
ConsumerProducer
Field Fork
Wastage by Consumer
(e.g. overeating, food wastage)
Developing
Countries –
Relatively
high losses
in the initial
parts of the
value chain
Britt-Louise Andersson, SIWI

6. 6
Some Identified problems …
Infrastructure for marketing of perishables
 Primary grading/ collection centers - non existent
 Warehousing and cold storage - inadequate
 Cold chain - non existent
 Quality certification system - non existent
 Transportation for perishables - non existent
 Rural markets - complete lack of infrastructure
 Wholesale markets - in government control, lack modern facilities

Private / direct markets - not permitted
Post harvest losses: 25 to 30 % in perishables

7. 7
Level of Processing across Segments
Segment India Other Countries
Fruits and
Vegetables
2.2%
US A (65 %),
Philippines (78%)
China (23)%;
Marine 26%
60-70% in developed
countries
Poultry 6%
Buffalo
Meat
20%
Milk 35%
60-75% in developed
countries

8. 15%
11%
0% 5% 10% 15% 20%
Fruits
Vegetables
India's s ha re in glo ba l pro duc tio n (2001-03)
63%
53%
0% 20% 40% 60% 80% 100%
Fruits
Vegetables
Indian prices as a % o f wo rld prices (2001-03)
0.5%
1.7%
0.4%
2.1%
0% 2% 4% 6% 8% 10%
Fruits
Vegetables
India 's s ha re in glo ba l e xpo rts
(2001-03)
(1991-93)
Source: UN COMTRADE Statistics, World Bank Staff
Estimates
India’s competitiveness in global markets

9. 9
Indian Food Trade
Supported by a committed government in improving the
food trade and providing a conducive atmosphere for
agriculture, India is a net exporter of agricultural
products. …India’s Position in Global Trade
• India stands a distant 21st
for the year 2007, with a 1.4% share in
the global trade.
• During the period 1980-2007, India’s share in the global exports
have increased from 1.1% to just 1.4%, the majority of the
increase happening in this decade.
• However, Export of Processed Food and Beverages is growing
faster than the overall Food and Beverages…

10. 10
34%
29%
17%
10%
7%
1%1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0 2000 4000 6000 8000 10000 12000 14000
Distance (Kms)
ShareofTrade
South Asia
Middle East
East Asia
Western Europe
Rest of the World
USA & CanadaAfrica
Indian Food Trade
India exports mostly to the proximate countries…
India’s geographical situation gives it the unique advantage of connectivity to Europe, the Middle
East, Japan, Singapore, Thailand, Malaysia and Korea.
Globally, most of the countries import from countries that are geographically closer.
• For example, 45% of USA imports are from Canada and Mexico.
• EU imports 50% from Spain, Netherlands, France, Italy, Belgium and Germany

11. 11
Industry Growth Drivers - Demand
Urbanisation, rise in disposable incomes and changing lifestyle
and aspirations are leading to significant demand for processed
food…
Increasing
Urbanisation –
Lifestyle and
Aspirations
Increasing Nuclear
Families and Working
Women
Increasing spends on
health foods
Food
Processing
Demand
Drivers
Changing
demographics – Rise
in disposable
incomes
Demand for
Functional Foods
Organised Retail and
Private Label
Penetration

12. 12
Challenges in the Sector
Challenge 1: Productivity Issues
India's overall agriculture productivity is still low…
Source: Innovative technology to ensure food security, UNI (United
News of India), 25 March 2009

13. 13
Challenges in the Sector
Challenge 2: R&D
Commodity-centric R&D Lack of a holistic approach involving a matrix of farm enterprises
Compartmentalization of
R&D agencies
Lack of effective bilateral flow of information amongst research, extension,
and implementation departments
Poor validation and
feedback mechanisms
Lack of large-scale on-farm validation of techniques and feedback thereon,
leading to practically no scope for enhancement
Key Problems in Indian R&D
A seven-step mechanism is required to set-up a research-development-technology transfer continuum
involving all stakeholders
1. Problem identification and prioritization
2. Convergence of existing technologies to match the need
3. Generation of need-based viable technologies using the holistic farming system approach
4. On-farm assessment and evaluation
5. Feedback on the technologies
6. Refinement of technologies, if necessary
7. Ensuring timely availability of inputs

14. 14
Challenges in the Sector
Challenge 3: Human Resource Development
Warehousing &
Distribution
Industry level
Enforcement
Regulatory
and trade
issues
Food production• Food safety
awareness
• Auditing and
inspection skills
• Process development
• Managerial and
Operational level HRD
• Institutional Development
• Focus on packaging techniques, storage and safe
transportation
• Platform to make policy
decisions
• Inclusion in academic
curriculum
• Emphasize food safety in storage conditions
• Training in Warehousing and Distribution
The industry is in direct need of highly skilled/trained manpower across different levels to handle various operations

15. 15
Challenges in the Sector
Challenge 4: Supply Chain Hindrances
Necessity for a Strategic focus on Supply Chain in FPI
• This situation discourages processing units to reach optimum size and achieve economies of
scale.
• Additionally, lack of consistent quality hinders small scale units to build brand equity for
themselves in international and domestic markets.
Seasonality
Perishability
Variability
Seasonal production Vs Year-round Processing Operations
Highly perishable nature of raw materials
Variable quality of raw materials due to cyclic variations and changing weather conditions

16. 16
Challenges in the Sector
Challenge 5: Low Adherence to Quality
Standards
ncreasing need for food processors to adhere to quality standards for both domestic as well as export marke
Increasing Globalisation Stringent Safety NormsRising Customer awareness on Quality and Health
• Lack of requisite controls across the agri-value chain-from farm inputs to
storage of produce to food processing techniques
• Poor compliance to requisite food standards in export countries
• Absence of basic standardization and certification infrastructure

17. 17
Opportunities
Food Processing sector has strong synergies with the
inclusive growth mandate of the government and also
provides a platform to significantly transform the face of
rural India…
A developed Food Processing sector will help overcome the biggest challenges in front of
India:
• Low farmer income and high subsidies
• High wastage along the value chain
• Poor hygiene and safety standards
Given the huge potential opportunity, players should consider the constraints as
opportunities waiting to be exploited and make investments for the overall growth of the
industry.

18. 18
Opportunities
High domestic demand and supportive policy provides significant
opportunities across the Food Processing value chain…
Financial & Business
Services
Farm Inputs Farming
Marketing/
Aggregator
Processing
Logistics
(Food)
Retail/
Food
Services
Consumer
Product Design
Distribution
MarketingTransport Services/
Infrastructure
Quality Control Market Intelligence
Policy Support
Financial & Business
Services
Farm Inputs Farming
Marketing/
Aggregator
Processing
Logistics
(Food)
Retail/
Food
Services
Farm Inputs Farming
Marketing/
Aggregator
Processing
Logistics
(Food)
Retail/
Food
Services
Consumer
Product Design
Distribution
Marketing
Product Design
Distribution
MarketingTransport Services/
Infrastructure
Quality Control Market Intelligence
Policy Support
Key
Opportunities
Mega Food Parks
Integrated Cold
Chain
Backward and
Forward Integration
Food Safety
Management
Systems
Training Facilities
B2B Sales
Quality Control Labs
Joint Research
Facilities
Customised Farm
Equipment

19. Thanks for your attention!
This is not an end ……This is not an end ……