(GIST OF KURUKSHETRA) Entrepreneurial Opportunities in Food Storage Infrastructure

(FEBRUARY-2024)

Entrepreneurial Opportunities in Food Storage Infrastructure

Context:

India’s food industry is one of the biggest in the world in terms of their contribution to country’s manufacturing, export, growth, and consumption potentialities. With the rise in population, urbanisation, new markets, and innovations, rising disposable incomes, change in food and dietary behaviours, this industry has grown manifold in the recent years. With a potential size of US$ 535 billion in 2025, India’s food processing sector provides ample opportunities for entrepreneurs as well as farmers.

Entrepreneurial Possibilities in Food Storage Infrastructure

Food system infrastructure covers everything needed in the supply chain of activity between the consumer and the producer, be that a farm, fishery or community garden. Infrastructure covers everything needed for agri-food entrepreneurs to move food from the farm to the plate or to move products. Agri¬ food supply chains involve:

Production: Inputs such as seed, feed, and harvesting services and equipment;
Processing: Activities such as washing, drying and freezing food;
Aggregation and Distribution: Things such as marketing cooperatives, storage facilities, brokerage services, logistics management, and delivery trucks;
Retailing: All those who sell or serve food to consumers, from restaurants, grocery stores and hospitals, to schools, caterers, and fast-food outlets etc.;
Marketing: The effort that goes into promoting products such as advertising, campaigns, packaging materials, branding and so on; and
Capital: Finance, natural capital (i.e. land, water and other ecological resources), human capital, and social capital.

Initiatives taken by government:

Mega Food Parks: The scheme aims to link agricultural production to markets by using a cluster approach, implemented by an SPV. It supports the creation of infrastructure for setting up of modern food processing units in the park and connecting it with a well-established supply chain.
Cold chain, Value Addition and Preservation Infrastructure: The scheme aims to provide integrated cold chain and preservation infrastructure facilities along the entire supply chain of food processing. It covers Minimal Processing Centre having weighing, sorting, grading, packing, storage and quick freezing facilities.
Creation of Food Processing and Preservation Capacities: The scheme aims to create and modernize processing and preservation capacities by increasing the level of processing and value addition, leading to a reduction in wastage.
Creation of Backward and Forward Linkages: The scheme aims to provide effective and seamless backward and forward integration in the processed food industry. Financial assistance is provided for setting up primary processing centres, collection centres, and modern retail outlets. This is supplemented with connectivity through insulated or refrigerated transport.
Food Safety and Quality Assurance Infrastructure: The scheme aims to make India’s food and agro-processing sector have a competitive edge in the market by creating infrastructure for safety and quality assurance services.
Agro Processing Cluster: The scheme aims at cluster approach based development of modern infrastructure and common facilities to encourage a group of entrepreneurs to set up food processing units.
PM Formalisation of Micro Food Processing Enterprises (PMFME): The recently announced PM Formalisation of Micro Food Processing Enterprises Scheme (PMFME Scheme) by the Ministry of Food Processing Industry (MoFPI) aims at providing financial, technical, and business support for the upgradation of existing micro food processing enterprises.

Way Forward

Adequate food storage facilities at affordable costs is the need of the hours not only to reduce food wastage but also to help small and marginal farmers to escape from distress sales. Improvements in food quality can be obtained through food processing and storage technologies, which are not always available to MSMEs because they have no access to credit and training programmes.
Accelerating the reduction of food waste and loss calls for developing food processing, refrigeration, storage and warehouse technologies. Therefore, efforts should be made to establish one cold storage in every Gram Panchayat by undertaking a detailed mapping exercise of crops, fruits and vegetables grown and their market outreach.
Such efforts can reduce transport and storage requirements and create an enabling environment for the demand and supply of safe and nutritious foods. However, it should be emphasised that only by developing a robust forward and backward linkages can ease large price fluctuations, ensure remunerative price for farmers, and provide lower prices for consumers: a win-win situation for all.