Indian food processors told to upgrade

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Related tags: Food processing

The Indian state of Karnataka has said that the food processing
industry will have to upgrade technologically and produce
world-class products in order to survive in competitive markets,
the Chief Minister, S.M. Krishna, has said.

The Indian state of Karnataka has said that the food processing industry will have to upgrade technologically and produce world-class products in order to survive in competitive markets.

In a speech by the chief minister, S.M. Krishna, given at a seminar on food processing industries, organised by the Karnataka State Finance Corporation, he said the survival of agriculture depended entirely on the progress made in the food processing industry and the Government of Karnataka was committed to the cause of the industry.

The number of small-scale industries going in for technological upgradation had risen after the State Government offered an interest subsidy of 4 per cent on loans taken by SMEs for such upgradation in existing plants, Krishna pointed out.

The Government had set up an agri-export zone for gherkins and was looking to set up similar zones for for acid-lime, grapes, pomegranates and mango. According to V. Srinivas Prasad, Union Minister of State for Food, Consumer Affairs, and Public Distribution, Karnataka has the opportunity to attract investment of over Rs10,000 crore (€200m) over the next 10 years. He said that the Karnataka State Finance Corporation (KSFC)'s lending policy, which considered food-processing sector as a thrust area for extending financial assistance, was welcome.

"The technology development and modernisation fund scheme of the SFC will greatly help small and medium scale industries to upgrade and modernise their technologies, thereby becoming cost-competitive,"​ he added.

Delivering the keynote address, Dr Shailendra Narain, former CMD, SIDBI, Lucknow, said that food processing industry assumed importance in the face of the non-elasticity of agricultural production and value. "Value-addition is crucial to get more from the produce,"​ he said. He suggested that entrepreneurs and financing institutions focus more on moving from raw material to semi-finished products rather than trying to produce finished products as the marketing and branding expenses and expertise may not be at their command. That could be best left to the big brands and large industries, while the sector sought to supply semi-finished products to these large industries.

The ready-to-eat market in the domestic sector was sizeable and had been neglected, Dr Narain pointed out. "At a time when large multinationals are aiming at the Indian market, Indian companies would do well to address this segment before focussing exclusively on exports,"​ he said.

According to him, the sector needed incentives for entry into the industry, for supplying to the domestic market and for exports. "Equity participation is essential while technological upgradation and automation also need attention. A guarantee fund must be in place for the sector to reduce the uncertainty, while policy initiatives were needed to encourage women entrepreneurs in the agro-processing sector,"​ he said.

With 10 agro-climatic zones, Karnataka was ideally suited for agro-processing while the agricultural universities and research institutions would provide technical inputs to entrepreneurs in the sector.

The universities and research institutions would be encouraged to develop a human resource base to meet the needs of the agro-processing sector, while every district would be encouraged to have food processing units. While the Karnataka Government has got approval for setting up three agro-processing, three more are awaiting approval.

Related topics: Processing & Packaging

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