Focus on perishables and reducing wastage
The first female parliamentarian from Punjab, Harsimrat Kaur Badal, who has been at the charge of Minister of Food Processing Industries believes that there is a lot of potential in the perishable sector but at the same time, there is big issue of food wastage. So to explore the potential and overcome the challenges, the ministry is concentrating on infrastructure, connectivity and developing cold chain facility. Talking about SIAL 2014, Badal said that India will present its variety of food culture.
You have been now in the position for three months. What is your first observation about the food processing sector in the country?
First and foremost, I see a huge potential, especially in the perishable section. We have made a very good progress in dairy sector but if we look at the perishables, in which we are the second largest producers of fruits and vegetables in the world; barely three per cent processing is being done. This indicates the potential lies in this segment.
The other thing that comes to mind is huge amount of wastage which happens basically at the harvest level and transportation level. The statistics shows that we are wasting food worth almost Rs 440 billion every year in this perishable which is as higher as 18 per cent. This data was collected in 2009. And I think, this is also the tip of the iceberg. In reality, it is probably a lot more. This is probably one of the reasons where with the growing population, the land holding is shrinking. So, it is very important that wastage is controlled. Instead of being wastage is processed, so it is available to a consumer; thus, ensuring food security and cheaper rates for the consumer and better price for the farmer. So, this is the challenge which we have taken up and to basically bring down inflation and to uplift the farmers, it is very important to process this huge amount of food, which is being wasted.
So, you have taken up the challenge but how would you get there?
In the last couple of months, we have done meetings across all the stakeholders – from big to small ones, various departments are involved. It is a multi-layered kind of thing. There are schemes and various departments. Well as my ministry just concentrate on, say, food parks, cold chains, abattoirs and things like that; but there is whole lot of being done in other ministries as well. So, there is a need to see what the gaps are – basically to figure out where the food is being produced, what shortages are in infrastructure, what needs to be built up, and then make a supply chain – a kind of a grid. Like an electricity grid, there should be food grid – from producer to consumer with least amount of wastage and shortest amount of time is available, especially during the lean period. What happens in our country that there is abundance during the season, the farmer even doesn’t get his desired price and the consumer, when he needs it after a while, is available to him at a very high price. The farmer has to sell it at a throw-away price. So, one of the requirements to get rid of this big issue is to have a cold chain facility – right from the farm level to the retail level, i.e. from farm to fork. So, cold chain needs to be built up. There is huge deficit in the amount of cold chain available in our country. Almost to the tune of 29 million tonnes is required and this is what needs to be pushed up. Yes, both backward and forward linkages need to be worked out, while you are making a cold chain because one it comes to cold chain, then it has to go to retail shop which also has that kind of facility available. Keeping this in mind, one of the key steps which has been taken in the first finance budget presented by the new government is special fund of Rs 20 billion set aside in NABARD (National Bank for Agriculture and Rural Development), where food processing industry can make use of it. We are trying that it becomes a priority sector like agriculture. We are looking at a moment when you get interest at a cheaper rate, especially for the food processing industry; this would help the big players coming into the market. We have also reduced excise duty from 10 per cent to six per cent. So, these are the new things which have taken place. Like I said, talking to the stakeholders, we found out the reason that is not progressing. There may be some issues regarding approvals and some other issues. So, we are working on them. As you know, FDI is through automatic route. It is 100 per cent. Considering this, many tax incentives are up on the website. For example, if you set up a new processing plant, you get incentive for five years. You don’t have to pay income tax. Lots of such information is available on the website.
You talked about linkages and infrastructure. It really means that it not only requires food processing ministry’s role but the participation of other ministries also to develop connectivity from villages to urban centres where the markets are. This is still very poor. Are these also the areas you are looking at?
There is no doubt that those various ministries are concentrating on those areas. In the last couple of years, there has been policy paralysis and growth has been rather slow and infrastructure development has been really low. This government has brought in thrust by clearing many policy paralysis taking decisions. So, highways are going to come up in the next few months. Changes are going to be seen. No doubt, there is scope for improvement in connectivity. However, some states are very well connected already. But we have to keep in mind that the domestic consumption is so huge that even if you start targeting consumption of your neighbouring areas, that itself will take care of a lot of what is grown in that area. That is something which is very workable. The wastage is to the tune of like if you look at a country like UK – what the UK consumes, is what India wastes. So, we are looking at this kind of wastage and this kind of numbers and figures which need to be brought down. So, bringing in latest technology in food processing, is one of the reasons why this has been done. This new corpus has been set up and bringing down the tax; so that latest technology comes in and then, these mega food parks which have already been schemed under our ministry. We have also put up another investors’ portal, which gives information regarding what the incentives of each state are, best practices – any kind of information about any state. Now we are also working on setting up food map of the country to tell you exactly what is grown and in which district so that if someone is interested in mango pulp – the big thing about India is that it has so much of mangoes. We have huge potential of mango and no one knows about it. So, the big companies overseas, whether they need fruits and vegetables for pulping or juicing; so if they go to this map, they will know exactly – which state to go, what are the policies of that state, how they need to go about it. For this, we have also put up this investors’ portal, which is also going to make it easy for food processing industry. There are many big companies who have shown their interest of coming to India and I think, being a growing market, there is opportunity for those who want to come in and invest.
But when you talk about foreign investors, there has been resistance because of policy paralysis. So, my question is about uncertainty about the country’s business direction which was there up to the elections. Is that behind us now?
Absolutely. When the new government and decisive prime minister have come in, there has been increase in GDP and the budget which came in has given a thrust to the economy. So, these all steps are in the right direction and with the passage of time, there is no doubt that the faith in the Indian economy and the way people globally are looking at us, is definitely improving by the sheer fact that how many people are approaching us. I have been meeting representatives from different countries probably once or twice a week. So that is the kind of interest people are showing here because there is majority government and decisive prime minister, they are seeing steps being taken and delivery systems are happening. So, I think, that is what needed – the confidence of the people.
Europe has been hit by number of food related scandals. What is India’s record in that – not considering European market but in Indian market? And what is your focus on improving safety standards of the country?
We have Food Safety and Standard Authority of India, which is an autonomous body. It doesn’t come under my ministry. It comes under the Ministry of Health. I think, they are doing a stringent job of controlling the food safety and standards of India. And, as far I know, there has been no major issues which have not been handled. Unfortunately, our standards have not been unified with CODEX standards. The authority is probably working towards achieving this. Earlier in India, we had to get approvals for different products from different departments, so it was brought under one umbrella and that was something which was quite recent. It was at a nascent stage and having problems. But now they have got all things together now and things are becoming a lot smoother. There are still few hiccups which the industry is facing – getting clearances and all – which I am working with the Health Ministry. And soon, the authority will put applications on the website. People will be able to apply and find out exactly where the clearances are. But as far as maintaining the standards are concerned, they have done good job within the country.
Coming to SIAL, what is an international show like SIAL mean to India? What are your expectations from the show?
I think, we need to brand our country especially in food sector. Indian food has become really popular all over but for some reason, Indian food is just Indian curry or may be chicken tikka (a dish of roasted chunks of chicken in a spicy sauce) or something like that. But there is so much potential. Though now it is too late because I think for SIAL, one has to book its space two years in advance – this is what industry told me. We have many private players who go there and represent their own companies and then there is ministry which goes there. So we scattered in this huge fair. One of the things I am looking at is that next time, we will come out as ‘Brand India’ with a large space where we all will come together. Also, I am looking to doing is that every state produces what is local food of that state. Our country is multi-cultural, multi-cuisine. It is so diverse. If you go from my state 100 km down to a neighbouring state and there you will find different culture, food, language, everything. Every state has its own unique culture and food, which the state corporations are packaging and processing and that is consumed within the state or the country. But it has not reached the overseas – neither to the Indians sitting in overseas nor westerns there. They have not been exposed to what is South Indian vada and idli right up to sarson ka saag and makki ki roti in the north – the huge variety from north to south. So, I am looking at collecting all the state corporations and their best foods and showcasing that in SIAL along with our private players so that people understand that if Italy is known for its pizzas and pasta, in India, you probably lose count – there is such a huge variety.
Again talking about SIAL, the organics at least in Europe is gaining huge momentum. Now organic food products are available in all departmental stores and in any kind of shop. Indian organic food is still not very visible. Is it because we don’t produce enough or is it because we don’t have market enough?
I think marketing is an issue because in North East, besides the potential, lot of food grown is already organic. There is huge amount of exotic fruits and vegetables which are grown in North East. But that is where marketing is lacking. As far as rest of India is concerned, there are pockets which are doing organic farming already. Since it has not caught on India as such, I think, this is probably the reason that it has not been marketed abroad. But there is huge potential. There are certain states which are naturally organic. And the government is also looking at making north east – the state of organic farming.
Is it your focus to push for more organic products to be produced in the country?
We are looking at pushing wherever the demand is because the kind of seasons we have in India and with the kind of geographical locations we have, I don’t think that there is anything which cannot grow here. I am not even getting into that 8,000 km coastal area where we can provide marine requirements. Governor of Andaman and Nicobar Islands was telling me that those little islands of Andaman can probably feed 30 per cent of marine consumption of our country. He was telling another interesting thing that there is a famous saying in Andaman and Nicobar Islands – fish die of old age there because no one catches it (laughs). So that kind of variety is in our eastern part. Potential is vast and no doubt, we have not been able to marketed. Organic thing has not taken off the way it should because there is still potential in the other sectors. But we are producing around 135 organic products, which are being marketed also. But like I said earlier, there is huge potential in perishables in which 2-3 per cent processing is being done.