Indian Food Processing Industry

Biz@India

November-December 2016

India, an agrarian economy, has an important food processing industry that is worth an estimated EUR 58 billion. In terms of economic growth and employment, the food processing industry is very crucial for the country. However, the industry faces a large number of problems such as lack of skills and employability of its manpower which is also preferring other sectors for better economic opportunities.

The food processing industry in India employs a staggering number of people, with direct employment provided to around 13 million. The large workforce is trying hard to keep up with the growing demands of the industry within the country and also to maintain international standards. According to the Ministry of Food Processing Industries (MoFPI), Government of India, the food processing sector contributes approximately 1.5 pc to India’s Gross Domestic Product (GDP).

Lack of skills 

Reports reveal that the biggest challenge for manpower in food processing is the lack of skill. This comes from a background of lack of training programmes and initiatives catering to each specific industry. While there are institutes offering courses and programmes, the numbers, when compared to the actual size of the workforce, remains miniscule. It gets worse when foreign technology is incorporated in the various stages of food processing, as skill training for the use of such machinery is almost absent.

Some of the jobs for the fruits and vegetables sector include operators, checkers and maintenance technicians-all of whom are required to have special training and understanding. For the meat and marine product processing, knowledge and skill becomes even more important, with jobs such as that of an electrical/refrigeration technician and microbiologist involved.

There are institutes and centres present who deal with skilling for manpower in the food processing industry but their numbers are low. Also, with the institutes that are currently involved in training the workforce involved in food processing, pedagogy and expertise in the sector is negligible. India lacks good trainers for the industry as well. Applied research in the field of food processing is not well explored and funded either. It can be said that linkages between Research and Development labs and the food processing industry remains weak.

Unorganised output 

About 42 pc of the output of food processing comes from the unorganised sector, 25 pc from the organised sector and the rest from small scale players, according to a study published in the Journal of Food Distribution Research.The unorganised sector in India is often associated with traditional methods of farming if an analysis of the skills of labour is made.

Another aspect, which deals with the technology used shows that low use of technology and low levels of mechanisation lead to challenges for the workforce employed in food processing sector. Dairy, fruits and vegetables, grains and cereals, meat and poultry and consumer foods significantly depend on the food processing sector, that sometimes come with individual sets of problems, when lack of skills combined with traditional methodologies is employed.

Low use of hybrids and biotechnology is said to be leading to inefficiency of the manpower involved, resulting in a high requirement of working capital. This high requirement doesn’t necessarily translate to attractive remuneration in comparison to other contemporary disciplines. The study by Journal of Food Distribution reveals the possibility of the loss of trained manpower to other industries and other professions due to better working conditions prevailing there, and this may lead to further shortage of manpower.

Regional disparities

State and national policies remain divided in the food processing industry. Also, training institutes are not as well distributed or strongly present. Employment opportunities vary from place to place, which is also a problem for the workforce. Factors are not only on political or educational level, industrial infrastructure as well as availability of labour and natural resources cause critical issues as well.

Some of the states in India that are possibly set to become key employers in the food processing industry, with Andhra Pradesh and Jharkhand projected as the top two, Andhra Pradesh leads with the maximum registered food units and Jharkhand has been seen as a possible leading employer in food processing due to its availability of land and costeffective labour force. Thus, the workforce in the food processing industry in India is also challenged by the geographical location where it is situated.

Some states in India have their own specific set of advantages and disadvantages fortheir manpower in the skill development industry, depending on the number of educational institutions, subsidies and funding by the central government, natural resources and foreign investment in infrastructure and food processing industry.

Initiatives in action 

A few institutes in India, on a national and state level, offer courses that train individuals and companies in the procedures and aspects involved in food processing. The National Institute for Food Technology and Entrepreneurship Management and Indian Institute of Crop Processing Technology under the Ministry of Food Processing in India are academic-cum-research institutions that have centres dedicated to training and researching on the various stages of food processing and how efficiency can be maximised.

Make in India, initiative of the Government of India, has focused on the sector as an important clog in moving the country forward. The Ministry of Food Processing and specific commodity boards under the Ministry of Commerce, along with the Ministry of Agriculture are looking into the challenges that the Indian manpower faces.

The National Mission on Food Processing under the MoFP is meant to have four components to address the shortcomings of the food processing industry and to find sustainable solutions for the workforce involved. These components are creation of infrastructural facilities for educational courses on the sector, training centres for food processing, entrepreneurship development programmes and training at central and state level institutions. Companies, through their individual initiatives, are trying to provide skills through training to its employees, such as ITC, which is trying to find their own solutions through tailormade programmes.

Apart from specific actions directed towards eradicating the challenges that the workforce involved in the food processing industry faces, public-private sector partnership becomes the key to boost skills training and development. Organisations such as Indian National Skill Development Corporation, under the Ministry of Skill Development and Entrepreneurship, aims to promote skill development by catalysing creation of large, quality, for-profit vocational institutions.

Lack of an organised output through use of technology and lacking opportunity for the workforce to gain skills and access to employment remain big problems. However, with numerous initiatives that have been underway, by the government and private sector, there is a scope of improvement of workforce involved in the food processing sector.