FDI in food processing puts Maharashtra state in advantage

The Union Ministry of Food Processing has listed Maharashtra among the four states with potential to derive maximum benefits from policy reforms in food processing.

Written by Shubhangi Khapre | Mumbai | Published: June 22, 2016 2:42:58 am

The Centre’s decision to allow 100 per cent Foreign Direct Investment (FDI) in the food processing sector is likely to boost agro-industrial investments in Maharashtra. The state government also believes that the decision would help them override the agrarian crisis in the state.

The Union Ministry of Food Processing has listed Maharashtra among the four states with potential to derive maximum benefits from policy reforms in food processing. The other states are Punjab, Haryana, and Andhra Pradesh. Maharashtra also leads in horticulture produce in the country, with 40 per cent produce.

According to NABARD status report for year 2015-16: “The food processing units would help Maharashtra to process 40 per cent vegetables and 30 per cent fruits, which are wasted due to lack of infrastructure. The inadequate food processing sector also is a primary reason for poor remunerations farmers get. They cannot bargain in absence of robust market linkages.”

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In spite of huge demand for processed food, which has become a global trend, reports suggest, “The overall percentage of vegetables and fruits processed in the state is less than 1.2 per cent.”

It also implies that the gap between supply and demand is met from processed food imported from abroad. At present, the state’s processing capacity of vegetables and fruits does not exceed one lakh metric tonne (MT). Interestingly, Maharashtra, a leading state in agriculture as well as industries, has failed to develop the food processing sector.

The NABARD report mentions, “Although the state is leading in agro-industry, it ranks way below others in investment by international standards in food processing infrastructure.”

Sensing shortcomings in the sector, Chief Minister Devendra Fadnavis has undertaken a course correction. He said, “For the first time, my government has taken a conscious decision to make greater investments in the agro-industrial sector. We have given greater impetus on strengthening value chains to provide channels for agro-produce through industrial units. The robust food processing sector, through the centre’s policy reforms, will open new avenues for farmers.”

The state government has already taken steps, with four mega food parks in Satara, Ahmednagar, Wardha and Nagpur getting a go-ahead.

At the Make In India Week in February (13-18), Fadnavis managed to get MoUs with private players in the food processing sectors. The government has already identified the regionwise potential for growth of food processing sector. Keeping in mind the interest of farmers, food processing units are being linked with crops/fruits grown in that particular region.

The districts for food/fruits processing units include Nashik, Pune, Kolhapur, Ahmednagar, Jalgaon, Nagpur, Latur and Sindhudurg. The chief minister believes the food processing sector should also be promoted in districts reeling under farmers suicide and drought.

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