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      Food Processing Industry News From around the World.

      India and China seek technical collaboration in the Food Sector

      Ministry of Agriculture has infomed that Minister of State for Agriculture, Prof. K V Thomas was on a trip to China where he held a series of meetings with Chinese authorities to strengthen technical collaboration in the food sector between the two countries.

      Among other locations the Minister visited the State Administration of Grains (SGA) headquarters which operates a huge market intervention scheme. China has about 0.52 billion tonnes of food grain production and stores about 0.32 billion to be released through the market intervention scheme through its state administration of grain (SGA).

      Thomas also urged his counterpart Niu Dun to open up Chinese markets for more agro products from India, like for basmati rice, bovine meat and seven varieties of fruits and vegetables to deliver on its earlier promise to help the country reduce the heavy trade imbalance. "China has already granted access to our mangoes, grapes and bitter gourd and I requested to open up for our fruits and vegetables also," Thomas told media.

      According to the Ministry, China has expressed interest to send a delegation to India in October to identify areas of technical collaboration and training needs for experts in the food sector of the two countries.

      Courtesy: http://www.foodindustryindia.com/newfood/detailnews.jsp?n=India%20and%20...

      Preferential Trade Agreement between India and South Africa soon

      Anand Sharma, Union Minister of Commerce & Industry, has informed that the talks for the Preferential Trade Agreement (PTA) between India and South African Customs Union (SACU) are expected to conclude soon. He said this during an interactive session of CEOs with the President of South Africa, Mr. Jacob Zuma, on June 4 in New Delhi.

      Minister Sharma further added that the agreement would also pave the way for India and South Africa to engage with other Southern countries. On the investment perspective, Sharma said that South Africa would be one of the most attractive destinations for Indian investors and many Indian companies in the agro-processing, pharmaceutical, energy, tourism, mining, film industries etc. have established their footprint.

      The interactive session was attended by the South African Trade & Industry Minister Mr. Rob Davies, and business leaders and senior officials from both the countries.

      The major items of exports to South Africa are petroleum, drugs, pharmaceuticals & fine chemicals, transport equipments, electronic goods, machinery etc. The major items of imports from South Africa are Gold, coal, Coke, inorganic chemicals, non-ferrous metals, pulp & waste paper etc., Ministry of Commerce has informed.

      India’s total foreign direct investment (FDI) inflows (equity inflows + reinvested earnings and other capital) during the financial year 2009-10 was of US $ 34,167 million. Top sectors attracting FDI inflows were services, computer software & hardware, housing & real estate, power, automobile, chemicals etc.

      Courtesy: http://www.foodindustryindia.com/newfood/detailnews.jsp?n=Preferential%2...

      Challenges of food distribution in India

      A new survey of ASSOCHAM suggests that the mall culture has not been able to shift the focus entirely away from local traditional markets as the shoppers prefer to hangout and shop there, more so because of the familiarity with ambiance, ease of access, variety of goods, early opening and late closing times etc. which suits to the local residents.

      Considering the often far away locations of malls, where an access is possible only with a vehicle, whereas the local kirana store round the corner can be visited by foot, then the results of the survey are not suprising.

      According to an earlier report of the Indian Council for Research on International Economic Relations (ICRIER), India has a total of estimated 13 million of so called unorganized retailers, which reach out to the masses of consumers. “Unorganized” is addressing the fact that these store are single store, without any links to other stores, whereas organized or modern retail has chain stores which are owned or franchised by a central entity. Among the unorganized retail sector are food stores (selling bakery products, dairy and processed food and beverages), kirana stores (selling bakery products, dairy and processed food, home and personal care, and beverages, cereals, pulses, spices, and edible oils), then fruits and vegetable sellers, etc.

      The kirana and other traditional stores sell food items, so the main question is now about the message of the survey for food distribution, especially for foreign food exporters which seek a market entry into India.

      The main aspect to address is the fact that Kirana stores are independent entities, and this means that one has to deal with them always separately. This again requires extra efforts and a complex system of distribution, which is in place already for most established items, and which will - as the kirana stores will remain due to the buyer's preferences - not disappear in the next time.

      In the Indian transition scenario, with an increasing number of malls, super-markets and wholesalers (Cash & Carry) and a parallel growth of the business which is made by traditional stores, there is no standard approach to the market. The message for every food supplier and the more for foreign suppliers of processed food products seems clear: offering food products is only a very small step to business. The biggest step and challenge is the customized approach to distribution.

      The best approach requires the identification and selection of the most able distributors (or importers) in different areas of a vast country like India. New entrants to the market have to identify, evaluate, select and contract the best qualified importers and distributors to get their products to Indian shelves, or have to develop such entities on their own.

      Many foreign food companies FII talked to in the past years have been facing that problem which they only realized when exhibiting at food fairs where they “suddenly” found out that business was not possible. "People liked our products, but business was not possible", that is what many exhibitors always tell FII. Certainly, like elsewhere in the world, small and traditional Indian retailer want to place their orders and get easy delivery, and do not want to import themselves, not to speak about dealing with customs clearance procedures and other formalities like labeling or health certificates.

      "It seems that often exhibitors are not doing their homework", S. Joshi, a strategic marketing consultant explains. "Companies get the pink picture about the Indian market from fair organizers and other interested parties to lure them to fairs in India, and at the end they have to realize, that due to not having contracted importers and distributors in place, business is not possible. It would have been better to care about an importer and distributors first before incurring heavy fair investment costs to showcase food items which later no one can buy".

      Courtesy: http://www.foodindustryindia.com/newfood/detailnews.jsp?n=Challenges%20o...

      'India needs Rs 1 lakh cr investment in food processing'

      India needs an investment of almost Rs 1 lakh crore in the food processing industry to raise its percentage to 25 per cent of the total agricultural produce annually.

      “The second green revolution will not be successful unless the imperatives of post harvest management and value addition mechanism in agriculture are adopted in right earnest,” Union Minister for Food Processing Subodhkant Sahai told Business Standard here.

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      He said the percentage of food processing industry was as high as 80-85 per cent in developed economies vis-à-vis under 10 per cent in India.

      “Even the developing countries in Asia like Thailand and Philippines have brought about a transformation in their economies by developing robust food processing infrastructure,” he added.

      Sahai further suggested that the state governments should encourage contract farming on the lines of sugarcane to boost agriculture and allied industries.

      “The contract farming would allow the market to invest in agriculture, water management and food processing. This way, the farmers would not shoulder any economic risk and will have the liberty to fix prices for their produce,” he said.

      He said rural prosperity and industrialisation was the only solution to check migration to bigger towns.

      He, however, lamented the Northern states in general were lax in adopting and investing in food processing industry.

      Besides, he claimed that in the last 6 years, not a single demand had come to his department from the Uttar Pradesh government regarding food processing sector.

      “We have given a lot of support to the private entrepreneurs in UP, but the state government has not sought our help,” he added.

      The minister exhorted the state governments to frame separate policies for food processing industry, keep tax regime benign at 0-4 per cent and amend the Agriculture Produce Marketing Committee (APMC) Act.“The respective state governments should create conducive environment for private investment in food processing, which would not only lead to higher agriculture production, but better prices to farmers,” he noted. Sahai was here as chief guest at inaugural function of the national conference on Managing Agri-food Supply Chain organised by IIM Lucknow in association with Indian Society of Agribusiness Management.

      Courtesy: http://www.business-standard.com/india/news/india-needs-rs-1-lakh-cr-inv...

      Indian, Canadian institutes sign MoU on food processing research


      New Delhi: The Indian Institute of Crop Processing Technology (IICPT) on Monday signed a memorandum of understanding (MoU) with the University of Saskatchewan, Canada, for collaborative research and training in the field of food processing and exchange of faculty and students.

      The MoU was signed here by IICPT director K. Alagasundaram and Venkatesh Meda, professor of bioprocess engineering at the university, on behalf of the Canadian institute. Food Processing Industries Minister Subodh Kant Sahai and Saskatchewan's Education Minister Rob Norris were present on the occasion.

      "This agreement will help in the development of post-harvest management and food processing (in India) and a lot of exchanges of scientists, teachers and students will take place," Sahai told the media after the signing of the MoU.

      The minister said the University of Saskatchewan has partnerships with over 150 business houses for new innovations in food technology, food taste and food products.

      "This is definitely going to help issues related to the Indian food industry," he said.

      The IICPT, based in Thanjavur, Tamil Nadu, is a national level institute and its mandates include basic, applied and adoptive research and development in post-harvest, processing, education and training to create a strong human resource base for the food processing industry.

      The university at Saskatoon in the Canadian province of Saskatchewan is an over 100 years old institution.

      Speaking about the Indian food processing industry, Sahai said he was aiming at taking the processing levels in the country from the current 10 percent to 20 percent by 2015.

      "The agricultural sector is huge in Canada and the country is known for its expertise in food technology and post-harvest processing," he added.

      He said that the agreement between the two institutes would help in India's efforts to make its farmers go for market-driven farming and reduce the annual wastage of agricultural produce worth around Rs.500 billion.

      Norris, who led the Canadian delegation, said the MoU "allows us to highlight the significance of the partnership in agriculture, agro-food and, more broadly, biosciences, not only between the countries but most importantly, between the twoinstitutes".

      Earlier, addressing the Canadian delegation, Sahai said through such MoUs, scientists could meaningfully contribute to the development of technologies for food processing by adoptive and applied research and exchange of knowledge and information.

      The MoU enables, among other things, long and short-term exchange of faculty and students for research, sabbaticals and advanced training, development of mutually beneficial academic programmes, coordination in joint research and development and exchange of research materials and technologies. IANS

      Courtesy: http://www.indiaedunews.net/International/Indian,_Canadian_institutes_si...

      High taxes hurting Punjab''s food processing sector

      Chandigarh, June 23 (PTI) The agri-food processing sector in Punjab has complained that prevailing high tax rates in the state in comparison to neighbouring states do not encourage them to expand business and offer value addition, despite having immense potential to do so. Punjab charges the highest tax rate of over 13 per cent on several processed food items such as ketchups, sauces, Namkeen, Bhujia and potato chips.

      But states like Himachal Pradesh, Delhi, Madhya Pradesh and Rajasthan have put these items under the lowest VAT slab of 4 per cent (5.5 per cent in Haryana). "There is a huge disparity in value added tax (VAT) rates being charged in Punjab compared to neighbouring states.

      It has rendered the state''s industry unviable and it will certainly hit investment flow into the state''s agri-food processing sector," Mrs Bector''s Cremica Group managing director Akshay Bector told PTI. "How can an industry, which is still nascent, grow when there is a difference of at least 6-7 per cent in tax rates," questioned Bector, who supplies to several national and global brands like McDonald''s, Pizza Hut, Domino''s, Reliance Retail, Caf Coffee Day and the Railways, to name a few. Cremica, which is one of the largest manufacturers of ketchups in the country, had earlier planned to shift its new unit from Haryana to Punjab.

      "But given the huge disadvantages these tax rates are causing, we have now shelved our plan to shift our facility from Karnal (Haryana) to Punjab," he said. Another player in the food processing sector A P Solvex Managing Director A R Sharma said despite the Punjab government offering to provide level playing field to food processing sector in its new Industrial Policy, this tax anomaly was never removed.

      He laments while Punjab has imposed 5.5 per cent VAT on deoiled rice bran oil, in other states it is not taxable. Solvex, which has one of the largest rice bran oil facilities, supplies to Pepsico.

      A disheartened lot of food processing sector players are now feeling discouraged to expand their capacities. "We are not keen to scale up our operations in the food processing segment as it is not an viable option.

      We are now waiting for the Goods and Service Tax (GST) roll out which could remove this disparity," said Kitty Industries Managing Director Ramesh Mago. With ample availability of wheat, paddy, potato, tomatoes, chilly and other raw materials Punjab possess immense potential for value addition in the food processing sector.

      The state government had also announced a separate agro-policy in 2009 to give a fillip to the industry.

      Courtesy: http://in.news.yahoo.com/20/20100623/372/tbs-high-taxes-hurting-punjab-s...

      India can create a niche in food processing sector: Sahai

      India can create a niche in food processing sector: Sahai

      Ahmedabad, June 18 : Food Processing Industries Minister Subodh Kant Sahai Friday said India can take to large scale development of the food processing industries to create a niche for itself in the world.

      Terming food processing a promising sector, Sahai said it has enormous opportunity for growth.

      The minister was addressing an investors' meet and a training-cum-awareness programme on prospects of food processing industry in Gujarat, organised by the Ahmedabad-based Entrepreneurship Development Institute (EDI).

      The minister said the food processing sector has "umpteen investment opportunities", which include those in cold chain projects, value added centres for agricultural products, fresh produce exports by air and sea, marine export, farm implements and seeds, organic farming and so on.

      Maintaining that there are many other unexploited areas in the food processing sector, he said there is also need for more trained and competent entrepreneurs who can set up their own businesses and look beyond the existing processes and take innovative ideas and challenges ahead in the sector.

      Courtesy: http://www.newkerala.com/news/fullnews-129981.html

      With 13 million employees, Sahai calls F P an employment intensive industry

      n a written reply in the Rajya Sabha, minister of food processing industries Subodh Kant Sahai said that food processing industry was employment intensive.

      It has been estimated that for every Rs 1 crore invested, it created 18 jobs directly and 64 indirectly in the organised sector and 20 jobs in the unorganised sector across the supply chain.

      At present food processing sector employed about 13 million people directly and about 35 million people indirectly.

      The government was encouraging the food processing sector to increase the processing level from 6% to 20 % and value addition increase from 20% to 30%. However, no specific area and gender-wise employment figures were maintained in the ministry.

      As far as the future Action Plan for the remaining part of Eleventh Plan regarding employment generation was concerned, the minister said that the expansion of food processing sector would have bearing on employment generation.

      The government had taken necessary steps to create more jobs in the food processing sector by providing financial assistance through its various schemes for development of food processing sector which was expected to lead to increased level of processing and employment.

      Thus the ministry had adopted Vision 2015, which aimed to triple the size of food sector by increasing the level of processing of perishables from 6% to 20%, value addition from 20% to 35% and share in global food trade from 1.5% to 3%.

      The minister further said that the MoFPI had been implementing various schemes for promotion and development of food processing industries in the country. The MoFPI through its various schemes for financial assistance and other promotional measures facilitated creation of food related infrastructure including processing facilities aimed at reducing wastages, enhancing value addition and increasing shelf life. Under the scheme for technology upgradation/ modernisation/ establishment of food processing industries, MoFPI extended financial assistance to food processing industries in the form of grant-in-aid @ 25% of the cost of plant and machinery and technical civil works subject to a maximum of Rs 50 lakh in general area or 33.33% subject to maximum of Rs 75. lakh in difficult areas such as Jammu & Kashmir, Himachal Pradesh, Uttarakhand, North-Eastern states, A&N Islands, Lakshadweep and ITDP areas. In addition, under the Technology Mission for Integrated Development of Horticulture in North Eastern and Himalayan States, higher levels of assistance @ 50% up to maximum of Rs 4 crore for setting up and Rs 1 rore for up gradation of fruit and vegetables processing was available. A National Horticulture Mission (NHM) has been launched with an objective to boost the horticulture sector.

      In the 11 th Plan, the ministry has approved new scheme to establish 30 mega food parks with a view to provide state-of-the- art infrastructure for food processing sector in the country on a pre-identified cluster basis with a strong backward and forward linkage and to provide value addition of agricultural commodities including poultry, meat, dairy, fisheries etc. in a demand driven manner. Financial assistance up to 50% of project cost excluding land component in general areas and 75% in difficult areas, subject to a maximum of Rs 50 crore is provided for setting up of mega food parks.

      To encourage setting up of cold chain facilities and backward linkages in the country, ministry of food processing industries has a Plan Scheme for cold chain,value addition and preservation of infrastructure during the 11th Plan to provide financial assistance to project proposals received from public / private organisations for cold chain infrastructure development. The scheme envisages financial assistance in the form of grant-in- aid @ 50% of the total cost of plant and machinery and technical civil works in general areas and 75% for North Eastern Region and difficult areas subject to a maximum of Rs.10.00 crore. There is no specific Plan for backward areas of Andhra Pradesh in this regard, however, the ministry has approved a mega food park which will link to agrarian communities t2o produce raw materials for further processing resulting in employment generation in Andhra Pradesh.

      Subodh Kant Sahai bets on techno-feasibility study to base mega food parks upon

      Subodh Kant Sahai, minister of food processing industries, said in a written reply in the Rajya Sabha that presently there was no proposal to undertake any survey to find out preference of domestic user for fresh fruits/vegetables or processed material.

      However, the ministry has got conducted the techno-feasibility study at five locations in Maharashtra, Andhra Pradesh, Jharkhand, Punjab and North East, for setting up mega food parks in the country. The objective of the study was to identify potential clusters of agro/horti produce in respective states, assessment of surplus processable material, demand-supply gap analysis and possibilities of forward linkages to major consumption markets.

      The mapping of potential consumption markets and its linkages with respective parks has also been undertaken in the techno-feasibility study.

      In addition to the above, the ministry has also got conducted the techno-feasibility study for setting up a strategic distribution centre (SDC). The SDC is envisaged as distribution hubs which would have linkages with such parks.

      In this study, a detailed mapping of major consumption market (including some of tier-II cities) have been undertaken with respect to expenditure patters of domestic consumers towards processed and packaged food products.

      The future trend of domestic demand of processed food products is also covered in the study. The SDC will also cater to the export market based on the demand and will offer assured supply to potential export customers.

      MoFPI keen to support Karnataka food industry with dedicated and modern food test lab


      The Ministry of Food Processing Industries (MoFPI) is keen to set up a food test lab in Bangalore to speed up the results required for exports.

      “We are willing to set up a food test lab of global standards in Bangalore. The food industry in the state can come out with details of the infrastructure availability,” said Ajit Kumar, joint secretary, Ministry of Food Processing Industries, at an interactive session with food sector officials in Bangalore at the behest of the BCIC (Bangalore Chamber of Industry and Commerce).

      Currently the Karnataka food industry needs to send the samples for export to the Central Food Technology Research Institute (CFTRI), Mysore, which takes time. In order to speed up the process and to make the food industry vibrant, an advanced food lab was mandatory, he said.

      While no details of investment were disclosed, Kumar said a built-up area of 3,000 sq. ft was needed. One of the locations to set up the lab was the University of Agricultural Sciences. There were also suggestions by the food industry on land available at Yelahanka, close to the Bangalore International Airport. This would allow the food sector to have better proximity for exports.

      The setting up of the lab would be overseen by the Indian Institute of Crop Processing Technology, Thanjavur, which is a research and development centre set up under the aegis of the MoFPI.

      Dr. Vasant Kumar, additional secretary, Department of Food Processing and Harvest Technology, said that state food industry also took the opportunity to highlight the paucity of human resources, and the poor infrastructure in the state.

      He said that despite the presence of 10 agro climatic zones in the state which enables cultivation of food grains and horticulture crops, the food sector had not taken off. Karnataka also pioneered the
      concept of Food Parks. Of the 6 sanctioned food parks at Malur, Hiriyur in Chitradurga, Jewargi in Gulbarga, Bagalkot, Mysore and Bangalore, only two at Hiriyur in Chitradurga and Jewargi in Gulbarga were ready to take off.

      There need to be speedy financial assistance from the Centre as the food parks were on a standstill mode for a while. According to the joint secretary, MoFPI, the reason for a slow decision on the food parks was the inadequate response from the state government, but now with the positive progress of the food parks, efforts would be made to increase the momentum for assistance.

      Other issues put forth were on hike in subsidy and need for guidelines on contract farming.