3. 3
The
Context
and
Overview
Food
processing
sector
critical
for
achieving
growth
in
the
agricultural
sector
which
in
turn
a
pre-‐requisite
for
healthy
growth
of
Indian
economy
Growth
of
sector
essential
to
meet
the
twin
national
objectives
of
“inclusive
growth”
and
“food
security”.
The
11th
Plan-‐
signiCicant
progress
of
the
sector
in
terms
of
both
approach
and
scale
of
the
Government
programmes,
with
stress
on
appropriate
backward
linkages
and
emphasis
on
synergy
between
production
and
processing.
4. 4
Source:
Annual
Survey
of
Industries
Growth
of
Food
Processing
Sector
Capital
Investment
in
Registered
Units
in
Food
Processing
Sector
(Rs.
in
Crore)
0
20000
40000
60000
80000
100000
120000
140000
1998-‐1999
1999-‐2000
2000-‐2001
2001-‐2002
2002-‐2003
2003-‐2004
2004-‐2005
2005-‐2006
2006-‐2007
2007-‐2008
Invested
Capital
Working
Capital
Fixed
Capital
5. 5
Contribution
to
GDP
(%
Growth)
GDP
at
2004-‐05
Prices
Source
:
National
Accounts
Statistics
2011
20.91
14.68
13.16
26.30
0.04
-‐5.84
2.60
5.19
2.93
-‐4.57
-‐10.00
-‐5.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
2005-‐06
2006-‐07
2007-‐08
2008-‐09
2009-‐10
Registered
FPIs
Unregistered
FPIs
6. 6
Increasing
Urbanisation
-‐
Lifestyle
and
Aspirations
Increasing
Nuclear
Families
and
Working
Women
Increasing
spending
on
processed
food
products
Food
Processing
Demand
Drivers
Changing
demographics
–
Rise
in
disposable
incomes
Demand
for
Functional
Foods/
Neutraceuticals
Growth
of
Organised
Retail
and
Private
Label
Penetration
Food
Processing
Sector–
Growth
Potential
7. 7
Shift
in
Demographic
proCile:
A
largely
untapped
domestic
market
of
1
Billion
Consumers
with
65%
of
population
below
35
years
of
age.
Growing
Middle
Class-‐
from
its
current
size
of
50
Mn
to
583
Mn
people
by
2025
(Source:
McKinsey
&
Co.)
Higher
Disposable
income:
Increase
in
per
capita
income
and
purchasing
power.
Increased
consumer
awareness
towards
quality
and
hygiene
aspects
of
the
Food
Food
Processing
Sector–
Demand
Advantage
8. 8
Supply
Chain
Institutional
Gaps
(procurement
dependence
on
APMC
markets
)
Inadequate
link
between
production
and
processing
(lack
of
processable
varieties)
Supply
Chain
Infra
Gaps
(Lack
of
primary
processing,
storage
and
distribution
facilities)
Challenges
for
Food
Processing
Sector
Lack
of
product
development
and
Innovation
Seasonality
of
operations
and
low
capacity
utilization
Inadequate
focus
on
quality
and
safety
standards
Food
Processing
Sector–
Impediments
9. 9
Source:
A
study
by
CIPHET,
2010
Wastage
of
Agriculture
Produce
Crop
Cumulative
Wastage
(%)
Cereals
3.9-‐6.0
Pulses
4.3-‐6.1
Oil
Seeds
6.0
Fruits
&
Vegetables
5.8-‐18.0
Milk
0.8
Fisheries
2.9
Meat
2.3
Poultry
3.7
A
nation
wide
study
on
quantitative
assessment
of
harvest
and
post
harvest
losses
for
46
agricultural
produces
in
106
randomly
selected
districts
was
carried
out
by
CIPHET.
Percentage
of
losses
estimated
for
major
produces-‐
10. 10
Mega
Food
Park
Scheme-‐
The
Need
Food
processing
sector-‐
a
sunrise
sector,
is
capital
intensive
with
long
gestation
periods
Hence,
incentives
from
the
Govt.
required
to
promote
private
investment
in
the
sector
The
Scheme
conceptualized
on
an
Industrial
Park
Model
and
customized
to
the
need
of
food
processing
sector.
Aim
also
to
overcome
the
weakness
plaguing
the
sector
Grant
assistance
to
be
provided
to
entrepreneurs
for
setting
up
common
infrastructure
The
common
infrastructure
to
act
as
the
feeder
point
for
processing
units
to
be
set
up
in
the
periphery
area
12. 12
Mega
Food
Park
Model:
An
Illustration
Field
Collec4on
Centers
Primary
Processing
Centers:
Pre-‐cooling,
Grading
pulping
Sor4ng,
waxing,
packing
,
Temporary
storage
Central
Processing
Center:
Pulping,
Asep4c
packing,
CA
chamber,
Cold
Store
QC
lab,
Logis4cs
center
etc
Mega
Food
Park
CPC
Importer
Exporter
Value
added
Product
Domes4c
sales
Fresh
Products
PPC PPC PPC
Domes4c
Retail
sales
Farmer
Groups
Self
Help
Groups
Individual
farmers
13. 13
Mega
Food
Park
Scheme
-‐
Background
MFPs
to
provide
state-‐of-‐the
art
infrastructure
facilities
–
to
enable
setting
up
of
food
processing
units
Setting
up
common
facilities
along
with
processing
units
in
the
periphery
Expected
to
facilitate
the
achievement
of
the
‘Vision
2015’
of
the
Ministry-‐,
i.e.
to
raise
the
processing
of
perishables
in
the
country
from
the
existing
6%
to
20%,
value
addition
from
20%
to
35%
and
country’s
share
in
global
food
trade
from
1.5%
to
3%
Scheme
formed
to
accelerate
growth
of
food
processing
industry
in
the
country
Demand
driven
with
focus
on
both
backward
and
forward
integration
30
Mega
Food
Parks
to
be
set
up
during
the11th
FYP
14. 14
Envisaged
Outcomes-‐
Mega
Food
Parks
Scheme
Envisaged
outcomes-‐
Increased
realization
for
farmers,
Creation
of
high
quality
processing
infrastructure
including
efCicient
supply
chain,
Reduction
in
wastage,
Capacity
building
of
producers
and
processors,
SigniCicant
direct
and
indirect
employment
generation
15. 15
Salient
Features
of
the
Scheme
Enabling
Infrastructure
Creation
along
the
supply
chain
Creation
of
CPC,
PPCs
and
CCs
Common
Facilities
and
amenities
to
be
assisted
Leverage
investments
in
food
processing
units
Provision
for
Standard
Design
Factory
and
Plug
&
Play
facilities
for
Micro
and
Small
Enterprises
Project
to
be
implemented
through
a
Special
Purpose
Vehicle
(SPV):
As
private
led
initiative
16. 16
Special
Purpose
Vehicle
(SPV)
SPV,
to
be
a
Body
Corporate
registered
under
the
Companies
Act,
and
can
be
constituted
by
stakeholders
like
infrastructure
developers,
FIs/Banks/PE
Firms,
Org.
retailers,
Food
Processors,
3PL
&
other
service
providers,
Farmer
Orgs.
etc…
Each
SPV
to
have
At
least
three
entrepreneurs
/
business
units,
with
the
entrepreneurs
being
independent
of
each
other
and
business
units
with
no
common
directors.
At
least
one
should
be
from
the
food
processing
sector
with
at
least
26%
equity
in
the
SPV
SPVs
to
bring
in
at
least
20%
of
the
eligible
project
cost,
including
the
cost
of
land,
as
their
contribution-‐
10%
in
case
of
Difdicult,
hilly
&
ITDP
notidied
areas
Eligible
project
cost-‐
total
project
cost
minus
cost
of
land,
pre-‐operative
expenses
and
MMWC.
Interest
during
Construction
(IDC),
a
part
of
pre-‐operative
expenses,
shall
be
considered
under
eligible
project
cost.
17. 17
SPV..Contd.
..
Combined
net
worth
of
the
shareholders
of
the
SPV
should
not
be
less
than
Rs.
50
Cr-‐
Food
Processor
should
have
at
least
Rs.
10
Cr
of
net
worth
Each
member
in
the
SPV
must
have
a
net
worth
of
1.5
times
of
their
proposed
equity
contribution
to
ensure
requisite
contribution
for
the
project
Government
agencies
may
also
become
shareholders
in
SPV,
with
maximum
equity
of
26%
so
as
to
ensure
private
sector
character
of
the
SPV
18. 18
Salient
Features
of
the
Scheme..
Contd.
Grant
Assistance
for
creation
of
common
infrastructure
facilities
and
setting
up
of
processing
units
Typical
Project
Cost
envisaged
–
Rs.125.00
Cr
to
Rs.
150.00
Cr.
Assistance
from
Ministry-‐
50%
of
the
eligible
project
cost
limited
to
Rs
50.00
crore
in
general
areas
75%
of
eligible
project
cost
limited
to
Rs.
50.00
crore
in
difCicult
&
hilly
areas
and
ITDP
notiCied
areas
Cost
of
land,
pre-‐operative
expenses
and
margin
money
for
working
capital
not
eligible
for
grant
under
the
Scheme
The
eligible
project
cost-‐
total
project
cost
minus
cost
of
land,
pre-‐operative
expenses
and
margin
money
for
working
capital.
However,
Interest
during
Construction
(IDC)
is
a
part
of
pre-‐operative
expenses
and
shall
be
considered
under
eligible
project
cost.
19. 19
Eligible
Project
Components
in
MFP
Core
Processing
Facilities
Primary
Processing
Centers:
Sorting
and
grading,
dry
warehouses,
cold
stores
including
pre-‐cooling,
reefer
vans,
mobile
pre-‐coolers
and
collection
vans
etc
Central
Processing
Center:
Sorting
and
grading,
Packaging,
Dry
warehouses,
Specialized
storage
facilities,
Pre-‐cooling
and
Ripening
chambers
etc,
IQF,
Cold
chain
infrastructure,
Irradiation
facilities,
Steam
generation
&
sterilization
units,
Food
incubation-‐cum-‐
development
centers,
QC
Lab
etc.
At
least
35%
of
the
eligible
project
cost
shall
be
towards
creation
of
above
mentioned
facilities
20. 20
Project
Components
in
MFP..
Contd.
Factory
Buildings
Provision
For
MSEs
–
A
maximum
of
10%
of
total
allotable
area
for
setting
up
Standard
Design
Factory
Sheds
for
MSEs
Enabling
Basic
Infrastructure
Roads,
drainage,
water
supply,
electricity
supply
including
captive
power
plant,
ETP
&
STP,
weighbridges
etc
Non
–core
Infrastructure
Admin
buildings,
training
centers,
canteen,
workers
hostel,
trade/
display
center
etc:
Cost
of
non-‐core
infrastructure
facilities,
not
exceeding
10%
of
the
eligible
project
cost,
would
be
eligible
for
grant
purpose
21. 21
Investment
Opportunities-‐
Mega
Food
Parks
Investment
through
Special
Purpose
Vehicle
(SPV)
in
the
Mega
Food
parks
Opportunities
to
join
project
speciCic
SPV
as
co-‐promoter/s:
Investment
in
the
form
of
equity
participation
15
projects
taken
up
in
1st
and
2nd
Phases
and
15
projects
in
the
3rd
phase
(status
detailed
in
later
slides)
As
partners
in
SPV,
the
members,
collectively,
would
be
responsible
for
development,
implementation
and
management
of
common
facilities
to
be
created
in
the
Project
100
percent
FDI
is
permitted
in
Food
Processing
Sector:
A
USP
The
MFP
would
have
plots
of
varying
sizes
that
FP
companies
can
take
on
lease
and
make
use
of
the
common
facilities
to
manufacture
processed
food
22. 22
Investment
Opportunities..
Contd.
Investment
in
the
Processing
Units
in
the
Mega
Food
Parks
13
Mega
Food
Parks
under
implementation–
each
Park
shall
provide
developed
infrastructure
for
setting
up
about
25
to
30
processing
units
leading
to
a
total
of
about
350-‐400
units
17
more
projects
in
the
pipeline
for
approval-‐
Shall
provide
for
setting
up
of
over
400
units
Given
leverage
of
investment
envisaged,
these
30
Parks
expected
to
have
a
combined
investment
of
over
Rs.
7000
crore.
Overall,
the
30
Mega
Food
Parks
shall
provide
for
setting
up
of
about
750-‐800
food
processing
including
ancillary
units
A
unique
opportunity
for
investors,
including
foreign
investors,
keen
to
engage
in/enter
the
food
processing
sector
23. 23
Proposed
Pattern
of
Assistance
During
12th
Plan
Mega
Food
Parks
General
Areas
35%
of
eligible
project
cost
subject
to
a
maximum
of
Rs.
25
crore
per
project
.
Interest
subsidy
@
6%
per
annum
subject
to
a
maximum
of
Rs.
10
crore
per
project.
Difdicult
Areas
50%
of
eligible
project
cost
subject
to
a
maximum
of
Rs.
25
crore
per
project.
Interest
subsidy
@
7%
per
annum
subject
to
a
maximum
of
Rs.
15
crore
per
project
24. 24
Proposed
Pattern
of
Assistance
During
12th
Plan
Mini
Food
Parks
General
Areas
35%
of
eligible
project
cost
subject
to
a
maximum
of
Rs.
15
crore
per
project
.
Interest
subsidy
@
6%
per
annum
subject
to
a
maximum
of
Rs.
6
crore
per
project.
Difdicult
Areas
50%
of
eligible
project
cost
subject
to
a
maximum
of
Rs.
15
crore
per
project.
Interest
subsidy
@
7%
per
annum
subject
to
a
maximum
of
Rs.
9
crore
per
project
26. 26
Current
Status
of
Projects
11th
Plan
proposed
for
setting
up
of
30
Mega
Food
Park
Projects
:-‐
10
projects
approved
by
CCEA
in
2008-‐09
05
projects
approved
by
CCEA
in
2010-‐11
15
projects
approved
by
CCEA
in
2011-‐12
27. 27
Current
Status
of
Projects
Out
of
30
projects,
Final
Approval
has
been
accorded
to
13
projects
Out
of
these
13
projects,
7
(Punjab,
Assam,
West
Bengal,
Tripura,
Andhra
Pradesh
and
Karnataka)
are
at
advanced
stages
and
rest
are
at
different
stages
of
implementation.
15
projects
have
been
accorded
In-‐principle
approval
in
the
month
of
September,
2012
whereas
two
projects
accorded
In-‐principle
approval
earlier
are
yet
to
complete
formalities
for
Cinal
approval
28. 28
Location
of
Mega
Food
Parks
Projects
accorded
Final
approval
Projects
accorded
In-‐principle
Approval
(1st
&
2nd
Phase)
Projects
accorded
In-‐principle
Approval
(3rd
Phase)
29. 29
The
National
Mission
on
Food
Processing
The
Ministry
has
launched
National
Mission
on
Food
Processing
(NMFP)
w.e.f.
1st
April,
2012
in
cooperation
with
State
Governments
during
12th
Five
Year
Plan.
This
is
aimed
at
ensuring
better
outreach
of
various
schemes
/
programmes
of
the
Ministry
and
provide
more
Clexibility
to
suit
local
needs.
Applications
are
being
received
and
processed
by
the
State
Governments
30. 30
Schemes covered under the Mission (NMFP)
Scheme for technology up-gradation, setting up/
modernization/expansion of food processing industries
Scheme for Modernization of Abattoirs
Scheme for Human Resource Development
Scheme for Promotional Activities
Cold chain projects for non-horticultural products
31. 31
Objectives of NMFP
To propagate significance of food processing for enhancing agricultural
productivity and farmers income in the Country
To assist the State Govts. in creating requisite synergy between their
agricultural plans and development of food processing sector
To assist the State Governments in addressing both institutional and
infrastructural gaps along the Value Chains and thus create efficient Supply
Chains for agricultural produces
To promote initiatives for skill development, training and entrepreneurship
To assist MSMEs in setting up/modernization of processing units
To assist food processing industry to meet requisite standards in terms of
food safety laws and market demand, both domestic and international
