Focus on food processing sector to boost economy

Bijendra Gogoi

(The writer can be reached at bijendra gogoi bijendragogoidme@gmail.com)

Chief Minister Sarbananda Sonowal recently launched Kisan Rath (fruits & vegetables) Mobile App to facilitate timely selling of agriculture products by promoting a buyer-seller network. While launching the App, he viewed that the App would help farmers to emerge strongly in today's competitive market and prove as a boon to growers of perishable fruits and vegetables as it would lead to radical reduction in wastage of their produce and boost agri-business by opening up markets across the country.

Earlier, the Chief Minister in his address to the people of Assam at the State-level celebration of the country's Independence Day laid out a roadmap for building 'Atmanirbhar Assam' by boosting agricultural output, adding value to farm products and strengthening the agri-business sector. He mentioned that amid the nationwide lockdown declared in the wake of the coronavirus pandemic, farmers of Assam sold horticultural products including vegetables and fruits worth Rs. 852 crore.

Here, it is pertinent to mention that the Advisory Committee constituted by the Government of Assam for Revitalization of the State's Economy in the backdrop of the COVID-19 pandemic situation warned that a substantial population engaged in the agriculture sector might abandon agro practices if loss compensation and income doubling options were not put in place within a reasonable timeframe. The panel report suggested that it is the right time to frame effective policies and strategies with the agenda for increasing food production and doubling the farmers' income. The panel, however, pointed out that there was scope for attaining self-sufficiency in food production and even going beyond to capture regional, national and global food markets.

While the agro-climatic condition of the State favours the growth of a variety of horticultural and cash crops including orange, banana, pineapple, coconut, sugarcane, tobacco, guava, mango, jackfruit, etc., farmers in Assam mostly practice subsistence crops. Until recently, horticultural and cash crops were practised as a largely non-commercial activity. Thus, most of the fruits and vegetables grown in Assam have been sent to other parts of the country, which are used there for processing many kinds of food. In such a backdrop, the State Government's recent steps to harness the potential in the food-processing sector will help in creating off-farm job opportunities and boost farmers income. In fact, many small establishments of producing soft drinks, pickles and snacks have recently come up in the State apart from rice mills, flourmills and oil mills. However, in view of the ever-increasing demand for processed food, the potential is yet to be tapped fully.

The State Government's recent decisions to provide financial support to local entrepreneurs and self-help groups for setting up 220 rice mills and Dairy Processing Plant in PPP mode in each district are expected to reasonably boost the farmers' income. Similarly, the decision to roll out a new programme for popularizing cultivation of spices such as turmeric, ginger, chilly, nutmeg, black pepper, clove etc., will open new business opportunities for the farmers. Poultry, meat and fish, produced in sizable quantity in the State also have tremendous business potential and the Government's decision to come up with intervention in this sector will benefit the livestock farmers.

In agriculture-dominated economy like Assam, food processing can emerge as one of the most promising sectors, if harnessed properly and adequately. Realizing its worth, the Union Ministry of Food Processing Industries (MoFPI) under Pradhan Mantri Kisan Sampada Yojana (PMKSY) has increased the capital subsidy for NE region varying from 50% to 75% to support creation of modern infrastructure projects, food manufacturing units, value chain development, backward and forward linkages and food testing laboratories. The rate of subsidy in general areas under the PMKSY varies from 35% to 50% depending on the nature of projects. Besides, the minimum equity contribution and bank loan component for the projects in the region is 10% as against 20% in general areas. Similarly, the minimum eligible project cost has been allowed at rupees one crore for NE region as against rupees three crore in general areas.

The Union Ministry has so far sanctioned 53 food processing and preservation projects with a total project cost of Rs. 980 crore and total subsidy commitment of Rs. 480 crore. These projects will benefit about 3 lakh farmers in disposing of their surplus agri-produce and create direct and indirect employment opportunities for about 50,000 persons. During last one year, for Assam alone, 16 new food processing and infrastructure projects have been sanctioned with a total project cost of Rs. 230 crore with subsidy commitment of Rs. 85 crore. Further, under "Atmanirbhar Bharat Abhiyan", the Ministry has launched "Prime Minister Formalization of Micro Food Processing Enterprises" which is to be implemented over a period of five years with the Central share of Rs 10,000 crore. The north eastern States will get Rs. 1000 crore as Central share to financially assist 20,000 micro food processing enterprises. Out of this, Assam alone will get Rs. 640 crore to cover about 13,000 micro enterprises.

However, the issue of concern is that funds earmarked for north eastern States under the schemes of MoFPI could not be fully utilized for want of suitable proposals from the region restricting the Ministry to not increase the allocation beyond the mandatory minimum 10% allocation. As such, the Expression of Interest (EoI) under the schemes of Agro-processing Clusters, Cold Chain Infrastructure, Unit for Food Processing and Preservation, Backward and Forward Linkages under PMKSY is kept open for the NER until the vacant slots are filled up.

In view of this, it is imperative that the State Government should give special emphasis to orient the farmers to realize the opportunities that exist in processing, sourcing, setting up cold chains and logistics of farm products. The entrepreneurs and farmers should also shift their focus towards food-processing sector, as the agri-business market is stretched up to the entire country and beyond. The realization of this potential will not only help in reducing agri wastage but also guarantee assured income for the farmers. Such an approach will encourage the youth to take up farming as a means of livelihood also. With better income, agriculture will not only bring stability into their financial condition but also raise their social stature.