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Making Northeast the food basket of India

The Central government’s decision to allocate Rs. 1000 crore to assist 20,000 micro food processing enterprises


Sentinel Digital DeskBy : Sentinel Digital Desk

  |  20 Aug 2020 1:33 AM GMT

The Central government's decision to allocate Rs. 1000 crore to assist 20,000 micro food processing enterprises in North-eastern states is music to the ears of food entrepreneurs and investors in the region. The challenge for the States in the region, however, remains in fully utilizing the earmarked funds under schemes of Ministry of Food Processing Industries in order to get higher allocations in the subsequent years. The allocation is from the total outlay of Rs 10,000 crore under the Central sector scheme - Prime Minister Formalization of Micro Food Processing Enterprises as part of the ambitious Atma Nirbhar Bharat Abhiyan to be implemented over a period of five years from 2020-21 to 2024-25. The scheme requires each state to adopt the approach of one district one product while identifying food product for a particular district keeping in view the availability of raw materials and existing clusters. Assam has high stakes under the new scheme as the state has been allocated Rs 640 crore to assist 13,000 micro food enterprises. The North Eastern states also enjoy special dispensation of higher rates of subsidy and other relaxations to attract the investors in food processing or food preservation under the Pradhan Mantri Kisan Sampada Yojana (PMKSY), the flagship scheme of the Ministry. The subsidy rates for projects in the region vary from 50 per cent to 75 per cent as compared to 35 per cent to 50 per cent in other states. The minimum eligible cost for setting up food processing units in the region is Rs 1 crore while it is Rs 3 crore in other regions. There are also relaxations in time for execution of projects in the region. The Ministry has so far sanctioned 53 food processing and preservation projects in the region in various supply chain component in the food processing sector with a total project cost of Rs. 980 crore and total subsidy commitment of Rs. 480 crore. Official records show that 16 projects have been completed, and operationalized so far, which have benefited about 70,000 farmers and created direct and indirect employment for 6,500 persons. It is estimated that after completion of all the projects an estimated 3 lakh farmers will be benefited. It will also create about 50,000 direct and indirect employment in the food processing sector. Ministry data show that during the last one year, a total of 177 food processing, preservation projects have been sanctioned in the country with a total project cost of Rs. 2,800 crore and subsidy commitment of Rs. 940 crore. The notion of high potential of setting up food processing units in the region has been derived from the fact that about 20 to 40 per cent of fruits and vegetable produce is lost in post-harvest operation and for want of processing facilities. Varieties of fruits and vegetables, some of them exotic, are abundantly grown in the region. Livestock rearing being a traditional occupation for most communities in the region, there is huge potential for setting up milk processing and meat processing unit apart from fruits, vegetables, and spices processing units. Creation of cold chain from farm gates to consumers is critical to success of food enterprises. Quality packaging of processed and value-added food products and strict adherence to food safety standards play crucial roles in brand positioning. Logistic support such as adequate storage facility for both raw materials and processed food at controlled temperature are needed to retain the freshness. The region's failure to overcome the supply chain challenges is attributed to food processing industries not taking off at the desired level despite special dispensation under various central schemes. Setting up of incubation and training centres in all the states of the region will go long way in grooming of food entrepreneurs in the region and utilization of the earmarked fund. Grooming of food exporters will help leverage the region's advantage of being at the centre of India's engagement with the ASEAN neighbours under the 'Act East Policy' to get access to a vibrant market next door. India supplied 1537 metric tonnes of egg and milk albumins, 6,75,673 MT of buffalo meat, 6,622 MT of dairy products, 15,666 MT of processed fruits, juices and nuts, 58,214 MT of jaggery and confectionery, 49,695 MT of milled products and 23,193 MT of cereal preparations to ASEAN countries in 2019-20. Organic cultivation and low use of pesticides create natural advantage for food products from the region. Revival of access to sea routes for the region through ports in Bangladesh is another motivating factor for the food entrepreneurs in North-eastern states to seize the opportunities. The State governments playing a pro-active role in building awareness among the food entrepreneurs on the opportunities available under the schemes and providing the logistic and infrastructure support for the supply chain will unlock the region's huge growth potential in food processing sector.

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