India has achieved self-reliance in food; now it's time for value addition: Chirag Paswan
Chirag Paswan said India must now shift from food self-reliance to value addition through processing, infrastructure, innovation and better farmer market access.
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Context
Union Minister Chirag Paswan emphasized the need for India to transition from food self-reliance to value addition through a robust food processing sector. The government has set an ambitious target to double food processing levels to 25% of total farm output over the next five years, aiming to boost farmers' incomes, reduce wastage, and position India as a global food supplier.
UPSC Perspectives
Economic
The Food Processing Industry (FPI) acts as a crucial link between agriculture and manufacturing, offering significant potential for economic growth. Currently, India processes a mere 12-13% of its food output, significantly lower than developed nations, presenting a massive opportunity for expansion. Increasing processing levels to the targeted 25% would drastically reduce post-harvest losses, which are currently substantial, thereby increasing the net availability of food and raw materials. This sector is a major driver of rural employment and entrepreneurship. A recent report projects the sector could reach a staggering $600 billion by 2030, driven by branded and premium foods rather than just higher agricultural output. The government's allowance of 100% Foreign Direct Investment (FDI) under the automatic route in the food processing sector is a strategic move to attract necessary capital, technology, and global best practices to realize this potential.
Governance
To catalyze growth in this sector, the government utilizes several schemes, most notably the scheme. This scheme is designed to address the challenges faced by unorganized micro-enterprises, which constitute a vast majority of the FPI. It provides crucial support in the form of financial assistance (capital subsidy), technical knowledge, and assistance in branding and marketing. The focus is on integrating these small producers into formal supply chains, thereby enhancing their competitiveness. The Minister's emphasis on adhering to global quality standards is vital; as India expands its global market access through various Free Trade Agreements (FTAs), ensuring that 'Made in India' products consistently meet international quality requirements is imperative to prevent rejections and build a strong global reputation.
Agricultural
The transition towards value addition is fundamental to achieving the long-standing goal of doubling farmers' income. Currently, a significant portion of agricultural produce is sold in its raw form, yielding lower returns for farmers. By strengthening forward and backward linkages—connecting farms directly to processing units and markets—farmers can capture a larger share of the value created. This approach also mitigates the risks associated with price volatility in raw agricultural commodities, as processed goods typically have more stable prices. Furthermore, a robust processing sector creates a reliable and consistent demand for agricultural produce, incentivizing farmers to adopt better technologies and improve yields. The ultimate vision is to create a resilient agricultural value chain that ensures prosperity for the 'annadatas' (farmers) while contributing to India's ambition of becoming a developed nation by 2047.