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Resource centre on India's rural distress
 
 

How Promising Is the Food Processing Industry for Indian Agriculture? -Seema Bathla and Siraj Hussain

-TheWire.in

Due to cultural reasons, India has a relatively small market for processed foods, and a number of factors afflict the food processing industry.

In the light of recent farmer protests, there have been apprehensions that corporates will develop a monopoly over agricultural markets, purchase large quantities of cereals at cheaper prices and sell processed products made from them at very high prices.

These apprehensions do not seem very plausible in the near future. Why? One important reason for this is the preference of Indians to consume fresh and home-cooked food rather than processed food made from rice and flour (wheat). Therefore, there is only a limited market for value-added products made from cereals, and big corporates may not have much interest in that.

What backs this argument is that while there is a well-established system of procurement of wheat and paddy (rice) by the Central and the state agencies – and also wholesale and retail trade in the APMC mandis – hardly 5% of the food grains undergo a higher level of processing in India.

In the table towards the end of this article, we provide estimates on the ‘extent of processing of agriculture commodities’ (EPA), in the organised and unorganised food-beverage industry/enterprises in India.

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