Fruits, Vegetables and Agro-Processing Industries

FRUITS, VEGETABLES AND
AGRO-PROCESSING
INDUSTRIES
POLICIES AND INSTITUTIONAL INVOLVEMENT
Government’s
Objectives Increase the income of farmers
Create employment opportunities
Diversify the rural economy
Foster rural industrialization
Government and Sectoral Institutions Involved
Licenses For Food

Processing
Industry
Prevention of Food
Meat Food Product Food Products FSSAI, 2006 Essential
Adulteration Act, AgMark
Order, 1973 Order, 1955 (License) Commodities Act
1954
 The total horticultural production in India is 314.67 MT
 India ranks second in world production of fruits & vegetables
 Production of fruits: 97.35 MT
 Production of vegetables: 187.5 MT
 Current processing potential is 2.2% of total production

 Industry likely to expand at a CAGR of ~7.62%
 Exported Rs. 10236.93 crores worth of fruits & vegetables in 2018-19
 Current share in global market is ~1%
Overcoming
Weaknesses
Weaknesses
Low productivity & Post-harvest loss

R&D for improvement of varieties
of 30-40%
Low capacity utilisation & value Government supported Food Parks,

addition cold chain facilities
Setting up multi-product processing

Inadequate infrastructural facilities
units to overcome seasonality
Source: Horticultural Statistics at a Glance, 2017
 Prevention of food adulteration, 1954
 Fruit product order, 1955
 Meat food product order, 1973
 Vegetable oil products order, 1947
 Edible oils packaging order, 1998
 Solvent extracted oil, de oiled meal,
and edible flour order, 1967
 Milk and milk product order, 1992
 Essential commodities act, 1955
 ISO 9000 : quality management
system
 ISO 14000 : environmental
management system
 ISO 17000 : conformity assessment
 ISO 22000 : food safety management
systems
• In processed foods • Grading and Marketing
sector • For agricultural and
• Third party certification allied commodities
system • Known as AGMARK
• Food colors, additives, standards
containers for packaging,
milk powder etc require
compulsory certification.
Directorate of
Bureau of Indian
Marketing and
Standards (BIS)
Inspection (DMI)
AGRICULTURAL FINANCING
S.No. Credit Facility Quantum of Assistance
1. Interest Assistance Crop loan up to Rs.3 lakhs at 7% rate of interest. This
interest rate becomes 4% due to 3% interest subvention
incentives provided to those farmers who repay crop loan
on time
Collateral / security-free loan No need of collateral security for farm loan up to Rs 1.6
lakh
2. Kisan Credit Card Farmers can avail crop loan through Kisan Credit Card.
Loan /credit limit is fixed on the basis of crop sown and
area under cultivation. Kisan Credit Cards are valid for 3-5
years. Farmers are also provided risk coverage in the
event of accidental death/ disability. Crop coverage loans
are covered under the Crop Insurance Scheme.
3. Investment Loan Loan facility to the farmers is available for investment
purposes in the areas viz. Irrigation, Agricultural
Mechanization, Land Development, Plantation,
Horticulture and Post-Harvest Management
RECOMMENDATIONS PERTAINING TO RURAL FINANCE AND ITS OBJECTIVES
Rural Infrastructure Development
Adoption of Flexible Delivery Systems
Micro-finance Mechanism to BOP
Future Trading Through Commodity Exchanges
Cooperative Initiatives in Credit Supervision
Amendment of Land Laws
Agricultural Research
Scheme for Human Resource
Technology
Development (Setting up of
Upgradation/Establishment/
FPTC, Degree courses for
Modernization of Food
Food Processing and Training,
Processing Industries
EDPs)
• Increase the level of processing, value • Development of rural
addition, increase exports, increase entrepreneurship and transfer of
farmers’ incomes, etc. technology for food processing,
• Assistance in the form of grant subject providing hands-on experience
to 25% of the plant and machinery, etc (focus on weaker sections)
to a maximum of Rs. 50 Lacs in • 1. Single Product Line Centre – Rs. 4
General Areas & 33.33% up to Rs. 75 lacs (fixed capital costs) and Rs. 2 lacs
Lacs in Difficult Areas (revolving seed capital)
• 2. Multiple Product Line Centre – Rs.
11 lacs (FC Costs) and Rs.4 lacs
(revolving seed capital)
Scheme for Quality
Assurance, CODEX Scheme for Strengthening
Standards and Research of Nodal Agencies
and Development
• Components – TQM, Promotion of • Providing financial support for
Quality Assurance and Safety concept, installation of basic office hardware,
bar coding, strengthening of Codex internet, etc
cell, quality control labs and R&D • Lump sum grant of Rs. 5 lacs for
• 50% of total project costs towards purchase of basic office equipment
TQM (Absolute ceiling at Rs. 10 lacs • Further lump sum grant of Rs. 5 lacs
for general areas & Rs. 15 lacs for for the same purpose after a gap of 5
difficult areas) years
• 100% grant in aid (up to Rs. 10 lacs for • Additional assistance for collection of
general areas & Rs. 15 lacs for difficult detailed field information, database
areas) preparation, etc.
Product
 Factors considered for a fruit &

vegetables processing plant Domestic Export
Market Market
 Location of processing unit

 Land & land development Civil Defence
 Technology
 Quality standards Household Institutional
 Market: Domestic & Export Consumers Buyers
 Financial Aspects
 Incentives from Government Hotels &
Hospitals
Other Bulk
Restaurants Buyers
 Aims at regulating sanitary and hygiene conditions
 Regional offices at Delhi, Mumbai, Kolkata, Chennai
 It lays minimum requirements for:
 Water to be used for processing
 Machinery and equipment
 Product standards
 Sanitation and Hygiene
 Premises should have proper lighting, ventilation & cleaning
 Equipment and the factory should not be used for processing of products like fish, meat,
eggs, etc.
 Adequate drainage system
 Proper chimneys and exhaust fans, etc
 Proper clean, neat and tidy clothes for workers
 Protect consumer from hazards
adulteration
 Help industry to produce safe,
hygiene and healthy products.
 Promote efficiency and assure quality
 Minimises wastages and cut costs
 Increase productivity and
profitability
 Provides 25% of the cost of plant &
machinery and technical civil works
(33% in difficult areas)
 Only new plant and machinery is
eligible.
 Boundary wall, office buildings, guest
house, canteen and roads not eligible
under civil work
 Individuals, firms, cooperatives,
companies and PSUs are eligible for
availing subsidy
 Subsidy disbursed in two equal
installments

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FRUITS, VEGETABLES AND

Government and Sectoral Institutions Involved

Licenses For Food

 Current processing potential is 2.2% of total production

Low productivity & Post-harvest loss

Low capacity utilisation & value Government supported Food Parks,

Setting up multi-product processing

Rural Infrastructure Development

Adoption of Flexible Delivery Systems

Micro-finance Mechanism to BOP

Future Trading Through Commodity Exchanges

Cooperative Initiatives in Credit Supervision

Amendment of Land Laws

 Factors considered for a fruit &

 Location of processing unit

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