Food Processing is the process in which any raw material of agriculture, diary, meat, fishing, animal husbandry is converted that has a commercial value and suitable for human and animal consumption and also enhance its shelf life.
- Food : Any combination of processed and unprocessed goods and also defines the source of energy.
- Processing :
- Primary– grading and sorting
- Secondary– raw materials>final goods. Example- dehusking(rice) (consumable)
- Tertiary– take the goods to such patent such that the goods can be considered of high value. Ex: Coke, pepsi.
Manufacturing process
Food processing includes processes under which any raw product of agriculture, dairy, animal husbandry, meat , poultry, fishing is transformed through a process ( involving employees, power, machines and money) in such a way that its original physical properties undergo a change and the transformed product has a commercial value and is suitable for human and animal consumption.
Value addition activities
It also includes the process of value addition to produced products through methods such as preservation, addition of food additives, drying etc. with a view to preserve food substances in an effective manner, enhance their shelf life and quality.
Significance of food processing industry in India
- Contribution of processed food in food market of India is one third
- The food processing industry is one of the largest industries in India and ranks fifth in terms of production, consumption, exports
- Create employment. Directly 13 million people associated and indirectly 35 million
- National manufacturing policy consider food processing industry in top 5 industries
- Contribution to GDP
Other significances of food processing industry in India
- Inclusive growth (food processing industry LED the growth of primary sector)
- Rural development (buy crop classification and commercialization of agriculture)
- Reduce the wastage of agricultural commodity
- Provides food security
Major challenges in food processing industry in India
- Lack of infrastructure (cold storage, NH is only 2% of total roads, dedicated freight corridor)
- Lack of effective national policy
- Laws related to hygienic food product
- Lack of skilled human labour
- Lack of research and development infrastructure (no lab)
- Issues related to taxation policy
Process
Input (raw material) > procurement and storage > primary processing (physical exchanges) > secondary processing (combining ingredients) > packaging, marketing and retailing
Utility of food processing industry
- To convert raw products into edible products
- To preserve food items for longer shelf life
- To extend accessibility and availability of food products to final consumers
- To add value to the products: high income, exports etc.
Benefits of food processing industry
- Increase in choice with consumers (nutrition security)
- Helps in reducing food inflation (by lowering wastage of perishable food items)
- Better development of rural and backward areas
- Doubling the income of farmers ( increasing crop diversification, highly renumerative crops)
- Increased export earnings
Challenges with food processing industry
- Fragmentation of land holdings
- Climatic variations
- India is lacking in primary processing, proper storage and distribution facilities
- Food quality standards
- Less availability of laboratories
- Lack of skilled manpower
- Export infrastructure gap
- Pooled marketability of process products
- Low access to credit and subsidized financing
Types of supply chain
- General ( producers > wholesalers > retailers > consumers)
- Supermarket (producers > supermarket > consumers)
- E- commerce (producers > consumers)
E- commerce
Advantages of e commerce
- Convenience (home delivery)
- No need of physical store (low infrastructure cost)
- No geographical limits (gaining new customers with SEO)
- Easy comparison of goods and services
- Cashless transactions
- Feedback mechanism (visible to other customers also)
Disadvantages of e-commerce
- Everything cannot be sold online
- Quality of goods can be ascertained only after its delivery
- Cyber security issue
- Risk of Identity fraud
- Need for good transportation infrastructure
- Not accessible to rural and tribal areas
- Risk of fraud
- Wrong item may be delivered.
Refer Economics Important Topics for more other such topics