What are the challenges and opportunities of food processing sector in the country? How can income of the farmers be substantially increased by encouraging food processing? (UPSC 2020)

India’s food processing sector can drive rural growth by linking farms to markets, reducing waste and creating jobs, but it remains underdeveloped.

• Challenges: fragmented holdings, low processing levels, poor cold chains and storage, high post-harvest losses, weak logistics, limited credit for small units, and compliance with food safety and export standards.
• Opportunities: a large raw material base, rising demand for ready-to-eat foods, e-commerce, and scope in dairy, fruits, vegetables, millets and organic products.

Farm incomes can rise through primary processing, grading, packaging and preservation at farm gate, which improves price realisation, cuts distress sales and wastage; FPOs, contract farming and cluster-based units can ensure assured procurement, reduce middlemen and integrate farmers into value chains.