Pradhan Mantri Kisan Sampada Yojana

Recently, the government sanctioned 32 projects under the ‘Unit’ scheme of Pradhan Mantri Kisan Sampada Yojana (PMKSY).
The projects approved are running across quadrilaterals of the country covering over 100 agro-climatic zones, in 17 States across the country.

The Central Sector Scheme - SAMPADA (Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters) was approved by the cabinet in May 2017 for the period of 2016-20 coterminous with the 14th Finance Commission cycle.
In 2017, SAMPADA was renamed as the Pradhan Mantri Kisan Sampada Yojana (PMKSY).

PMKSY focuses on the reduction of agricultural waste, modernizes the procedure of processed food products, and supplement agriculture.

Under PMKSY the following schemes are to be implemented:

It is a comprehensive package which will result in creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet.
It will provide a big boost to the growth of food processing sector in the country.
It will help in providing better prices to farmers and is a big step towards doubling of farmer’s income.
It will create huge employment opportunities especially in the rural areas.
It will also help in reducing wastage of agricultural produce, increasing the processing level, availability of safe and convenient processed foods at affordable price to consumers and enhancing the export of the processed foods.

The food sector has emerged as a high-growth and high-profit sector due to its immense potential for value addition, particularly within the food processing industry.
The Processed food market is expected to grow to $ 543 bn by 2020 from $ 322 bn in 2016, at a CAGR of 14.6%.
The sector contributes around 11% of agricultural value-added and 9% of manufacturing value-added. According to the ministry of food processing industries annual report, the sector employs 12.8% of the workforce in the organised sector and 13.7% of the workforce in the unorganised sector.

100% FDI is permitted under the automatic route in food processing industries.
100% FDI is allowed through Government Approval route for trading (including e-commerce) in respect of food products manufactured in India
Under the Make in India initiative, the Government plans to stimulate growth in the Food Processing sector through the creation of a strong infrastructure, reduction of food wastage and promotion of Ease of Doing Business (EODB) measures.
MoFPI is having a dedicated investor portal in which a range of information like resource base, availability of land, state specific policies, fiscal incentives, etc. are shared with potential investors to attract investments in the food processing sector.
The Food Safety and Standards Act, 2006,envisage regulation of manufacture, storage, distribution, sale and import of foods to ensure availability of wholesome and hygienic food for human consumption.

Strengths

Abundant availability of diverse types of raw material and varied agro-climatic zones.
Leading producer of various agricultural commodities such as milk, fruits and vegetables, marine products, etc.
Priority sector status for agro-processing given by the central Government.
Growing domestic market.
Proximity to growing international markets like Gulf, Middle East etc. with a sea route.

Weaknesses

Lack of adequate infrastructural facilities, viz., Power, Road & Rail connectivity, Storage, etc.
Large number of intermediaries in the supply chain leading to wastage and price rise at each level. Capital intensive - High requirement of working capital because of the seasonal nature of raw material.
Lack of established linkages between R&D labs and the industry

Challenges

Lack of comprehensive national food processing policy leading to inconsistency in Central and State policies.
Delays in land acquisition due to requirement of conversion of land use (non-agricultural use permission).
Lengthy procedures for Government clearance.
Inadequate facilities for mentoring of Start Ups & pilot testing of technologies and innovations. There is also lack of applied research on processes and technology.
High cost of manufacturing and packaging making the products as luxury items and unaffordable to common population.
Fluctuation of raw material prices leading to viability issues in food industries.
Inadequate flow of credit, especially for working capital requirement.
Non-availability of skilled man power for food processing is a big challenge.
Poor adoption of quality standards by food industry leading to lowering of brand value of Indian Food Industry.
Lack of market intelligence and brand building of Indian Food Processing Industries.

A National Food Processing Policy may be formulated to follow a uniform approach for food processing sector on Pan-India basis.
Relax non-agricultural land use permission for food industry procuring raw materials directly from the farmers and to Farmer Producer Organisations.
The Single Window approach for Government clearances may need to be in place in all the States.
Providing affordable credit to food processing Industry to promote creation of investments in the sector.
Enlarging the scope of credit guarantee fund / creation of a risk fund will help in mitigating stress on banking industry on financing the sector which is mostly of seasonal nature and capital and labour intensive.
Creation of a National Brand EquityFund for Food Industry with a contribution from Industry Associations, GoI, etc. to India brands internationally.
Make in India to give focus on manufacture of plant and machinery and packaging materials locally to reduce cost of production.