Factors affecting the productivity of the Indian food processing industry

Abstract

The Indian food processing industry is the link between India’s huge agricultural production base and India’s equally huge consumer base. In spite of- or perhaps because of- government intervention to increase the importance of this sector, Indian food processing is a pygmy. Post-harvest losses of agricultural produce amount to 30%: almost Rs. 60,000 crore- the size of India’s defense budget. The food processing industry, if fully developed could pick up this wasted produce for processing and market it to both the huge domestic market and the export market. However, market distortions have so far prevented the uniform development of the industry. Despite this, the industry was estimated to have grown at 8% in the 2003-04 fiscal year. In our study, we will attempt to discover the factors which have contributed to processed food’s growth in India so far, try to estimate the increase in growth and profitability if factors affecting its productivity were to be resolved, and identify market opportunities as well as policy guidelines.