The Hindu : State's food processing policy soon

Online edition of India's National Newspaper
Monday, Mar 29, 2004

Kerala

Kerala

State's food processing policy soon

By Our Staff Reporter

KOCHI, MARCH 28. The State will soon frame a policy for the food processing sector, the draft of which has been prepared by the Kerala Industrial Infrastructure Corporation (Kinfra).

The draft envisages value-addition for at least 50 per cent of State's natural sources in the food sector within the next two Five Year Plan period, ending 2012. It also calls for encouraging potential investors by offering a subsidy of 33 per cent by the Central and State Governments.

The food processing sector would utilise the resources of the agrarian and farm sectors in the State, and thus revive the prospects of those sectors. This would indirectly provide more job opportunities and the State's economy would be benefited from value-addition. The draft policy aims at linking the farming community to marketing outlets by excluding middlemen. The specific objective of the policy is to ensure that foods and food packaging meet relevant standards of quality, composition and labelling.

The proposed strategy is to develop world-class infrastructure with the required support services for manufacturing units by setting up specialised food processing industrial parks in selected locations. Creation of a separate cell for interaction with the Central Government and development of Research & Development works are part of the strategy. Emphasis will be laid on avoidance of procedural delays and bottlenecks.

The draft policy has outlined thrust areas so as to increase the export of value-added products. These include fruits and vegetables, dairy, poultry and meat products, fisheries, cashew, coconut, spices, grain and packaged foods and drinks.

While the potential of Kerala in the areas of agriculture and livestock commodities has been underutilised, the State has the advantage of having distinct varieties of banana, pineapple and mango. The value of fresh fruits and vegetables exported from the State was Rs.143 crores last year. About 50 per cent of this was banana.

The demand for fruit juices and fruit-based beverages is increasing in the State and there is scope for setting up new units. The fruit juice industry using locally available raw materials has a promising future in both domestic and export markets owing to increasing health consciousness among consumers. There is an urgent need for establishing a properly coordinated fruit juice processing industry to make use of surplus production of fresh fruits.

Opportunities also exist in other food processing technologies such as canning and bottling of food items, dehydration of fruits and vegetables, etc. Currently, a produce of Kerala that is in high demand is pickle made from fresh fruits and vegetables.

Branding of the products is now on the increase and the quality standards are being upgraded to compete with the international sector. The State Government should encourage setting up of pack-houses, which are eligible for incentives. The regulation under the Fruit Product Order (FPO) is also instrumental in increasing the standards of products in this sector. The availability of raw materials for the dairy sector products is on the increase. The products have a large local market while the export market is widening, especially in the Gulf. The draft policy points out that the prospects in the poultry and meat products sector are adversely affected by the non-availability and non-application of scientific breeding and raising techniques. The total meat production in the State amounts to 1,44,500 tonnes.

Marine output of Kerala is one-fourth of the country. The European Union is the major market of Kerala marine products, which accounted for 42.66 per cent of the country's share during 2001-02. The coastal districts of the State are famous for their marine products and are suitable for setting up industries for value-addition.

Kerala accounts for 60 per cent of the country's total export of cashew nut and shell liquid. There is scope for increasing the exports to the U.S., Korea, Japan, etc. Opportunities exist for export of processed coconut products, spices, grain and packaged foods and drinks.

The draft policy envisages investment subsidy to new units in the agro and food processing sector. All new units in the food processing sector - tiny, medium or large - should be eligible for investment subsidy at the rate of 25 per cent of fixed capital investment subject to a ceiling of Rs.50 lakhs in addition to applicable Central subsidies. There will be a 25 per cent State subsidy on capital cost for setting up cold chains.

Three quality control laboratories will be established in Thiruvananthapuram, Kochi and Kozhikode for providing quality certification for export. The State should encourage individual organisations in the public or private or cooperative sector in patent registration by providing an assistance of 50 per cent cost of patent registration, subject to a ceiling of Rs.5 lakhs. Under the technology upgradation scheme, capital subsidy to the extent of 25 per cent of the cost of fixed capital investment may be provided to encourage the existing industry. Assistance will also be provided for setting up centres of excellence for fresh fruits and vegetables.

Market promotional assistance, interest subsidy, tax and duty concessions and single window clearance also form part of the draft policy.

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