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Call for focus on farmers, consumers

Special Correspondent

KOCHI: A position paper on the Indian food processing industry prepared by ASSOCHAM (Associated Chambers of Commerce and Industry of India) underscores the need for better focus on both the farmer and the Indian consumer and concerted action by the industry, the Government, and the institutions concerned to attain the larger goals of the industry.

The paper, presented to the Union Food Processing Ministry, points out that the food processing industry is dominated by small-scale and cottage industries.

It has attained only limited penetration in the rural sector. As a result, most of the potentials remain unexplored and under-exploited.

Though the direction and prospects of the sector are coherent, the rapidity of change towards realising the potential remains uncertain, the paper says.

In order to accelerate the pace of change, the Government should enable direct access to agriculture produce, create a level-playing field through tax reforms and a revised food law, drive the growth of key enablers such as the retail sector, reduce market interference, and proactively facilitate industry initiatives and exports. Catering to domestic consumers' needs alongside the export requirements should receive priority. For this, given the fact that retail Foreign Direct Invest (FDI) in the food sector may get opened up soon, prescribing harmonized standards for the domestic market seems a necessity. A study by the ASCI, Hyderabad, pointed out in July 2005 that the Indian food processing industry required a whopping $40-billion investments for upgrading technology, capital expenditure and turning competitive.

It emphasised that inadequate investments would mean not meeting the global quality standards or the required regulatory concerns since lack of economies of scale as a result of FDI and other routes of investments by multinational corporations posed a potential threat to a large number of Indian players in the coming years.

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