A roadmap for boosting India's agri-export
In a bid to give impetus to strengthen the supply chain from farm to fork, foster collaboration among global and Indian food sector stakeholders, and support food processing units near farm gates to ensure better profits for farmers and reduce post-harvest losses, The Ministry of Food Processing Industries is taking the lead by hosting 'World Food India'.
In addition, the Union Budget for 2024-25 has allocated Rs 1.52 lakh crore to prioritise agricultural sector development. This funding will focus on climate resilience, productivity, innovation, and processed food exports.
Notably, five products — rice, wheat, meat, spices, sugar and tea/coffee — account for over 50 per cent of total agricultural exports and sometimes face restrictions to match the domestic demands and supplies to control inflation. Only 25 per cent of our agro-exports are processed or value-added, a figure that has remained virtually unchanged over the last decade.
This is significant due to a need for more tech-based operational size and production capacity and for meeting international standards to tap the global market. However, the success of global giants like Nestle (Switzerland), with an annual turnover of $111 billion in the processed food and beverages sector, shows us what is possible with technology and research.
Notable Indian firms in domestic processed agriculture, such as AMUL, with a turnover of $9 billion, are far behind in operational size, production capacity, and meeting international standards. Still, they can achieve similar success with the proper support and approach.
The Global exports of processed agricultural products are nearing $1 trillion, with Germany($63 billion) at the top, the US ($58 billion), the Netherlands ($57 billion), China ($53 billion), and France ($50 billion). Southeast Asian nations like Indonesia, Malaysia, and Thailand are also major exporters of processed agricultural products. While, India’s value-added exports increased by $6.5 billion over the last five years since the agro-export policy was introduced to boost value-added agriculture exports, taking the total to $15 billion, it only marginally improved our global rank from 21 to 17.
This can be surely improved.The Economic Survey 2023-24, reveals that the annual output of fruits and vegetables in India is the world’s second-largest at a substantial 300 million tonnes after China, yet the processing levels at 4.5 per cent for fruits, 2.7 per cent for vegetables, 21.1 per cent for milk, 34.2 per cent for meat, and 15.4 per cent for fisheries, compared to 25-30 per cent in China and 60-80 per cent in Western countries.
This deficiency in processing capacity leads to a substantial amount of produce going to waste in India. Estimates of post-harvest losses in the country vary from 18% to 25% across the entire supply chain, though they are thought to be much higher, at up to 45%, for fruit and vegetables.
NITI Aayog estimated annual post-harvest losses of close to Rs 90,000 crore. To improve this situation, it is suggested to focus on proper sorting and grading near the farm gate and enhance processing capacity. Incentivizing Farmers: It's crucial to repurpose agricultural incentives to motivate farmers to reduce losses and waste on and near farms.
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