Oil & Food Journal October 2014

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Vol. 09 Issue 12 October 2014

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CONTENTS

CONTENTS BAKERY NEWS 49 Kellogg’s CEO to meet with United Biscuits 49 Mondelez to invest $90m in new biscuit manufacturing plant in Bahrain

FOOD PROCESSING NEWS 50 Academic’s Publication Recognised as a Top Twenty Food Book 51 Manipur all ready to tap potential in Food Processing Sector 52 MP-CM announces 5- year exemption from mandi fee for food processing units

The Organic Oasis Pg 28 09 Enabling Pulses Revolution in India

32 FSSA I Sentinel or Slayer

NEWS 53 Markem-Imaje Debuts High-speed, High resolution Thermal Inkjet Solution: the New 1050 Printer 54 FSSAI’s new mandate puts winemakers in a fix 54 Goa Dairy set up its own ice creams plant 55 Arla pushes for industry collaboration to include dairy products in food aid 55 Govt to ease control on organic food export AGRICULTURE NEWS 56 Britannia makes way into kid’s hearts with a new cookie - Tiger Butter Krunch 57 71% of U.S. moms agree: Food and happiness go hand in hand 58 Home Minister pledges agri-based industry for Haryana farmers

18 Global Comparative study of food and grocery retail market in 2014

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36 The Food Processing Influencers

44 Analysis of supply chain of Spices in India: A case study of Red chillies

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EDITORIAL

From the Desk of Editor

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3ULQWHG $W 5ROOHUDFW 3UHVV 6HUYLFHV & *URXQG )ORRU 1DUDLQD ,QGXVWULDO $UHD 3KDVH 1HZ 'HOKL The views expressed in this issue are those of the contributors and not necessarily those of the magazine. Though every care has been taken to ensure the accuaracy and authenticity in information, “Oil & Food Journal� is however not responsible fordamages caused by misinterpretation of information expressed and implied within the pages of this issue.

All disputes are to be referred to Mumbai jurisdiction.

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A

s I was just delegating what to write this month that could catch the attention of our readers, my thought was caught by a plate of food trashed by people sitting near me in a restaurant. We waste food while thousands sleep empty stomach daily. And to make it clear, food isn’t wasted only at the fork level; it is wasted through the entire processing system. Sadly many statistics support my claim and consequently I did say, there is an pressing necessity to curb food wastage in India.

7R EULQJ GRZQ LQĂ€DWLRQ WKHUH LV DQ XUJHQW QHHG RI VRPH LQWHJUDWHG SROLF\ IRU WKH IRRG processing sector. Thus our government is currently working on the National Food Processing Policy to reduce wastage of perishables and improve the supply situation. Food Processing Minister Harsimrat Kaur Badal recommends that agriculture credit should also EH FRQQHFWHG ZLWK IRRG SURFHVVLQJ VHFWRU DV WKH XOWLPDWH EHQHÂżFLDU\ LV WKH IDUPHU India is the second largest producer of fruits and cereals, third in marine production and has the largest livestock in the world, but still the country is able to process only 2 per cent.

At this time, around Rs 44,000 crore worth food is being wasted and unless we work towards removing that, our growth story cannot be completed. Even the cold chain capacity of the country is 30 million tonnes, whereas it produces around 200 million metric tonne RI SURGXFWV 7KHVH ÂżJXUHV WHOO WKH ZKROH VWRU\ )RRG ZDVWDJH LVVXH LV WKH RQH RI WKH PDLQ predicament of the food processing industry and according to Badal, “there should be zero tolerance towards waste “.

The Minster accentuated that the paramount focus should be on reducing wastage of the WKUHH PDLQ YHJHWDEOHV RQLRQV WRPDWRHV DQG SRWDWR DV WKH\ DUH GULYLQJ LQĂ€DWLRQ 7DONLQJ about the challenges the industry faces, the Minister said, “The biggest challenge the industry faces is power, without which the cold chain cannot be successful. States need to invest in renewable energy and provide solar energy at subsidized rates.â€?

Another step taken by the Government to enhance the food processing and reduce wastage is to impart skill development training to 10,000 youths annually in partnership with National Skill Development Corporation (NSDC) and various food industries.

The training will be initially provided to 10,000 youths and will be extended on the requirement basis. The youths will be trained in fruit and vegetable, dairy and meat processing industries. This training will be a step to stop the wastage of food via proper training and execution.

Strengthening of backward and forward linkages is also helps in controlling the food wastage and if things go accordingly then in next 10 years, food processing industry in India will be worth Rs 2 lakh crore and provide employment to one crore people.

With so many lagging concerns in Food processing industry, one often tend to wonder what is being done with the Rs 2000 crore. Well funds announced in the budget had not taken off due to some issues. But the government will soon come out with guidelines for operationalising Rs 2,000 crore special fund by National Bank for Agriculture and Rural Development (Nabard) to boost food processing industrials and mega food parks. :LWK JRYHUQPHQW FOHDULQJ WKH DLU RQ XWLOL]LQJ WKH PRQH\ IRU UHÂżQDQFLQJ DV ZHOO WKH GUDIW guidelines is likely to be approved shortly. The idea behind this special fund is to make available affordable credit to agro-processing units being set up, especially in designated food parks.

Three mega food park projects in Khagaria, Bihar, Satara in Maharashtra and Una in Himachal Pradesh have been approved recently. Initially the government proposed to set XS ÂżYH PHJD IRRG SDUNV LQ WKH FRXQWU\ 6HYHUDO FROG FKDLQ SURMHFWV DUH DOVR EHLQJ VHW XS 7KH RIÂżFLDO VDLG D VSHFLDO IXQG ZRXOG EH DYDLODEOH IRU SURMHFWV LQ GHGLFDWHG IRRG SDUNV LQ the country, mega food parks and designated special economic zones.

The fund would be available for units processing fruits and vegetables, meat, poultry and ÂżVK ,QGLD ORVHV 5V FURUH ZRUWK RI IUXLWV DQG YHJHWDEOHV DQQXDOO\ GXH WR rotting, poor logistics and improper handling at the time of harvest. A sizeable percentage of this wastage could be avoided by boosting food processing industries.

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Enabling Pulses Revolution in India By: A Amrinder Reddy, MCS Bantilan, Geetha Mohan

Introduction Historically India is the largest producer, consumer and importer of pulses.

Although it is the world’s largest pulses producer, Indiahas been importing 3-4 million tons (MT)of pulses every year to meet its domestic demand. However, during the last decade, growth in pulses SURGXFWLRQ KDV LQFUHDVHG VLJQL¿FDQWO\ India achieved a record output in pulses

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production at 18.1 MT in 2010-11 with an all-time high production achieved in chickpea (8.25 MT), moong (1.82MT) and urad (1.74 MT). Even though pulses SURGXFWLRQ LQFUHDVHG VLJQL¿FDQWO\ during the last decade, continuing the faster growth is a bigger challenge for researchers, extension agencies and policy makers. For some crops such as oilseeds, earlier experience shows

most of the success is short lived if we don’t align production technology with policy support (Reddy 2009). Still, the productivity of pulses in India (694 kg/ ha) is lower than most of the major pulse producing countries and yield potential attained at research stations and on-farm demonstrations.

The brief discusses strategies followed to increase pulses production in the

10 www.agronfoodprocessing.com last decade and the way forward to sustain the increased production. It also examines the factors behind the fast growth in production of pulses in recent years with chickpea in Andhra Pradesh as an example. Introduction of chickpea crop into non-traditional areas like south Indian states is an example of technological and institutional breakthrough to be replicated in other crops. Introduction of chickpea into black cotton soils, availability of plenty of rabi fallow lands, adoption of short duration and high yielding varieties like KAK- 2 and JG-11, and well developed land lease market to facilitate large scale mechanization to cope with labor shortage in villages are some of the contributing factors for the expansion of chickpea area into south Indian states. It highlighted the importance of (i) successful government programs like National Food Security Mission in increasing pulses production, (ii) development and distribution of improved seed through semi-formal seed systems and farmers participatory varietal selection (FPVS) , (iii)emphasis on abiotic and biotic stress management to increase stability in area and yields through integrated approach (iv) increased availability of subsidised improved seed, micronutrients like sulphur, gypsum, popularization of herbicides and farm machinery to cope with labor shortages, and lastly (v) developing market information systems and warehouse infrastructure, enhancing credit availability, establishing markets with state-of-the-art post harvest management and cold storages. )RU SXOVHV WKHUH KDV EHHQ QR VLJQLÂżFDQW technological breakthrough until now due to peculiar problems like indeterminate plant type, low response to fertilizers and management practices. However, after experiencing a steep rise in prices and declining per capita availability of pulses, governments have encouraged pulses production through various programs, including Integrated Scheme of Oilseeds, Pulses, Oil Palm and Maize(ISOPAM) National Food Security Mission (NFSM). The efforts of the governments are supported by various research bodies such as national agricultural research systems (NARS) and ICRISAT. This has resulted in some improvement in the

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production of major pulses, including chickpea and pigeonpea (Graph 1). It is only since 2001 that the growth rate of SXOVHV SURGXFWLRQ LV VLJQLÂżFDQWO\ KLJK for example, the growth rate of chickpea is 6.32% per annum and pigeonpea is 2.05%, while that of total pulses is 3.35% per annum, which is much ahead of the population growth but way below the growth in demand.

Importance of pulses in food basket Pulses are a good source of proteins for a majority of the population in India.

HIGH PULSE

protein, which indicates the importance of pulses in their daily food habits. About 89% consume pulses at least once a week, while only 35.4% of persons consume ÂżVK RU FKLFNHQ PHDW DW OHDVW RQFH D ZHHN (IIPS, ORCMacro, 2007). It is also to be noted that pulse is consumed by the rich and the poor almost in the same frequency. For example, among the very poor in rural areas, pulses consumption increased from 0.15 kg/month in 197374 to 0.41 kg/month in 2009- 10. Further, any reduction in prices and increase in LQFRPHV ZLOO EHQHÂżW SRRU FRQVXPHUV VLJQLÂżFDQWO\ PRUH WKDQ WKH ULFK

Graph 1. Trends in pulses production from 2001 to 2011 and projections for 2020.

Protein malnutrition is prevalent among men, women and children in India.

Pulses contribute 11% of the total intake of proteins in India (Reddy 2010). In India, frequency of pulses consumption is much higher than any other source of

consumers (Mittal 2006). Keeping the cheapest source of protein, it is important to increase pulses production to increase balanced diet among the socially and economically backward classes. Further, pulses provide healthy proteins, which

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11 www.agronfoodprocessing.com have nutritional attributes assumed to EHQHÂżW ZHLJKW FRQWURO LQFOXGLQJ VORZO\ GLJHVWLEOH FDUERK\GUDWHV KLJK ÂżEHU DQG protein content, and moderate energy density when compared to other protein rich sources like meat and meat products.

Lastly, pulses meet tastes of different sections of society across India. The major chickpea consuming states are Punjab, Haryana and Rajasthan. The major red gram consuming states are Karnataka, Maharashtra and Andhra Pradesh while the major green gram consuming state is Gujarat. In Assam, Bihar and West Bengal, lentil dal has been predominant. Black gram is a major food item in Tamil Nadu and Uttar Pradesh.

This shows diversity in the consumption of pulse crops in terms of quantity and variety among different states within India (Reddy 2004).

priority has been given for increasing the production of pulses across the country to curtail growing imports, reduce protein malnutrition and make pulses affordable to the common man. Pulses are grown across the country with the highest share coming from Madhya Pradesh (24%), Uttar Pradesh (16%), Maharashtra (14%), Andhra Pradesh (10%),Karnataka (7%) followed by Rajasthan (6%),which

Impact of technology-reduction in yield instability In addition to inelastic supply response to prices, the production of pulses is highly unstable. Instability in yield decreased from 13.6% to 5.5% due to the adoption of pest and disease resistant varieties and adoption of plant protection technologies.

Instability in area is higher for chickpea than pigeonpea (Graph 2), while

Production trends and geographical distribution Major pulse crops grown in India are chickpea, pigeonpea, mungbean, XUDG EHDQ OHQWLO ¿HOG SHDV DQG EHDQV They are important crops in terms of the daily diet, contribution to human nutrition (protein) and also in terms of their contribution to farmers’ income and employment. Most importantly, all pulse crops improve soil fertility by ¿[LQJ DWPRVSKHULF QLWURJHQ LQWR VRLO DQG helps in increasing sustainability and soil productivity. Pulses in India have long been considered as the poor man’s meat. Pulses are grown on an area of 22-23 million hectares with an annual production of 13-18 million tons (MT).

India accounts for 33% of the world area and 22% of the world production of pulses. About 90% of the global pigeonpea, 65% of chickpea and 37% of lentil area falls in India, corresponding to 93%, 68% and 32% of the global production, respectively (FAOSTAT 2011). There is a steep increase in the prices of pulses due to supply constraints to meet the growing demand due to population increase. The net availability of pulses has come down from 70.1gm/ day/person in 1951 to 31 gm/day/person (Indian Council of Medical Research recommends 65 gm/day/ capita) in 2008. More recently, under the National Food Security Mission (NFSM),high

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Graph 2.Yield instability of pulses in India. together share about 77% of the total pulse production, while the remaining 23% is contributed by Gujarat, Chhattisgarh, Bihar, Orissa and Jharkhand. Among pulses, chickpea (45.1%) occupies the major share, followed by pigeonpea (15.7%), moong (9.9%), urad(9.6%), and lentil (7.3%), which together account for 87% of the total pulses production. Much of the pulses production has been slowly shifted from kharif to rabi and now the rabi share is increased to about 61.0% of the total pulses production. The research and development investments on each crop should be in proportion to the share of the crop in the respective category.

More emphasis should be given to rabi pulse crops as their production share is much higher and increasing in recent years.

instability in yield is lower in chickpea (11.3%) than pigeonpea (15.4%).

Methodology With this background, this policy brief tries to examine the reasons for the success of pulses production in recent years at the all India level with special reference to chickpea and pigeonpea and suggest policy options to increase production. It also examines the reasons behind the successful introduction of a new crop, chickpea, in to South India. The objectives of

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HIGH PULSE of pigeonpea increased faster than that of chickpea, which indicates that the supply of pigeonpeas is not able to meet the increase in demand due to supply side constraints such as biotic, abiotic and other socio-economic constraints.This resulted in faster increase in equilibrium prices to match the increased demand supply. Nominal prices of chickpea are increased less than pigeonpea even though there is huge increase in demand as due to technological progress supply of chickpea increased faster than pigeonpea at lower cost.

Reasons for long run inelastic supply of pulses the policy brief are (i) to understand changes in the trends in area, production and yield of pulse crops in India, (ii) to review the gaps in demand and supply of pulses, (iii) to examine the past success in policy and agricultural techniques for increasing pulses production, and (iv) to evolve policy options for increasing pulses production. The study used secondary data collected from FAO, Directorate of Economics and Statistics, Ministry of Agriculture to depict trends in area, production and yield, and prices of pulse crops over a period. The cost of cultivation scheme data was used to examine the relative cost advantage of SXOVHV LQ GLIIHUHQW VWDWHV 7KHVH ÂżQGLQJV are supplemented by ICRISAT- Village Dynamics in South Asia (VDSA) farm level data collected from 18 SAT villages.

which necessitates an annual growth rate of 4.2%� (IIPR 2011). All these estimates indicate that to bridge the gap between demand and supply, pulses production should grow at least 4% per annum. A long run price trend shows the changes in equilibrium demand and supply of a commodity. If prices of commodity -A goes faster than prices of commodity –B, it indicates that the supply of commodity –A is inelastic to price changes even though demand increases and vice versa.

To examine the general price trends in pigeonpea and chickpea, Graph-3 presents long run trends of prices of pigeonpea (as exemplar of inelastic supply) and chickpea (as exemplar of elastic supply). The long run price trend

Since 1966, pulse crops have been neglected with the agricultural policy environment favoring the spread of green revolution technology in a few crops like paddy and wheat for food security reasons in India. This input-intensive technology further enhanced the already existing yield gap between major cereals and pulses. Due to prolonged neglect for several decades, yield levels of pulse crops are stagnant (increased only by 12.2% from 1966 to 2009 as against 162.6% increase in yield of wheat). The real price steeply ncreased for pulses (by 85.4% for pigeonpea and 80.1% for chickpea) compared to a decline for wheat (-19.6%), maize (-9.6%) and millets (-2.3%), mainly due to the low supply response of pulse crops.

Evidence of growing mismatch between demand and supply The study by Kumar (1998) used the Food Characteristic Demand System (FCDS) to estimate demand projections.

The total demand for pulses is projected to be 30.9 MT in 2020. Mittal (2006) projected pulses demand to be 42.5MT by 2020, which is at the upper end of all the projections.As per these estimates,the GHÂżFLW RI SXOVHV ZLOO EH WR WKH WXQH RI 07 E\ 7R EULGJH WKLV GHÂżFLW WKH required growth rate of pulses production is 6.51%, while the current growth rate is only 3.35%. In its vision 2030, IIPR stated WKDW ÂłLQ RUGHU WR HQVXUH VHOI VXIÂżFLHQF\ the pulse requirement in the country is projected at 32 MT by the year 2030,

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Graph 3. Long run supply and demand trends of pigeonpea and chickpeas between 1966 and 2012 (2012 constant prices).

13 www.agronfoodprocessing.com As a result of the widened gap between yields of pulses and major cereals, the UHODWLYH SUR¿WDELOLW\ DQG FRPSHWLWLYHQHVV of pulse crops reduced even though prices increased due to shortage of supply to meet the rising demand. Another important reason for decreased preference of pulses by farmers is continued higher instability in yields of pulse crops than major cereal crops (Chand 2008). The main reasons for inelastic supply of pulses are (i) scattered and thin distribution of various types of pulse crops cultivated mostly in marginal and low productive lands, with each crop contributing a small share in total pulses area – the biggest hurdle for all stakeholders (researchers/ extension/ development/credit/market support agencies in both public and private sector) to provide input and output services and other institutional support; (ii) indeterminate plant type of many pulse crops with low yield potential; (iii) low response to input management; (iv) shifting of pulses to low-productive and marginal lands; (v) high frequency of crop failure and yield instability due to biotic and abiotic stresses; (vi) low priority by policy makers (Materne and Reddy 2007). The major R&D issues LGHQWL¿HG IRU SXOVHV DUH ORZ JHQHWLF \LHOG potential, poor and unstable yield, huge post-harvest losses, inadequate adoption of improved technology and low SUR¿WDELOLW\ ZKLFK QHHG WR EH WDFNOHG As a result, the area under paddy and wheat increased in high-productive zones along with high doses of inputs like fertilizer and pesticides, and pulse crops shifted to marginalized lands with no or

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little inputs and consequent low supply response even though prices are high.

The recent increase in pulses production is attributed to the announcement of higher minimum support price (MSP), emphasis on improved seed production and distribution, increase in area in nontraditional areas for crops like chickpea, and higher market prices.

Short-run policy response In response to shortage and higher prices, the Government of India reduced import duties on all pulses, banned exports (except kabuli chickpea), and enabled imposition of stock limit orders by state governments. The Government has also undertaken publicity campaigns to popularize the consumption of yellow peas, and measures have been taken by PSUs to distribute the same through PDS @1 kg per family per month at a subsidy

HIGH PULSE

of Rs 10 per kg. All these activities are effective in the short run to reduce prices.

However, to reduce supply demand gap in the long run, there is a need for greater R&D efforts to reduce cost of production.

Long-run policy response The low priority for pulses restrained productivity increases and investments in enabling institutions, R4D and other drivers of progress (Planning Commission 2008). If such policy support and investments were in place, they would have increased pulses productivity more rapidly, making them more affordable for the poor and expanding WKHLU HQYLURQPHQWDO EHQH¿WV 3XOVHV were brought under the umbrella of The Technology Mission on Oilseeds, Maize, Oil palm in 1990–91, but it has been ineffective in increasing production. On the price front, the price of pulses in most years has been more than the MSP for all crops, which indicates that real action is needed in the technology front with focus on reducing cost of production. As D ¿UVW VWHS HIIRUWV ZLOO KDYH WR EH PDGH WR ¿OO XS SURGXFWLYLW\ JDSV RI WKH H[LVWLQJ technologies and their scaling up through proper extension mechanisms through supply of inputs, institutions and proper governance. In some regions, pulses are replacing coarse cereals, which needs to be promoted by providing improved VHHGV RI SXOVHV DYDLODELOLW\ RI VSHFL¿F nutrients like sulphur and phosphorous and better market linkages (Planning Commission 2008). To give a boost to pulses production, the government

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HIGH PULSE This is an important way to reduce the gap between demand and supply. As a strategy to cope with this situation, cultivars having combined resistance to most frequent and major biotic and abiotic stress factors need to be developed. The scope for development of multiple resistant varieties increased after recent advances in genomics and needs to be exploited further.

MSP and cost of production

has been implementing National Food Security Mission-Pulses in 16 major pulses producing states covering about 97.5% pulses area in the country. India has also launched Accelerated Pulses Production Program (A3P) in 2010 as a part of NFSM-Pulses for demonstration of production and protection technologies in village level compact blocks.

Assistance is also being provided to the farmers under other crop development programs such as integrated development of 60,000 villages of Pulses, Rashtriya Krishi Vikas Yojana (RKVY), Macro Management of Agriculture (MMA), Bringing Green Revolution to Eastern India (BGEI) in rain fed areas across the country for increasing crop productivity and strengthening market linkages. The substantial increase in the MSPs of pulses incentivised farmers to increase their area and input use. All these efforts resulted in record production.

Wide yield gaps and farmers’ level of technology adoption Yield gap analysis for chickpea shows that VLJQL¿FDQW \LHOG GLIIHUHQFHV H[LVW ERWK LQ desi and kabuli cultivars. Yield gap I, which is the gap between research station and on-farm trial yields, is highest in the South Zone (30%) and lowest (17%) in the Northwest Zone. Yield gap II, which is the gap between on-farm trials and zone average yields, is very large in all zones, ranging from 64% in the Northeast Zone to 148% in the Central Zone. Wider yield gap II is an indication that there is a large gap between on-farm demonstration yield and zone average yield, which can be bridged by wider adoption of existing technology by farmers. The existing technology has the potential of doubling production at national level without increasing area under chickpea if farmers adopt the recommended package of practices (Reddy et al. 2007).A similar yield gaps exist in pigeonpea also.

Technological Options Through integration of conventional breeding approaches with cutting edge technologies such as genomics, molecular marker-assisted breeding, transgenics, it is possible to develop suitable varieties which tolerate biotic and abiotic stress, KLJK LQSXW XVH HIÂżFLHQF\ GHVLUHG TXDOLW\ traits. Exploitation of heterosis and yield genes from wild relatives have also EHHQ LGHQWLÂżHG DV SURPLVLQJ DYHQXHV IRU breaking yield plateaus (IIPR 2011).

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Huge crop loss due to insect pest and diseases Pulse crops are also affected by different pests and diseases during the crop growing stage and also after harvest of the crop. Most of the studies estimated the losses in the range from 15% to 20% (IIPR 2011). It means, India can increase pulses availability by 15 to 20% with investments in appropriate crop protection research and development.

For rabi pulse crops, MSP is far less than for kharif pulse crops (Rs2100/q for chickpea and Rs2250/q for lentil vs. Rs 3200/q for pigeonpea, Rs3500 for moong and urad). This indicates the competitiveness of rabi pulse crops for further expanding area, keeping their low cost of production( graph 4. It is also to be noted that the cost of production is less in Bihar and Madhya Pradesh for both chickpea and pigeonpea than the MSP, which indicates the cost competitiveness of Bihar and Madhya Pradesh in pulses production. In addition, in case of chickpea, cost of production is also less in Andhra Pradesh. This indicates the scope for expanding area under pulses in Bihar, Madhya Pradesh and Andhra 3UDGHVK EDVHG RQ KLJKHU SURÂżWDELOLW\ ,W LV important to increase yield to reduce cost of production; for example, the cost could be reduced by 6%in pigeonpea if its yield levels increase by 10%(CACP 2012).

Profitability and resource conservation of pulse based cropping systems Pulses are usually cultivated as mixed crops along with cotton, mustard, etc, or as catch crop between two cereal crops.

If a pulse crop is one of the crops in crop rotations or in a mixed cropping system, then we categorize that cropping system as a pulse-based cropping system. A comparison of economics of pulsebased cropping systems with non-pulse-based cropping systems has been done by Materne and Reddy(2007). The input

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15 www.agronfoodprocessing.com utilization (fertilizers, pesticides, labor and water) was less for the pulse-based cropping systems.

that can provide stable and also higher yields. The genome sequencing will HQDEOH WKH LGHQWL¿FDWLRQ RI WKH VWUXFWXUH

Graph 4. Projected cost of production of chickpea and pigeonpea for the year 2011-12.

7KH EHQH¿W FRVW UDWLR ZDV DOPRVW VDPH (1.8) for both the cropping systems.

However, gross returns and net returns per unit area were higher for non-pulsebased cropping systems (as they are mostly irrigated and high input-intensive) EXW ZDWHU XVH HI¿FLHQF\ LV KLJKHU IRU pulse-based cropping systems. Overall, pulse-based cropping systems are more suitable for resource-poor farmers and water scarce regions. The pulse-based cropping systems are environmentally sustainable also, as they require lower use of fertilizers, pesticides and irrigation in addition to enhancing the productivity of cropping systems by increasing yield of subsequent crops (Reddy 2004, Reddy 2009a).

Windows opened for technological breakthrough in pigeonpea 8iRbYT @YWU_^`UQ DUSX^_\_Wi* To break the yield barrier in pigeonpea, ICRISAT and partners have developed a cytoplasmic male-sterility (CMS) based hybrid breeding technology in pigeonpea.

CMS-based medium maturity hybrids, ICPH 2671 and ICPH 2740 produced 3040% greater grain yields than the popular YDULHWLHV DFURVV IDUPHUV¶ ¿HOGV LQ ,QGLD

DXU ]Q``Y^W _V dXU `YWU_^`UQ WU^_]U* It is a breakthrough that helps in speeding up the development of improved varieties

Vol. 09 Issue 12 October 2014

and function of more than 48,000 genes of pigeonpea. There are some unique genes that impart drought tolerance to pigeonpea. This trait can be transferred to identify high yielding varieties. This would also help cut down on the time

availability like Gujarat, Karnataka, Andhra Pradesh, Maharashtra and Tamil Nadu, (iii) Popularization of rabi pigeonpea in the states of Orissa, Gujarat, West Bengal, Bihar and eastern UP, and (iv) Increasing area through inter-cropping of pigeonpea with soya bean in MP, Maharashtra and Rajasthan; and with cotton, sorghum, pearl millet and groundnut in the states of Andhra Pradesh, Maharashtra, Karnataka, Gujarat, MP and UP,which is expected to get additional coverage underpigeonpea by at least 1 million hectares by the turn of the century, (v) Pest management of pod borer, fusarium wilt and sterility mosaic.

Chickpea revolution in South India Introduction of chickpea crop into nontraditional areas like south Indian states is an example of technological and institutional breakthrough, which has the potential to be replicated in other crops.

The area under chickpea is shifting from northern states to southern states.

Graph 5.Shift in area from northern states to southern states (1991 to 2010). taken to breed new varieties, from 6-10 years to just about 3 years. Production of pigeonpea can be increased through (i) Popularization of extra early and stable dwarf type suitable for multiple cropping and improved crop management in sequence with wheat under irrigated conditions in the states of Uttar Pradesh (UP), Haryana, Punjab and northern parts of Madhya Pradesh(MP), (ii) Replacement of other dryland crops like cotton in states with less water

During the period 1991-93 to 200608, highest increase in productivity of chickpea has been recorded in Andhra Pradesh (124%), followed by Karnataka (63%), Maharashtra (52%) and Gujarat (40%). Still, there is scope for productivity enhancement in the states to increase production to meet growing demand at the national level (AICRP on chickpea,2012). Many institutional and technological factors contributed to the expansion of area in to South India.

HIGH PULSE

16 www.agronfoodprocessing.com These include introduction of chickpea into black cotton soils, availability of plenty of rabi fallow lands, adoption of short duration and high yielding varieties (KAK-2, which was a Kabuli type with higher market demand; and short duration and wilt resistant varieties like JG-11), stable yield and prices, and well developed land lease market,which facilitated large scale mechanization.

This large scale mechanization facilitated consolidation of operational holdings, contracting out of major labor demanding works like harvesting and threshing, to address the labor shortage, helped in scale economies in procurement of inputs

which resulted in production increase from 19.9 thousand tons to 730.7 thousand tons during the same period.

The annual compound growth rate of area is 12.41% and yield is 5.80% and resulted in a whopping 18.21% per annum growth in production from 1987 to 2008. ‡ 'HYHORSPHQW RI YDULHWLHV WROHUDQW to drought, moisture stress, high temperature ‡ 'LYHUVL¿FDWLRQ RI FHUHDO EDVHG cropping systems ‡ 0DQDJHPHQW RI SRG ERUHU )XVDULXP wilt, Ascochyta blight ‡ (PSKDVLV RQ ODUJH VHHGHG NDEXOL chickpea

seed produced, at farmers level there is D VKRUWDJH RI &HUWL¿HG 7UXWKIXO VHHG Both public and private agencies have failed in the supply of enough quality seed andthe seed replacement ratio is very low. There has beensome success in establishing semiformal seed systems to produce Truthfully Labelled seed, in which linkages were established between the formal and informal seed sectors through supply of basic quality seed by the NARS, and quality of seed production is monitored by university/ nongovernmental nongovernmental organisationss/farmers’ associations. In this way, there will be enough quantity of seed production at the local level.

It should also be coupled with farmer participatory varietal selection (FPVS), which gives farmers an opportunity to select from a range of improved varieties(Abate 2012).

1gQbU^Ucc QR_ed ^Ug dUSX^_\_Wi*

Graph 6. Trends in chickpea revolution in Andhra Pradesh.Future thrust areas. as well as in production and marketing of output. Overall, even though investments increased in chickpea cultivation due to adoption of technology, it helped in reducing cost of production due to steeper LQFUHDVH LQ \LHOGVDQG SURÂżWDELOLW\ 7KH wider availability of highly subsidized cold storage warehouses helped farmers to store chickpea during the peak harvest season to overcome lower market price DQG WR UHDS SURÂżWV IURP KLJKHU SULFHV during later periods. Importance of successful government programs like NFSM, subsidized seed distribution and mechanization, encouragement for cold storage structures and higher MSP helped in chickpea revolution in South India.

Chickpea revolution in Andhra Pradesh In Andhra Pradesh yield of chickpea increased from 393 kg/ha to 1375 kg/ ha from 1987 to 200,(2008?) while area increased from 52.2 thousand ha to 542 thousand ha (are these correct values),

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Overcoming socio-economic constraints CU]Y V_b]Q\ cUUT cicdU]c* Even though there are good HYVs released for all major chickpea and pigeonpea locations in India, and there is enough Breeder seed and Foundation

Farmers’ awareness on improved varieties and seed availability of improved varieties are the key factors in the spread of improved varieties. The television would be the most popular media for increasing awareness and also FPVS will also be helpful.

3QcX Q^T 3bUTYd* Cash is a key element for enabling smallholder farmers to shift from low input-lowoutput to high-input-highoutput agriculture. But access to credit by these farmers is low because of their low asset base, low risk bearing ability

17 www.agronfoodprocessing.com and high risk environments. This can be effectively tackled by the insurancelinked credit to pulse crops without any FROODWHUDO VHFXULW\ 7KH VFDOH RI ÂżQDQFH VKRXOG EH VXIÂżFLHQW HQRXJK WR FRYHU DOO the costs of the recommended practices.

Hence, farm mechanization in peak season activities like harvesting and threshing needs to be encouraged through the distribution of subsidized farm machinery to cope with labor shortage and higher wage rates.

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Ce``\U]U^dQ\ YbbYWQdY_^*

Markets for legumes are thin and fragmented due to scattered production and consumption across states. Farmers/ village traders sell their marketed surplus immediately after harvest, while some large traders/wholesalers trade between major markets and hoard pulses to take advantage of speculative gains in the off-season. Due to this, farmers do not EHQHÂżW IURP WKH KLJKHU PDUNHW SULFHV RI pulses.

Investments in market infrastructure, cold storage, warehouses, market information systems both in public and private sector through PPP models and viability gap funding models need to be encouraged in SAT India.

With the expansion of irrigation facilities through ground water and also through canal irrigation systems, there is a scope for expansion of irrigated area under pulse crops, especially summer, rabi and spring season crops, as yield response is higher.

In short, to increase area and production of pulse approaches. Already ICAR and ICRISAT, with the support of state and central governments, are involved in the development of short duration, photothermo insensitive varieties for different agro-ecology, development of hybrids LQ SLJHRQSHD GHYHORSPHQW RI HI¿FLHQW plant architecture in major pulses crops, development of bio-intensive Integrated Pest Management modules, design of improved machines to cope with labor shortage,production of Breeder seed of latest released varieties and in organizing frontline demonstrations in farmers’ ¿HOGV 7KH HIIRUWV XQGHU 1)60 3XOVHV and R&D under NARS needs to be strengthened with the major thrust on

6Qb] ]USXQ^YjQdY_^ Q^T \Q^T \UQcU ]Qb[Ud* One of the reasons for success of expansion of area under chickpea in Andhra Pradesh is the development of suitable varieties for farm mechanization.

Vol. 09 Issue 12 October 2014

HIGH PULSE ‡ 5HSODFLQJ FHUHDO FURSV LQ WKH prevailing rice-wheat cropping systems with high yield varieties of pulses ‡ (QFRXUDJLQJ 5 ' RQ H[WUD HDUO\ maturity pigeonpea suited to multiple cropping and improved crop management ‡ 'HYHORSLQJ SLJHRQSHD JHQRW\SH suitable for rabi/ spring and summer seasons ‡ ,QFOXGLQJ VKRUW GXUDWLRQ YDULHWLHV RI pulses as catch crop; introducingurad/ mung (spring) will utilize unutilized land and water in the spring/summer season with high returns ‡ 8VLQJJHQRPLFV DQG ELRWHFKQRORJ\ tools for development of multiple disease and pest resistant varieties to reduce yield loss of standing crop and to increase yields ‡ 5HGXFLQJ VWRUDJH ORVVHV DQG improving market information and infrastructure. ‡ 7HFKQRORJ\ GLVVHPLQDWLRQ DQG LQSXW delivery mechanisms were too weak for pulses. Coordinating research, extension and farmers to encourage farmer-participatory research. ‡ /LQNLQJ 063 WR PDUNHW SULFHV FDQ bridge the gap between demand and supply.

18 www.agronfoodprocessing.com

Global Comparative study of food and grocery retail market in 2014 G lobal food and grocery retail sales are forecast to reach US$11trillion by 2018, largely driven by the growth of modern retailing formats in developing economies China is set to continue as the largest food and grocery market globally in 2018, with 32% of the global share of food and grocery retailing Convenience stores (including independents) and gas stations are set to remain the largest channel for food and grocery sales; however, online retailers are growing at a faster pace The dominance of local and smaller retailers in the world’s most populous countries of India and China, and other HPHUJLQJ PDUNHWV SULPDULO\ LQÀXHQFHV the large size of convenience stores in the global food and grocery market.

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In this report oils and food is going to analyze the retail market of 4 different countries that hold the helm of food retailing in the world.

India The Indian retail industry has presently emerged as one of the most dynamic and fast paced industries as several players have started to enter the market.

It accounts for over 10 per cent of the country’s gross domestic product (GDP) and around eight per cent of the employment in India. The country is WRGD\ WKH ¿IWK ODUJHVW JOREDO GHVWLQDWLRQ in the world for retail.

Several corporate have planned to exploit the opportunities in the Indian retail space, such as Reliance Industries Ltd (RIL), which has lined up capital expenditure of

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Rs 1.8 trillion (US$ 29.41 billion) for the next three years for its petrochemicals, telecom and retail ventures.

With the growth in the retail industry, the corresponding demand for real estate is also being created. Further, with the online medium of retail gaining more and more acceptance, there is a tremendous growth opportunity for retail companies, both domestic and international.

The Indian retail sector is estimated at US$ 520 billion and was among the largest employers in the country. By 2018, the Indian retail sector is likely to grow at a compound annual growth rate (CAGR) of 13 per cent to reach US$ 950 billion. Food and grocery is the largest category within the retail sector with 60 per cent share followed by the apparel and mobile segment.

19 www.agronfoodprocessing.com

Organized retail, which constituted seven per cent of total retail in 2011-12 is estimated to grow at a CAGR of 24 per cent and attain 10.2 per cent share of total retail by 2016-17, according to a study titled ‘FDI in Retail: Advantage Farmers’ conducted by an industrial body.

India has about one million online retailers - small and large - which sell their products through various e-commerce portals. Presently, these online retailers have started to use the medium of online mobile apps to increase their reach to the FXVWRPHUV 6HYHUDO H FRPPHUFH ÂżUPV Amazon will host more than 100 varieties of gourmet products and beverages.

Amazon India is in talks with breakfast cereal maker Kellogg’s and Nachos manufacturer, Cornitos to provide exclusively for Amazon. Amazon is all set

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to launch the delivery of packaged foods and will not foray into delivering groceries \HW WKRXJK PDQ\ $PD]RQ RIÂżFLDOV DUH hinting at it. Olympia Industries, a trusted and premium seller for Amazon is running a tight ship this festive season stocking up the new Coca Cola Zero and other products for the online retailer in Manesar.

Amazon India is the only e-commerce site to have introduced F&B in their e-store.

Foreign direct investment (FDI) by multinational food processing companies has shot up to $2.14 billion in the country between April and October 2013, and FRQWLQXHV WR LQFUHDVH VLJQLÂżFDQWO\ The Indian retail market, currently estimated at $490 billion, is project to grow at a compounded annual growth rate of 6 per cent to reach $865 billion by 2023.

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The opportunities in food and grocery retail in India are immense, given that it constitutes about 69 per cent of India’s total retail market, according to panel members at the seventh Food and Grocery Forum India.

The food processing sector is growing annually at 7.2 per cent compared with SHU FHQW LQ DJULFXOWXUH IRU WKH ODVW ÂżYH years, ending 2013.

Foreign direct investment has also been LQFUHDVLQJ VLJQLÂżFDQWO\ DW WKH UDWH RI DYHUDJH LQĂ€RZ RI PLOOLRQ IRU years ending 2011-12. In 2012-13, it was $401 million. The exports were increasing at the rate of 20.4 per cent per annum.

UK-based Tesco is chalking out expansion plans, even as most global retail majors like Walmart are waiting for

20 www.agronfoodprocessing.com a positive signal from the Narendra Modiled central government before moving ahead with their plans for the Indian multi-brand retail sector. The company, in equal partnership with the Tata group’s Trent, is working on opening six to eight new stores in Maharashtra and Karnataka XQGHU WKUHH RI LWV IRUPDWV WKLV ÂżQDQFLDO year Walmart will replace three of the wholesale stores set up by French group Carrefour in India with its own. Carrefour had in July announced it was exiting the India market. It has only a small Walmart KDG ÂżQDOL]HG D GHDO ZLWK WKH ODQG RZQHUV concerned for long-term leases to take up Carrefour stores in Delhi, Jaipur and Agra. However, the American chain refused to comment on “rumors or speculationâ€?. Walmart has said it would expand its number of cash and carry or wholesale stores in India to 50 in the next IRXU WR ÂżYH \HDUV

United Kingdom Three concepts are currently shaping trends in grocery retailing in the UK: convenience stores; discounters; and online sales. 2013 saw strong expansion in the number of convenience stores RSHUDWLQJ LQ WKH 8. FRQÂżUPLQJ WKH GHYHORSPHQW RI D WUHQG ZKLFK ÂżUVW emerged in 2012 as UK consumers are

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now less likely to make major weekly grocery shopping trips, preferring instead to make smaller weekly grocery shopping trips and topping up their grocery stocks during the week by shopping in local small independent grocers and convenience stores.

This change in shopping behaviour helps to reduce food waste, thereby saving consumers money as disposable income levels continue to fall in the UK as ULVLQJ LQĂ€DWLRQ DQG VWDJQDWLQJ VDODULHV amidst challenging economic conditions continue to dictate consumer behaviour to a large degree. In addition, the rising price of fuel has made out-of-town retail locations, which are most likely to be hypermarkets, less appealing to many UK consumers.

The number of convenience stores outlets operating in the country increased by 3% during 2013, the third strongest growth rate in grocery retailers in 2013 behind discounters supermarkets.

Discounters are a category which is rising from a much smaller outlet base. Growth in convenience stores continues to be fuelled by the activities of the leading retailers in the channel, some of which have opened numerous new outlets, with many of them announcing further plans to continue opening new outlets in the near future.

WORLD RETAIL During 2011, Wm Morrison announced WKDW LW ZRXOG EH RSHQLQJ LWV ÂżUVW convenience stores under the M Local fascia, with the number of such outlets rising to 12 by the end of 2012. During 2013, the company acquired 62 outlets from other retails, all of which are set to be converted into M Local outlets.

Overall, grocery retailers in the UK is a highly concentrated category, with the four leading players Tesco, J Sainsbury, Wm Morrison and Asda accounting for 59% of total retail value sales in 2013, a proportion which remained static from 2012, although the proportion of total grocery retailers value sales accounted for by these four players combined has consistently expanded over many years.

In a category which was characterized by modest growth towards the end of the review period, if any single retailer expands its value share, this can come only at the detriment of other players.

The UK’s grocery retailers are operating in a very challenging trading environment dominated by short-term promotional activities, mainly through coupons but also Sainsbury’s Brand Match and Tesco’s Price Promise programmes, which reduce the need for consumers to shop around as they are able to determine the best price much more easily. At the same time, many of the UK’s leading grocery retailers have expanded their consumer bases and although Waitrose is reporting stronger growth than its competitors, a trend which is being fuelled by the introduction of lower-priced product ranges, at the other end of the price spectrum, discounters such as Lidl have reported that much of its growth in recent years has been derived from the launch of its Deluxe private label range, which offer premium delicacies such as Beef Wellington and Caviar at low prices.

Growth in convenience stores in the UK is expected to remain positive in both the short term and the longer term. Over the forecast period, convenience stores is expected to record the second strongest constant value growth in grocery retailers, increasing at a CAGR of 2%, while the number of convenience stores operating in the UK is also set to increase at a CAGR of 2% as the country’s leading grocery retailers are rapidly moving into convenience stores, while the channel’s

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21 www.agronfoodprocessing.com

existing leading retailers are expanding their outlet networks.

This is part of the trend under which cashstrapped UK consumers are increasingly avoiding large weekly shopping trips in large format outlets in out-of-town locations as they attempt to save money on fuel as well as avoiding food waste.

At the same time, the UK’s convenience VWRUHV DUH H[SHFWHG WR EHQH¿W IURP WKH ULVH of online grocery retailing as many UK consumers are expected to be reluctant to order fresh produce online, preferring instead to purchase it from local grocery retail outlets.

United States For the past 25 years America’s grocery shopping habits have been dominated by the “supercentre”. Many thought the dominance of massive, out-of-town stores – mainly owned by Walmart – would kill local supermarkets.

But something is changing. This year Kroger, the US’s largest supermarket chain, will pass $100bn revenue mark, despite having no presence overseas.

This local chain has now enjoyed 43 consecutive quarters of growth. Walmart has taken note and is trying to get back

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into smaller, urban supermarkets after spending years trying to kill them off.

There was a generation of shoppers who were fairly comfortable with a long, weekly shopping trip, It was like the early days of America, with people going to market day once a week. But today’s harried consumer wanted more convenience and to spend less time in the aisles.

The result has been an increase in the number of options available to consumers.

Where once they had two or three local competitors, now they have four.

Wal-Mart Stores Inc remained the largest grocery retailer in the US with 25% value share of overall grocery retailers followed by Kroger Co with 8%. WalMart’s value sales grew by 2% in 2013 and the company continued to reduce its mass merchandising locations in order to increase the number of hypermarkets and a variety of smaller locations. WalMart’s smaller formats include Walmart Markets, Walmart Express stores and Walmart on Campus locations. These stores are all designed to serve locations that are not suitable for Walmart Supercenter locations.

The most important factor driving growth over the forecast period will be the

effects of segmentation on consumers. $IÀXHQW FRQVXPHUV ZLOO FRQWLQXH WR look for unique offerings from grocery providers. Upscale offerings from delis, produce, seafood and meat offerings are expected to increase as consumers look to purchase local, organic and non-environmentally damaging foods.

These foods are all premium items that command a higher price and draw more discerning customers. In order to attract the dollars of these consumers, retailers will have to continually differentiate themselves through other services and a higher level of service.

China To the UK’s beleaguered supermarkets, China may look like a gold mine. The country’s grocery industry became the world’s largest in 2012, and, according to the Institute of Grocery Distribution, reached US$1tn last summer, more than three times the size of the UK’s.

Yet the market is fractured and highly competitive. While western companies such as Walmart, Tesco, Metro and Carrefour have been operating in the country for years, if not decades, they’re increasingly vying with a cohort of local

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chains, discount shops and convenience stores for customers who would often rather shop online. “The top 10 or 12 companies represent less than half of the market,â€? according to WKH ÂżUP 0LQWHO 0DQ\ IRUHLJQ FKDLQV DUH expanding into second, third and fourthtier cities, far from the bright lights and saturated markets of Beijing and Shanghai. Yet even there, supermarket chains are struggling. Local competition LV ÂżHUFH WKH HFRQRP\ LV VORZLQJ DQG e-commerce is on the rise. In 2013, Walmart, Carrefour and Tesco saw their mainland expansion slow by 27%. :DOPDUW VKXW GRZQ ÂżYH EUDQFKHV All of these chains have realized they really need to localize and understand their market. It’s not about covering as much of the country as possible; it’s about adapting to the regions you move into. Some regions demand DPSOH VXSSOLHV RI OLYH ÂżVK IRU H[DPSOH others can’t be without certain types of vegetables. Convenience stores are proliferating in pedestrian-friendly cities such as Shanghai; hypermarkets remain WKH PRGHO RI FKRLFH LQ WUDIÂżF FKRNHG Beijing.

China Resources Enterprise continues to lead grocery retailers in 2013, with a 3% share of retail value sales (RMB120.5 billion). Applying the multi-format strategy, China Resources has developed

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in hypermarkets, supermarkets and convenience stores, while it also operates the franchise model. In 2013, the company had 4,109 outlets, which covered almost every province in China.

Moreover, it is actively looking for merger and acquisition opportunities.

For instance, in August 2013, China Resources Enterprise acquired an 80% share of Tesco China Co Ltd’s business.

This helped it to consolidate its leading position in grocery retailing via a 16% increase in retail value sales.

A 6% constant value CGR is expected in grocery retailing over the forecast period.

Growth will mainly be driven by the rising purchasing power of consumers and further expansion of modern channels, especially in lower-tier cities.

0RUHRYHU WKH JRYHUQPHQWœV WZHOIWK ¿YH year plan aims to boost the economy via domestic demand. This should encourage robust and healthy growth in retailing, including grocery retailing. In 2018, however, grocery retailers’ share of retail value sales in retailing is set to fall to 33%.

Japan Tesco is one of several foreign supermarkets to have tried and failed to succeed in Japan’s notoriously FKDOOHQJLQJ UHWDLO PDUNHW 7KH ¿UP pulled out of Japan in 2011 after

spending eight years and £250m attempting to woo Japan’s picky shoppers customers and navigate the country’s labyrinthine distribution system. Japan’s retail market, the second-biggest in the world, includes myriad supermarket chains, some of which operate only a handful of stores.

Despite the fragmentation, a battle for control was emerging amid the DUULYDO RI QHZ SOD\HUV DQG D ÀXUU\ of mergers and acquisitions, an expert on Japanese consumer trends. Japan’s biggest seller of food is now 7-Eleven, while the biggest supermarket chain, Aeon, has taken advantage of the regionally diverse food supply system by opening a string of local subsidiaries.

The market is far from impenetrable, however. Walmart, the only “everyday low pricing� operator in Japan, has forced domestic rivals to keep their prices low where it operates stores. Costco, with 20 stores nationwide, has proved a success, offering prices comparable to those found in the US. Tesco’s foray into Japan was frustrated, in part, by consumer idiosyncrasies.

While bogof promotions are rare, individual supermarkets launch special deals every week, prompting shoppers to switch loyalties in search of a bargain.

Conclusion 'HVSLWH WKH ÂżQDQFLDO GLIIHUHQWLDWLRQ RI wealth in the continents the food retail industry is almost equally spread between $PHULFDV (XURSH DQG $VLD 3DFLÂżF 7KLV is due to food production surpluses in North America, Australia and Western Europe that the global food market is close to equilibrium.

The global food retail industry grew by with compound annual growth rate &$*5 RI RYHU ODVW ÂżYH \HDUV WR reach a value in excess of $5.5tn. The greater amount of food is being sold by Supermarkets and Hypermarkets, with the distribution share of over 50%.

Growth in this industry has been and is expected to be primarily driven by GHPDQG LQ WKH $VLD 3DFLÂżF UHJLRQ DQG this region is supposed to remain the

23 www.agronfoodprocessing.com fastest growing market. This is due the Chinese and Indian demand for food.

In the recent time (beginning of 2014) the Food and Agriculture Organisation (FAO) noticed that the price of food is declining globally. World food prices fell in May 2014 for the second month in a row, which was associated largely with the reduction in the cost of dairy products, cereals and vegetable oils.

Despite the drop in the price the industry is expected to grow in value as the increased demands for food in fast developing countries as well as the increasing demand for biofuels in European countries are fuelling the increase in volume of food products.

The performance of the food retail industry is forecast to accelerate with an anticipated CAGR of IRU WKH ¿YH \HDU SHULRG – 2018. Major players within the market are looking forward the increasing sales expected over next few years.

Vol. 09 Issue 12 October 2014

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Indian food export boom targets African markets

I

ndia became the world’s seventhlargest exporter of agricultural products in 2013, overtaking Australia, according to the US Department of Agriculture (USDA) In terms of net exports, India is now the world’s sixth-largest supplier, with net exports double those of the EU28.

The Indian government’s support for both production and exports has contributed to a rapid growth in shipments, which are increasingly destined for developing countries, including Africa’s least-developed nations such as Rwanda.

India has in turn become a very important player on the global market, especially for rice, cotton, sugar, and buffalo beef. In addition to these products, India has also become a sizeable exporter of soybean meal, guar gum, corn, and wheat, as well as a diverse range of other products.

India’s export growth over the past decade has been the highest of any country, with an annual rate of more than 21%. In comparison, Brazil’s annual exports grew by 15% over the past decade, China’s rose 12%, and the

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US increased by 9%, USDA data shows.

India’s farm exports to date in 2014 have remained roughly at last year’s record level. From January-May, rice exports were up 10%, compared with this time last year, cotton up 2%, bovine meat (buffalo) up 18%, and wheat up 75%.

Soybean meal, guar gum, and corn exports, however, are down from the same period last year.

One of the drivers behind India’s export growth has been the dramatic growth in government supports provided to agriculture, particularly for wheat and rice. %DVHG RQ RI¿FLDO VRXUFHV WKH 86'$ )RUHLJQ $JULFXOWXUDO 6HUYLFH RI¿FH LQ New Delhi estimates that the Indian government’s total support for agriculture has risen from $68 billion in 2009/10 to $85 billion in 2013/14.

Furthermore, the new government budget recently released indicates that support is likely to reach a new record high in 2014/15, despite the election of BJP Prime Minister Narendra Modi, with his more free-market economic and political orientation.

In addition to subsidising irrigation,

AGRI EXPORT electricity, and fertilisers, which boosts production for many export crops such as cotton and sugar, the Indian government provides direct price support to wheat and rice, among other commodities.

The Indian government purchases rice and wheat directly from farmers at minimum support prices (MSPs). The MSPs for wheat and rice have increased VLJQLÂżFDQWO\ RYHU WKH SDVW VL[ \HDUV ZLWK rice up 75% and wheat up 40%, despite government reforms.

These surging MSPs have contributed to ever-expanding production and booming government stocks. Exports of these grains have in turn grown, in part, as a result of the government release of these stocks on the domestic market, which lowers prices, making Indian supplies more competitive.

Open market sales depress wheat prices more than rice prices due to the volume differences. Exports have also been bolstered, in the case of wheat, through direct exports by the government from government stocks at prices below acquisition and transport costs.

Exports have been particularly strong to least developed countries (LDCs), with India becoming the top supplier in 2013 with USD5.2 billion and with a rapidly growing agricultural trade surplus with these nations of USD2.4 billion.

The leading LDC markets for India are in South Asia but exports to Sub-Saharan Africa are on the rise, nearly quadrupling RYHU WKH SDVW ÂżYH \HDUV India exports agricultural products to roughly 40 LDC markets, with impressive growth in nearly all over the past few years. Leading LDC markets include Bangladesh, Benin, Liberia, Senegal, Nepal, and Yemen.

2YHU WKH SDVW ¿YH \HDUV ,QGLDœV VKLSPHQWV to LDCs have grown at more than double the rate of Indonesia’s (314% vs. 133%), the second-fastest growing exporter to LDCs. By comparison, exports from the US to LDCs over the same period increased just 28%.

Agricultural trade growth with LDCs has certainly not been a two-way street.

India enjoys a very large agricultural trade surplus in these markets, exporting more than USD5 billion in 2013, while importing only USD1.9 billion.

Indian exports to LDCs have grown

25 www.agronfoodprocessing.com more than 300% over just the past four years while imports have increased only 20%. India enjoys a surplus in the vast majority of LDC markets, with the largest trade surplus in Bangladesh. India also has sizable and growing surpluses with several Sub-Saharan African countries.

India is a major exporter of cotton, soyabean meal, maize, and sugar to LDCs. The increase in Indian government support for rice and wheat has driven up production and stocks, despite supply disruptions when there are arbitrary bans. As a result, these grains now lead all products in export growth to LDCs, soaring from USD83 million in 2010 to USD2.4 billion in 2013.

Wheat exports, for example, have EHQHÂżWHG IURP GLUHFW H[SRUW VXSSRUW in the form of open market sales from government stocks, which have led to increased available domestic supplies, lower prices, and, ultimately, greater wheat exports. ,Q WKH ,QGLDQ ÂżVFDO \HDU $SULO March), the government released 5.8 million tonnes of government-owned wheat to the market. That amount is H[SHFWHG WR JURZ VLJQLÂżFDQWO\ LQ WKH FXUUHQW ÂżVFDO \HDU

Rice Higher support prices for rice and wheat, as well as other types of direct support, have spurred production, stocks, and exports. From 2011 to 2012, India doubled total rice exports to LDCs in just one year, becoming to the world’s largest rice exporter, a position it has maintained since 2012.

Furthermore, the Indian government currently holds more rice in stocks than the total combined exports last year by the other leading suppliers: Thailand, Vietnam, Pakistan, the United States, Burma, and Cambodia.

Indian rice exports have become increasingly important to Sub-Saharan Africa. Not only may the rice market in Benin be affected by the surge in rice imports but neighboring Nigeria has reportedly seen large-scale illegal imports from Benin that have circumvented Nigeria’s high import duties, due to porous borders. Senegal has also seen a surge in low-priced imports from India.

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In fact, dozens of the LDC markets have experienced very rapid growth in Indian rice shipments, which overall have increased from USD78 million in 2009 to USD1.8 billion in 2013. This increase in Indian exports has come at the same time as these countries are seeking to increase their own production for rice for greater VHOI VXIÂżFLHQF\ Export bans can affect LDCs that are net food importers. India has frequently used exports bans, particularly for wheat, rice, and cotton, over the past several years to control internal prices. India has also used export restrictions for a number of other commodities including pulses, vegetable oils, sugar, and onions.

The Indian government has shown little hesitation in shutting off exports if it believes that domestic prices are LQFUHDVLQJ DQG LW ZLOO EH PRUH GLIÂżFXOW WR procure supplies at the minimum support price. Export restrictions on rice by major global suppliers, including India, in 2007 were important factors leading to record global prices in 2007 and 2008.

Rwanda India’s critics also believe much of the export surge has been boosted by the food security programme that it is now vigorously defending at the WTO. Rwanda’s trade minister, Francois

AGRI EXPORT Kanimba, said his country has seen a surge in food imports from India at improbably low prices. This has complicated Rwanda’s own efforts to build food security, despite an impressive average agricultural growth rate of 4.9% per annum since 2000, following recovery from a bloody civil war in the mid-1990s.

Two-thirds of the Rwandan labour force works in agriculture, and coffee and tea remain its most valuable exports, while rice production has risen over recent years.

Agricultural commodities from India such as rice and sugar had been reaching Rwanda “at such low prices [that] you are left wondering if these are really global market prices, simply explained by the competitiveness of the Indian economy,â€? Kanimba told the Financial Times. ,Q DQ DWWHPSW WR ÂżJKW EDFN 5ZDQGD increased the taxes on rice imports in March following the example of other African countries such as Nigeria.

6R ,QGLD PD\ LQFUHDVLQJO\ ÂżQG WKDW LWV traditional allies might not continue to support its battles with Washington on world farm trade reforms, particularly when it chooses to behave like one of those large developed food exporters it so often lambasts.

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ORGANIC TREND

The Organic Oasis

T

he organic food products are those made entirely from natural substances, which in turn have been grown eschewing the use RI DUWLÂżFLDO FKHPLFDOV IHUWLOL]HUV DQG pesticides.

Although nascent, the Indian organic food market has begun growing rapidly, according to a yes bank report in 2012, it was estimated at Rs 1,000 crore ($170 million) - of which Rs 700 crore came from exports - and is growing at 30 to 40 per cent annually.

India has 4.43 million hectare under organic cultivation with a total organic FHUWLÂżHG SURGXFWLRQ RI WRQQH LQ comparison, the US organic foods market is worth $26 billion, the European, $10 billion.

Organic farming has thrived in India since ancient times, with the Indian cow – “kamadhenu�, providing the natural fertilizers and other inputs.

In the decades post-independence

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however, the soaring population increased dependency on food imports.

A self reliance policy propagated in the WKLUG ÂżYH \HDU SODQ KHUDOGHG D thrust on domestic farm production and our scientists rose to the occasion by introducing high-yielding varieties which were heavily dependent on chemical fertilizers and pesticides.

However this shift also brought along with it many ill-effects, resulting in many farming communities across India. It is thus important to shift back to the traditional organic farming and promoting organic and health foods.

The government of India also recognized this and has initiated norms for organic production and farming known as the national programme for organic production (npop), which are now accepted worldwide.

Organic agriculture According to codex Alimentarius (FAO/

WHO), organic agriculture is a holistic production management system which promotes and enhances agro ecosystem health, including biodiversity, biological cycles and soil biological activity.

The word “organic� refers to the way farmers grow and process agricultural products in the natural way, such as fruits, vegetables, grains, dairy products and meat. Organic farming practices are designed to encourage soil and water conservation and reduce pollution.

Farmers who grow organic produce and meat do not use conventional methods to fertilizer, control weeds or prevent livestock disease. for example, rather than using chemical herbicides, organic farmers may conduct more sophisticated crop rotations and spread mulch or manure to keep weeds at bay.

International federation of organic agriculture movements (IFOAM) is the worldwide umbrella organization for the organic movement. The principles of

29 www.agronfoodprocessing.com organic agriculture serve to inspire the organic movement in its full diversity and guide ifoam’s development of positions, programmes and standards. the principles are ethical statements and formulated to inspire action.

Organic agriculture is based on the principle of health, ecology, fairness and care. in particular, organic agriculture is intended to produce high quality, nutritious food that contributes to preventive health care and well-being.

In view of this it should avoid the use of fertilizers, pesticides, animal drugs and food additives that may have adverse health effects.

Global organic market The growth in global organic food and beverages market is driven by increasing DZDUHQHVV DERXW KHDOWK EHQHÂżWV RI organic foods which has led to increased organic farming in the world. the global organic food and beverages market is expected to grow from $ 57.2 billion in 2010 to $ 104.5 billion in 2015 at an estimated CAGR of 12.8 per cent.

In 2010, Europe had the largest share in the global organic food and beverages market with revenue of $ 27.8 billion.

Germany is the biggest consumer in Europe with a share of 32 per cent of organic food and beverages in the region, while the Asian organic food market is expected to grow at an estimated CAGR of 20.6 per cent from 2010 to 2015.

Japan leads the Asian countries in terms of organic food consumption with nearly 54 per cent of the share in 2010. Fresh produces (fruits and vegetables) are the highest selling organic food categories with 37 per cent of the organic foods segment in terms of revenue.

In 2014, the global

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organic food market has a value of USD 100 billion, an increase of 60 per cent since 2009.

Indian organic market It is estimated that 65 per cent of the country’s cropped area is organic by default, as small farmers have no choice but to farm without chemical fertilizers and pesticides which they cannot afford.

According to International competence centre for organic agriculture (ICCOA) approx 1.5 per cent of all agricultural acreage in India is expected to be organic FHUWLÂżHG DQG WKURXJK LWV VWURQJ RUJDQLF export programme, India will hold 2.5 per cent of the global market.

The off-shore demand for organic food market is one of the major drivers of organic agriculture in India, due to relatively increased returns with lesser input costs.

The current size of the market for organic foods in India is pegged at about Rs. 1,000 crore, with a huge untapped potential.

The organic food market in India is expanding at a staggering rate of 400 per cent every year according to a report published by confederation of Indian industry (CII) but the farmers are unable to realise the full potential of the crops grown with natural fertilizer.

It is because they are marginalized by the government which extended maximum support to corporate entities.

ORGANIC TREND Empirical data gathered from about nine lakh farmers across the country by scientist proved that the difference in yields of organic and conventional V\VWHPV RI DJULFXOWXUH ZDV MXVW DERXW ÂżYH per cent. The cost of production came down by 10 to 15 per cent and returns were higher by at least 10 per cent.

Farmers were able to achieve better yields but they struggled in marketing the organic products due to the lack of government support. Post-harvest and supply chain issues bothered the farmers and the government rarely came to their rescue.

There is need for a major shift in fertilizer usage from NPK to organic manures and chemical-based pesticides which have high concentrations of heavy metals, to eco-friendly substances.

The rising costs and inability of farmers to sustain the present levels of production were issues of concern around the world and the only long-term solution was organic farming.

Healthy India Organic products, which until now were PDLQO\ EHLQJ H[SRUWHG DUH QRZ ÂżQGLQJ more consumers in the domestic market. $ZDUHQHVV RI WKH QXWULWLRQDO EHQHÂżW RI these products has resulted in more land coming under organic farming. Although health is the key reason for growing GHPDQG RWKHU LQFLGHQWDO EHQHÂżWV VXFK as better taste and better environment are also driving growth.

There is also a growing awareness of the dangers of consumable food grown with the aid of chemicals.

Food contaminated by chemicals or grown from geneticallyPRGLÂżHG VHHGV DQG planting material is unhealthy as compared with

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31 www.agronfoodprocessing.com naturally grown food. Organic farming does away with these unhealthy, shortterm “production boostersâ€? and brings into picture a diverse, healthy and sustainable crop production system. :KLOH FHUWLÂżFDWLRQ LV PDQGDWRU\ for exports, products for domestic FRQVXPSWLRQ DUH PRVWO\ XQFHUWLÂżHG This is because most producers are either small or marginal farmers, small co-operatives or trade fair companies.

The small farmers, scattered across the country, offer an incomplete product range that are mostly available as a small or local brand.

Organic retail market 7KH EXON RI FHUWLÂżHG RUJDQLF IRRG VDOHV currently happens either in organic specialty stores (including non-food chain stores that specialize in crafts and handloom fabrics), or in modern supermarket chains. While a few organic stores have been around for longer, there has been a wave of new store openings since 2010. Most supermarkets and modern retail chains started stocking organic products only recently, and in many stores the organic product range is still limited. The growth rates that are reported by organic retailers are impressive, ranging up to 300 % at times.

In addition to organic stores and supermarkets, a variety of other retail channels has emerged over the past few years. For instance, online retail and home delivery are picking up fast.

This enables more consumers to access organic products, as organic stores are scattered across large cities with high WUDIÂżF YROXPHV DQG LQDGHTXDWH WUDQVSRUW infrastructure.

Another innovative approach, communitysupported agriculture and consumer cooperatives are trying to bridge the widening gap between rural producers and urban consumers.

Most stores in India sell only packaged, dry organic food products. organic fresh produce – fruits and vegetables – is not as readily available, because many retailers avoid the risks of selling these highly perishable products under uncertain market conditions.

Organic producers in India lack access to separate facilities for transport, storage and processing of organic produce. These

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ORJLVWLFDO FKDOOHQJHV PDNH LW GLI¿FXOW WR EULQJ D UHOLDEOH ÀRZ RI IUHVK SURGXFH WR urban consumers and it is also one of the reasons that drive up the prices of organic produce.

Organic in India is still a small niche market, hence, at present there is not a VXIÂżFLHQW QXPEHU RI SURGXFHUV WR PHHW the growing demand in the cities.,coupled with inadequate transport infrastructure, lack of storage facilities and high losses, this brings up the cost of organic produce.

At the same time, many organic farmers do not have access to organic markets and are forced to sell their produce in conventional outlets, losing out on the premium. As the product range in the organic sector is still limited compared to conventional food, most organic stores do not sell exclusively organic but also a number of conventional and “natural� products.

At present, even though adequate supply is the more important bottleneck, lack of awareness on the part of consumers is another obstacle that needs to be addressed in order to sustain the growth of organic sales.

Conclusion Notwithstanding the fact that highyielding varieties of seeds will need chemical fertilizers for increasing farm output; and agrochemicals will be needed in abundant quantities to protect the crop output; thus helping in food security and providing food to the growing million across the globe; naysayers

ORGANIC TREND of organic farming would also collude to the fact that given a choice any consumer ZRXOG GHÂżQLWHO\ OLNH WR HDW SXUH chemical-free food.

Similarly, prolonged and continuous use of organic products will result in the human body developing a natural LPPXQH V\VWHP WR ÂżJKW GLVHDVH 6RPH of this is given in the famous agriculture treatise by sir albert howard at www. journeytoforever.org.

An episode of the serial “satyamev jayate� aptly raked up the issue of harmful effects of agrochemicals usage and emphasised the use of organic foods and its healthy effects on human body The fact that a large number of stock keeping units available in retail are available in organic option is a compliment to the fact that organic segment is here to stay and is booming by the day.

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SAFETY DELIMA

FSSAI

Sentinel or Slayer

By Firoz H Naqvi The FSSAI menace FSSAI came into the existence to protect consumer’s right for having good quality foods but somehow it has become a menace for the food industry, it is becoming a force to hinder business among the raw material and food ingredient suppliers.

According to the food processing and Allied industry, FSSAI has stalled the industry’s business to a great extent and many companies have stopped any further development for fear of availability for ingredients.

Punaam Dabre, Export - Import Executive, Givaudan India, believe that, FSSAI is killing the food industry. She said that, it is true that food ingredients and its raw materials are part of food

Vol. 09 Issue 12 October 2014

product and has to go through sampling however there should be some time OLQH ¿[HG WR JHW WKH UHSRUWV DV ZHOO DV clearance-which is not at all in existence in case of FSSAI. Hence many importers are not able to meet the deadlines and most of new launches of the clients are totally disturbed, she added.

Customers have now started doubting the food industry’s credibility and many have started black listing for untimely supplies or non supplies. In fact many companies and customer who had launched products and spent a lot of money have been left stranded just because of the inability to supply ingredients required by them, said Prakash Saghvi, Vice President-FIMSIA & Director Delta Nutritive.

Dhiren Kanwar, President FIMSIA &

Country Head Puratos, India, added on that, earlier food was regulated casually and it was mostly left to the ethics of the manufacturer and supplier to adhere to quality standards. With the implementation of the new rules, as in any regulatory scenario, it is bound to take up some time. However, over regulation and rules which are out of sync with current market needs do create constraints in business and trade. So it is not the regulation but the implementation that needs to be improved.

The situation created by Fssai is becoming quite grim. In the last 3 to 4 years the food ingredients and additives business has been hampered and gone down due to the draconian behavior of the Food safety agency.

33 www.agronfoodprocessing.com Labelling issue Food Safety and Standards Act of 2006 that came into effect in 2011, does not allow stickers to be pasted on imported food products. Imported packaged food labels must list all ingredients used in the product, along with nutritional values in English. The names of the manufacturer, address and the country of origin must be displayed on the product in the prescribed format.

The role FSSAI is to encourage and foster a business environment rather than control and choke the system, said Dhiren Kanwar. “We are part of the world marketplace and need to be agile to respond to customer needs. Fssai needs to understand that we can upgrade ourselves only by aligning rules with the international community as well as equal implementation for all� he added further.

The Food Safety & Standards Act, 2006 is applicable to all food products including those that are imported into India. Here regulations do not allow sale of chocolates that contain vegetable fat. As per FSS Act, Rules & Regulations, ‘Chocolate’ LV GHÂżQHG DV D KRPRJHQHRXV SURGXFW obtained through an adequate process of manufacture from a mixture of one or more ingredients like cocoa beans, cocoa nib, cocoa mass, cocoa press cake and FRFRD GXVW FRFRD ÂżQHV SRZGHU LQFOXGLQJ fat reduced cocoa powder. Product may be with or without additions of sugars, cocoa butter, milk solids including milk fat.

However, the chocolates shall not contain any vegetable fat other than cocoa butter.

Mahesh Morde, Director, Morde Foods Pvt. Ltd said, “The Indian manufacturers have been barred from using different cocoa powders of different hues and FRORXUV GXH WR DJH ROG VSHFLÂżFDWLRQV WKDW prohibits use of such powders as it cannot be imported or manufactured in Indiaâ€?

It is important to recognize the difference between the retail products which go to the customers directly and is meant for direct consumption and the ingredients/ additives which are meant for food LQGXVWU\ ZKR PDNH WKH ÂżQLVKHG SURGXFWV “The solution we foresee is to remove the provision of mentioning nutritional content table, green or red label dot, the requirement of provision of standard metric quantity to be complied with legal metrology act, removal of need of NOC FHUWLÂżFDWH ,Q IDFW 06'6 FHUWLÂżFDWH RI DQDO\VLV DQG VSHFLÂżFDWLRQV RI LQJUHGLHQW VKRXOG EH VXIÂżFLHQW´ UHYHDOHG 7LUWKD Gala, Sr. Executive - Nutrition and Regulatory Affairs, Roquette India Pvt. Ltd. These labeling regulations are proving to be detrimental to the food processing industry as imported food items worth crore have not been given the green

SAFETY DELIMA signal by FSSAI due to incorrect labeling.

With the festival season on the threshold, food importers are concerned about the losses they might suffer as the imports continue to remain at custom warehouses.

Moreover, some importers have paid in advance for these food imports.

As per Punam Dabre, labelling is an integral part of a food product package.

Standard labelling done by overseas suppliers gives details of Exporter , Importer , Product, Net weight , Gross weight Mfg date, Best Before date and origin. These details are enough to understand about the shipment. However she added that if product is directly consumable, which can be sold in open market (Direct consumable Product) immediately after clearance, we must follow FSSAI rules. ³+RZHYHU IRRG LQJUHGLHQWV DQG ÀDYRXUV labelling should not be mandatory because we are not going to sell them in a open market or not going to put them on a shelf of departmental stores.

Normally we bring shipments in tonnes and once cleared take them to our factory , we do some processes and then send to the end client with their required labelling , In such cases FSSAI labelling is of no use�, further added M s

Dabre.

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SAFETY DELIMA

34 www.agronfoodprocessing.com Labeling issue has enhanced the concern of importers as American and European suppliers do not print customized labels for India. They have to apply stickers which are against the Indian norms, which in turn are not allowed as per Fssai regulations, stated Prakash Saghvi.

According to Mr Chetan Purohit, Operation Manager, Sensient India, import of food ingredients has become GLI¿FXOW DV WKH ODZV DUH QRW LQ V\QF ZLWK the international regulations. He further added on that the foreign entity cannot know or understand the Indian regulation, and it’s important that the food safety authority of India understand this.

Roughly, between 400 to 500 containers of food ingredients like canola oil, olive oil and olives, chocolates, liquor, seafood, herbs and other ingredients required by the catering and food industry have not been cleared by the FSSAI.

Dire straits A regulatory body’s insistence on adhering to obscure regulations about the labeling of imported food, oil and liquor has held up consignments worth some

Rs.25,000 crore at ports, forcing several major brands and groups to either shut shop or cut back on imports.

Among the items worth crore that are stuck at ports due to steps taken by the Food Safety and Standards Authority of India (FSSAI) are wines, premium liquors and perishable items such as cheese and seafood, say importers. The importers pointed to the unusual steps taken by the FSSAI, which comes under the health and family welfare ministry, such as its insistence that all imported containers of canola oil should be labeled “rapeseed oil - low erucic acid�. As a result, consignments of canola oil have been stuck at ports since December last year.

Tirtha Gala said that Fssai initial intent was to ensure safe food for consumer. And this intention should have gone beyond safety too. “They should also look at the other aspect of setting standards which they have not done. Our standards are old and the worlds have moved beyond.

They spirit of the act is to ensure safety and encourage innovation by complying with global standards�.

India needs to become a manufacturing hub of world class standards. Unless we don’t upgrade the standards, it will EH GLI¿FXOW WR IRVWHU LQQRYDWLRQ DQG EH competitive in the global scenario.

Also new instructions from the Food Safety and Standards Authority of India (FSSAI) on labeling of imported food and alcohol have sent city hoteliers and restaurateurs into a tizzy.

Consignments of black olives, a few brands of olive oil, a popular Swiss chocolate brand, a number of gluten-free products, nachos, Southeast Asian sauces and noodles have either been rejected or stalled at various ports causing massive ÂżQDQFLDO ORVV ,I WKLV FRQWLQXHV 'HOKLÂśV dreams of becoming the gourmet capital may soon end.

According to FSSAI’s data from January 2014 to June 2014, as many as 165 imported consignments were rejected at the Delhi airport mainly due WR ÂłQRQ UHFWLÂżDEOH ODEHOLQJ GHIHFWV´ DQG “non submission of product approval FHUWLÂżFDWH´ ,Q WRWDO FRQVLJQPHQWV were rejected in ports across the country with a majority due to labeling issues.

121, 1st Floor, Rassaz Multiplex, Station Road, Mira Road (E), Dist Thane - 401 107, Maharashtra

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SAFETY DELIMA

35 www.agronfoodprocessing.com The Scotch Whisky Association, whose 51 members account for over 90 per cent of the global sales of the spirit, registers its strongest sales in India in the festive season that begins in September.

However, it has cut back on imports after consignments worth about Rs.70 crore were not cleared because they failed to comply with labeling rules. Diageo and Pernod Ricard have suspended shipments to India completely, importers said.

Fssai has generated a negative wave and is now functioning as slayer rather than a sentinel. This food safety authority was formed to guard the food industry and upgrade it. Unfortunately it turned out to be the destructive force for the sector causing much misery to food importers, food processing industry and many customers.

The FSSAI has been insisting that imported foods and beverages should conform to domestic regulations on labeling and packaging even though they already comply with Codex, the harmonized global food standards developed by FAO and WHO. Stung by the FSSAI’s actions, Lindt & Sprungli has decided to shut down. The Swiss chocolate major acted after two of its consignments were sent back by FSSAI purportedly because they did not comply with the new rules.

Initially, the FSSAI insisted that ingredients should be listed in descending order of composition by weight or volume. Though Lindt complied with this regulation in January, its consignments were again rejected because a new regulation stated chocolates with vegetable oil or fat could not be imported.

Many importers blame FSSAI chief K. Chandramouli for the current state of affairs. They claimed the FSSAI’s actions could impact the NDA government’s efforts to showcase India as a country that was open for business without unnecessary red tape.

Law and regulation There have been a number of instances where the dispute between the importers and Fssai reached the Court of Law. Companies like StarBuck had to go to the court to get their food products from the claws of FSSAI and even the wine importer had to knock the doors of the law.

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After Dalmia Continental Private Limited, a leading importer of canola oil, petitioned the Bombay High Court against the FSSAI’s directives regarding packaging and labelling regulations, the court ruled on September 16 that the “said label prima facie appears to be in complete conformity [with regulations] and the action of rejecting the said consignments is absolutely arbitrary”. The high court further directed FSSAI to clear the detained consignments and listed the case IRU ¿QDO GLVSRVDO RQ 1RYHPEHU 'XULQJ the hearing, a two-judge bench described the FSSAI’s stance as “unreasonable” and said the regulatory body’s lawyer had been unable to explain the logic of its orders.

But Mr Chetan of Sensient puts in a very practical idea that, before the court there has to be the tribunal / appellate mechanism to redress the issues of the aggrieved party. It will reduce business load of the courts and bring easy and fast outcome.

While Mr Kanwar, thinks that the absence of an arbitrator is causing the aggrieved parties to go directly to the court. Non DYDLODELOLW\ RI VHQLRU RI¿FLDOV WR DGGUHVV these issues is also being cited as one of the reasons. These cases are attracting a ORW RI QHJDWLYH SXEOLFLW\ DQG ZLOO GH¿QLWHO\ affect the attraction of investment in the food industry, as is being projected by the new Prime Minister.

Globally Codex Alimentarius is accepted and implemented for food safety so why India is enduring with FSSAI incompetent regulations and law. Things need to be done as soon as possible or the global picture of Indian food Industry will

be demeaned and many international companies will close their doors to India.

If Codex accepted it will facilitate business better and will help in import as well as exports, said Mr Purohit.

FSSAI in their appendix of standards for various categories of products and raw materials has limited standards. Since they do not have an exhaustive list of standards they should adopt CODEX standards. This adaptation should eliminate many issues with standards and bring uniformity with world standards, enlightened Mr Mahesh Morde.

Counteract Union Food Processing Minister, Harsimrat Kaur Badal, has taken up the issue of import consignments lying at various ports and airports with the Health Minister as FSSAI, which handles food related issues, works under the Ministry of Health & Family Welfare.

Badal denied the fact that she wanted the FSSAI to work conjointly with the Health Ministry and the Food Processing Industry.

However, she was emphatic about the fact that she would like the FSSAI to be less arbitrary, more transparent and a little more ÀXLG LQ LWV DSSURDFK VR WKDW WKH VWULQJHQW regulations do not harm the growth of the food processing industry. She agreed that while food safety standards need to be maintained; regulations should not discourage food importers as that could lead to stagnation in the industry.

The matter has now been brought to the notice of the PMO.

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The Food Processing Influencers Introduction The food processing industry has gained wider acceptance across India and is poised to grow manifold in the near future. Food processing is on the radar of many investment engines as processing sectors like dairy, bakery products, ketchups and gourmet segment present a slew of attractive opportunities.

This industry provides direct employment to 1.6 million Indians and constitutes a sizable share (~9-10%) of the overall manufacturing output by value. Unlike other manufacturing, food processing not

Vol. 09 Issue 12 October 2014

only adds to the economic value but also OLIWV WKH QXWULWLRQDO DQG FDORULÂżF YDOXH RI the produce. The size of the Indian food processing industry can be estimated at USD 150 billion and is expected to grow at a CAGR of 10% to reach USD 200 billion by 2015.

An estimated 15 private equity and venture capital funds deals, with a total value of USD 285 million, were clinched in 2011. The huge consumption potential, as well as the ample supply of raw materials, provides the backing for such deals.

VIRTICAL GROWTH

Currently, a large part of food processing happens primarily on the commodity side. However, as the nutritional needs of the Indian consumer increase, alongside a shift towards an urban lifestyle, it is expected that value-added products will witness high growth. Apart from rapid urbanization, the Indian food processing LQGXVWU\ LV VHW WR EHQHÂżW IURP VXFK RWKHU promising growth drivers as changing lifestyles, increasing disposable income, rising health consciousness, growing culture of nuclear families, greater presence of women in the workforce and higher nutritional needs.

The almost year-round availability of fresh products across the country, combined with consumers’ preference for fresh products and freshly-cooked food, stands out as a huge challenge against the acceptance of processed food.

In 2010-11, the export of commodities related to Indian food processing clocked a remarkable USD 9 billion. Foreign 'LUHFW ,QYHVWPHQW RU )', LQĂ€RZV DOVR

37 www.agronfoodprocessing.com supported the attractiveness of the sector, touching the USD 2.7 billion mark for the period from April 2000 to November 2011. The domestic consumption of processed food is expected to grow by 10-15%, while the export market is also seeing high potential and is expected to growth at a CAGR of 18-20%.

The major markets for Indian processed food are Europe, the Middle East, Japan, Singapore, Thailand, Malaysia and Korea. The food processing industry, which was primarily driven by exports in the past, is now witnessing rapid growth in the domestic market as well.

In addition to the changes on the demand side, there are also changes occurring on the supply side with growth in organized retail, increasing FDI and new product introductions supporting the industry’s growth. Moreover, the central government has given priority status to all agro-processing businesses. *RYHUQPHQW LQFHQWLYHV LQ WKH ¿HOG RI mega food parks, cold chain, research and development, etc., supported by exports, are also playing an important role in promoting food processing, but come with their own challenges.

By mapping the perishability, processing level and organized segment penetration it can be seen that there is a clear need for improvement across the supply chain to uplift the penetration of organized SURFHVVLQJ 6SHFLÂżFDOO\ LQ NH\ VHFWRUV such as Fruits & Vegetables, Dairy, Seafood and Marine Products, the perishability index is high and supply chain improvements represent enormous investment opportunities.

Analyzing the high wastage level clearly reveals that the extant state of our infrastructure is incapable of coping with crop surpluses. This leads to price reduction due to logistical challenges impairing market access. Food processing is one of the solutions poised to solve crop surplus issues as perishability can be countered through processing and price realization can be maintained while assuring quality.

Apart from infrastructural challenges, the cost associated with middlemen also emerges as one of the major obstacles in India’s food processing arena. The middleman tends to be one of the most important links between farmers and

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food processors. If policies eliminate middlemen from the supply chain, IDUPHUV ZLOO EH WKH ¿UVW WR LQFXU KXJH losses followed by food processors and retailers. At an operational level, middlemen play a very crucial role in the success of any perishable’s supply chain.

Supply side constraints are more crucial to the processed food value chain and need immediate attention. There is also a clear need for effective and implementable action points as these constraints will result in blockages in the food processing growth story.

This segment concentrates on the different, crucial enablers of the food processing industry. The progress and importance of, and the challenges associated with, these enablers directly impact the industry’s development. $PRQJ WKH YDULRXV LQÀXHQFHUV WKH PRVW crucial ones are cold chain, packaging and retailing.

In this feature we are going to see FHUWDLQ VHFWRUV WKDW KLJKO\ LQĂ€XHQFH WKH development of the food industry. Cold chain, packaging and retail are the main pillar of the Indian food industry. One IDFWRU LQĂ€XHQFHV WKH RWKHU ,I &ROG FKDLQ is essential for food processing, then packaging is the main branch and retail the backbone.

Cold chain Currently, India has close to 27 million metric tons of cold storage capacity with close to 5,800 cold storage units.

VIRTICAL GROWTH

However, over 65% of this capacity is used solely for potato storage. The cold storage market in India can be estimated at ~ USD 2.5 billion and has grown at an annual rate of 15% over the past 4-5 years.

The growth in the cold storage market has been driven by a shift from single product cold storages to multi-product cold storages which have higher utilization. Multipurpose cold storages DUH VXFFHVVIXOO\ UHDSLQJ EHQHÂżWV IRU investors and gaining popularity among users such as food service players, pharmaceuticals and F&V transporters.

Similarly, in terms of transportation, more than 3/4th of the temperature-controlled transportation capacity is utilized only for milk and allied products.

The refrigerated transportation capacity in India has grown at a rate of 5-6% per annum and is expected to reach 38,000 trucks by 2015, with capacity addition expected in the non-dairy segment.

The cold storage market in India can also be split into three major categories on the basis of players: ‡ ,QWHJUDWHG 3OD\HUV DUH SULPDULO\ companies which not only have storage capabilities but have also developed back-end capabilities through connections with farms.

These companies are capable of value addition though grading, sorting and primary processing. They primarily concentrate on product procurement, processing, storage and distribution

38 www.agronfoodprocessing.com

‡

‡

and outsource their transportation requirements. This segment has only evolved in the past 3 to 4 years and is seeing increased interest from such corporate sector entities as Adani Agri Fresh, Bharti Field Fresh, Fresh and Healthy (Concor) etc. Most of the integrated players are currently focusing on fruits like apples, bananas, mangoes, besides imported products.

Standalone Cold Storage Companies mainly thrive by storing potatoes and high value fruits like apples, pears and different berries.

Most of the standalone players also act as wholesalers in the product categories they store. This segment is highly unorganized with more than 2500-3000 players. Most of these standalone players have single product cold storages with a capacity of 4,000-4,500 metric tons.

3/ 6HUYLFH 3URYLGHUV FDQ SURYLGH end-to-end cold chain solutions including warehousing and transportation. They can store and transport multiple product categories and some of them can also provide value addition in terms of sorting, grading, bulk breaking, etc.

Vol. 09 Issue 12 October 2014

Most of these are presently working with large FMCG companies and pharmaceutical companies to provide cold chain solutions.

The most advanced arrangements evolving in the cold chain sector are 3PL service providers. These Arrangements allow cold chain service clients (retailers/ food service players/ food processors) to deploy single point storage, sorting and distribution responsibilities. Further, these also help in better management and better concentration on core business activities. These players are also incorporating additional services like cash collection and reverse logistics in their service offerings.

The importance of cold chain needs no validation; perishability has a direct impact on business economics in the food space and cold chain can bridge the gap. The cold chain market SUHVHQWV VLJQLÂżFDQW RSSRUWXQLWLHV IRU international and Indian companies primarily on account of the various growth drivers on the demand as well as supply side. The cold chain sector has seen a few positive improvements in the recent past but addressing the full potential offered by the sector is still a long way away.

VIRTICAL GROWTH

Food Packaging Food packaging is one of the major VDOHV LQĂ€XHQFHUV 0RUHRYHU LW HQKDQFHV quality and extends the shelf life of food products. It acts as a consumer platform for product detailing in terms of nutritional content, traceability and FHUWLÂżFDWLRQ $W WKH PDQXIDFWXUHUÂśV HQG it helps draw the customer ‘s attention towards that packaged food.

The packaging of food products & FMCG grabs the customer’s attention, highlights the product advantages and delivers brand authenticity. Indian food processers are investing intensively in state-of-the-art packaging infrastructure & technology.

Recent technologies and improved packing materials are rapidly capturing the organized segment of the Indian food processing sector. Currently, the majority of the organized food processing segment has established or is in the process of installing “hands free packaging� which is synonymous with “aseptic packaging�, which serves as the primary level of improved packing in the food processing space and ensures the safety and security of consumable products.

Apart from a preliminary level of improved packaging, the industry is also

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40 www.agronfoodprocessing.com witnessing innovations at secondary level ZKLFK DGGUHVV PRUH UHÂżQHG WHFKQRORJ\ and machinery. Some of the recent trends under the secondary level of improved packaging cover:

Perforated packaging Their usage is limited to the organized DQG JRXUPHW UHWDLOHUV VSHFLÂżF WR KLJK value perishable Products, e.g. lettuce, strawberries, dwarf beans and niche bakery products like pies & pasties.

The material facilitates the products’ natural respiration mechanism and secures freshness while maintaining the equilibrium of nutritive contents.

From the processors’ point of view, there is an array of packaging materials available in the market.

The range varies as 1/4/8/32/160/360 holes per square inch of packing material, depending on the perishability and nature of the product. More perishable products like vegetables correspond to fewer holes per sq. inch vis-Ă -vis more holes per sq. inch for bakery products.

Killer paper The innovative killer paper technology can overcome food poisoning issues, especially in meat products involving FKLFNHQ ÂżVK RU UHG PHDW 7KH SDFNLQJ material works using the mechanism of LQQRYDWLYH VHQVRU SDFNDJLQJ ÂżOP ZKLFK changes its color from yellow to blue to indicate the spoilage of packaged content.

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Further, killer paper helps preserve IRRG E\ ÂżJKWLQJ WKH EDFWHULD WKDW FDXVH spoilage.

The paper contains a coating of silver nanoparticles, which act as powerful antibacterial agents. The commercial usage of killer paper for food product packing is not feasible as yet. Firms dealing with this technology are working on costing and perhaps, changing the shape of silver nanoparticles will be an affordable compromise.

Odor absorbent packaging In addition to preserving the freshness of packaged food, odor absorbent packaging is another new direction. The usage RI ÀDYRU DQG RGRU DEVRUEHQW ¿OPV DQG sachets reduces the permeation of aroma RU ÀDYRU DFURVV WKH FRPSRQHQWV RI packaged food. The usage of the technology is not restricted to perishables but also expanding towards FMCG products.

VIRTICAL GROWTH merchandising value for the product when displayed on the retail shelf.

Food packaging therefore, is being seen holistically as a system providing all the factors for improving the product’s life as well as enhancing its brand appeal. Marketers take a lot of interest in designing the appropriate packaging size and system. There is a very thin line between customers and consumers and marketers have to satisfy both these entities. The former help in converting sales while the latter enable convenience and repeat purchases.

On the development curve, India has seen a slew of advanced packaging solutions but this phase is yet to become widely established. Attractive packaging can generate curiosity in the minds of the consumers, motivating them to try out the product. It is thus correct to say that WKH SDFNDJLQJ DFWV DV WKH ÂżUVW WRXFK SRLQW for the customer.

Food & Grocery Retailing Ripeness Indicators This digital technology helps in monitoring the ripeness of fruits and other packaged food products. The technology is still in testing stage and it’s too early for Indian processors to utilize the same.

'HÂżQLQJ WKH UROH RI IRRG SDFNDJLQJ will primarily involve protecting the quality and freshness of the product in addition to ensuring convenience and safety. It also has to provide and enhance

Food and Grocery, or F&G, retailing serves as the link between consumers and manufacturers. In recent years, these retailers have witnessed a clear paradigm shift (need-convenience-comfort-quality premium) in the Indian consumer’s habits.

Today, the consumer is more aware and prefers a comparison based product purchase. The expectations from organized retailers in terms of product knowledge, offers and overall ambience have increased as the same cannot be expected from the unorganized shopkeeper down the lane. New categories are penetrating the sector and being accepted by the large consumer base.

Organized retail largely depends on food retailing in India, but the reverse is not true. Food retail is not dependent on the organized segment but the growth thereof is directly proportional. The expansion is mutual but food retail is also absolute within its own orbit. The mutual growth of food retail & organized segment has IRPHQWHG ³IRRG VSHFL¿F RUJDQL]HG UHWDLO´ formats -the previous year witnessed an appreciable growth in such formats.

Outlets like Godrej’s Nature’s Basket and Le Marche Sugar & Spice have grabbed a hold on the Delhi NCR market. Serving to a niche segment, almost ~80% of the

41 www.agronfoodprocessing.com space in these outlets is allocated for food and grocery articles.

Going into the nitty-gritty of organized retail formats, food retailing has served as the backbone in the past and will continue to do so in the future. With an estimated market of USD 343 billion, the food and rocery segment is the single largest retail category and accounts for nearly 70% of the total retail market (2012). The organized retail segment for food & grocery is estimated at USD 10 billion and accounts for 30% of all organized retail.

For organized formats, India serves as a land of opportunities with a population in excess of a billion, and supporting a sizeable high & middle income segment.

The opportunity may be huge, but so are the challenges. Presently, a food retailer deals with high rentals and a lack of skilled manpower. Apart from these operational challenges, the wide geographical spread and varied local preferences also play a crucial role in satisfying the consumer’s needs across the nation.

Some small-scale retailers have unlocked the local preference puzzle; however they are unable to capitalize on the expansion opportunity. The wide demographics and democracy are key Indian assets but catering to this demography is the biggest challenge confronted by food retailers.

The huge consumer base is in actuality a challenge as the majority is in the rural sphere. Percolating traditional supply chain practices, patchy logistics and undulating support infrastructure adds to the problems in this space.

In a typical product value chain, food retail is considered as the endpoint.

However, it is time to view it as an initiation point so as to enable better future interventions for food retail. Food retailers in India deal with an array of challenges and the need of the hour is to seek “comprehensive steps” towards holistic solutions, as a “single challenge at a time” approach will not serve the purpose.

Conclusion After cricket and movies, food is the next big activity which unites India. Within the food industry, thereis no disagreement that food processing is the next big revolution waiting to happen. It can lead

Vol. 09 Issue 12 October 2014

to inclusiveness, support better farm income, reduce wastage levels, utilize crop surpluses and improve nutritional and economic returns while ensuring national food security.

From the demand side, the higher awareness level among consumers is diluting the preconceived notions regarding the unhealthy nature of processed food day by day. Consumers are proactively accepting processed and packaged food as healthy food; even diet charts have included many processed foods as potent ingredients.

Increased spending power and lower availability of food preparation time has supported the growth of the industry.

Processed food has gained more shelf space in a majority of retail formats; this is poised to increase further in future.

Also, processed food is not restricted only to imported segments in a retail store but has also spread to staples, FMCG, F&V, Dairy, Frozen & Meat categories.

Retailers are stepping out and extensively ODXQFKLQJ VSHFL¿F SURFHVVHG IRRGV DV private labels.

The wide acceptance is boosting the TXDOLW\ RI RIIHULQJV 7KH EHQH¿WV associated with processed food still need to percolate to the consumer level; this will enable consumption across the masses. Improvements and better reach of food retail will be the key driver to speed up the penetration of processed food.

From a supply perspective, it can be clearly said that there is need for adequate infrastructure across storage, transportation and processing. There is

VIRTICAL GROWTH

a clear need for technology-intensive storage and transport infrastructure followed by an improvement in existing storage capabilities.

7KH ,QGLDQ JRYHUQPHQW KDV LGHQWL¿HG food processing as one of the priority sectors and enabled assistance across processing, preservation and research VWUHDPV 7KHUH DUH VRPH VSHFL¿F processed food sectors such as dairy, bakery and breakfast cereals witnessing a higher growth rate and higher acceptance among consumers.

These have seen ample activity and investment opportunities across procurement, processing and distribution levels. Apart from these brighter segments, there is a range of other non-core processing support functions offering numerous opportunities.

These include supply chain intervention, infrastructure support, logistics and transportation facilities followed by third party account management. To sum, India as a nation is shifting towards consolidation, improving from a situation of excessive wastage.

Food processing is an imperative and will sustain India’s growth story. There are ample investment opportunities across supply and demand interventions.

India as a country can feed other nations, the production parameters are in place and food processing can act as the delivery interface. The stage is all set to invite food processors from different geographies: buying power is elevated and infrastructure is improving. For food processors & consumers the good times have just begun.

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Vol. 09 Issue 12 October 2014

43 www.agronfoodprocessing.com

14-16 Nov 2014 Bombay Exhibition Centre

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Vol. 09 Issue 12 October 2014

Food Processing & Packaging Systems

SPICY SPICES

44 www.agronfoodprocessing.com

Y Prabhavathi, N T Krishna Kishore, Dr. Seema

Analysis of supply chain of Spices in India: A case study of Red chillies

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Abstract India ‘Land of spices’ is the major producer and exporter of chillies. $Q HIÂżFLHQW VXSSO\ FKDLQ HQVXULQJ remunerative prices to the producers for their products and to deliver maximum satisfaction to the end consumers for the price they pay. Two major supply chains KDYH EHHQ LGHQWLÂżHG :KLFK UHYHDOV WKDW VXSSO\ FKDLQ ,, LV PRUH HIÂżFLHQW WKDQ WKH supply chain I because more value goods are delivered to consumer from producer at low marketing costs. The study shows that farmers who bring good quality chillies to market prefer Supply chainII to supply chain-I. But farmers who bring poor quality, discolored chillies, are preferring supply chain-I. Delay in payment after sale, problems in fare price evolution process, collection of excess commission and availability of loan through bank on produce important problems that farmers are facing in this market.

SPICY SPICES

45 www.agronfoodprocessing.com Index Terms Supply Chain of Chillies, Marketing Spices, Price spread, Price discovery

INTRODUCTION India’s Agro climatic conditions provide scope for cultivation of 63 different spices, making India the ‘Land of spices’.

India is the largest producer (76 lakh MT), consumer (73 lakh MT) and exporter (3.8 lakh MT) of spices in the world.

India’s share in world trade of spices is 3.8 lakhs MT i.e. 48%. The area under spices is 57 lakh hectares. In India the southern states grow spices like pepper, cloves and cardamom. Southern states of India together produce 30percent of cardamom and 25-30% pepper of the world. Gujarat and Rajasthan grow the spices like cumin, coriander, fennel and fenugreek. They alone produce 80 % and 90 % world production in respect of coriander and cumin. The states of Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Maharastra, and West Bengal, are major producers of onion, garlic, mustard and chillies. Orissa, Tamil Nadu, Andhra Pradesh, Mehalaya, Assam and Himachal Pradesh grow turmeric and ginger. Kerala contributes 96 percent of the total black pepper production in the country. Karnataka and Kerala alone grow 90 percent of small cardamom.

Chillies are pungent fruits of capsicum annum L and capsicum frutescence. It is also known as red pepper or dry chillies.

Majorly used as condiment or culinary. It is specially used for its pungency, spicy taste, besides the appealing colour it adds to the food. It is used in pickles, sauces, ketchup, essences, oleoresins and it is an inevitable ingredient in Indian dishes. An alkaloid capsaicin is extracted from chili. which has medicinal value, besides its richness in vitamin C. Average per capita consumption in India ranges from 50gms60gms per day.

The major producers in the world are India, China, Pakistan, Morocco, Mexico, Turkey and Bangladesh. Chillies are grown in all regions of India. The major Producers are Andhra Pradesh, Maharashtra, Karnataka, Tamil Nadu, Orissa and Rajasthan contributing 2/3 rd of India’s production. And Andhra Pradesh alone contributes 46% for production making it the largest producer in India.

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Andhra Pradesh has a production of 5.58 lakh MT area from 1.74 lakh hectares, which accounts for 26 % percent of area and 54 % percent of production in the country. In Andhra Pradesh it is grown in all the districts namely Warangal, Khammam, Guntur, Karimnagar, Prakasham and some other districts.

About 65% of the total chillies produced in India are traded from six major markets, Guntur, Warangal, and Khammam in Andhra Pradesh, Raichur and Bellary in Karnataka, and Jalgoan in Maharastra and even exported to Srilanka, Bangladesh, Malaysia, USA, Nepal, Indonesia, UAE, Italy from these markets. $Q HI¿FLHQW VXSSO\ FKDLQ HQVXULQJ remunerative prices to the producers for their products and to deliver maximum satisfaction to the end consumers for the price they pay. This motivates the producers to increase the production and productivity on the one hand and can generate additional income and employment to their farm family. In this view an analytical study of supply chain of chillies, to know the problems associated with marketing of chillies and preferences of producers towards different supply chains.

METHODOLOGY Present study was carried out in three major production centers namely Khammam, Warangal, and Guntur GLVWULFWV RI $QGKUD 3UDGHVK ZLWK VSHFL¿F objectives of supply chain analysis of chillies. A combination of purposive VWUDWL¿HG DQG UDQGRP VDPSOLQJ WHFKQLTXHV

were used for market functionaries, district, market and farmer selection required for the purpose of study.

Personal interviews were conducted with growers belonging to different strata and marketing intermediaries with specially designed questionnaire for all the stakeholders. Besides data relating to quantity purchased, price paid/received, costs incurred were collected from the market functionaries.

FINDINGS AND DISCUSSIONS The major functionaries involved in supply chain of chillies are:

REGULATED MARKET: The market committee is the major institutional unit establishes under the APMC act of the state to establish regulated market, which also creates and develops infrastructural requirements for the market and see that there is no malpractices during the marketing process.

PRODUCER Producers play a major role in marketing because important practices like drying, cleaning, grading and packing are done by them. which play major role in supply FKDLQ EHFDXVH WKHVH SUDFWLFHV LQÀXHQFH the price of produce, which is ultimate goal of any marketing process .

COMMISSION AGENT Commission agents are licensed brokers in regulated market, who take 3% commission from farmers an sale

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Vol. 09 Issue 12 October 2014

SPICY SPICES

47 www.agronfoodprocessing.com as storage is main constraint for them, because cold storage facilities are not available at their place of business as wholesalers are scattered unlike traders.

PROCESSORS:

the produce at good price, by treating a competitive environment between the (traders ,wholesale and processor) purchasers during the price evolution process. Commission agents are not directly involved in trade process but facilitated trade process by arranging weighing machines, hamalli, transport and credit to farmer.

TRADER/ EXPORTER Traders/Exporters are the purchasers who participate in trade. They handle the produce for a short period on behalf of distantly located wholesalers, exporters and for processors. They play very important role in chillies trade then other crops because the quantity sold by the wholesale and exporter are in small quantities but throughout the year . But chillies require cold storage facilities to retain their quality (colour). These traders purchase in behalf off wholesalers and exporters by taking in hand order and store them in cold storages nearby market yard and facilitate year around supply.

WHOLESALERS: There are the functionaries who purchase large quantities and sell them in bulk to retailers. There are only very few wholesalers take part who belong to local areas. For distant wholesalers depend on traders for purchasing these products

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Processors are the important functionaries in supply chain of chillies because they take up different value addition process like chilli powder ,making olieoresin extaction, pigment extraction, pickles etc.

In Warangal most of the processors are small and main process is chilli powder making.

Few branded companies like Priya foods Ltd, ITC, MTR are also located but they have direct tie ups with farmers. In case of shortage they also come for procurement through regulated market. The Processors located at distant places depend upon traders for procurement of chillies on behalf of them as these traders procure WKH VSHFLÂżF TXDOLW\ DV SHU WKH UHTXLUHPHQW of processor and arrange for cleaning, grading and transporting to the place of processors which is added advantage to them. Some local processors who process chillies to powder and pack on behalf of some exporters.

RETAILER: 5HWDLOHU ZKR ÂżQDOO\ GHOLYHU FKLOOLHV DQG chilli powder from the wholesalers and processors and sell in small quantities required to the consumer. These retailers are scattered all over and are the ultimate contact points with consumers.

The chilli growing farmers bring the produce into the market after well drying, grading and packed in gunny bags. The quantity packed in gunny bags vary from 40kg to 70kg per gunny bag. The farmer bring their produce to the market by his own transport facilities as large farmer do, or through common transport arranged by a group of farmers of the village

hired vehicle as in case of marginal and medium farmers do. This produce after arriving to the market is stacked to lots at shop of the authorized commission agent. The commission agent arranges for hamali (labour)who help the farmers in stacking their produce into different lots as per different grades, in weighing the procuce and also show the produce by cutting the gunny bags to the traders who is willing to purchase.

The general method of sale process involved is open auction method. When few number of traders assemble at the commission agent shop the commission agent starts the auction by price by quoting a starting price which is decided by him.

In negotiation with farmer, previous day closing price in market and considering the market arrivals then individual trader quotes the maximum price to pay to own the produce. After the auction process, if any quantity of chillies is not sold due to high prices or poor quality the commission agent negotiates with farmer for little lower price. If the farmer agrees, the commission agent keeps the produce for auction otherwise the farmer has an option to store the produce in the cold storage until he gets a good price and disposes the produce when he gets good price.

Dg_ ]QZ_b ce``\i SXQY^c QbU YTU^dYVYUT Y^ dbQTU _V SXY\\YUc Y^ 9^TYQ* SUPPLY CHAIN-I In this supply chain the movement of produce from producer is through WUDGHU ZKROHVDOHU UHWDLOHU DQG ÂżQDOO\ to the consumer. The trader purchases the chillies through open auction at Regulated Market, in presents of commission agent. The trader avails a credit facility from the commission agent who in turn pay to the farmers after receiving payment from trader.

Generally there is a period to 30 days for payment during which no interest is charged either to trader or commission agent due to which farmer are generally at loss. Here no major value addition takes place. The raw chillies are just sold from intermediary to other in variable quantities as per requirements. Only in few cases grading and cleaning takes place.

SPICY SPICES

48 www.agronfoodprocessing.com SUPPLY CHAIN-II In this supply chain the produce is purchased from the producer by the processor in Regulated market through open auction method. Unlike supply chain I the processor pays immediately for the produce purchased. So farmers at advantage when compared to supply chain-I The processor adds value to the raw chillies by different value addition processing and change the produce in to ready to use products like chilli powder and is attractively packed in small quantities as per the consumer choice then their value added products are distributed to retailers as per their RUGHUV DQG WKH\ DUH ÂżQDOO\ UHDFK consumer through retailers.

PRICE SPREAD IN SUPPLY CHAIN I The price spread in supply chain I revealed that the consumer’s rupee was shared as Producer’s share 49%, Trader’ share 6%, Wholesaler’s share 6%, Retailer’s share 13% and marketing costs incurred at all levels was incurred to 26%. Out of the total marketing cost incurred in the supply chain 30% was incurred at Producer level, 25% at Trader level, 18% at Wholesaler level, and 27% at Retailer level.

PRICE SPREAD IN SUPPLY CHAIN II The price spread in supply chain II revealed that the consumer’s rupee was shared as Producer’s share 40%, Processor’s 17%, Retailer’s share 20% and marketing costs incurred at all levels was incurred to 23%. Out of the total marketing cost incurred in the supply chain 28% was incurred at Producer and 28% at Processor’s level.

COMPARISION OF SUPPLY CHAIN I TO SUPPLY CHAIN II The study marketing costs and market margins in supply chain I and supply chain II reveal that marketing cost in supply chain I and supply chain II are 50% and 40% respectively and market margins are 50% and 60% respectively.

Which reveals that supply chain II is PRUH HIÂżFLHQW WKDQ WKH VXSSO\ FKDLQ I because more value goods are delivered to consumer from producer at low marketing costs.

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PREFERENCE OF FARMERS TOWARDS DIFFERENT SUPPLY CHAINS: The study shows that farmers who bring good quality chillies to market prefer Supply chain-II to supply chain-I. But farmers who bring poor quality, discolored chillies, are preferring supply chain-I. The procurers are willing to buy well graded, clean and well dried chillies with maximum of 8-12% moisture, packed in 40Kg gunny bags and rejecting those which are tightly packed that weigh more than 40Kgs of chillies. However, the traders are ready to buy any quality material because they get more bargaining power if the produce is poor in quality, there by more margins.

They supply these materials to many small and unorganized far distance processors, and they also go for grading and repacking of this poor quality material in to 2 or 3 grades as possible and supply them to as per the grades required by their customers.

CONCLUSION 1.

2.

3.

4.

5.

6.

PROBLEMS ASSOCIATED WITH MARKETING OF CHILLIES To identify the problems in the two supply chains, a pre-tested questionnaire was designed.

Separately for identifying constraints producer level, trader level and processor level as they were the important functionaries in two LGHQWLÂżHG VXSSO\ FKDLQV 7KH constraints faced by producers covered in the questionnaire were grouped under ten headings.

DXU bQ^[ gYcU S_^cdbQY^dc YTU^dYVYUT gUbU* 1 2 3 4 5

Poor transportation facilities.

Poor market information Delay in sale of produce.

Poor weighing procedures.

Unfair practices during in open auction.

6 Delay in payments from agents.

7 Collection of excess commission.

8 Lack of storage facilities at market yard.

3RRU ÂżQDQFH IRU ZDUH KRXVH receipts during lean market prices.

10 Lack of facilities for farmers at market yard.

Poor understanding of Volatile 3ULFH ÀXFWXDWLRQV ZKLFK DIIHFW WKH EHQH¿W RI IDUPHUV DQG PLGGOH PHQ DUH EHLQJ SUR¿WHG GXH WR WKLV The Traders take major share in chilli supply chain due to which Producers are not able to get there actual share in the consumer’s rupee.

The present supply chain which is dominated by Supply chain-I is LQHIÂżFLHQW EHFDXVH WKH IDUPHU LV getting a better price for the same quality of produce in Supply chainII. There is no value addition involved in supply chain-I which is the major supply chain at present.

Poor post harvest practices like drying, cleaning, grading, and packaging of farmers are rendering the quality of chillies and not attracting the processor during the open auction process causing loss in the actual price.

Delay in payment after sale, problems in fare price evolution process, collection of excess commission and availability of loan through bank on produce important problems that farmers are facing in this market.

POLICY IMPLICATIONS: 1.

Flow of market information of both domestic and international market prices, taken through forward and back ward integration and best utilization ICT solutions, So that 3URGXFHU ZLOO EH EHQHÂżWHG WKURXJK proper price discovery.

2. Arrangements for training and education of post harvest handling so that producers would meet world food standards and packing standards.

3. Processing units should be encouraged to make the supply chain more organized. $GHTXDWH ÂżQDQFH IDFLOLWLHV VKRXOG be made available at producer level to reduce dependence on non institutional credit, so that producer would get time utility and more bargaining power at open auction process.

49 www.agronfoodprocessing.com

Kellogg’s CEO to meet with United Biscuits

K

ellogg Co.’s CEO will head to London to discuss a purchase of United Biscuits in a deal worth an estimated $3.2 billion, according to the Wall Street Journal.

The deal is not set in stone. United Biscuits is said to be pursuing a “dual-track” to maximize the cash it can raise. Under a dual track a company makes plans for a possible initial public offering while simultaneously preparing to sell the company.

Rival Burton’s Biscuits and Turkish biscuit

Mondelez to invest $90m in new biscuit manufacturing plant in Bahrain

U

S-based Mondelez International is planning to invest $90m to build a new biscuit manufacturing plant in Bahrain.

The new facility, which is part of the company’s efforts to cater to increasing demand in the Middle East and Africa, is claimed to be the company’s most

Vol. 09 Issue 12 October 2014

advanced biscuit manufacturing plant and will be used for its brands such as Oreo, Ritz and TUC biscuits.

Commercial production is scheduled to commence during early 2016. During the initial two to three-year phase, four biscuit manufacturing lines will be operated, with an overall capacity of approximately

BAKERY NEWS company Ulker Biskuvi Sanayi are also VDLG WR KDYH PRYHG WR WKH ¿QDO VWDJH RI bids for United Biscuits.

A Kellogg’s purchase of United Biscuits would make sense on lots of levels.

First there’s the “synergies.” Kellogg, which makes Pop Tarts, already has experience in manufacturing little cakelike snacks like United Biscuits’ Jaffa Cake.

Second, Kellogg is likely impressed with how well rival Nabisco has done with BelVita biscuits, and wonders if it could do the same with United Biscuits’ McVities Digestive biscuits.

And third, as we’ve noted before, little snacks are one of the global food industry’s growth areas and do well in largely untapped markets like the Middle East.

90,000t a year.

“This investment in Bahrain is part of our ongoing supply-chain reinvention plan.”

Mondelez Integrated Supply Chain executive vice-president Daniel Myers said: “This investment in Bahrain is part of our ongoing supply-chain reinvention plan.

“We’re implementing several such initiatives around the world to capitalise on growing demand, while also reducing costs and improving productivity.

“We’re pleased with our progress in regions such as Mexico and India, where we’ve already begun to invest.”

Over the following three years, the company’s supply-chain reinvention scheme is expected to deliver $3bn in gross-productivity savings, $1.5bn in net savings and $1bn in incremental cash.

Mondelez International Middle East area vice-president Vishal Tikku said: “We are investing for the future, and are very grateful to the Government of Bahrain for its long-standing and unwavering support of our investments here.

“We are seeing very rapid growth for our iconic brands across emerging markets, including the Middle East and Africa.”

By the end of the initial phase, the new plant will create around 300 direct jobs and, depending on future investment decisions, has the potential to generate 700 more direct jobs and sustain thousands of indirect jobs.

50 www.agronfoodprocessing.com

Government is working on National Food Processing Policy to reduce wastage

Academic’s Publication Recognised as a Top Twenty Food Book

A

ccording to Food Processing Minister Harsimrat Kaur Badal, the Government is working on National Food Processing Policy to reduce wastage of perishables and improve the supply situation,.

Badal also said agriculture credit should also be connected with food processing sector as the ultimate EHQHÂżFLDU\ LV IDUPHU 6KH IXUWKHU added that, “there is need of some integrated policy for the food processing sector we are working on it with the purpose of reducing the wastage of perishable fruits and vegetables so that we can bring down WKH LQĂ€DWLRQ Badal was speaking at the National Cold Chain Summit organized by CII jointly with Ministry of Food Processing Industries and Ministry of Agriculture and National Centre for Cold Chain Development (NCCD).

Badal added India is the second largest producer of fruits and cereals, third in marine production and has the largest livestock in the world, but still the country is able to process only 2 per cent. “There should be zero tolerance towards waste. Currently, there is Rs 44,000 crore of wastage and unless we work towards removing that, our growth story cannot be completed.

The cold chain capacity of the country is 30 million tonnes, whereas it produces around 200 million metric tonne of products,� she said.

Badal emphasised that the utmost focus should be on reducing the wastage of three main vegetables -onions, tomatoes and potato as they DUH GULYLQJ LQĂ€DWLRQ

Vol. 09 Issue 12 October 2014

FOOD PROCESSING NEWS

A

publication co-edited by University of Wales Trinity Saint David (UWTSD) academic Dr Emma-Jayne Abbots, based in the United Kingdom, has been named one of the top twenty food books by the sustainable food-based organisation Food Tank. )RRG 7DQN LV DQ $PHULFDQ EDVHG QRQSURÂżW organisation focused on building a global community for safe, healthy, nourished eaters. They spotlight environmentally, socially, and economically sustainable ways of alleviating hunger, obesity, and poverty and create networks of people, organisations, and content to push for food-system change.

Food Tank has selected twenty books WKDW HQWHUWDLQ LQIRUP DQG UHDIÂżUP WKH importance of food and agriculture. From sustainable seafood to ethical eating WR ÂżHOG JXLGHV IRU IRRG DFWLYLVWV WKH books highlight innovative and creative methods that are creating a better, more sustainable food system while educating and informing eaters and consumers.

One of the books selected is entitled ‘Why We Eat, How We Eat: Contemporary Encounters Between Foods and Bodies’, which has been edited by UWTSD’s Dr Emma-Jayne Abbots and Dr Anna Lavis from the University of Birmingham. This book explores the intersection between food and body and examines how eating draws together people, places and objects that may never tangibly meet. Its multi-

disciplinary approach to how and why people eat presents a timely and important contribution to current critical debates about people’s food choices.

Dr Abbots has also contributed to two other books in the list, ‘Food Between the Country and the City’ and ‘Food Consumption in Global Perspective’.

Dr Emma-Jayne Abbots is a lecturer in Social/Cultural Anthropology and Heritage at UWTSD’s Lampeter campus. She is a political and economic anthropologist, and her teaching and research interests focus on questions of ecological, cultural, social and economic sustainability; the cultural politics of food; materialities and material culture; the body and biopolitics; and the (re) production, representation and mediation of knowledge.

Dr Abbots has also published on the themes of food safety; food, care, intimacies and kinship; gender and generations; migration and transnationalism; gift and exchange; space and architecture; celebrity chefs; and competitive eating.

Dr Abbots said: “The book addresses a number of critical themes such as food security, health and obesity, and environmental sustainability. It has received excellent academic reviews but this recognition by Food Tank is especially welcome.�

The authors and editors that have contributed to the top-twenty list make up some of the world’s leading experts on food justice and sustainable eating. Food Tank hopes the facts and information in these books will not only inspire people already involved in the food movement but also encourage readers to share and educate others.

51 www.agronfoodprocessing.com

FOOD PROCESSING NEWS

Manipur all ready to tap potential in Food Processing Sector

T

he northeast region is rich in natural resources making it an extremely suitable place for the growth of Food Processing Sector. Recently, a food expo was held in Imphal to encourage entrepreneurs and food processing units and give a boost to the sector.

A large number of food processing units from Manipur recently showcased their produce at Imphal Food Expo held at Iboyaima Shumang Leela Shanglen. Âł, JHW SURÂżW IURP WKLV H[SR DQG DOVR Directors and Ministers visited here and taught us about the use of preserving food/ fruits so we get knowledge from them. So I think it’s very good,â€? said Owner of the food processing unit Naorem Arujayenti Devi. “There are lots of fruits and vegetables

available here but people don’t know how to preserve so it gets spoilt and wasted so I started preserving and made the different items out of it,� added an exhibitor, Vidyalakshmi Devi.

The northeast region produces vast varieties of fruits, vegetables and other crops, making food-processing industry not just an opportunity but a necessity.

Besides reducing wastage of agro products, this will give a huge boost to the state’s economy, if the products are marketed properly.

The government has also been encouraging self-help groups and

entrepreneurs to start their own food processing units.

During the event, loans were distributed

by National Mission on Food Processing 10)3 WR VHOHFWHG EHQHÂżFLDULHV RI WKH food processing programme 2012-13.

There is a huge scope of growth in the food processing sector in Manipur, given the state’s conducive environment for production of fruits and vegetables.

The sector possesses major potential for export and generation of employment as well.

Rs2k cr for food processing planned to be used soon

T

he government will soon come out with guidelines for operationalising Rs 2,000 crore special fund by National Bank for Agriculture and Rural Development (Nabard) to boost food processing industrials and mega food parks, a JRYHUQPHQW RIÂżFLDO VDLG RQ 7KXUVGD\ The Rs 2,000 crore fund announced in the EXGJHW E\ ÂżQDQFH PLQLVWHU $UXQ -DLWOH\ had not taken off due to some issues with regard to utilising the money not just

Vol. 09 Issue 12 October 2014

IRU GLUHFW ÂżQDQFLQJ

by Nabard to food processing industries EXW UHÂżQDQFLQJ DV ZHOO Nabard is basically a UHÂżQDQFLQJ LQVWLWXWLRQ to promote agriculture development.

After discussions with food SURFHVVLQJ DQG ÂżQDQFH ministries and Reserve Bank of India, Nabard has formalised the draft guidelines, which has been sent to the centre for approval.

With government clearing the air on XWLOLVLQJ WKH PRQH\ IRU UHÂżQDQFLQJ DV well, the draft guidelines is likely to be approved shortly. The idea behind this special fund is to make available affordable credit to agro-processing units being set up, especially in designated food parks.

Three mega food park projects in

Khagaria, Bihar, Satara in Maharashtra and Una in Himachal Pradesh have been approved recently. Initially the JRYHUQPHQW SURSRVHG WR VHW XS ÂżYH mega food parks in the country. Several cold chain projects are also being set up.

7KH RIÂżFLDO VDLG D VSHFLDO IXQG ZRXOG EH available for projects in dedicated food parks in the country, mega food parks and designated special economic zones.

The fund would be available for units processing fruits and vegetables, meat, SRXOWU\ DQG ÂżVK ,QGLD ORVHV 5V 40,000 crore worth of fruits and vegetables annually due to rotting, poor logistics and improper handling at the time of harvest. A sizeable percentage of this wastage could be avoided by boosting food processing industries.

Though India is among the largest producers of fruits and vegetables, there is VLJQLÂżFDQW ZDVWDJH UHVXOWLQJ LQ LQDGHTXDWH VXSSO\ IXHOOLQJ IRRG LQĂ€DWLRQ

52 www.agronfoodprocessing.com

MP-CM announces 5- year exemption from mandi fee for food processing units

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hief Minister Shivraj Singh &KDXKDQ VDLG WKH VHHG FHUWLÂżFDWLRQ institutes would be opened at Shahdol, Indore and Jabalpur while an organic research and training centre would be opened in Mandla. He said those setting up factory for food

processing would be exempted from ‘ 0DQGL IHHÂś IRU ÂżYH \HDUV 7KH FRPPLWWHHV comprising farmers would be set up for organic products.

Chauhan was addressing the concluding ceremony of ‘ Rashtriya Jaivik Krishi Utsava’ in Mandla on Monday, said that

FOOD PROCESSING NEWS Madhya Pradesh would carve a niche not only in the country but in the world in the ÂżHOG RI RUJDQLF IDUPLQJ &KDXKDQ VDLG WKH state contributes 40% in organic farming of the country and it is an outcome of the ardor and awareness of farmers of the state. As many as 23 MoUs were also signed in the Krishi Utsava.

The CM said farmers in the state would be given grant on green manure.

Arrangements of counter in every Mandi would be made for organic product. To encourage organic production, a meeting of Jaivik Vikas Samiti would be conducted once in every three months, he said.

Chauhan said Seed Development Corporation would be asked to develop traditional seeds. Arrangements for branding and packaging of organic production would be done. Animal husbandry would be promoted in the state, added Chauhan.

India’s organic food exports stifled by certification Issue

I

ndia’s performance in the organic food export sector remains dismal, despite favourable climatic conditions and a heritage of organic farming.

According to government estimates, the DUHD XQGHU RUJDQLF FHUWL¿FDWLRQ LQ ,QGLD stands at around 4.72 million hectare, which is 2.6% of the total agricultural land of around 182 million hectare in the country. India’s organic food exports account for a mere $224 million, which is about 0.35% of the $64 billion worth global organic food market.

Demand is strong in both domestic and international markets. According to industry representatives, the organic food market in India is growing at around 15% annually while export growth is almost double at around 30%.

States like Sikkim have taken a lead in promotion of organic foods but the sector remains plagued by complicated FHUWLÂżFDWLRQ SURFHGXUHV ODFN RI technology, unavailability of organic pesticides and manure, and lack of processing industries.

However, the immense potential to grow in this sector hasn’t gone unnoticed. It was recently announced that the Ministry

Vol. 09 Issue 12 October 2014

of Commerce is planning to exempt organic processed food exports from bans even if the primary produce of that commodity is subjected to some restrictions. He added WKDW D FUHGLEOH FHUWLÂżFDWLRQ V\VWHP ZLOO help in this. $ZNZDUG FHUWLÂżFDWLRQ SURFHVVHV RQO\ EHQHÂżW WHVWLQJ ODEV DQG WKLUG SDUW\ FHUWLÂżFDWLRQ DJHQWV DQG WKH DGGLWLRQDO costs are passed on to the consumer while farmers continue to get low prices.

Unfortunately, “pure� food is seen as something exclusive when it actually should be the endeavor of the governments across the world to provide healthy food to the people and preserve the environment.

A change in mindset is required to address the problems faced by the organic food sector and it is critical to believe in India and Indian farmers, and make life simple for everyone in the chain with the help of

simple polices.

At present, Organic India helps associated IDUPHUV LQ WKH FHUWLÂżFDWLRQ SURFHVV DQG FHUWLÂżFDWLRQ VKRXOG EH DOORZHG DW WKH producer level. Organic farming and exports from India will remain below potential unless farmers are allowed to certify the products themselves and entrepreneurs are encouraged to valueadd products. Key is to have value addition to products and not focus on EXON H[SRUWV 7KLV JLYHV PDQ\ EHQHÂżWV including better prices.

Encouraging value addition will also go a long way in promoting organic food among farmers and bringing private sector involvement. To do this, companies need to evaluate the global demand and produce value-added organic products instead of shipping raw commodities.

This has helped Organic India. Today, the company has a turnover of around Rs.200 crore, of which around 60% is from exports. The company’s main export comprises value-added products of Tulsi (Holy Basil) which alone accounts for around 40% of the company’s overall sales which is growing at around 30-40% annually.

NEWS

53 www.agronfoodprocessing.com

Markem-Imaje Debuts High-speed, High resolution Thermal Inkjet Solution: the New 1050 Printer The 1050’s high-speed accuracy is due to the precision control of 600 separate ink nozzles, allowing variable dpi from 1 to 600 for optimal printing. The ÀH[LEOH SULQW KHDG FDQ SULQW FRGHV IURP 12.7 mm up to 50.8 mm high.

The 1050 is easy to maintain because it features ink cartridges that combine the printhead and ink, which means no moving parts. It’s simple and free from hassle, with snap-in and -out cartridges, allowing operators to maintain the 1050 with minimal line interruption, and keeping availability high.

The 1050 thermal inkjet utilizes the same easy-to-use 7� touch-screen user interface with intuitive WYSIWYG as other Markem-Imaje products. It is fully compatible with Markem-Imaje’s powerful CoLOSŽ coding software as an option for network control of all Markem-Imaje printers.

About Markem-Imaje

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he 1050 thermal inkjet printer provides an ideal option for customers who seek high resolution codes for general coding, improved traceability and promotional coding at fast-moving line speeds.

Markem-Imaje, a worldwide manufacturer and distributor of product LGHQWL¿FDWLRQ DQG WUDFHDELOLW\ VROXWLRQV has announced the introduction of the 1050 integrated thermal inkjet printer to further complement MarkemImaje’s product offering. The 1050 produces high resolution serialized data and complex 1D and 2D barcodes on fast-moving production lines in the food, beverage, pharmaceutical and other industries. The new 1050 printer is also designed to excel at case

Vol. 09 Issue 12 October 2014

coding in dusty, humid or corrosive environments.

According to Christophe Lopez, Vice President, Sales and Marketing for Markem-Imaje, the introduction of the 1050 thermal inkjet printer is a response to the demands of an evolving industry.

He explains, “Increasingly, customers around the world require serialized SURGXFW LGHQWLÂżFDWLRQ VROXWLRQV ERWK for enhanced traceability as well as the ability to deliver customized product promotional coding in short runs.

That’s precisely what the 1050 delivers.

Thermal inkjet is a proven technology in the marketplace and the new MarkemImaje 1050 offers more, thanks to a system that can produce text, logos and high density graphics as high as 600 x 600 dpi, even at rapid line speeds.�

Markem-Imaje, a wholly owned subsidiary of the US-based Dover Corporation is a trusted world PDQXIDFWXUHU RI SURGXFW LGHQWLÂżFDWLRQ and traceability solutions, offering a full line of reliable and innovative inkjet, thermal transfer, laser, and print and apply label systems.

Markem-Imaje provides global reach to over 40,000 customers with 30 subsidiaries, 6 technology centers, several equipment repair centers and manufacturing plants with the most comprehensive marking and coding portfolio available in the marketplace. www.markem-imaje.com for further information.

Address H-23, Sector-63 Noida 201301, Gautam Budh Nagar(U.P) Ph. 0120-4099570, 4099556, 4099547 Fax-01204099555 Email salesindia@markem-imaje.com Visit

54 www.agronfoodprocessing.com

NEWS

FSSAI’s new mandate puts winemakers in a fix

T

he Indian wine makers are all once again at back foot due to the new Food Safety and Standards Authority of India (FSSAI) QRWLÂżFDWLRQ WKDW PDNHV LW PDQGDWRU\ IRU all foods and alcoholic beverages to list all ingredients used on their label, in Devnagri or English.

The Indian wine industry has so far been working on establishing `wine standards’ for the country. Now even domestic wineries will have to comply with the labelling requirements of FSSAI. Till last year, anyone could get an import-export code and import wines from overseas under an Open General License. Now, all importers have to comply with labeling requirements laid down by FSSAI which mandates that all ingredients used in the production of a beverage must be printed on labels. A product also requires testing in ‘approved labs’. The rule doesn’t apply to single ingredient foods. Alcoholic beverages, which contain additives including colour, water, and preservatives,

should carry such labels, which is not always possible for international manufacturers who consider India a small market.

According to industry sources, close to 50 containers (each consists of around 9,000 bottles) were stopped at the Mumbai port recently because they failed to meet the new labeling requirements of India.

According to industry representatives, there are technical differences in FSSAI rules and Codex. Many spirits in other countries are single ingredient spirits though in India they aren’t considered thus. Winemakers in India argue that since wine is a single ingredient, it should not require any kind of labeling.

According to Jagdish Holkar, Chairman, India Grape Processing Board (IGPB), the board has been in touch with international bodies on this issue and these are of the opinion that since wine is a natural product and is a single ingredient, labelling should not

be emphasised. India imports around 500,000 cases of wine annually.

At present, wines come under the Bureau of Indian Standards. Now, importers KDYH WR UHJLVWHU ZLWK )66$, ÂżUVW EHIRUH bringing wines into the country. However, the new directive has led to confusion in the industry since work has already been in progress on creating a standard labelling format for the industry, Holkar said. “There are around 20 odd parameters which are being considered by the industry, including tolerance levels, ingredients, alcohol content, MRP, manufacturers name and address.

Because of the new label standards, wineries and importers have to report to three enforcement bodies — FSSAI, Legal Metrology and excise departments

Goa Dairy set up its own ice creams plant

G

oa dairy, the premier milk supplier in the local Goan market, has set up its own ice cream plant within the dairy premises at Curti-Ponda which will start functioning from Friday.

Vol. 09 Issue 12 October 2014

Cooperation minister Pandurang ‘Deepak’ Dhavalikar will inaugurate the plant in the presence of the Ponda legislator Lavoo Mamledar.

Earlier, Goa dairy was manufacturing ice cream at the Verna industrial estate on trial basis from January to May. N C Sawant, managing director of Goa dairy, said, “We have milk processing facilities at Curti-Ponda, which caters to the demand of milk and milk products in the state. We KDYH QRZ WXUQHG LW LQWR D IXOO Ă€HGJHG LFH cream plant without seeking any grant or loan from any organization.â€?

He said that the Goa state co-operative milk producers’ union, popularly known as Goa dairy, had invested about 15 to 20 lakh on machinery in January. Now, it has just infused another 75 lakh to start the new ice cream plant, Sawant said.

7KH GDLU\ KDG HDUQHG D SURÂżW RI GXULQJ WKH ÂżVFDO \HDU 2013. The organized ice cream market in India is pegged at 3,500 crore and is growing at 20-25% every year.

There is a big demand in Goa for packaged ice creams and the dairy has planned to produce all types of ice cream, including family packs, SDUW\ SDFNV FXSV FKRFR EDUV NXOÂż dolly, etc. in different favours, Sawant added.

55 www.agronfoodprocessing.com

Arla pushes for industry collaboration to include dairy products in food aid

A

rla Foods Ingredients has stressed the importance of including dairy products in emergency food programmes, and has called for industry collaboration to make it a reality.

The company said that dairy products are usually not included in programmes such

as the UN’s world food programme, which works on tackling food problems in developing countries, because of cost-related concerns.

Arla is currently funding research on WKH EHQHÂżWV RI ZKH\ protein to show that dairy ingredients are affordable and superior because of their nutrition density.

This means they can be used in smaller quantities compared to alternatives such as vegetable proteins.

In addition, dairy ingredients can be used with proteins of other sources to create food aid products that are rich in nutrition.

However, Arla has said that there is a

Govt to ease control on organic food export

T

he Union government would like to move towards lifting a ban on export of organic agricultural products and their derivatives.

On the sidelines of the 4th National Conference on Organic Farming organised by The Associated Chambers of Commerce and Industry of India, A K Tripathy, joint secretary, department of commerce and industries, said, “We are trying that there is never a ban on organic processed food export, even if the primary produce of that commodity is subjected to some restrictions.�

While export of primary organic agricultural produce is allowed, there are restrictions on a host of other commodities, such a pulses and edible oils.

Vol. 09 Issue 12 October 2014

The ban has been imposed primarily because of differentiation in quality VSHFLÂżFDWLRQV DQG WKH ODFN RI D FUHGLEOH FHUWLÂżFDWLRQ V\VWHP

NEWS need for the industry to come together.

Arla Foods Ingredients senior R&D manager Henrik Jørgen Andersen said: “Even though we are an international business, we don’t operate in every UHJLRQ WKDW EHQHÂżWV IURP DLG LQLWLDWLYHV like the world food programme. “Dairy ingredients can be used with proteins of other sources to create food aid products that are rich in nutrition.â€? “This means the global dairy ingredients industry must stand together to make sure we can deliver affordable, high-quality products in every geography touched by these programmes. “Consequently, only if other major dairy ingredients companies join us in this effort can we succeed in persuading the organisers of food aid programmes that our products have a key role to play in the war on hunger.

The company recently showcased its research at the International Whey conference in the Netherlands, where it said that ingredients like whey and permeate are suitable for use in ready-toeat products that are designed to address moderate malnutrition. They are typically produced as a paste that is packed with nutrients and is easy to consume.

³8QOHVV ZRUOG FODVV FHUWL¿FDWLRQ agencies are established, the credibility of India’s organic food exporters would remain in question outside the country. But once domestic standards are made compulsory, the supply of quality goods for exports will also improve VLJQL¿FDQWO\ ´ VDLG 7ULSDWK\ The global organic food market is estimated at $64 billion. India’s share is 0.35 per cent.

Santosh Sarangi, chairman of the Agricultural and Processed Food Products Export Development Authority (Apeda), said: “One major challenge for India is to maintain the LQWHJULW\ RI DQ RUJDQLF FHUWLÂżFDWLRQ system.â€?

Apeda says it is working to expand the portfolio of organic products available for export. It is working to, among other things, add aquaculture, textiles and livestock to the category.

56 www.agronfoodprocessing.com

AGRICULTURE NEWS

Government of India Britannia stresses on need to makes way strengthen Indointo kid’s hearts with a French cooperation in new cookie - agro-processing sector Tiger Butter Krunch

B

ritannia brand `Tiger’ all set to take on mass cookie market.

It makes way into kid’s hearts with a disruptive new cookie Tiger Butter Krunch. This will mark the entry of Britannia Tiger into the main stream cookies segment.

Filled with the wholesome goodness and taste of butter, Tiger Butter Krunch brings alive the credo ‘Makhkhan maar ke’. Packed with essential nutrients like iron, calcium and vitamins, Tiger Butter Krunch delivers a delightful cookie that promises to keep kids going the whole day.

Ali Harris Shere, Director - Marketing, Britannia Industries Ltd. said “There is a unique Tiger inspired design on each cookie which builds brand Tiger’s equity through product design.� “With the launch of Tiger Butter Krunch, delightful butter cookies, brand Tiger is all set to take on the mass cookie market,� he added.

What differentiates Tiger Butter Krunch from others in the cookies space is the coming together of great taste and health. These tasty butter cookies are IRUWLÂżHG ZLWK LURQ YLWDPLQV DQG FDOFLXP That makes it a magical product for both mothers and kids alike. “With Salman Khan as our brand ambassador, the communication will GHÂżQLWHO\ EH FOXWWHU EUHDNLQJ ´ $OL Harris Shere said.

S

Vol. 09 Issue 12 October 2014

mt. Harsimrat Kaur Badal, Minister for Food Processing Industries, Government of India has reiterated the need to strengthen Indo-French cooperation in agro-processing sector during her recent visit to France.

Mrs Badal was in France from 19-21, October 2014 to inaugurate the India pavilion at SIAL-2014 Food Fair being held in Paris from 19-23 October 2014.

Shri Arun K. Singh, Ambassador of India to France, was also present during the inauguration on 19th October, 2014.

The Minister visited the Indian participants at their stalls and interacted with them. Over 120 Indian exhibitors are displaying a range of Indian food products at the exhibition both privately, and under the aegis of ITPO, APEDA, CEPCI, MPEDA, Spices Board, Tea Board and Coffee Board.

SIAL (Salon International de l’Alimentation) is one of the largest food fairs in the world and it is held every two years in Paris. This year more than 6000 exhibitors from 105 different countries are participating and over one million visitors are expected to visit the fair.

The Minister met her French counterpart at the India pavilion. The two Ministers discussed issues of mutual interest and reiterated the strong desire of their respective governments to deepen the existing cooperation in the agroprocessing sector. Minister also interacted with representatives of leading French companies in the Agro-Processing sector including Andros, Bongrain, Roquette and Sodiaal. Minister invited the French companies to take advantage of the large size and growth potential of the Indian market and the abundant availability of a variety of agricultural products by investing in Agro processing sector in India.

Badal Minister delivered the key note address at the 3rd India France Agro Food Conference, organized by the Embassy of India, Paris in collaboration with the India-France Chamber of Commerce and Industry, Paris (CCIFI), which saw participation by over 60 Indian and French food producers, exporters, investors and traders. The theme of the conference was ‘New opportunities for manufacturing in the food processing sector in India’.

57 www.agronfoodprocessing.com

71% of U.S. moms agree: Food and happiness go hand in hand

KRXJKW IRU )RRG VXUYH\ LGHQWLÂżHV trends in food purchasing The majority of U.S. moms (71 percent) believe the foods they eat affect the quality of their lives. By reading more labels, researching ingredients and actively engaging in conversations to

T

inform purchasing decisions, moms are making informed decisions about food in order to help their families lead better lives.

Leading food i n g r e d i e n t company, Chr. Hansen’s Natural Colors Division, commissioned the “Thought for Food� survey to learn what U.S. moms look for in food labels and gauge their perceptions of natural ingredients. While moms rely on personal insight gained from Google searches, news segments and social media

AGRICULTURE NEWS discussions, most of their purchasing choices are made by reading food labels. Âł2QH VLJQLÂżFDQW RXWFRPH IURP WKH survey found 83 percent of respondents wish there were more naturally derived food offerings from U.S. food companies.

This insight drives product development to help our customers meet consumer needs,â€? said Mary Bentley, senior vice president color sales and commercial development, Natural Colors Division, Chr. Hansen. “It’s also interesting to note 80 percent of moms are more likely to purchase a product if it contains naturally derived ingredients, which demonstrates strong purchase intent that will position those products as market leaders.â€? “Findings also revealed U.S. moms are very knowledgeable and active in the natural ingredient conversation,â€? said Bentley. “Our strategy to be Nature’s #1 drove the “Thought for Foodâ€? survey. We KRSH WKDW E\ VKDULQJ RXU ÂżQGLQJV LW FDQ serve as a benchmark for future studies as interest in natural ingredients continues to gain momentum as a leading consumer trend.â€?

Indian Institute of Crop Processing Technology (IICPT) to open its centre of food processing unit in Ludhiana

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he Indian Institute of Crop Processing Technology (IICPT) will open its centre of food processing unit in Ludhiana on the campus of Punjab Agricultural University (PAU), announced union minister for food processing industry Harsimrat Kaur Badal on Friday.

Badal was in the city for the national seminar on ‘augmenting processing and shelf-life of perishable food products’.

After the setting up of food processing unit at the PAU, all kinds of crops and vegetables will be processed here in Ludhiana that will reduce food wastage.

The PAU has also been given land to set up a second food processing unit in Bathinda as well. “My aim is that we come up with such a scheme where a farmer and his family, especially youths, would be involved in all stages, right from sowing to processing to marketing of a particular

Vol. 09 Issue 12 October 2014

product. And here, we are already working on it so that our farmers can become selfreliant,â€? said the union minister. “Now, the PAU has given land for the setting up of Bathinda and Ludhiana centres. Once they start functioning, 3XQMDE ZRXOG EHQHÂżW LQ D ELJ ZD\ DV DOO kinds of crops would be processed here,â€? she added.

The idea of setting up a food processing unit was taken from Maharashtra. Badal shared that during her visit to Maharashtra she noticed that several farmers have collectively set up a separate food processing unit at the same place they do

farming. The best production is sold to the consumers and B grade products are used for food processing, thus they have managed to reduce food wastage.

Further, while addressing to the PAU vice-chancellor Baldev Singh Dhillon, Badal urged him to put an emphasis on organic farming and processing fruits and vegetable into non-alcoholic wines.

58 www.agronfoodprocessing.com

AGRICULTURE NEWS

Potato product companies ask government to remove the 30% import duty

Home Minister pledges agri-based industry for Haryana farmers

RWDWR FKLS IULHV DQG ÀDNH manufacturers have urged the government to waive the 30% import duty on potato to improve supplies and check soaring prices at home.

The demand comes at a time when the JRYHUQPHQW LV FRQVLGHULQJ ÀRDWLQJ tenders for potato imports.

Manufacturers say their stocks of processed potato have almost depleted and they may be forced to shut plants until the new crop arrives in December. “We are requesting the government to waive the 30% import duty,� said .. said Manesh Agarwal, MD at Agra-based Bankey Bihari Ji Food Products, which recently tied up with industrialist Ravi Jaipuria to manufacture French fries under the Farmbell brand.

Agarwal said several manufacturers are in talks with Australian and European suppliers to procure processed potato, adding that the tentative landed price of imported potato will be Rs20-24 per kg depending on the quality compared with the current domestic price of Rs25-30.

Himalaya International, which does contract manufacturing of potato products for Reliance Retail, is also looking for opportunities to import the YHJHWDEOH Âł2XU 86 RIÂżFH LV LQ WDONV ZLWK

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nion Home Minister Rajnath Singh, who was projected as a “messiah of farmers and son of a farmer�, held a rally for farmers of Farrukhnagar, a neglected block of Badshahpur constituency in Gurgaon district. “Today, the sons of farmers are willing to work even as watchmen, or take up any odd job in the city, but are not interested in working as farmers.

(To solve this) We can promote small scale industry and set up units here for industries such as food processing so that not only farmers get the right price for their produce but local youth also get employment,� he said.

The Minister said that a unit of manufacturing chips can be set up in the village so that potatoes grown locally can be used by the industry directly.

Vol. 09 Issue 12 October 2014

European and Australian companies,� said Man Mohan Malik, chairman and CEO at Himalaya International. “Potato availability this year has been less and prices are touching the roof.�

A good source of calcium, vitamin C and iron, potato is considered the king of vegetables. India, which is the biggest potato producer after China and Russia, has two million hectare under the crop, with an annual output of 44 million tonne.

Last week, the government had asked Nafed and Small Farmers’ Agribusiness Consortium to explore the possibility of importing potato from Europe. The government, however, is focusing on varieties that can be directly used by consumers.

But Sachid Madan, director at Technico Agri Sciences, said there is no need to import potatoes. “The kharif crop has been good and the early rabi crop is also on track and will start from early November. Prices have also stabilised atRs30 per kg for processed potato and are gradually falling for table potato,� he said. Sanjay Murarke, MD at Kolkata based Potato King Foods, said the government should not allow potato exports in the beginning of the season as it leads to lower availability, hoardinng and higher prices.

59 www.agronfoodprocessing.com

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