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AGRICULTURE

&
THE PROCESSED FOOD

SUBMITTED BY:
~ Ankita Verma
~ Neha Tyagi
~ Pankaj Goel
CONTENTS
 Overview
 Production Centers
 Domestic Industry
 Trend in Export
 Major Export Destinations
 Export from India for last three years
 Major Competitors in the global market
 Quality Standards
 Provisions in FTP
 Problems / Challenges faced by the exporter
 Relevant News articles
OVERVIEW
 India has geographic location, receives good rainfall and proper sun light in
the right proportions as required for good crops.
 India’s land is agricultural and people are land owners, as well as farmers. So
agriculture news is important for a large population of the country.
 Agriculture is one of the strongholds of the Indian economy and accounts for
14.6 per cent of the country's gross domestic product (GDP) in 2009-10, and
10.23 per cent (provisional) of the total exports
 India ranks second worldwide in farm output. 
 India’s total export is US $ 7347.07 million in 2009-10
 India’s import is US $ 4,438.755 million in 2007-08
 There are more than 300 export-oriented units for floriculture.
 Agriculture, including crop, forestry and agro processing constitutes the very
basis of socio economic lives of India.
Source: Apeda, general information, available at
http://www.apeda.gov.in/apedawebsite/six_head_product/floriculture.htm as accessed on 2010,
2)apeda, country profile, availabe at
http://tradejunction.apeda.com/countrysearchnew/products_imported.aspx?ctryid=99999&ctryn=INDIA as accessed
on 2009,
3)apeda, export statistics, available at http://tradejunction.apeda.com/indexp/monthexport.aspx as accessed on 2009
4)apeda, Indian data, available at http://tradejunction.apeda.com/indexp/ExportStatement.aspx?val=2, accessed on
2009
5) GOI, agriculture, available at http://www.ibef.org/economy/agriculture.aspx as accessed on 2009
6) apeda,tradejunction available at http://tradejunction.apeda.com/IndImp/SpecAgroProdImportCommodityWise.aspx
as assessed on 2009.
 
OVERVIEW
 Processed foods have been altered from their natural state for
safety reasons and for convenience.
 Fruit and vegetable juice is also an example of a healthy processed
food. In fact, some orange juice is fortified with calcium to make it
even more nutritious. Processed foods and prepackaged meals are
very convenient and popular
 India’s exports of Processed Food was 2219.533 Million US $ in
2008-9 and 1752.58 Million US $ in 2009-10 i.e 28.12% and 23.84%
respectively of total exports.
 A number of new initiatives like Technology Mission for Integrated
Development of Horticulture in the North Eastern States (TMNE),
National Horticulture mission(NHM), National Food Security Mission
(NFSM), Macro management in Agriculture (MMA), Rashtriya Krishi
Vikash Yojana (RKVY), National Project on Organic Farming
(NPOF), National Project on Management of Soil Health and Fertility
(NPMSHF).

Source: Apeda, general information, available at


http://www.apeda.gov.in/apedawebsite/six_head_product/PFV_OPF.htm as accessed on 2010
PRODUCTS
PROCESSED FOOD AGRICULTURE
 Dried & Preserved Vegetables  Fruits, Vegetables and their
 Mango pulp Products
 Pulses  Cereal and Cereal Products
 Ground nut
 Groundnuts, Peanuts and
 Jaggery & Confectionary
Walnuts
 Guargum
 Floriculture and Floriculture
 Cocoa Product
Products
 Cereal Preparation
 Herbal and Medicinal Plants
 Alcoholic & Non Alcoholic
 Organic Products
Beverages
 Miscellaneous Preparation
 Milled Products
Major Production Centers
FRUITS VEGETABLES
COMMODITY STATE COMMOTIDY STATE
 Apple Jammu & Kashmir  Brinjal West Bengal
 Banana Maharastra  Cabbiage West Bengal
 Citrus Andhra Pradesh  C flower West Bengal
 Grapes Maharastra  Okra West Bengal
 Gauva Jharkhand  Peas Karnataka
 Litchi Bihar  Tomato Karnataka
 Mango Uttar Pradesh  Onion Maharastra
 Papaya Andhara Pradesh  Potato West Bengal
 Pineapple West Bengal  S.potato Orissa
 Tapioca Tamil Nadu
 PLANTATION

  COMMODITY STATE
 Cashewnut Andhra Pradesh
 Arecanut Karnataka
 Cocoa Kerela
 Coconut Kerela
DOMESTIC INDUSTRY
 The Indian Agriculture Industry is on the brink of a
revolution that will modernize the entire food chain, as
the total food production in India is likely to double in the
next ten years.
 Total food market is US$ 69.4 billion
 The Government of India has also approved proposals
for joint ventures, foreign collaborations, industrial
licenses and 100% export oriented units envisaging an
investment of US $ 4.80 billion.
 The agricultural food industry employs around 65 per
cent of the population.
Source: indiamart, industry overview, available at http://agro.indiamart.com/agro-industry-overview/
as accessed on 2009
DOMESTIC INDUSTRY
 The other attractive features of the Indian agro industry that have
the capacity to lure foreigners with promising benefits are the milk
and milk products, meat and poultry segments
 The Ministry of Food Processing Industries (MOFPI) has formulated
a Vision 2015 action plan. This includes trebling the size of the food
processing industry, raising the level of processing of perishables
from 6 per cent to 20 per cent, increasing value addition from 20 per
cent to 35 per cent, and enhancing India’s share in global food trade
from 1.5 per cent to 3 per cent.
 The cumulative FDI received by the food processing industry from
April 2000-September 2010 stood at US$ 1,102.03 million.

Source: Apeda, processed food, Available at http://apeda.com/apedawebsite/ as accessed on 2008


STATE DISTRICT/AREA & RESPECTIVE PRODUCTS PRODUCED
Darjeeling-Pineapple,Darjeeling Tea
West Bengal 1.
2. Uttar Dinajpur-Pineapple
3. Cooch Behar-Pineapple
4. Jalpaiguri-Pineapple
5. Districts of Murshidabad-Lychee,Mangoes, Vegetables
6. Malda-Lychee,MAngoes
7. 24 Pargana (N)-Lychee
8. Districts of Hoogly-Potatoes
9. Burdwan-Potatoes
10. Midnapore (W) –Potatoes
11. Uday Narayanpur and Howrah-Potatoes
12. 24 Pargana (S)-Lychee, Vegetables
13. Nadia-Vegetables
Dharmapuri-Flowers
Tamil Nadu 1)
2) Districts of Madurai-Mangoes
3) Theni-Mangoes
4) Dindigul-Mangoes
5) Virudhunagar-Mangoes
6) Tirunelveli-Mangoes
7) Cuddalore- cashewnut
8) Thanjavur- cashewnut
9) Pudukottai- cashewnut
10) Sivaganga- cashewnut
Source: apeda, general information, available at
http://www.apeda.gov.in/apedawebsite/trade_promotion/Agri_Export_Zone.htm as accessed on 2009
TRENDS

EXPORTS
OF
INDIA
FRUITS & VEGETABLES EXPORTS IN 2006

Source: apeda, international data, available at http://tradejunction.apeda.com/Market%20Profile/Volume_IV/World


%20Trade%20Scenario%20of%20Crop.aspx as accessed on 2006
MOST EXPORTED PRODUCTS
INDIAS MAJOR EXPORT DESTINATIONS

Source: Apeda, agriculture trade portal, indian data, exports statistics, Generate your Own report available at
http://tradejunction.apeda.com/indexp/genReport.aspx as accessed on 2010
Source: apeda, Indian data(import data), available at
http://tradejunction.apeda.com/countrysearchnew/products_imported.aspx?ctryid=99999&ctryn=INDIA as accessed on
2009-2010
Data as accessed on 2009-10
Value in US $ million

Source: apeda, Indian data(exports), availabe at


http://tradejunction.apeda.com/indexp/ExportStatement.aspx?val=2 as accessed on 2009-10
MAJOR COMPETITORS
 CHINA: On average, China produces 108,712 TMT of wheat
annually. This makes China the world’s largest wheat producer,
producing 42,856 TMT more than India, the world’s second largest
wheat producer.

 THAILAND: Thailand's agriculture export, world's largest exporter


of rice, export of fisheries products and livestock products,
agricultural and food policy, agricultural credit 

 UNITED STATES: Agriculture is a major industry in the United


States and the country is a net exporter of food. As of the last
census of agriculture in 2007, there were 2.1 million farms, covering
an area of 922 million acres (373 million hectares), an average of
418 acres (170 hectares) per farm.

Source: U.S. Library of Congress, available at http://countrystudies.us/thailand/67.htm


EW, world agriculture, available at http://www.economywatch.com/ as accessed on 2008.
PROVISIONS IN FTP
Towns of Export Excellence [TEE]
A number of towns have emerged as dynamic industrial Excellence (TEE) clusters contributing
handsomely to India’s exports. It is necessary to grant recognition to these industrial clusters with
a view to maximizing their potential and enabling them to move higher in the value chain and tap
new Markets. Selected towns producing goods of Rs. 750 Crore or more will be notified as TEE
based on potential for growth in exports. However for TEE in Handloom, Handicraft & Agriculture
threshold limit would be Rs150 Crores.

S.NO. Town of export State Product


excellence category
1. AEKK (Aroor, Kerala Seafood
Ezhupunna,
Kodanthuruthu &
Kuthiathodu)
2. Kollam (Quillon) Kerela Cashew products
3. Indore Madhya Pradesh Soya Meal and
Soya Products
Source http://commerce.nic.in/pressrelease/pressrelease_detail.asp?id=2628
 VISHESH KRISHI AND GRAM UDYOG YOJANA (VKGUY) (SPECIAL
AGRICULTURE AND VILLAGE INDUSTRY SCHEME)
 Objective of VKGUY is to promote exports by providing 3% of duty credit of
FOB value. All Status Holders shall be incentivised with duty credit script
equal to 10% of FOB value of agricultural exports which can be used for duty
free import / procurement of capital goods related to infrastructure meant for
agro-processing to promote agricultural exports provided that the total
benefits for all status holders put together does not exceed Rs 100 Cr (i.e. Rs
50 Cr for each half year). And the products included under this scheme are :
(i) Agricultural Produce and their value added products;
(ii) Minor Forest Produce and their value added variants;
(iii) Gram Udyog Products;
(iv) Forest Based Products; and
(v) Other Products, as notified from time to time.
Instant Tea included for benefits under VKGUY @ 5% of FOB value of
exports

Source- http://www.ganatragroup.net/foreigntrade.html#8
EPCG SCHEME
 EPCG licences issued to agro units in the agri export zones, a period of 12
years reckoned from the date of issue of the licence would be permitted for
the fulfillment of export obligation
 The agro units in the agri export zones would also have the facility of
moving the capital goods imported under the EPCG within the agri export
zone
 An LUT/ Bond in lieu of BG may be given for EPCG licence granted to units
in the Agri Export Zones provided the EPCG licence is taken for export of
the primary agricultural products.
Source : http://pib.nic.in/archieve/ForeignTradePolicy/ForeignTradePolicy.pdf
 Duty Credit Scrip
 Duty Credit Scrip benefits are granted with an aim to compensate high transport
costs, and to offset other disadvantages. Exporters, of products notified in Appendix
37A of HBPv, shall be entitled for Duty Credit Scrip equivalent to 5% of FOB value of
exports (in free foreign exchange) for exports made from 2009 onwards.
 However, for exports made w.e.f 1.7.09, some Flowers, Fruits, Vegetables and other
products, as listed in Table of Appendix7A shall be entitled to an additional duty credit
scrip equivalent to 2% of FOB value of exports; over and above the 5% or 3%
VKGUY reduced rate entitlement.
 
EPCG for agro units
 LUT/Bond or 15% BG ( as applicable) may be given for EPCG Authorization granted to units in Agri Export
Zones provided EPCG Authorization is taken for export of primary agricultural product(s) notified in Appendix
8 or their value added variants

FOCUS PRODUCT SCHEME (FPS)


 Objective is to incentivise export of such products, which have high employment intensity in rural and semi
urban areas, so as to offset infrastructure inefficiencies and other associated costs involved in marketing of
these products Exports of notified products (as in Appendix 37D of HBP v1) to all countries (including SEZ
units) shall be entitled for Duty Credit scrip equivalent to 2% of FOB value of exports for each licensing year
commencing from 1st April, 2006.
 Oil Meals (Cotton, rape seed, groundnut), Castor Oil derivatives, Packed Coconut Water and Coconut Shell
worked items shall be entitled for benefits @ 2% of FOB value of exports to all markets under FPS

FOCUS MARKET SCHEME (FMS)


 Objective is to offset high freight cost and other externalities to select international markets with a view to
enhance our export competitiveness in these countries. Exporters of all products to notified countries (as in
Appendix 37C of HBP v1) shall be entitled for Duty Credit scrip equivalent to 3% of FOB value of exports for
each licensing year commencing from 1st April, 2009.
 Market Access Initiative
 Under MAI scheme, Financial assistance is provided for export promotion activities
on focus country, focus product basis. Financial assistance is available for Export
Promotion Councils (EPCs), Industry and Trade Associations (ITAs), Agencies of
State Government, Indian Commercial Missions (ICMs) abroad and other national
level institutions/eligible entities as may be notified. A whole range of activities can be
funded under MAI scheme. These include, amongst others,
I. Market studies/surveys,
II. Setting up of showroom / warehouse,
III. Displays in International departmental stores,
IV. Brand promotion,
V. Reimbursement of registration charges for pharmaceuticals and expenses for
carrying out clinical trials etc., in fulfillment of statutory requirements in the buyer
country,
VI. Testing charges for engineering products abroad,
VII. Assistance for contesting Anti Dumping litigations etc.
Each of these export promotion activities can receive financial assistance from
Government ranging from 25% to 100% of total cost depending upon activity and
implementing agency.
MARKET DEVELOPMENT
ASSISTANCE
It is a scheme to encourage exporters to access n develop overseas markets
i Participation in international trade fairs,
ii. Publicity campaigns
iii. Overseas study tours

90% of the cost of air ticket by economic class and 25% of the cost of publicity
material.
AGRI EXPORT ZONES
 An Agri Export Zone is a specific geographic region in a country
demarcated for setting up agri based processing industries, mainly
for export. The term is widely used mainly in India
 These zones have been set up for end to end development for
export of specific products from a geographically contiguous area. 

 Units in AEZ would be entitled for all the facilities available for
exports of goods in terms of provisions of the respective schemes
AGRI EXPORT ZONES
 West Bengal- Pineapple,Lychee, Potatoes, Mangoes , Vegetables, darjeeling tea
 Punjab- potatoes, vegetables, basmati rice
 Maharashtra- Grapes&grape wine, mangoes, kesar mango, Flowers
 Uttar Pradesh- Potatoes, mangoes, basmati rice and vegetables
 Rajasthan- Coriander, cumin
 Other states: Uttaranchal, karnataka, Tripura, Bihar, Tamil Nadu, Assam, sikkim,
MP, Orissa, Gujarat, Jharkhand, Himachal Pradesh.

Source: apeda, general information, available at http://www.apeda.gov.in/apedawebsite/trade_promotion/Agri_Export_Zone.htm as accessed


on 2009

 SINGLE WINDOW SYSTEM


 To reduce transaction and handling costs, a single window system to facilitate
export of perishable agricultural produce has been introduced. The system will
involve creation of multi-functional nodal agencies to be accredited by APEDA
SPS & TBT
 WTO Agreements on Sanitary and Phytosanitary Measures (SPS)
and the Agreement on Technical Barriers to Trade (TBT) try to strike
a balance between these competing uses of standards in
international trade.
 The SPS and TBT agreements acknowledge that governments have
the right to take necessary measures for the protection of human,
animal and plant health and allow some freedom for setting national
standards to the extent required to protect them.
PACKAGING MATERIALS as TBT
Test parameters Methodology Adopted Applicability

Tin, Chromium AAS Tin plate


Sulphide stain Chemical Food cans
Laquer Physical Chemical Tin cans
Migration tests Chemical Food grade plastics
Heavy metals like Pb, As, AAS Coloured plastics
Cd, Se, Ba,
Water vapour permeability Humidity chamber Plastics

Identification of plastic Chemical FTIR DSC Food packaging materials


materials
Physical tests Thickness gauge Plastic packages
Universal testing machine 
Elmendrof tear tester 
Dart impact tester

Source: http://www.shriraminstitute.org/ available at http://www.shriraminstitute.org/food.html


QUALITY STANDARDS
 There are two organisations, the Bureau of Indian Standards (BIS) and
the Directorate of Marketing and Inspection (DMI), currently dealing with
the voluntary standardisation and certification systems in the food
sector in India.
 According to industry sources, for the processed food sector BIS
certification is more important than DMI certification.

ISI MARK
 The certificate given by Indian Standard Institute, that the commodity is
as per the standard quality & quantity. Every manufacturer has be
submit the each lot or batch of production to the quality inspector & he
takes some sample quantity for examination. Than the certificate issued
to producer, Than the batch despatched to market for sale.
Fruit Product Order (FPO)
 Fruit Products Order -1955, was formulated with an objective to
manufacture fruit & vegetable products maintaining sanitary and
hygienic conditions in the premises and quality standards laid down
in the Order. It is mandatory for all manufacturers of fruit and
vegetable products including some non fruit products like non fruit
vinegar, syrup and sweetened aerated water to obtain a license
under this Order
ACTS & REGULATIONS

Prevention of Food Adulteration Act, 1954


Fruit Products Order, 1955
Meat Food Products Order, 1973
Vegetable Oil Products (Control) Order, 1947
Edible Oils Packaging (Regulation) Order, 1988,
Solvent Extracted Oil, De-oiled Meal and Edible Flour (Control) Order, 1967
Milk and Milk Products Order, 1992
Any order under Essential Commodities Act, 1955 relating to food.
Analysis is done as per both National and International Standards with
the following major protocols :

» Bureau of Indian Standards


» Agricultural Markings
» Prevention of Food Adulteration Act
» Fruit Product Order
» Association of Official Analytical Chemists International
» American Association of Cereal Chemists
» American Oil Chemist's Society
» American Spice Trade Association
» American Dry Products Institute
» American Public Health Association
» SriLanka Standard Institution
» In-house validated methods and procedures
» Party's specifications
QUALITY SPECIFICATIONS
Quality attributes for tomatoes used for tomato paste
   
Attribute Accept Reject
     
Colour Orange/red More than 10% green
     
Size Any -
     
Shape Any -
     
Damage    
- splitting Less than 5% More than 5%
- insect Less than 5% More than 5%
- mould None Any evidence of mould
     
Hardness Soft to over-soft More than 10% hard

Source: http://www.shriraminstitute.org/ available at http://www.shriraminstitute.org/food.html


PROBLEMS/CHALLENGES
 India's large agricultural subsidies are hampering productivity-enhancing
investment.
 Overregulation of agriculture has increased costs, price risks and uncertainty.
 Inconsistent government policy. Agricultural subsidies and taxes often
changed without notice for short term political ends.
 Infrastructural facilities are inadequate
 Tariffs peaks, tariff escalation, commodity-specific bilateral agreements and
special exemptions remain major issues restricting market access abroad for
products
 Few Examples:
 Lack of harmonization of egg products standards in EU member countries
resulting into requirement of approval of production units by individual
member countries.
 Ban on the import of fresh grapes from India on the basis of report of the
incidence of oriental fruit fly on grapes in Pakistan
RELEVANT ARTICLES
 Impact of Liberalization on India's Agricultural Exports: A
Behavioral and Discriminant Approach.
 Comparative Advantage of India in Agricultural Exports. vis-à-vis
Asia: A Post-reforms Analysis.
 Differences remain over cash for grain.
 Promoting Sustainable Agriculture in India.
 Agriculture in India: Issues and Challenges.
 Global agricultural trade and developing countries.
REFERENCES
1. Apeda, general information, available at
http://www.apeda.gov.in/apedawebsite/six_head_product/floricultu
re.htm
as accessed on 2010,
2. apeda, country profile, availabe at
http://tradejunction.apeda.com/countrysearchnew/products_import
ed.aspx?ctryid=99999&ctryn=INDIA
as accessed on 2009,
3. apeda, export statistics, available at
http://tradejunction.apeda.com/indexp/monthexport.aspx as
accessed on 2009
4. apeda, Indian data, available at
http://tradejunction.apeda.com/indexp/ExportStatement.aspx?
val=2, accessed on 2009
5. GOI, agriculture, available at
http://www.ibef.org/economy/agriculture.aspx as accessed on
2009
6. Apeda, general information, available at
http://www.apeda.gov.in/apedawebsite/six_head_product/PFV_OPF
.htm as accessed on 2010
7. apeda, Indian data, available at http://tradejunction.apeda.com/India
%20Production/Result_SearchState.aspx as accessed on 2009-
2010
8. indiamart, industry overview, available at
http://agro.indiamart.com/agro-industry-overview/ as accessed on
2009
9. Apeda, processed food, Available at
http://apeda.com/apedawebsite/ as accessed on 2008
10. apeda, general information, available at
http://www.apeda.gov.in/apedawebsite/trade_promotion/Agri_Export
_Zone.htm as accessed on 2009
11. http://www.shriraminstitute.org/ available at
http://www.shriraminstitute.org/food.html
12 apeda, international data, available at
http://tradejunction.apeda.com/Market%20Profile/Volume_IV/World
%20Trade%20Scenario%20of%20Crop.aspx as accessed on 2006
13 apeda, Indian data(exports), availabe at
http://tradejunction.apeda.com/indexp/ExportStatement.aspx?val=2
as accessed on 2009-10
14 apeda, Indian data(import data), available at
http://tradejunction.apeda.com/countrysearchnew/products_importe
d.aspx?ctryid=99999&ctryn=INDIA as accessed on 2009-2010
15 apeda, products,available at
http://tradejunction.apeda.com/prodgallery/prodgallary.aspx as
accessed on 2009
16 U.S. Library of Congress, available at
http://countrystudies.us/thailand/67.htm EW, world agriculture,
available at http://www.economywatch.com/ as accessed on 2008.

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