FDI is growing in a big way. Projected to be Rs.1,300 crore by 2009!
VC funds, innovative agro technologies can change the face of Indian agri/food sectors.
Subodh Kant Sahay, Minister for food processing. Wants to create more agro-entrepreneurs!

All agri universities must start agro entrepreneur’s courses! One of the unsung heroes of the Indian agricultural sector is the minister for food processing, namely, Mr.Subodh Kant Sahay. For one reason or other, he or his ministry is not hitting the news headlines! It is high time he does takes his role seriously and gets all that is within his powers to get his ministry’s work  noticed by the public.

Why the food processing ministry is not taken notice of? See what his ministry’s potential is.
India has over 1.10 billion consumers and there is a fast growing high income earning middle class. There is a largely untapped domestic market of 1,000 million consumers for the food processing sector. 200 million middle class ,urban based and otherwise, high income earning workers and professions and they are expected to shift to processed foods in one form or other ,given the fact there is a faster urbanisation of life and lifestyle for these vast millions of consumers.

he minister has set out a number of potential invest schemes for the new age entrepreneurs in food processing. Mega food parks, agri infrastructure from cold chains to supply chains and logistics, vegetables and fruit processing to ready to eat foods, in dairy to animal products to seafood to cereals to wine and beer and machinery for packaging. In fact, there are various stages in food processing, from primary processing to specific processing for specific food segments. Milk processing in itself is a vast enterprise, given the fact that India is the top milk producer and the per capita consumption of milk is still low and the potential for dairy industry is almost unlimited in the foreseeable future. So too in every other agri segment.

So, what all these means for the average traditional farmers  and farming families which are now exposed to new education and other opportunities to reach the next stage of growth?

Now, India has over 50 agri universities and any number of research stations under the ICAR and other Centre-funded autonomous institutions as in Hyderabad. As it is, they are all almost languishing for want of a current mandate in tune with the vibrant changes that are impacting all around.

Mr.Sahay has spoken in recent times about the spurt of FDI in food processing, Fine! He says there is a jump in the last 2 years from Rs.174 crores in 2005 to Rs.441 crore in 2007.This is good news. But what is not spelt out by anyone is the fact that it is the MNCs we are all waiting for. Only we are then think of ourselves.
Retail chains of Indian origin are also very slow to go for innovative  supply chain management. No Indian corporate thinks of involving the farmers in the very supply chain. The corporate want to play safe and they want the farmers to mind their finance, their choice of crops and also the supervision and get their products ready to the farm gate and then only the big corporates come into the picture. This is how the Reliance Fresh and also the Field Fresh, the two big names making big splashes of publicity for their ventures do. They buy directly from farmers and that is okey. But they have to go beyond this touch me not syndrome.
This is the rub. So, we welcome the minister’s ideas to train farmers as farm entrepreneurs.

We are also greatly pleased to read that the Silicon Valley based “The India Entrepreneurs(TIE) finds sectors other than IT are now attracting venture funds in an increasing manner and he cites the Kerala chapter of TIE finds the agrotech area doing what  the man calls” the fantastic work in agrotech”! That is very encouraging. If the small farmers dominated Kerala agri sector can demonstrate such a success, then, other states like more progressive Maharashtra and AP can do n wonders with the VC funds in the agri/food sector. As he says the “ecosystem for VC funding in the Indian sectors outside IT is becoming very attractive”>This is as it should be, given the fact that big MNCs are coming into the food retail business and the food processing sector would become only bigger as India becomes the sourcing hub, besides being the growing domestic market for agri/food products.

The minister says that he is demanding more incentives to the sector in the 2008 budget. This is very important.
What the minister says is very important for the finance ministry to take note of if it wants to promote agriculture in a big way. The minister says that one of the key areas would be initiatives for training facilities and capacity building for farmers and entrepreneurs.

He further says his ministry would take steps to do the entrepreneurship training nation-wide. The minister says his ministry would train farmers for food processing.
But there is some wishful thinking here. The point is that the food processing ministry must urge Mr.Sharad Pawar, the food and agri minister to engage the agri universities in the farmers/other entrepreneurship programmes in a big way. As they are the farm universities are doing out of date work in the name of research.

It is not out of place to note here that Monsanto, the American MNC in agri biotechnology almost single handedly and also in a monopolistic manner had succeed in penetrating the Indian Bt cotton seed market and the ICAR is nowhere when it comes to agri biotech breakthroughs when compared with Monsanto. The US co. is now transferring biotech in an aggressive way to the Indian agri sector. Now, it has transferred a new tech into papaya breeding. The company must have studied the potential. It is about to take up India’s other major crops, pulses and other crops including vegetables. Almost the ICAR has been rendered jobless in the frontier technologies.
So, it is time that the Central government revamps the agri universities to start new courses so that farmers are given training in a wide variety of ways so that they can find some synergies in what they are already doing and what they can do further in the emerging market scenario.

So, in a way the food processing sector could create a new class of new generation farmers ready to contribute in the new wealth and value creation in the food supply chain.

There is no way agriculture can get modernised except through more integration with the emerging food market. Already the private sector FMGG companies are playing some role in integrating the farmers through their various devices like e-choupal. But we need is almost a new  food processing revolution and this will become a mass movement only when the agri universities and other business and technical schools and colleges come forward to tap this vast potential for a better trained manpower in the agri/food processing sector.

The food processing minister says his ministry is in  talks with MNCs like Wal-Mart, Carrefour and Woolworth for sourcing Indian food products. These  giant  food retailers could change the rules of the game!

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