Issues and concerns of food processing manufacturing units in j&k 2


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Issues and concerns of food processing manufacturing units in j&k 2

  1. 1. International Journal of Management (IJM), ISSN 0976 –MANAGEMENT (IJM) INTERNATIONAL JOURNAL OF 6502(Print), ISSN 0976 – 6510(Online),Volume 3, Issue 3, September- December (2012)ISSN 0976 – 6502(Print)ISSN 0976 – 6510(Online)Volume 3, Issue 3, September- December (2012), pp. 160-168 IJM© IAEME: Impact Factor (2012): 3.5420 (Calculated by GISI) © ISSUES AND CONCERNS OF FOOD PROCESSING MANUFACTURING UNITS IN J&K Dr. Saurabh Asst. Professor, College of Management Shri Mata Vaishno Devi University Sub post office: Katra, Jammu & Kashmir- 182320, E-mail: Abid Sultan Ph.D. Research Scholar, College of Management Shri Mata Vaishno Devi University Sub post office: Katra, Jammu & Kashmir- 182320 E-mail: ABSTRACT The Food processing industry in J&K is in embryonic stage with immense potential for fruits, vegetables and other eatable products. It can become of the source of industrial development in the State. However, the industry growth has not been significant over the last few years. The maximum focus of the government has been upon packaging and export of fruits and dry fruits. The entrepreneurial motivation in the sector requires certain interventions to boost the industry. The paper discusses the core issues of the industry based upon the interviews of various entrepreneurs in food processing industry in the State of Jammu and Kashmir. The entrepreneurs have started with zeal based upon the potential of the state and now they are surviving their units at a status-quo. The topography of the state is conducive to support food processing industry provided there can be some technical interventions as per the issues and concerns identified in the paper. Keywords: Food processing, J&K, issues, entrepreneurs 160
  2. 2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online),Volume 3, Issue 3, September- December (2012)INTRODUCTIONThe growth of the world population is being accompanied by increasing urbanization andemployment opportunities including dietary transition towards convenience foods, fresh dairyproducts and higher consumption of fresh fruit and vegetables (John & Rudi, 2008). As a result,modern food systems based on packaged food production are growing at a very muchimpressive rate. The changes in customer tastes and preferences have created a significantdemand for processed food such as packaged/convenient food, dairy products, value addedfoods etc.India is one of the growing nations in the world. Its economy has experienced rapid growth inthe last 2 decades. India has the second largest arable land of 161 million hectares and has thehighest acreage (55 million hectares) under irrigation. India ranks second largest food producerin the world and has the potential to immerge the biggest with its food and agricultural sector(Indian Processed Food Industry Opportunities Galore,2008).The total land under fruit andvegetable cultivation in India is over 5.7 million and 7.8 million hectares respectively. The totalfruit production in India is over 63.5 million tonnes. India is the second largest producer ofvegetables in the world producing over 125 million tonnes of vegetables (Gavane, 2012).However, India accounts for less than 1.5% of international food trade .The Indian foodprocessing industry ranks fifth in size and is estimated at more than US $200 billion. The foodindustry in India is expected to grow to $310 billion by 2015.Of India’s total agricultural &food produce only 2 percent is processed (Economic Times ,May,2010). Ministry of foodprocessing in its Vision 2015 document has estimated the processing level of perishable toincrease from 6% to 20%, value addition to increase from 20 % to 35% and India’s share inglobal food trade to increase from 1.5 % to 3%. Table no 1: Processing of Agriculture produce in different Countries S.No Country Level of Food Processing (in %age) 1 China 20 2 Thailand 30 3 Brazil 70 4 Philippines 78 5 Malaysia 80 Source: Indian Processed Food Industry Opportunities Galore,2008In a population of 1.22 billion India has a strong 31.4 million middle class households or 160million individuals. By 2025-26 the number of middle class households in India is likely toreach 113.8 million households or 547 million individuals. The percentage of the middle classin the countrys total population will increase to 20.3% by 2015-16 and 37.2% by 2025-26(Hindustan Times,Feb.,2011). According to Global Food & Drink Sector Review (2009), “300million Indian consumers currently purchase processed and packaged food. This population isexpected to grow to 500 million in the next five years (2014). This extraordinary expansion willdrive growth in the food processing industry at almost 20% each year”.Domestically, the spending on food and food products amounts to nearly 21% of the grossdomestic product of the country and constitutes the largest portion of the Indian consumer 161
  3. 3. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online),Volume 3, Issue 3, September- December (2012)spending more than a 31% share of wallet. The food processing industry contributes 7 percentto India’s GDP and provides employment to about 13 million people directly (Food ProcessingSector in India, 2012).Though the food processing industry of India is quite large but it’s at infancy stage whichrequires lot of development both in terms of infrastructure and management. India can capitalizeon this huge market and growing industry by focusing attention towards the states having strongadvantages in terms of climate and soil. States like Jammu & Kashmir can contribute a lottowards the development and growth of the food processing industry in India.JAMMU & KASHMIRThe strategic geographical location of Jammu & Kashmir is a blessing for the state’s economy.Due to its geographical location, climate and soil type the state is the producer of rich variety offruits and vegetables. The state is the highest temperate fruit producing state of India (Farm-to-Fork, 2010). The total area under fruit and vegetables in the state is 8, 74, 21,000 hectares(Digest of Statistics, 2008-09). The fruits & vegetables of the Jammu and Kashmir state arefamous all over the world. The fruit industry is the second most important industry after tourismin Jammu and Kashmir and probably is most ideal unparalleled area in the world for growingtemperate and dry fruits(Buyer-seller meet & conference, 2007). The diverse agro climatic conditions of the state are an added advantage, which facilitate the growing of the different kinds of fruits (Farm-to-Fork, 2010).The Agro climate of the can be divide into four zones : Table no 2: Agro climatic Zones of Jammu and Kashmir State Zone Areas Suitable Fruit Kinds 1 Temperate Zone Entire Kashmir Valley, Parts ofApple, Pear, Cherry, Poonch, Rajouri, Doda, Kishtwar, Walnut, Almond, Ramban, Reasi, Kathua and Chesnut, Strawberry, Udhampur Stone Fruit Grapes, Prunes, Kiwi etc 2 Sub-Temperate Parts of Jammu Province, Uri & Peach, Plum, Apricot, Zone Karnah Tehsil in Kashmir Pears, Pecan Nut, Olive , province Kiwi etc 3 Sub-Tropical Zone Jammu, Samba , Parts of Reasi, Mango, Citrus, Litchi, Parts of Doda, Parts of Rajouri Guava, Grapes, Ber Aonla 4 Arid Temperate Districts of Leh & Kargil Grapes (Raisin type), Zone Prunes Apricot (drying type), walnut, Currants etc Source: Farm-to-Fork ,2010The rich produce of fruits and vegetables can be a great input for the growth and developmentof the food processing sector. The total fruit production of J&K during 2008-09 was 16.91 lakhmetric tonnes comprising of 15.30 Tonnes of fresh fruit and 1.61 lakh metric tonnes of dry fruit. 162
  4. 4. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online),Volume 3, Issue 3, September- December (2012)The export of the fruit outside the state was 11.61 lakh metric tonnes (Digest of Statistics, 2008-09). Despite of various potentials the industry still lacks confidence to leverage out of theopportunities of development. The paper deals in identifying the various driving forces of foodand beverages manufacturing units and concerns of the entrepreneurs in J&K.METHODOLOGY For the purpose of identification of various driving forces and issues, the research design chosenis exploratory in nature. The objective of the paper is to identify some of the prominent issuesthat hampers or can hamper the growth and development of the food processing industry in thestate along with the various factors that drive the opportunities for the industry. The researchused various facts and data available through secondary sources and used unstructured interviewmethod to identify the issues of 18 entrepreneurs in the food processing business in J&K.FINDINGS AND DISCUSSIONSJ&K is a growing economy. The agricultural produce, specially fruits and dry fruits thatconstitute the larger share of the basket have geographic brand identity as well as growingproduction. Apart from these the improving education level, standard of living as well as statusof development and infrastructure they assist in the growth of the sector. The various drivingforces for the Food and Processing industry are identified as follows: 1. Availability Of Raw Material Table No: 3 Year wise production of Fruits in the State of J&K (Qnty. In Metric Tonnes) Year Total Fresh Fruit Total Dry Fruit Total Fruit Production Production Production 1 2004-05 1217604 114257 1331861 2 2005-06 1280428 122798 1403226 3 2006-07 1373678 130333 1504011 4 2007-08 1477920 158283 1636203 Source: Digest of Statistics , 2008-09, Directorate of Economics & Statistics ,J&KThe Food processing industry requires the assurance of uninterrupted supply of raw material.The state has witnessed a growth in the production of the fruits and dry fruits in last few years.(Table 3) 2. Labour Force AvailabilityThe state is at par with other northern States in India. The unemployment rate in the state isnearly 51 percent and the employability of the people is nearly forty percent against nationalaverage of fifty one percent. If trained the state has the workforce to support the state which hasa huge potential with natural endowments. 163
  5. 5. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online),Volume 3, Issue 3, September- December (2012) Table No : 4 Labour Force Participation Rate (LFPR) in the Northern States State Labour Force Participation Unemployment Rate (UR) Rate (LFPR) (Rural + (Rural + Urban) (in per 1000) Urban) (in per 1000) (15 - 59 (15 - 59 years) years) 1 Chandigarh 422 19 2 Delhi 477 8 3 Haryana 420 86 4 H.P 434 64 5 J&K 401 51 6 Punjab 440 111 7 Rajasthan 553 181 8 U.P 429 82 9 Uttarakhand 421 46 10 India 513 90 Source : North India Leveraging Opportunities for Accelerated Growth,CII,2012 3. Consumer IncomeThe purchasing capacity of the people in J&K has increased in recent years. Though the per-capita income of the inhabitants have been low as compared to Delhi and Chandigarh in northernpart of India but still the income index of the state is ranked high as compared to Uttar Pradeshand Rajasthan. Table no : 4 Per Capita Income of the Northern Region States State Per Capita Income Rank in the Rank in India (Rs) 2009-10 Northern Region 1 Chandigarh 91,598 1 2 2 Delhi 89.037 2 3 3 Haryana 55,214 3 6 4 Punjab 43,199 4 12 5 Uttarakhand 42,486 5 13 6 H.P 40,690 6 14 7 J&K 26,739 7 22 8 Rajasthan 23,653 8 25 9 U.P 16,411 9 30 Source : North India Leveraging Opportunities for Accelerated Growth,CII,2012 4. Social InfrastructureWith reference to the income the status of the living of the people in J&k has also beenimproving over the period. The state has reasonable status of education and is ranked tenth inHuman development index. This can be construed as a readiness for the development and growthof the state. In the income status of the state is poised at fifth rank along with reasonable percapita income. 164
  6. 6. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online),Volume 3, Issue 3, September- December (2012) Table no: 4 Ranking of Northern States as per HDI & its Constituents State HDI Health Index Income Education Rank Index Index 1 Delhi 2 2 1 2 2 Haryana 9 11 7 11 3 H.P 3 3 4 4 4 J&K 10 16 5 13 5 Punjab 5 4 3 8 6 Rajasthan 17 13 16 22 7 U.P 18 19 18 20 8 Uttarakhand 14 16 13 9 Source : North India Leveraging Opportunities for Accelerated Growth,CII,2012The parameters above indicate that the state has balanced status. It provides the advantageousscope for the growth and development industrial sector in the state of J & K. However thegrowth of industry can be a balanced growth if the advantages of the natural endowmentsefficiently linked. The Food processing sector of J&K is a potential link both in terms ofconsumption as well as deployment of young resources. The industry is impending to createmarket for its product at regional, national as well as for the international level. The industry atpresent is surviving on the advantageous cues available, but for an accelerated growth there aresome core developmental issues. The issues have been identified with the help of unstructuredinterviews of the entrepreneurs having Manufacturing/ packaging units in the Food ProcessingSector in J&K.Some of the issues identified on the basis of the interview are: 1. InfrastructureThe food processing units require a robust support of infrastructure. With the regularavailability of quality raw material to the facility of transportation, storage and electricitysupport are some of the key deliverables necessary for the industrial development. In J&K dueto unavailability of packaging and processing facilities, 30 per cent of the total fruit producedget wasted(Buyer-seller meet & conference, 2007) .The mismatch between the production andpost-harvest management is one of the concerns for the food processors. The post-harvest losesin fruits Varies from 25-35% (Food and Agri Processors Conclave,2011 ) .This loss is mainlydue to inadequate infrastructure in form of poor storage and transportation factors. The presenceof limited cold storage facility in the state is creating a lot of problems for the unit holders.There are just 19 cold storage facilities in J&K with the capacity of 42869 Metric Tonnes (Coldstorages in India, Indiastat). While as, the total production of fruits 16.91 lakh metric tonnesduring 2008-09.The connectivity is one of the biggest issues of the food processing industry in Jammu andKashmir. The geographical conditions and Hilly terrain hampers the connectivity of the statewith rest of the India round the year (Food and Agri Processors Conclave, 2011).The food processing sector is technology driven industry relying heavily on the electricity. Theelectricity is one of the important factors of production in the food processing. The electricitydemand and supply gap in the state is creating a lot of problems for the units. The state has huge 165
  7. 7. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online),Volume 3, Issue 3, September- December (2012)potential of electricity around 20000MW. But the state has so far been able to generate around750MW. The state requires total 2200 MW of electricity while as it is able to produce only750MW (Greater Kashmir, May, 2010). Although the gap is fulfilled through the Northern gridbut the availability of round the clock supply is still a distant dream. 2. Quality Management/Testing/AccreditationQuality is the most important attribute of the processed food. Quality certification of all types ofpackaged fruit/ food items by Quality Control/ Analysis Laboratories is an essential componentof food control system to protect health and safety of domestic/ international consumers. Thestate of Jammu and Kashmir doesn’t have any such facilities on sufficient basis. TheGovernment of India has established Food Quality Control/ Analysis Lab at Indian Institute ofIntegrative Medicine, Jammu (Greater Kashmir, August,2012).The lab offers undertakes testing,quality control & offers consultancy/ licensing services with regard to plants, drugs, water,fertilizers, metal residues and pesticides residues etc. But the IIIM facility is insufficient to meetquality control testing/assurance requirements of horticulture producers & food processorsscattered all over the state (Greater Kashmir, August,2012).Also the reach-ability of suchservices to the difficult spread and terrains to the manufacturing units is limited. Some of theunits have their own testing labs o maintain the quality, but the reliability and accreditation isstill an area of concern. Thus another area of concern that needs attention of is QualityManagement/Testing/ Accreditation. 3. Marketing SupportThe Food Processing Sector of Jammu and Kashmir is at its infancy stage. The sector needs thecare and support of state government for its expansion and growth. According to the President,Kashmir Chamber of Food Processing Industry (KCOFI), Dr Zain-ul-Abidin,” Government isproviding marketing support to other sectors in one way or the other, but it provides no supportto the food processing industry of the Valley. Further, there are no proper schemes for the food-processors in the Valley. Also the support at central level is not very much impressive. DirectorGeneral of Foreign Trade (DGFT) is to provide marketing support to the unit holders all over thecountry, but the food processing sector is not included in DGFT, where as many other sectors areincluded, like those of furniture, glass, plastic products, iron-based products, fabrications andothers”( Greater Kashmir, Feb.,2009).The state government provides support to the various industrial sectors through two modes.Firstly, through various schemes and incentives, secondly through SICOP (Small ScaleIndustries Development Corporation Limited), this is a designated agency of the stategovernment for providing marketing support to the various industries of the state. ThroughSICOP, the government is providing support to the steel, wood-based and other industries, butone could not trace any significant policy support specifically for the food processing industry. 4. Lack of Technology AwarenessOn interview of the entrepreneurs involved in processing and packaging of food products it wasfound that the traditional methods are being utilized in processing and tracking the products. 166
  8. 8. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online),Volume 3, Issue 3, September- December (2012)One of the reasons for this is the poor technological awareness among the entrepreneurs and theyouth (Food and Agri Processors Conclave, 2011). The state has Multiline food processingtraining centre sponsored by MOFPI at SKUAST Kashmir. The centre was established in 2001.The centre provides training about the food and vegetable processing. But the reach of thecentre is very much limited. A single centre to cater the needs of the three regions of the stateseems to be short of hand.CONCLUSIONThe status of food and processing manufacturing units is in nascent stage. The industry requireda comprehensive support of various government as well as non government agencies. Theinfrastructure building in terms of road connectivity, electricity availability and cold storagefacilities needs an immediate attention of the State government. For the efficient and effectiveinfrastructure on the Public Private Partnership (PPP) basis can be very much beneficial to thestate.The quality assurances can be ensured by establishing the quality management policy both at theorganizational level and as well as the governmental level. These recognized/ accreditedlaboratories should be easily accessible to producers of fresh/ dry fruits and processed foods whomay seek certification of quality of their products against affordable charges/ fees and well intime. Exploring avenues of bringing labs to land would be some innovative implementationswhere the IIIM and SUKAST can focus. These laboratories in addition, accreditation of thelaboratory by an appropriate accreditation agency within the country or from outside, shallenable the laboratory to improve its performance and to ensure reliability and accuracy of results.Quality assurance and testing labs will pave way for the market expansion of the food processingunits of the state of Jammu & Kashmir. Beside, this it will also monitor quality of state’sagricultural/ horticulture produce entering national/international trade. Thus, simultaneouslyhelps in building the brand image of the products.The technological awareness needs to be developed in the state. Training cum awarenessprograms for the existing unit holders can be conducted so as to develop the technologyawareness among the entrepreneurs. Also workshops can be conducted for the youth, educatedgraduates and professional graduates to highlight the technological advancement in the field ofthe food processing and also to make them aware about the growth and prospect in this industry.Such awareness programs can be held with the support of MSMEDI, NABARD, EducationalInstitutions, SIDCO, SICOP etc.The state government needs to develop the special schemes, policies and incentives for thedevelopment and growth of the food processing sector of Jammu and Kashmir. The governmentcan link its various schemes and programs with the food processing sectors. The food processorscan supply pulses, edible oils, milk, bread, Jams, Pickles, etc. to the schools/ offices comingunder the various government schemes. Food processing industry requires a strategic technicalintervention. The nurturing, support and collaborative at this stage will create opportunity ofdevelopment with synergetic effect. 167
  9. 9. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online),Volume 3, Issue 3, September- December (2012)REFERENCES1. Buyer-seller meet & conference, 2007, “Emerging opportunities and challenges of fruit industry of Jammu and Kashmir and developing national and international trade, organized by Indian Society of Agribusiness Professionals Apple Growers’ Association of India available online at,%20Temperate%20Fruits%20and%20Nuts%20- %20Brochure%20and%20Registration%20Form.pdf,Accessed on 5, August, 20122. Cold storages in India State wise data. Available at www.indiastat.com3. Digest of Statistics, 2008-09, Directorate Of Economics and Statistics , Government of J&K4. Economic Times , May 2010 ,”Food Processing – Food basket” ,Accessed on 1 August,20125. Food Processing Sector in India (2012), available online, Accessed on 1 March,20126. Farm-to-Fork, An Update of Agriculture and Food Issue, Bi Monthly ,E- Newsletter,Nov.2010, Vol.11 no.77. Food and Agri Processors Conclave,2011 , organized by ASSCHOM and SKUAST (Kashmir), available at and-K.pdf, Accessed on 1 June,20128. Global Food & Drink Sector Review (2009), available online at http://www.mergers-, Accessed on 18 april,20129. Greater Kashmir , 27/May/2010,” J&K Lags Behind in Hydel Power generation “Accessed on 18 Feb.,201210. Greater Kashmir, 17/Aug/2012 ,”Canned Food from J&K”, Accessed on 8 Feb.,201211. Greater Kashmir, 9/Feb,2009 ,“Valley Food Processing Lacks marketing Support”, Accessed on 19 August,201212. Gavane S. S. , “Food Processing: The biggest Agro-based industry in India”, Golden Research Thoughts, , ISSN No-2231-5063 Vol.1,Issue.X/April 2012pp.1-413. Hindustan times , 6 Feb. 2011,” Indias middle class population to touch 267 million in 5 years”, accessed on 16th September,201214. Indian Processed Food Industry Opportunities Galore,2008, available online at, Accessed on 10 October,201215. John Wilkinson and Rudi Rocha,2008,” Agri-processing and Developing Countries, Background Paper For The World Development Report 2008, available online at 1191427986785/WilkinsonJ&RochaR_Agriprocessing&DevelopingCntries[1].pdf, Accessed on 1 September,201216. North India :Leveraging Opportunities for Accelerated Growth, Confederation of Indian Industry, 2012 available at 20Opportunities%20for%20Accelerated%20Growth.PDF, Accessed on 7 Feb.,2012 168