Our Bureau

Chennai , Aug. 18

THE Government is exploring possibilities of setting up an export market development fund and a dedicated financial institution, an agri-business Processing and Development Bank of India, to support agro-based food processing industry, according to Mr S.P. Singh, Secretary, Ministry of Food Processing.

Addressing a seminar on "Indian Food Processing Industry Issues and Prospects", he said the industry should respond to this proposal with suggestions.

To support agro-based food processing industry, commercial banks, National Bank for Agricultural and Rural Development (Nabard) and Exim Bank should set up a dedicated financial and credit system, he said.

The seminar was organised by the Federation of Indian Export Organisations (Southern Region) and the Indo-American Chamber of Commerce (South India Council).

The Centre has also initiated a series of steps, apart from concessions in levies, to encourage this sector. These include ways to encourage a demand driven processed food industry. Processed foods will soon become a necessity with increasing economic growth.

It has circulated a draft of a model contract farming Act to State governments to bring the farmer and processor closer. State Governments should encourage this move by bringing in appropriate amendments to the Agricultural Produce Marketing Acts, he said.

Mr Singh cautioned exporters to pay attention to quality issues. This would emerge the single most effective non-tariff barrier in the coming years.

Apart from exports, the industry should look at the domestic market. The middle class segment constitutes a little less than 50 per cent of the population and its purchasing power matches that of the European countries. But in numbers they are more than the entire population of the European Union. To tap this market, processors will have to look at bringing down costs.

Packaging costs alone contribute to the high cost of processed foods. The industry needs to look at cheaper and effective options, he said.

Later, in an informal chat with reporters, Mr Singh said the Cabinet had approved a draft for a unified legislation for the food processing industry. The Bill would soon be introduced in Parliament, he said.

This is a long-pending demand of the industry that will bring under a single head some of the legislations that have an impact on food processing.

A single regulatory authority, a Food Safety and Standards Authority of India, would be put in place, he said.

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