Govt plans national food grid to ease supply, rein in prices

  • Gaurav Choudhury
  • Updated: May 27, 2016 07:31 IST

NEW DELHI: The government plans to set up a “national food grid” to move fruit and vegetables from surplus areas to deficit ones quickly by ramping up storage and processing as part of a long-term strategy to contain food prices.

The food processing ministry will bring in the “National Food Grid Development Authority Bill” that will enable seamless movement of food products,” food processing minister Harsimrat Kaur Badal told HT.

A “food grid” is akin to a power grid that speedily allocates power according to demand.

Badal said that a national cold chain network would be an essential part of the grid for ferrying goods during glut and shortfall.

The National Food Grid Development Authority will undertake mapping of all gaps in terms of infrastructure for storage, cold chains, markets and food testing laboratories.

“We shall bring policies, which shall put food processing on an auto-pilot seamless growth mode,” Badal said. “We began with Nabard agriculture loans, FDI in food retail and now we are focussing on food processing infrastructure”.

In 2014, the government set up a Rs 2,000-crore corpus for National Bank for Agriculture and Rural Development (Nabard) to help lend to food-processing units at a lower interest rate.

In the budget for 2016-17 in February, finance minister Arun Jaitley announced the government’s intent to allow 100% foreign direct investment (FDI) in food retail.

FDI in multi-brand retail for food products will also likely come bundled with the condition that these items are completely produced in India.

Inter-ministerial consultations have begun for writing the finer policy rules for fully opening up the food sector to overseas investors.

Although India’s food processing industry accounts for 32% of the total food market, only 2-3% of India’s vegetables are processed into various products to increase their shelf life. “The objective is to develop a singlewindow mechanism for all kinds of approvals in a stipulated time-frame for food processing industries. The national food grid authority will bring about a transparent regulatory approval system,” the minister said.

All power of approvals and regulations shall be vested in the authority, which will have representatives from industry, farmers and labour.

T he Food Safety and Standards Authority of India (FSSAI) has harmonised product standardisation for more than 8,000 additives, bringing them on a par with global Codex parameters, a joint WHO-FAO Food standards programme, Badal said. “This is a big step forward because until recently the FSSAI acknowledged only 370-odd categories, which made the product approval procedure tedious and cumbersome for the food processing industry.”

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