External and Internal Goods: Self-sufficiency in food

Introduction:

• Political independence does not have much meaning without economic independence. One of the important indicators of economic independence is self-sufficiency in food grain The overall food grain scenario in India has undergone a drastic transformation in the last 75 years.
• India has traversed a long journey from begging other countries for food to overflowing grain stocks. We started as a victim of enormous exploitation by Colonial Rule. Our natural resources, iron ores, gold mines, wealth, and manpower were subject to intense exploitation. Due to these atrocities, the Indian economy on the eve of independence showed poor/low economic growth.

Features of the Indian Economy on the Eve of Independence

• Underdeveloped Economy
• Backward Economy
• Stagnant Economy
• Agricultural Economy
• Semi-Feudal Economy

Food grain scenario in India after gaining Independence:

• India was a food-deficit country at the time of its Independence. It had to import food grains to feed its people. The situation became more acute during the 1960s. The imported food had to be sent to households within the shortest possible time. The situation was referred to as ‘ship to mouth’.
• Right after Independence, India had to import a large quantity of foodgrains from the USA and other developed economies and due to successive wars in 1948, 1962, and 1965, India faced an acute shortage of food. Thus, the famous slogan was given by former Prime Minister Shri Lal Bahadur Shastri - “Jai Jawan, Jai Kisan”.

The Transformation:

• After independence, many measures had been adopted to gain self-sufficiency in food grains. India adopted a new approach in agriculture like the 'Green Revolution' to amplify the manufacturing of wheat. The success of wheat was later replicated in rice.
• The highest rate of growth was achieved in Punjab and Haryana, where the foodgrain production jumped from 7.23 million tonnes in 1964-65 to reach an all-time high of 30.33 million tonnes in 1995-96. Tamil Nadu and Andhra Pradesh, on the other hand, recorded massive increases in rice yield.
• Presently, Food Corporation of India (FCI) storage facilities are overflowing with food grain stocks, which has made it possible to ensure food security in the country. For example, the existence of Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) was introduced during the first nationwide lockdown due to Covid-19 would have been impossible.

Green Revolution:

• Green Revolution that began in the 1960s enabled the nation to make great strides in domestic food production and significantly contributed to progress in agriculture and allied sectors. The main focus areas of the movement were:
  • Farm mechanization by substituting the use of cattle with modern tractors and other machinery to increase productivity,
  • The use of hybrid varieties of seeds for better yield, and
  • Using the new dams constructed post-independence for better irrigation.
• It transformed India from a food-deficit nation to a food-surplus country.

White Revolution:

• White Revolution is the concerted efforts on a cooperative level to increase the milk supply.
• As a result, the Indian Dairy Industry has grown to the extent that milk output has not only topped the world.
• It has also exhibited sustained growth in the availability of milk and milk products.
• The dairy sector is now the largest contributor in the agricultural sector to the nation’s GDP.

National Dairy Development Board (NDDB):

• It was formed in 1965 to promote, plan and organize dairy development through cooperatives launched Operation Flood in 1970 which is considered to be the world’s largest dairy development programme.
• Under this programme, professionals were employed for marketing and application, and science and technology to link rural producers with urban consumers.

Fast-forward to 2022:

• India’s agriculture exports touched a historic high of USD 50 billion (FY 2021-22). The highest-ever exports were achieved for staples like rice, wheat, sugar, other cereals, and meat. As per the provisional figures released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), agricultural exports have grown by 19.92% during 2021-22 to touch $50.21 billion.
• India has achieved self-reliance in the production of food grains in the last several decades, and it is a mammoth achievement for our agriculture sector as well as the overall economy. Today, India is the world’s largest sugar-producing country and holds the second position in rice production only after China.
• India is also the second largest producer of wheat with a share of around 14.14 percent of the world’s total production in 2020. India is also inching towards self-reliance in pulse production. As per the 4^th Advance Estimates, the production of food grains in the country is estimated at 315.72 million tonnes which is higher by 4.98 million tonnes than the production of food grains during 2020-21.

To make Indian agriculture future-ready, the Government has introduced many initiatives:

• National Mission for Sustainable Agriculture
• Promotion of scientific warehousing
• The adoption of drone technologies
• Agri-Tech Infrastructure Fund
• Paramparagat Krishi Vikas Yojana
• Long-Term Irrigation Fund and Micro Irrigation Fund
• Rastriya Krishi Vikas Yojana (RKVY) Scheme

Food Processing and the Present Status of the Sector in India

• Food processing industry in India is a “sunrise sector” that has gained prominence in recent years. This sector serves as a vital link between the agriculture and industrial segments of the economy.
• Food processing is a type of manufacturing in which raw materials are processed into intermediate foods or edible items using scientific knowledge and technology. Bulky, perishable, and occasionally inedible food resources are converted into more usable, concentrated, shelf-stable, and pleasant meals or beverages using a variety of techniques.

Trends in Food Processing Sector

• The contribution of the food processing sector has increased continuously with Gross Value Added (GVA) in the food processing sector from Rs.1.34 lakh crore in 2014-15 to Rs. 2.37 lakh crore in 2020-21 at a Compound Annual Growth Rate (CAGR) of 9.97%.
• The Indian food processing industry is on the cusp of a transformation, and the industry could potentially grow at a CAGR of 10-11 per cent to reach $500-530 billion by FY27, according to a report.

Present Status:

• India is the world’s second-largest producer of fruits and vegetables, after China, yet just 2% of the crop gets processed.
• Despite a significant manufacturing base, the processing is little (less than 10 percent). 
  • Processing accounts for around 2% of fruits and vegetables, 8% of marine products, 35% of milk, and 6% of poultry.
• India has the world’s greatest livestock population, with 50% of buffaloes and 20% of cattle, but only around 1% of the entire meat population is transformed into value-added goods.

Various Initiatives by the Government

Pradhan Mantri Micro Food Industry Upgradation Scheme

• It was launched by the Ministry of Food Processing Industries in June 2020 under the Atma Nirbhar Bharat Campaign to enhance the competitiveness of individual micro-enterprises.
• The scheme adopts the One District One Product (ODOP) approach to reap the benefit of scale in terms of procurement of inputs, availing common services, and marketing of products. It will be implemented over a period of five years from 2020-21 to 2024-25.

Agriculture Infra Fund (AIF)

• It is a financing facility launched in July 2020 for the creation of post-harvest management infrastructure and community farm assets, with benefits including 3% interest subvention and credit guarantee support.
• Under this, Rs 1 lakh crore from 2020-21 to 2025-26 provision of funds has been made and interest subvention and credit guarantee assistance will be given till the year 2032-33.

Pradhan Mantri Krishi Sampada Yojna (PMKSY)

• Pradhan Mantri Kisan Sampada Yojana, a Central Sector Scheme of the Ministry of Food Processing Industries, is envisaged as a comprehensive package, which will result in the creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet.
• Seven component schemes under PMKSY:
  • Mega Food Parks.
  • Integrated Cold Chain and Value Addition Infrastructure.
  • Infrastructure for Agro-Processing Clusters.
  • Creation of Backward and Forward Linkages.
  • Creation/Expansion of Food Processing & Preservation Capacities.
  • Food Safety and Quality Assurance Infrastructure.
  • Human Resources and Institutions.

Various Policy Measures taken by the Government

• Inclusion of food & agro-based processing units and cold chain as an agricultural activity under Priority Sector Lending (PSL) norms in April 2015.
• As a measure toward ease of doing business, the Food Safety and Standards Authority of India (FSSAI) through notifications in 2016 has shifted from product-by-product approval to an ingredient and additive-based approval process.
• 100% Foreign Direct Investment (FDI) approval under automatic route has been permitted for the food processing sector
• A Special Food Processing Fund of Rs. 2000 crore was set up with National Bank for Agriculture and Rural Development (NABARD) to provide affordable credit for investments in setting up Mega Food Parks (MFP) as well as processing units in the MFPs. 

Food processing Industry is significant in India

• Enhance farmer’s income by better utilization and value addition of agricultural produce
• Minimize wastage at all stages in the food processing chain by the development of infrastructure for storage, transportation, and processing of agro-food produce
• Introduce of modern technology into the food processing industries from both domestic and external sources;
• Encouraging R&D in food processing for product and process development and improved packaging
• Provide policy support, and support for the creation of Infrastructure, capacity expansion/ Upgradation and other supportive measures for the growth of this sectors
• Promote the export of processed food products
• Generate Employment: It provides direct and indirect employment opportunities because it acts as a bridge between Generate Employment Agriculture and Manufacturing
• Reduce malnutrition: Processed foods when fortified with vitamins and minerals can reduce the nutritional gap in the population
• Crop-diversification: Food processing will require different types of inputs thus creating an incentive for the farmer to grow and diversify crops.

Self-Reliant in Food:

• Self-reliance on food does not mean that we have to produce everything ourselves at home, irrespective of the cost. Its true meaning lies in specializing in commodities in which we have a comparative advantage, exporting them, and importing those in which we don’t have a significant comparative advantage.

Challenges to Self-Reliance in Food

• High Dependence on Edible Oil Import: India has achieved self-reliance in agriculture by producing a reasonably large amount of food, and also being a net exporter of Agri-produce. The high dependence on imports for edible oils — hovering around 55 to 60% of consumption — however, remains a concern. India’s potential to emerge as a significant exporter of Agri-produce remains untapped.
• Low-Value Exports: Further, most processing in India can be classified as primary processing, which has lower value-addition compared to secondary processing.
  • Due to this, despite India being one of the largest producers of agricultural commodities in the world, agricultural exports as a share of GDP are fairly low in India relative to the rest of the world.
  • The same proportion is around 4% for Brazil, 7% for Argentina, and 9% for Thailand, while for India it is just 2%.
• Lack of Effective Decentralized: The real promise of a decentralized system — of experimentation, of learning from each other, and the adoption of best-practices and policies — has largely failed to materialize.
  • Instead, Indian agriculture since Independence has remained highly fragmented.
• Low-Value Exports: Further, most processing in India can be classified as primary processing, which has lower value-addition compared to secondary processing.
  • Due to this, despite India being one of the largest producers of agricultural commodities in the world, agricultural exports as a share of GDP are fairly low in India relative to the rest of the world.

Conclusion:

• Indian journey has been remarkable and it is essential to salute our farmers for these heroic accomplishments. At the same time, it is also crucial to make the best use of the position we have attained for future growth. It is also the time to acknowledge the contribution made by the farmers in reaching this feat, without whom it would have been a farfetched dream.
• Keeping in mind the needs and challenges of the future, the country must move ahead with strategic plans. We are aware that to sustain high food grain production, we have to increase productivity too.