Food processing industry in India: Opportunities and constraints for Fruits and vegetable processing sector

Abstract

India produces 82 mm tones of vegetable (10.9% of global production), and 47 mm tones of fruits (8.4% of global production). However, the level of processing of fruits and vegetable in India is about 2%. This, low level of processing resulting 35% wastage of total fruits and vegetable production of the country that accounts for approximately Rs. 35000 crore per annum. Since 1976, significant increases in the installed capacity have been found, as the number of fruits and vegetable-processing units has been increasing. This has gone up further after 1991. However, the level of capacity utilization remains below 50% of total installed capacity. It may be because of the meager demand of processed fruits and vegetable. Studies on cross-country consumption pattern show that consumption structure of consumers are changing with the increase in their income levels. They shift their consumption from normal food like cereals’ to high value food like fruits and vegetable, meat, fish, and processed food. In order to examine this in Indian context, an attempt has been made in this study to calculate the Engel elasticity of demand for vegetable, fresh fruits, dried fruits and processed food by using data on per capita monthly consumer expenditure from NSSO 55th round.

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