North East’s food processing sector part of PM’s ‘Make in India’ mission

The North East’s Food Processing sector was a part of Prime Minister Narendra Modi’s ‘Make In India’ mission, Union Food Processing Industries Minister Harsmirat Kaur Badal said

”Organic production has a very huge national and international market and only North East India has the potential to meet this demand through organised production”, Badal said at the Indian Chamber of Commerce (ICC) Exclusive Interactive Session.

”I am happy to inform you the North East Food Processing Industry is part of Prime Minister Modi’s ‘Make In India’ mission”, she said.

Badal said this was her maiden visit to the North East and ”I am here to hear from the industry captains, entrepreneurs, growers of the food processing and allied sector and address their issues”.

”I was surprised to find very little utilization of funds when I took charge of the ministry but in five months I have ensured use of 50 per cent funds in a proper way”, the minister added.

She urged entrepreneurs to make maximum use of the National Mission on Food Processing.

Mega Food Parks have been conceptualized with all common infrastructure of a food processing industry under a hub like the North East Mega Food park in Tihu and ”our Government plans to set up food park in all the districts in next five years”, Badal said.

She also expressed concern on food waste in India and emphasized on the need for scientific and proper use of the infrastructure.

”Farmers are the future of Food Processing Industry and our ministry will ensure that food grown and produced reach consumers without wastage. This is what I call ‘Khet to Thali’ and we are committed to it”, she added.

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NE India and Italy eye business ties

Italy is looking forward at developing bilateral business and trade ties with North-east India. The Kolkata-based consulate of the west European nation has identified food processing, infrastructure and energy as three sectors where bilateral relations could be developed.

“To start-with, I think we can primarily work on three sectors, food processing, energy and infrastructure, to build bilateral relationship with North-East India,” said Cesare Bieller, consul general of Italy.

He added: “I cannot deny that there isn’t much business opportunity in North East. Also, the awareness level regarding this region is far less amongst the business community in Italy compared to other regions of India. But, I feel there exists great potential in food processing, energy and infrastructure in this region. My job is to pass on the message to the business community in my country so that business and trade relations could take-off.”

Bieller was in Guwahati today and had an interactive session with a group of journalists under the banner of Federation of Industry and Commerce of North Eastern Region (FINER).

Bieller, however, had a word of caution for the food processing sector of North-East. Citing the recent ban on alphonso mangoes by EU, he said Italy, along with other European nations, adhere to strict quality checks when it comes to import of food products. “You need to ensure certain standards. These are requirements you cannot avoid. Ensure the quality of what you grow and what you produce meet our standards,” Bieller said.

The North-East’s industry is looking forward at attracting technology from Italy, particularly in the food processing sector. “We have potential in food processing industry. What we need most to exploit that potential is technology. We also want some sort of buyback arrangement so that investors is ensured, at least in the initial years, that selling his products would not be a problem,” said RS Joshi, chairman of FINER.

FINER has also urged upon the consul general to press upon the Union government to ease ATA Carnet norms for North-Eastern states of India. ATA Carnet is an international uniform customs document which permits duty free temporary admission of goods especially for exhibition and showcasing purpose. “We would want food products be included under ATA Carnet for North-East as then only it would be of much help for us. We would also want Guwahati international airport to be authorised to avail ATA Carnet facilities,” said Joshi.

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A Call to Farms

So you thought agriculture was a poor man’s business and the high-profile financial world of Dalal Street was the only place to make big bucks, right? Wrong. Actually, many Indian lords of the field are raking it in with simple commodities such as potatoes, maize, rice and soybean, with their success attracting big private equity deals at a time when the rest of the economy is in the grip of a slowdown.

Business Today has picked four agricultural barons to look at how they hit pay dirt.

A Call to Farms

Anil Agrawal, Anil Mittal, Rahoul Jain and Jang Bahadur Singh Sangha

Take Cornell University-educated Jang Bahadur Singh Sangha, for example, who bet big on potato and maize when Punjab was growing more lucrative crops such as wheat and paddy. Today, the Sangha Group is the largest potato and maize producer in the country.

Then there’s Anil Mittal, Chairman and Managing Director of India’s top rice exporter, KRBL, who has given India one of its best-known brands, India Gate, and clocked sales of Rs 2,100 crore in basmati.

Some like Rahoul Jain, MD of Capricorn Food, have made their fortune in more unconventional crops. Jain is one of the country’s top mango processors and has just received an infusion of Rs 60 crore from private equity firm Quadria Capital.

Little-known Sanwaria Agro Oil’s Director Anil Agarwal is another agricultural baron who tapped his family’s years of expertise in the soybean business to convert it into a Rs 2,000-crore company.

How did we pick these agricultural barons? Simple, these five commodities represent areas of core need. More importantly, they are also relatively free from frequent government intervention and these entrepreneurs have used innovative technology in businesses that for years saw little or no change at all.

Today, agricultural commodities are more relevant than ever before as India Inc struggles with an economic slowdown and galloping inflation.

Food for Thought: India’s food expenditure has shifted towards high-value foods in the last decade, growing at an average of 8 per cent annually

According to a McKinsey-CII study, the agricultural processing business has the potential to grow to Rs 5.7 lakh crore in 2030 from Rs 1.1 lakh crore in 2011. Food exports are expected to rise to Rs 7.7 lakh crore in 2030 from Rs 1.4 lakh crore in 2011. Mangoes, bananas, potatoes, soybean and poultry are expected to lead the rise.

Despite the potential, Indian agriculture is beset with problems. Vast tracts of agricultural land have been lost to non-agricultural uses because of rapid industrialisation and urbanisation. Moreover, declining per capita land availability and shrinking farm sizes are also responsible for the slow performance of agriculture. To make things worse, Indian agriculture is dependent on the vagaries of nature, and low mechanisation and power subsidies remain big worries.

“The major issue is that governments do not recognise the farm-to-fork needs of the farmer. Most of the policies are aimed at assisting farmers at field, but major bottlenecks are there when it comes to marketing the produce,” says Rakesh Kumar, who heads Nalanda Organic Vegetable Growers’ Federation.

Still, agriculture remains the one ray of hope for the economy. According to CRISIL’s State of the Nation report, agriculture is set to bounce back because of a bountiful monsoon. As the largest sector in the country employing 52 per cent of the population, it continues to weigh in on GDP growth. “Farm GDP growth could more than double from last year … This will help check food prices and support rural consumption,” it says.

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UK’s first ‘social supermarket’ opens to help fight food poverty

Britain’s first “social supermarket” opens its doors on Monday, offering shoppers on the verge of food poverty the chance to buy food and drink for up to 70% less than normal high-street prices.

If successful, the Community Shop, in Goldthorpe, near Barnsley, south Yorkshire, which is backed by large retailers and supermarkets, could be replicated elsewhere in Britain.

Community Shop is a subsidiary of Company Shop, Britain’s largest commercial re-distributor of surplus food and goods, which works with retailers and manufacturers to tackle their surpluses sustainably and securely.

It sells on residual products, such as those with damaged packaging or incorrect labelling, to membership-only staff shops in factories. The new project goes one step further, located in the community for the first time and also matching surplus food with social need.

Membership of the pilot store – in Goldthorpe, an area of social deprivation – will be restricted to people living in a specific local postcode area who also get welfare support.

Individuals who shop at Community Shop will not only get access to cheaper food, but will also be offered programs of wider social and financial support, such as debt advice, cookery skills and home budgeting.

The scheme is being supported by retailers, brands and manufacturers, including Asda, Morrisons, Co-operative Food, M&S, Tesco, Mondelez, Ocado, Tetley, Young’s and Müller. All are diverting surpluses to the pilot.

Company Shop hopes to open Community Shops in London and beyond next year should the pilot prove successful and sustainable.

Sarah Dunwell, director of environment and social affairs at Company Shop, said: “With many families facing tough times in Barnsley, Company Shop wanted to do more to match surplus stock with people who really need it.

“I was delighted to help develop and deliver the UK’s first social supermarket. Industry surplus is hard to avoid, but what Community Shop shows is that if we all work together we can make sure that surplus food delivers lasting social good.”

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Branded Spices gaining flavour in Indian households

India’s domestic spices market is estimated at 5.3 mn tons, with branded segment contributing 20% in value terms. This segment is growing at a compound annual growth rate (CAGR) of 14% in value terms and is expected at a CAGR of 12% to 15% in the next four to five years.

Branded spices market in India is showing a healthy growth following a shift in buying patterns of consumers observed during the past decade. Now the preference has changed to ground spices instead of whole spices- a trend more visible in urban areas, according to a new report by Rabobank titled Decoding Spices, India Emerging as a global hub for processing spices.

India’s domestic spices market is estimated at 5.3 mn tons, with branded segment contributing 20% in value terms. This segment is growing at a compound annual growth rate (CAGR) of 14% in value terms and is expected at a CAGR of 12% to 15% in the next four to five years.

Direct household consumption of spices (whole or powder) has remained constant, ranging from 3.4% to 3.6% of total food expenditure in households, however, consumption of spices in quantity terms has grown through increased expenditure on processed food products such as snacks and beverages including at home and out-of-home consumption.

– Indian market preference for spice blends and mixes are rising.
– Organised retailers have launched private labels.
– Increased demand is observed in seasonings, oleoresins, extracts for various food and non-food applications.

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Build brand NE, say experts

Build brand Northeast with the inherent strengths of the region is what speakers highlighted at a Northeast marketing conclave here today.

The focus of the Ficci-organised conclave, Remark, was to help the region attract investors and ensure that local goods and services are able to compete in the domestic and international markets.

The chief operating officer (COO) of Amalgamated Plantations Private Ltd, Prabir Banerjea, said the Northeast should create a regional identity with some common factors to build brand Northeast. The identity can be based on four attributes found in the region — natural, fresh, traditional and wild & unexplored.

He said multinationals were attracting consumers with local flavours and it was imperative that the region built on its inherent strengths.

“The region has the potential to become largest producer of organic and naturally-grown horticulture and spice products,” he said.

In spices, it can become a supplier of high value spices to processors, whereas in fruits, it can supply fruits like passion fruit, pineapple, strawberry and kiwi to various markets. In flowers, it can target the metro market and create a retail chain.

He said consumers/customers were increasingly looking at hygiene and convenience and private label brands were becoming the order of the day in modern trade.

Assam health and education minister Himanta Biswa Sarma, who was the chief guest at the conclave, said marketing should be based on honesty. “There should be a honest admission of facts,” he said.

Referring to Kaziranga, which is a big craze for tourists, he said the authorities should tell the tourists what they could expect and not go over board.

“If you consider human development index, Assam comes in 16th position but what it does not say is that it comes third when one considers last three years and not the entire period after Independence. Even when considering the drop in maternal mortality rate, Assam will have beaten Gujarat when we look at the last three years. Comparisons should be done amongst equals and it should be taken into account that some of them are not historically in an advantageous position,” Sarma said, adding that social campaigns should be backed by ground reality.

Other speakers stressed that the Northeast needed to make right choices in chalking out an effective strategy to market itself.

Though it has many unique goods and products, there seems to be a lacuna in marketing them in national and international markets, the speakers said.

Bejon Misra, a consumer policy expert, said during a panel discussion on opportunities and issues of direct selling that promises made to a consumer must be delivered in the manner he or she wanted.

“The key expectations of the consumers are accountability, transparency, standard, information, non-discrimination, a good redressal mechanism and service with a smile,” he added.

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Tea major forays into spice trade

Amalgamated Plantations Private Limited is planning to introduce a brand of spices sourced from the Northeast, including pepper from its plantations, in the national market.
Pepper being grown in a nursery inside an APPL garden.

Guwahati, July 14: Amalgamated Plantations Private Limited, the second largest tea producer in the country, is all set to launch its brand of spices.

The tea major, which has been growing other crops on its estates, is aiming big vis-à-vis spices and wants to become a national player within five years.

“The idea is to have fair price aggregation and develop market linkages with the organised sector. APPL’s vision is to become the preferred provider of agri business supply solutions in the Northeast to ultimately benefit the farmer,” Prabir Banerjea, the chief operating officer of APPL’s agri business division, told The Telegraph.

The company is growing only black pepper — the most traded spice in the world — in its gardens. Black pepper, known as the king of spices, is known for its hot, biting flavour and pungent aroma. The latest price for black pepper in India ranges from Rs 35,000 to Rs 50,000 per quintal. The company sources other spices from different states of the region.

“The brand names are being shortlisted and our brands could hit the market by August,” Banerjea said.

The company started growing black pepper commercially from 2007 and the yield this year was 24 metric tonnes — 20 per cent higher than last year. As on date, the company has 200 hectares under black pepper cultivation.

He said the company planned to announce the origin of the produce and their USPs across marketing channels in the organised sector, as “at present, spices from the Northeast are being sold in mandis and nobody knows where these are coming from”.

Independent nurseries have been set up in all gardens to ensure self-sufficiency in planting material and high-yielding and drought-resistant varieties have been sourced from south India.

Banerjea said single polished turmeric fingers with specified curcumin content were recently sent to Olam International — a leading global integrated supply chain manager and processor of agricultural products and food ingredients — for export. “This is for the first time spices have been exported from the Northeast,” he said. The turmeric was mainly sourced from Assam’s Karbi Anglong district.

The company is also setting up a state of the art processing and packaging plant for spices and fruits aggregated from the Northeast at the North East Mega Food Park in Tihu. Construction will commence after the monsoon this year and trial production will start from the winter of 2014.

The official said the company’s entry into the spices sector in the Northeast would create national links for local produce, benefiting the farming community of the region.

Spices are high value export-oriented commodities, which play an important role in the country’s agricultural economy, as India is the principal source of spices in the global market. In the Northeast, black pepper is mainly grown in Meghalaya, which produces about 400 metric tonnes of the spice annually.

According to Spices Board, the Northeast has tremendous potential for largescale production of spices and it is anticipated that the region can create exportable surpluses at competitive prices, ensuring that the country stays on top in the international spices market.

In fact, the spices sector has been making strides in the Northeast and Spices Board has proposed an outlay of Rs 66.75 crore in the Twelfth Plan to promote the sector in the region. The Twelfth Plan focus is on development of large cardamom and other spices with respect to area expansion, irrigation and land development, mechanization, organic farming and post-harvest processing.

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APPL to help North-East farmers

APPL to help North-East farmers

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African countries invite Indian investment in agriculture

African nations like Zambia, Ethiopia and Mozambique invited Indian investors to invest in various sectors, especially in agriculture, saying this has the potential to provide food to both Africa and India.

Diplomats from the three countries showcased the immense potential and urged Indian investors to take advantage of the investor-friendly climate and a host of incentives they were offering.

They were addressing a session on “Doing business with African countries” organised by the Confederation of Indian Industry (CII) here Thursday.

The diplomats told the investors that by investing in their respective countries, they (the investors) can also reach out to markets in the entire Africa, Middle East and European Union.

With vast unutilised arable land, best agro-climatic conditions, a stable political system and investment incentives including 100 percent repatriation of profit, the African countries offer huge business opportunities to Indian investors, they said.

The diplomats said African nations were ideal destination for investment for Indian investors given the commonalities between India and Africa.

Susan Sikaneta, high commissioner of Zambia, said Indians with their good knowledge of agriculture, expertise and technology should come forward to invest in agriculture in Zambia, which is offering land and other incentives on first come, first served basis.

The central African country has 43 million hectares of land but only six million is being currently used.

“Chinese are coming in big numbers but we love Indians to come. You have passion for Africa. You are not like other countries which are interested only in making money,” she said advising investors not to miss the opportunity.

Eighty percent of Zambia’s 13 million population is dependent on agriculture. The investors can grow and export maize, cotton, wheat ando ther produce.

Maria Fatima G.C. Phume, deputy high commissioner of Mozambique, said only 15 percent of 36 million hectares of arable land in her country was utilised due to lack of agriculture technology.

She said Mozambique, which was one of the world’s fastest growing economies, offers excellent investment opportunities in agriculture,energy, mining and infrastructure.

“The investment in agriculture can not only secure food for our people but also for India. The investors can also export the agriculture produce to other African countries and Middle East,” she said.

With 23.4 million population, Mozambique has Portuguese as national language but English is widely used for business purposes

Jerusalem Amdemariam, minister counsellor, economic and business in the Ethiopian embassy, highlighted the investment incentives like 100 percent exemption from import duties. The investors are allowed to repatriate the entire profit. Agro-processing industries are also exempted from income tax for two to seven years

With 82 million population, Ethiopia is the second most populous African country after Nigeria and with its proximity to Middle East and Europe, offers access to big markets.

She said Indian government was collaborating in road developments and laying new railway lines. Ethiopia offers tremendous business opportunities in agriculture, manufacturing particularly agro-processing,food and beverages, she added.

I.Y.R Krishna Rao, Andhra Pradesh’s special chief secretary, cooperation and agri-marketing, said a delegation headed by state agriculture minister would soon visit Africa to explore investment opportunities in agriculture and allied sectors.

“We should really build up mutually beneficial relationship in agriculture which has tremendous implications in terms of food security in India and as well as Africa,” he said.

Rao said once African agriculture develops, it can to a large extent ensure food security of the world. “As a continent, in terms of agriculture, there is a lot of scope for development there,” he said.

Suchitra K. Ella, chairperson, CII-Andhra Pradesh, said there was tremendous scope for cooperation between India and the three African countries given their historic relationship and the commonalities.

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Vietnam set to beat India to emerge as the commodity trading hub of South-East Asia

When Singapore Mercantile Exchange, the first pan-Asian commodity exchange, opened for business in February, it chose Ho Chi Minh City as the delivery benchmark for its pepper contract, constituting a fresh setback for India in its losing battle against Vietnam for supremacy as South-East Asia’s commodity hub.

Prices set on the Mumbai-based National Commodity and Derivatives Exchange Ltd (NCDEX) have traditionally moved the global pepper market, but now this edge is in danger of being lost.

“The new exchange is still in a nascent stage. But Vietnamese traders are aggressive. The warehouses as delivery points for the exchange are getting full,” said S Kannan, executive director at the Jakarta-based International Pepper Community, an inter-governmental association of pepper-producing nations.

The annual global pepper market is worth around $2 billion. Singapore Mercantile Exchange’s preference for Vietnam as the new market mover is an indication that the global market no longer considers India as an influential player due to its declining volumes.

This is the latest in a series of setbacks that India has suffered on the commodities front as a combination of stagnant yields, rising labour costs, tiny farms, low mechanisation and faulty government policies erode the country’s competitiveness in comparison with its South-East Asian rival.

Though it is no match for India in size and resources, Vietnam’s graph as a commodity hub has been steadily climbing. In the past five years, the country with a population of 90 million has, one by one, overtaken India in production and export of cashew, seafood, coffee and pepper. Very soon, it is expected to surpass India in rubber production as well.

Vietnam’s aggressive growth in agriculture and commodity trade has begun attracting global investors.

The International Finance Corporation (IFC), a division of the World Bank, recently announced two investments totalling $40 million to aid Vietnam’s growing demand for trade and commodity financing.

Vietnam gets its edge from policies which link the entire value chain from production to the final consumer overseas and are designed to improve efficiency at each level, said PK Joshi, director (South Asia), International Food Policy Research Institute, a Washington-based think tank that helped the South-East Asian nation boost its rice production a decade ago.

“Vietnam has a policy for production that ensures timely delivery of inputs and high-quality services, a policy to create market linkages, and a very effective trade policy with clear strategies on how to target each market.

Together, this becomes a great recipe for success in the global commodity market,” Joshi added.

A decade ago, India was the world’s largest pepper producer, with an annual crop of 80,000 tonnes.

But while its annual production has declined to 48,000 tonnes, Vietnam’s has increased to 1.20 lakh tonnes, and it now exports almost five times more pepper than India.

“Vietnam has successfully introduced high-yielding pepper vines from Madagascar,” said CP Krishnan, director, Geojit Comtrade, a commodity brokerage.

A similar story was repeated in cashew nuts. India used to buy raw cashew nuts from Vietnam for processing and re-export, but soon Vietnam set up its own processing centres. Today, it exports around 1.70 lakh tonnes of cashew kernels versus 1.10 lakh tonnes by India

Higher productivity has taken Vietnam past India in the global seafood market as well. “Vietnam has gone in for intensive cultivation. While we have touched $3.5 billion in seafood export, they have crossed $5 billion,” said Anwar Hashim, managing director, Abad Fisheries.

The shrimp, Vannamei, currently a top money-spinner in the world market, is a good example of how India has lost the race. “Vietnam’s production of Vannamei is around 75,000 tonnes while we are at 30,000-40,000 tonnes. In Basa, which is widely consumed as fillets, Vietnam has a productivity of 250 tonnes per hectare, while we are at 20 tonnes,” added Hashim.

In rubber, too, India’s position as the fourth-biggest producer is under threat from Vietnam’s faster growth. Last year, its production grew 8% to 8.12 lakh tonnes and it is slated to rise by 6% this year to 8.6 lakh tonnes.

In comparison, India’s rubber production rose by 4.9% to 8.93 lakh tonnes in 2011. It is expected to slow down to a mere 4% and reach 9.27 lakh tonnes this year.

Vietnam may overtake India by 2015, given its current rate of growth, said Jom Jacob, senior economist at the Kuala Lumpur-based Association of Natural Rubber Producing Nations.

“They are going for high-yielding clones to enhance production. Nearly half the plantations are state-owned and are run efficiently,” he added.

To stay in the reckoning, India needs to get its policy act together. “India is only targeting production. It is not thinking of marketing and it has nothing for trade.
We need to stop this piecemeal approach if we wish to stay competitive,” said Joshi.