1. NOVEMBER 6-7, 2013 NOVEMBER 6-7, 2013 HYDERABAD INTERNATIONAL CONVENTION CENTER, HYDERABAD. HYDERABAD INTERNATIONAL CONVENTION CENTER, HYDERABADNOVEMBER 6-7, 2013 AD INTERNATIONAL CONVENTION CENTER, HYhe Next Wave of Opportunitie s T K NOWLEDGE P APERext Wave of O p p o r tu

2. Enhancing Competitiveness of Indian Food Chain2013 Food360 Knowledge Paper2 3. Message from Ministry of Food Processing IndustriesIndia is a richly endowed agricultural nation. It has a tenth of worlds arable land and a fifth of worlds irrigated land. We are major producer of fruits and vegetables and top producer of milk. We have a domestic market of over a billion consumers with 300 million middle class. Preferences and practices in consumption are changing very fast in favour of processed food. Abundant supply of raw materials, increased in demand and fiscal incentives offered by the government has impacted food processing sector positively in the last couple of years. Today the food processing sector growing at a faster rate than agriculture sector. This implies that more and more agriculture produce is now getting processed. However, we need to accelerate the trend as the level of wastage at harvest and post-harvest stage is unacceptably high. Food processing industry in India is increasingly seen as a potential source for driving the rural economy as it brings about synergy between the agriculture, industry and consumer. A well-developed food processing industry is expected to increase farm gate prices, reduce wastages, ensure value addition, promote crop diversification, generate employment opportunities as well as export earnings. Even though India is one of the largest food producers in the world, it only accounts for 2.0 per cent of total worldwide food trade. We have not been able to tap the potential of overseas food market despite our potential. I am happy to note that the theme of the 3rd edition of FOOD 360 is The next wave of opportunities. FICCI is also bringing out two Reports; FICCI-KPMG report on Enhancing Competitiveness of Indian Food Chain and FICCI-ICRISAT Report on Promoting Entrepreneurship in Food Processing Sector for Inclusive Market Oriented Development (IMOD) - Strategies & Support Mechanisms. These two reports identify challenges and also convey the opportunities for the concerned stakeholders. I hope the deliberations of the conference and reports will provide further impetus for the growth of the sector.SIRAJ HUSSAIN Secretary, Ministry of Food Processing Industries Government of IndiaFood360 Knowledge Paper3 4. Message from the conference General ChairMessage from the Conference General ChairFICCI Andhra Pradesh State Council is organizing the 2nd The of FOOD 360: International Processing Industries are seen as future edition Indian Agriculture and FoodConference on business opportunity by many countries around the Agribusiness and Food Processing on November 5-6, 2012. world. India is no exception in this thinking and more so Andhra Pradesh. As agriculture oriented country, it The second edition of FOODfor India particular significance to the fullest in developing the is a great opportunity 360 is of to use its strengths as sector to stay atInnovation andon a global stage by firmly establishing these two it is focused on the forefront Technology. I firmly believe that innovation and technology in Agriculture and industries in the economy. Food sector will drive the future of our country and world Given at large. the important role played by the sector, the government has accorded its highest priority to ensure higher growth trajectory and better returns to the The key challenge is farmers. However, the sector is yet toinnovations. full potential in terms of yield, to encourage and enhance agricultural realise its Presently, there is a need toGiven the countrys Agri-climaticof innovation the sector fulfills only 50-60 processing and exports. understand and examine the process conditions, in Agri and potential yield sector. crops. Private marketing plays a percent of thefood processingfor mostWe believe thatequity participation, PPPs, better marketing and phenomenal role than production. It increasingly drives agriculture and food branding that drove this sector in several developed and middle-income countries are yet to articulate its processing development. Hence, we volumesadopt changing approach for in global exports is below par presence in India. Despite good need to of produce, Indias share support to encouragement to and food innovation. comparedandthe top agricultureagricultural processing countries.ToThe conference will try to look into additional insights and types of innovations examine the sector and its opportunities, ICRISAT, KPMG and FICCI have jointly developed the that can be of FICCI-FOOD 360 Conference Knowledge Report. This effort builds on the previous third edition derived from an innovation and technology perspective that can influence the editions of it and provides detailed use of and suggestions in a 360 degree holistic first and second present and future generations andanalysisInnovation, Information and Technology for map for the sector. approach to an integrated road agricultural development in India. In this background, I am happy that FICCI has taken a lead in organizing this I hope this report will be an opportunity to explore fresh avenues for the development by every conference in this sector. stakeholder of Andhra Pradesh again in the year 2012. I am sure the participants will be benefited out of the Conference deliberations and Exhibitions. We hope this report will encourage a greater participation by Indian & International companies in the Agri and food processing sectors. We hope this report will be useful and look forward to your inputs and feedback. J A ChowdaryConference General Chair - FOOD 360 J A Chowdary Co-Chair, FICCI AP State Council Conference General Chair - FOOD 360 & Executive Chairman - Talent Sprint Co-Chair, FICCI AP State Council & Executive Chairman - Talent SprintFood 360 Knowledge Paper | IIIFood360 Knowledge Paper4 5. Message from the Programme ChairmanMessage from the Programme Chairman From being a net importer of food a few decades ago, India has successfullyThe agriculture, agribusiness and food processing sectors taken by its agriculture. emerged as a major exporter, with the help of giant strides covered under the label 'Food 360' are probably the most With the increasing per capita incomes and growing awareness, todays consumers vital sectors to India, given their role in providing livelihood are seeking better quality and more variety in their food products. They are willing opportunities to more than half the offer convenience while buying and using. Food to spend more on products that population and food & nutrition is becoming anentireof concern for them. safety security to the area nation. Much like the way agricultural production system responded to the need for moreWhile tremendous progress has been achieved across all food in the past, this next wave brings an opportunity to build businesses around these sectors from the days ofthese to mouth' existence to becoming a leading meeting 'ship new consumer preferences. 'agri products exporter', further potential is immense. There are also new Besides the obvious opportunity of adding value through food processing and packaging, there are challenges such as dwindling bio-diversity and declining natural resources, several other possibilities in the areas of agri services, farm mechanisation, post-harvest management, while the pressure on growing more food is ever-increasing. quality testing services, and supply chain management. These interventions have immense potential to raise farm incomes as well, contributing to an area of national priority.The key to realizing this potential, by overcoming the challenges posed, lies inBetween the two complementary knowledge reports prepared by ICRISAT and KPMG on behalf of leveraging technology and innovation. For the desired outcomes to occur in a FICCI, the whole 360 degrees spectrum of opportunities is fully covered for the benefit of new and old complex system like agriculture and food, it is not enough for such can create entrepreneurs alike. They also recommend a policy framework thatinnovation a conducive environment to take place in islands of excellence. The the sector. to harness the entrepreneurial energies in innovation has to be synchronizedacross the whole ecosystem. For synchronized innovation to occur, a shared vision among all the stakeholders is critical, supported by a conducive policy environment. I am sanguine that this report specially prepared by ICRISAT for the second edition of FICCI Food 360, together with the Conference and Exhibition, will Programme Chair, FICCI FOOD 360 & play a catalytic role in evolving such a shared vision and in turn laying a strong foundation - Agri & a vibrant innovation ecosystem for the benefit of Group Head to buildIT Businesses, ITC Limited consumers, producers and the industry. S. SivakumarS. Sivakumar Programme Chair, FICCI FOOD 360 & Group Head - Agri & IT Businesses, ITC LimitedFood 360 Knowledge Paper | IVFood360 Knowledge Paper5 6. Contents I.Overview of the Indian food value chain post-harvest ................................................................................7IITrends, opportunities across the value chain- post-harvest ..............................................................................10 II.IHarvesting ............................................................................................................................................... 11Mechanisation ................................................................................................................................................ 11 II.IIPackaging and processing ................................................................................................................... 14Grading and sorting...................................................................................................................................... 14 Packaging...................................................................................................................................................... 15 Food processing............................................................................................................................................ 19 II.IIIRetail .................................................................................................................................................... 26Retail and services ....................................................................................................................................... 26 II.IVSupply chain infrastructure.................................................................................................................. 28Logistics, storage and procurement............................................................................................................ 28 Basic Infrastructure power, roads, water ............................................................................................... 32 II.VMarketing infrastructure ..................................................................................................................... 33Marketing intelligence/marketing information........................................................................................... 33 Marketing supply chain ................................................................................................................................ 37 II.VISoft infrastructure ................................................................................................................................ 40Research and development......................................................................................................................... 40 Human resource development .................................................................................................................... 42 Support infrastructure.................................................................................................................................. 43 III Government interventions ..............................................................................................................................46 IV Investment scenario agri business value chain ..........................................................................................47 VAgri incubators: Gaining foothold in India ...................................................................................................49VI Recommendations ..........................................................................................................................................50Food360 Knowledge Paper6 7. Food360 Knowledge Paper7 8. Food360 Knowledge Paper8 9. 35%510%2030%35%510%2030%15%15%12%530%15%15%12%530%Food360 Knowledge Paper9 10. Food360 Knowledge Paper10 11. Food360 Knowledge Paper11 12. Food360 Knowledge Paper12 13. Food360 Knowledge Paper13 14. Food360 Knowledge Paper14 15. Food360 Knowledge Paper15 16. Food360 Knowledge Paper16 17. Food360 Knowledge Paper17 18. Food360 Knowledge Paper18 19. Food360 Knowledge Paper19 20. Food360 Knowledge Paper20 21. Food360 Knowledge Paper21 22. Food360 Knowledge Paper22 23. Food360 Knowledge Paper23 24. Food360 Knowledge Paper24 25. Food360 Knowledge Paper25 26. Food360 Knowledge Paper26 27. Food360 Knowledge Paper27 28. Food360 Knowledge Paper28 29. Food360 Knowledge Paper29 30. Food360 Knowledge Paper30 31. Food360 Knowledge Paper31 32. Food360 Knowledge Paper32 33. Food360 Knowledge Paper33 34. Food360 Knowledge Paper34 35. Food360 Knowledge Paper35 36. Food360 Knowledge Paper36 37. Food360 Knowledge Paper37 38. Food360 Knowledge Paper38 39. Food360 Knowledge Paper39 40. Food360 Knowledge Paper40 41. Food360 Knowledge Paper41 42. Food360 Knowledge Paper42 43. Food360 Knowledge Paper43 44. Food360 Knowledge Paper44 45. Food360 Knowledge Paper45 46. Food360 Knowledge Paper46 47. Food360 Knowledge Paper47 48. Food360 Knowledge Paper48 49. Food360 Knowledge Paper49 50. Food360 Knowledge Paper50 51. Food360 Knowledge Paper51 52. Food360 Knowledge Paper52 53. About KPMGFood360 Knowledge Paper53 54. About FICCI Established in 1927, FICCI is the largest and oldest apex business organisation in India. Its history is closely interwoven with Indias struggle for independence and its subsequent emergence as one of the most rapidly growing economies globally. FICCI plays a leading role in policy debates that are at the forefront of social, economic and political change. Through its 400 professionals, FICCI is active in 39 sectors of the economy. FICCIs stand on policy issues is sought out by think tanks, governments and academia. Its publications are widely read for their in-depth research and policy prescriptions. FICCI has joint business with 79 countries around the world. A non-government, not-for-profit organization, FICCI is the voice of Indias business and industry. FICCI has direct membership from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 83,000 companies from regional chambers of commerce. FICCI works closely with the government on policy issues, enhancing efficiency, competitiveness and expanding business opportunities for industry through a range of specialised services and global linkages. It also provides a platform for sector specific consensus building and networking. Partnerships with countries across the world carry forward our initiatives in inclusive development, which encompass health, education, livelihood, governance, skill development, etc. FICCI serves as the first port of call for Indian industry and the international business community.Food360 Knowledge Paper54 55. Thank You PartnersDelegate Kit PartnerAssociate PartnerBadge PartnerKnowledge PartnerNetworking PartnerSupport PartnersMedia Support PartnersOutdoor Media Partnerw w w. f i c c i f o o d 3 6 0 . i nwww.ficci.com