International Journal of Management (IJM), ISSN 0976 MANAGEMENT (IJM) INTERNATIONAL JOURNAL OF 6502(Print), ISSN 0976 6510(Online), Volume

e 3, Issue 3, September- December (2012)

ISSN 0976 6502(Print) ISSN 0976 6510(Online) Volume 3, Issue 3, September- December (2012), pp. 160-168 IAEME: www.iaeme.com/ijm.asp Journal Impact Factor (2012): 3.5420 (Calculated by GISI) www.jifactor.com

IJM
IAEME

ISSUES AND CONCERNS OF FOOD PROCESSING MANUFACTURING UNITS IN J&K

Dr. Saurabh Asst. Professor, College of Management Shri Mata Vaishno Devi University Sub post office: Katra, Jammu & Kashmir- 182320, E-mail: saurabh.sri@smvdu.ac.in Abid Sultan Ph.D. Research Scholar, College of Management Shri Mata Vaishno Devi University Sub post office: Katra, Jammu & Kashmir- 182320 E-mail: abidsultan2012@gmail.com ABSTRACT The Food processing industry in J&K is in embryonic stage with immense potential for fruits, vegetables and other eatable products. It can become of the source of industrial development in the State. However, the industry growth has not been significant over the last few years. The maximum focus of the government has been upon packaging and export of fruits and dry fruits. The entrepreneurial motivation in the sector requires certain interventions to boost the industry. The paper discusses the core issues of the industry based upon the interviews of various entrepreneurs in food processing industry in the State of Jammu and Kashmir. The entrepreneurs have started with zeal based upon the potential of the state and now they are surviving their units at a status-quo. The topography of the state is conducive to support food processing industry provided there can be some technical interventions as per the issues and concerns identified in the paper. Keywords: Food processing, J&K, issues, entrepreneurs

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INTRODUCTION The growth of the world population is being accompanied by increasing urbanization and employment opportunities including dietary transition towards convenience foods, fresh dairy products and higher consumption of fresh fruit and vegetables (John & Rudi, 2008). As a result, modern food systems based on packaged food production are growing at a very much impressive rate. The changes in customer tastes and preferences have created a significant demand for processed food such as packaged/convenient food, dairy products, value added foods etc. India is one of the growing nations in the world. Its economy has experienced rapid growth in the last 2 decades. India has the second largest arable land of 161 million hectares and has the highest acreage (55 million hectares) under irrigation. India ranks second largest food producer in the world and has the potential to immerge the biggest with its food and agricultural sector (Indian Processed Food Industry Opportunities Galore,2008).The total land under fruit and vegetable cultivation in India is over 5.7 million and 7.8 million hectares respectively. The total fruit production in India is over 63.5 million tonnes. India is the second largest producer of vegetables in the world producing over 125 million tonnes of vegetables (Gavane, 2012). However, India accounts for less than 1.5% of international food trade .The Indian food processing industry ranks fifth in size and is estimated at more than US $200 billion. The food industry in India is expected to grow to $310 billion by 2015.Of Indias total agricultural & food produce only 2 percent is processed (Economic Times ,May,2010). Ministry of food processing in its Vision 2015 document has estimated the processing level of perishable to increase from 6% to 20%, value addition to increase from 20 % to 35% and Indias share in global food trade to increase from 1.5 % to 3%. Table no 1: Processing of Agriculture produce in different Countries S.No Country Level of Food Processing (in %age) 1 China 20 2 Thailand 30 3 Brazil 70 4 Philippines 78 5 Malaysia 80 Source: Indian Processed Food Industry Opportunities Galore,2008 In a population of 1.22 billion India has a strong 31.4 million middle class households or 160 million individuals. By 2025-26 the number of middle class households in India is likely to reach 113.8 million households or 547 million individuals. The percentage of the middle class in the country's total population will increase to 20.3% by 2015-16 and 37.2% by 2025-26 (Hindustan Times,Feb.,2011). According to Global Food & Drink Sector Review (2009), 300 million Indian consumers currently purchase processed and packaged food. This population is expected to grow to 500 million in the next five years (2014). This extraordinary expansion will drive growth in the food processing industry at almost 20% each year. Domestically, the spending on food and food products amounts to nearly 21% of the gross domestic product of the country and constitutes the largest portion of the Indian consumer
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spending more than a 31% share of wallet. The food processing industry contributes 7 percent to Indias GDP and provides employment to about 13 million people directly (Food Processing Sector in India, 2012). Though the food processing industry of India is quite large but its at infancy stage which requires lot of development both in terms of infrastructure and management. India can capitalize on this huge market and growing industry by focusing attention towards the states having strong advantages in terms of climate and soil. States like Jammu & Kashmir can contribute a lot towards the development and growth of the food processing industry in India. JAMMU & KASHMIR The strategic geographical location of Jammu & Kashmir is a blessing for the states economy. Due to its geographical location, climate and soil type the state is the producer of rich variety of fruits and vegetables. The state is the highest temperate fruit producing state of India (Farm-toFork, 2010). The total area under fruit and vegetables in the state is 8, 74, 21,000 hectares (Digest of Statistics, 2008-09). The fruits & vegetables of the Jammu and Kashmir state are famous all over the world. The fruit industry is the second most important industry after tourism in Jammu and Kashmir and probably is most ideal unparalleled area in the world for growing temperate and dry fruits(Buyer-seller meet & conference, 2007). The diverse agro climatic conditions of the state are an added advantage, which facilitate the growing of the different kinds of fruits (Farm-to-Fork, 2010).The Agro climate of the can be divide into four zones : Table no 2: Agro climatic Zones of Jammu and Kashmir State S.no Zone Areas 1 Temperate Zone Entire Kashmir Valley, Parts of Poonch, Rajouri, Doda, Kishtwar, Ramban, Reasi, Kathua and Udhampur

Suitable Fruit Kinds Apple, Pear, Cherry, Walnut, Almond, Chesnut, Strawberry, Stone Fruit Grapes, Prunes, Kiwi etc 2 Sub-Temperate Parts of Jammu Province, Uri & Peach, Plum, Apricot, Zone Karnah Tehsil in Kashmir Pears, Pecan Nut, Olive , province Kiwi etc 3 Sub-Tropical Zone Jammu, Samba , Parts of Reasi, Mango, Citrus, Litchi, Parts of Doda, Parts of Rajouri Guava, Grapes, Ber Aonla 4 Arid Temperate Districts of Leh & Kargil Grapes (Raisin type), Zone Prunes Apricot (drying type), walnut, Currants etc Source: Farm-to-Fork ,2010

The rich produce of fruits and vegetables can be a great input for the growth and development of the food processing sector. The total fruit production of J&K during 2008-09 was 16.91 lakh metric tonnes comprising of 15.30 Tonnes of fresh fruit and 1.61 lakh metric tonnes of dry fruit.
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The export of the fruit outside the state was 11.61 lakh metric tonnes (Digest of Statistics, 200809). Despite of various potentials the industry still lacks confidence to leverage out of the opportunities of development. The paper deals in identifying the various driving forces of food and beverages manufacturing units and concerns of the entrepreneurs in J&K. METHODOLOGY For the purpose of identification of various driving forces and issues, the research design chosen is exploratory in nature. The objective of the paper is to identify some of the prominent issues that hampers or can hamper the growth and development of the food processing industry in the state along with the various factors that drive the opportunities for the industry. The research used various facts and data available through secondary sources and used unstructured interview method to identify the issues of 18 entrepreneurs in the food processing business in J&K. FINDINGS AND DISCUSSIONS J&K is a growing economy. The agricultural produce, specially fruits and dry fruits that constitute the larger share of the basket have geographic brand identity as well as growing production. Apart from these the improving education level, standard of living as well as status of development and infrastructure they assist in the growth of the sector. The various driving forces for the Food and Processing industry are identified as follows: 1. Availability Of Raw Material Table No: 3 Year wise production of Fruits in the State of J&K (Qnty. In Metric Tonnes) S.no Year Total Fresh Fruit Total Dry Fruit Total Fruit Production Production Production 1 2004-05 1217604 114257 1331861 2 2005-06 1280428 122798 1403226 3 2006-07 1373678 130333 1504011 4 2007-08 1477920 158283 1636203 Source: Digest of Statistics , 2008-09, Directorate of Economics & Statistics ,J&K The Food processing industry requires the assurance of uninterrupted supply of raw material. The state has witnessed a growth in the production of the fruits and dry fruits in last few years. (Table 3) 2. Labour Force Availability The state is at par with other northern States in India. The unemployment rate in the state is nearly 51 percent and the employability of the people is nearly forty percent against national average of fifty one percent. If trained the state has the workforce to support the state which has a huge potential with natural endowments.

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Table No : 4 Labour Force Participation Rate (LFPR) in the Northern States S.no State Labour Force Participation Unemployment Rate (UR) Rate (LFPR) (Rural + (Rural + Urban) (in per 1000) Urban) (in per 1000) (15 - 59 (15 - 59 years) years) 1 Chandigarh 422 19 2 Delhi 477 8 3 Haryana 420 86 4 H.P 434 64 5 J&K 401 51 6 Punjab 440 111 7 Rajasthan 553 181 8 U.P 429 82 9 Uttarakhand 421 46 10 India 513 90 Source : North India Leveraging Opportunities for Accelerated Growth,CII,2012 3. Consumer Income The purchasing capacity of the people in J&K has increased in recent years. Though the percapita income of the inhabitants have been low as compared to Delhi and Chandigarh in northern part of India but still the income index of the state is ranked high as compared to Uttar Pradesh and Rajasthan. Table no : 4 Per Capita Income of the Northern Region States S.no State Per Capita Income Rank in the Rank in India (Rs) 2009-10 Northern Region 1 Chandigarh 91,598 1 2 2 Delhi 89.037 2 3 3 Haryana 55,214 3 6 4 Punjab 43,199 4 12 5 Uttarakhand 42,486 5 13 6 H.P 40,690 6 14 7 J&K 26,739 7 22 8 Rajasthan 23,653 8 25 9 U.P 16,411 9 30 Source : North India Leveraging Opportunities for Accelerated Growth,CII,2012 4. Social Infrastructure With reference to the income the status of the living of the people in J&k has also been improving over the period. The state has reasonable status of education and is ranked tenth in Human development index. This can be construed as a readiness for the development and growth of the state. In the income status of the state is poised at fifth rank along with reasonable per capita income.
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Table no: 4 Ranking of Northern States as per HDI & its Constituents S.no State HDI Health Index Income Education Rank Index Index 1 Delhi 2 2 1 2 2 Haryana 9 11 7 11 3 H.P 3 3 4 4 4 J&K 10 16 5 13 5 Punjab 5 4 3 8 6 Rajasthan 17 13 16 22 7 U.P 18 19 18 20 8 Uttarakhand 14 16 13 9 Source : North India Leveraging Opportunities for Accelerated Growth,CII,2012 The parameters above indicate that the state has balanced status. It provides the advantageous scope for the growth and development industrial sector in the state of J & K. However the growth of industry can be a balanced growth if the advantages of the natural endowments efficiently linked. The Food processing sector of J&K is a potential link both in terms of consumption as well as deployment of young resources. The industry is impending to create market for its product at regional, national as well as for the international level. The industry at present is surviving on the advantageous cues available, but for an accelerated growth there are some core developmental issues. The issues have been identified with the help of unstructured interviews of the entrepreneurs having Manufacturing/ packaging units in the Food Processing Sector in J&K. Some of the issues identified on the basis of the interview are: 1. Infrastructure The food processing units require a robust support of infrastructure. With the regular availability of quality raw material to the facility of transportation, storage and electricity support are some of the key deliverables necessary for the industrial development. In J&K due to unavailability of packaging and processing facilities, 30 per cent of the total fruit produced get wasted(Buyer-seller meet & conference, 2007) .The mismatch between the production and post-harvest management is one of the concerns for the food processors. The post-harvest loses in fruits Varies from 25-35% (Food and Agri Processors Conclave,2011 ) .This loss is mainly due to inadequate infrastructure in form of poor storage and transportation factors. The presence of limited cold storage facility in the state is creating a lot of problems for the unit holders. There are just 19 cold storage facilities in J&K with the capacity of 42869 Metric Tonnes (Cold storages in India, Indiastat). While as, the total production of fruits 16.91 lakh metric tonnes during 2008-09. The connectivity is one of the biggest issues of the food processing industry in Jammu and Kashmir. The geographical conditions and Hilly terrain hampers the connectivity of the state with rest of the India round the year (Food and Agri Processors Conclave, 2011). The food processing sector is technology driven industry relying heavily on the electricity. The electricity is one of the important factors of production in the food processing. The electricity demand and supply gap in the state is creating a lot of problems for the units. The state has huge
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potential of electricity around 20000MW. But the state has so far been able to generate around 750MW. The state requires total 2200 MW of electricity while as it is able to produce only 750MW (Greater Kashmir, May, 2010). Although the gap is fulfilled through the Northern grid but the availability of round the clock supply is still a distant dream. 2. Quality Management/Testing/Accreditation Quality is the most important attribute of the processed food. Quality certification of all types of packaged fruit/ food items by Quality Control/ Analysis Laboratories is an essential component of food control system to protect health and safety of domestic/ international consumers. The state of Jammu and Kashmir doesnt have any such facilities on sufficient basis. The Government of India has established Food Quality Control/ Analysis Lab at Indian Institute of Integrative Medicine, Jammu (Greater Kashmir, August,2012).The lab offers undertakes testing, quality control & offers consultancy/ licensing services with regard to plants, drugs, water, fertilizers, metal residues and pesticides residues etc. But the IIIM facility is insufficient to meet quality control testing/assurance requirements of horticulture producers & food processors scattered all over the state (Greater Kashmir, August,2012).Also the reach-ability of such services to the difficult spread and terrains to the manufacturing units is limited. Some of the units have their own testing labs o maintain the quality, but the reliability and accreditation is still an area of concern. Thus another area of concern that needs attention of is Quality Management/Testing/ Accreditation. 3. Marketing Support The Food Processing Sector of Jammu and Kashmir is at its infancy stage. The sector needs the care and support of state government for its expansion and growth. According to the President, Kashmir Chamber of Food Processing Industry (KCOFI), Dr Zain-ul-Abidin, Government is providing marketing support to other sectors in one way or the other, but it provides no support to the food processing industry of the Valley. Further, there are no proper schemes for the foodprocessors in the Valley. Also the support at central level is not very much impressive. Director General of Foreign Trade (DGFT) is to provide marketing support to the unit holders all over the country, but the food processing sector is not included in DGFT, where as many other sectors are included, like those of furniture, glass, plastic products, iron-based products, fabrications and others( Greater Kashmir, Feb.,2009). The state government provides support to the various industrial sectors through two modes. Firstly, through various schemes and incentives, secondly through SICOP (Small Scale Industries Development Corporation Limited), this is a designated agency of the state government for providing marketing support to the various industries of the state. Through SICOP, the government is providing support to the steel, wood-based and other industries, but one could not trace any significant policy support specifically for the food processing industry. 4. Lack of Technology Awareness On interview of the entrepreneurs involved in processing and packaging of food products it was found that the traditional methods are being utilized in processing and tracking the products.
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One of the reasons for this is the poor technological awareness among the entrepreneurs and the youth (Food and Agri Processors Conclave, 2011). The state has Multiline food processing training centre sponsored by MOFPI at SKUAST Kashmir. The centre was established in 2001. The centre provides training about the food and vegetable processing. But the reach of the centre is very much limited. A single centre to cater the needs of the three regions of the state seems to be short of hand. CONCLUSION The status of food and processing manufacturing units is in nascent stage. The industry required a comprehensive support of various government as well as non government agencies. The infrastructure building in terms of road connectivity, electricity availability and cold storage facilities needs an immediate attention of the State government. For the efficient and effective infrastructure on the Public Private Partnership (PPP) basis can be very much beneficial to the state. The quality assurances can be ensured by establishing the quality management policy both at the organizational level and as well as the governmental level. These recognized/ accredited laboratories should be easily accessible to producers of fresh/ dry fruits and processed foods who may seek certification of quality of their products against affordable charges/ fees and well in time. Exploring avenues of bringing labs to land would be some innovative implementations where the IIIM and SUKAST can focus. These laboratories in addition, accreditation of the laboratory by an appropriate accreditation agency within the country or from outside, shall enable the laboratory to improve its performance and to ensure reliability and accuracy of results. Quality assurance and testing labs will pave way for the market expansion of the food processing units of the state of Jammu & Kashmir. Beside, this it will also monitor quality of states agricultural/ horticulture produce entering national/international trade. Thus, simultaneously helps in building the brand image of the products. The technological awareness needs to be developed in the state. Training cum awareness programs for the existing unit holders can be conducted so as to develop the technology awareness among the entrepreneurs. Also workshops can be conducted for the youth, educated graduates and professional graduates to highlight the technological advancement in the field of the food processing and also to make them aware about the growth and prospect in this industry. Such awareness programs can be held with the support of MSMEDI, NABARD, Educational Institutions, SIDCO, SICOP etc. The state government needs to develop the special schemes, policies and incentives for the development and growth of the food processing sector of Jammu and Kashmir. The government can link its various schemes and programs with the food processing sectors. The food processors can supply pulses, edible oils, milk, bread, Jams, Pickles, etc. to the schools/ offices coming under the various government schemes. Food processing industry requires a strategic technical intervention. The nurturing, support and collaborative at this stage will create opportunity of development with synergetic effect.

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REFERENCES 1. Buyer-seller meet & conference, 2007, Emerging opportunities and challenges of fruit industry of Jammu and Kashmir and developing national and international trade, organized by Indian Society of Agribusiness Professionals Apple Growers Association of India available online at http://www.isapindia.org/Apple,%20Temperate%20Fruits%20and%20Nuts%20%20Brochure%20and%20Registration%20Form.pdf,Accessed on 5, August, 2012 2. Cold storages in India State wise data. Available at www.indiastat.com 3. Digest of Statistics, 2008-09, Directorate Of Economics and Statistics , Government of J&K 4. Economic Times , May 2010 ,Food Processing Food basket ,Accessed on 1 August,2012 5. Food Processing Sector in India (2012), available online http://www.cci.in/pdf/surveys_reports/food-processing-india.pdf, Accessed on 1 March,2012 6. Farm-to-Fork, An Update of Agriculture and Food Issue, Bi Monthly ,ENewsletter,Nov.2010, Vol.11 no.7 7. Food and Agri Processors Conclave,2011 , organized by ASSCHOM and SKUAST (Kashmir), available at http://www.assocham.org/events/recent/event_624/Proceedings-Jand-K.pdf, Accessed on 1 June,2012 8. Global Food & Drink Sector Review (2009), available online at http://www.mergersalliance.com/uploads/nutrientcms_documents/278ae4e6f7e49b37f9e4c72465f6c87f.pdf, Accessed on 18 april,2012 9. Greater Kashmir , 27/May/2010, J&K Lags Behind in Hydel Power generation Accessed on 18 Feb.,2012 10. Greater Kashmir, 17/Aug/2012 ,Canned Food from J&K, Accessed on 8 Feb.,2012 11. Greater Kashmir, 9/Feb,2009 ,Valley Food Processing Lacks marketing Support, Accessed on 19 August,2012 12. Gavane S. S. , Food Processing: The biggest Agro-based industry in India, Golden Research Thoughts, , ISSN No-2231-5063 Vol.1,Issue.X/April 2012pp.1-4 13. Hindustan times , 6 Feb. 2011, India's middle class population to touch 267 million in 5 years, accessed on 16th September,2012 14. Indian Processed Food Industry Opportunities Galore,2008, available online at http://way2wealth.com/reports/RR150420084.PDF, Accessed on 10 October,2012 15. John Wilkinson and Rudi Rocha,2008, Agri-processing and Developing Countries, Background Paper For The World Development Report 2008, available online at http://siteresources.worldbank.org/INTWDR2008/Resources/27950871191427986785/WilkinsonJ&RochaR_Agriprocessing&DevelopingCntries[1].pdf, Accessed on 1 September,2012 16. North India :Leveraging Opportunities for Accelerated Growth, Confederation of Indian Industry, 2012 available at http://mycii.in/KmResourceApplication/E000001218.6032.North%20India%20Leveraging% 20Opportunities%20for%20Accelerated%20Growth.PDF, Accessed on 7 Feb.,2012

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