AGRICULTURE

&
THE PROCESSED FOOD

SUBMITTED BY:
~ Ankita Verma
~ Neha Tyagi
~ Pankaj Goel

CONTENTS

Overview
Production Centers
Domestic Industry
Trend in Export
Major Export Destinations
Export from India for last three years
Major Competitors in the global market
Quality Standards
Provisions in FTP
Problems / Challenges faced by the exporter
Relevant News articles

OVERVIEW

India has geographic location, receives good rainfall and proper sun light in the
right proportions as required for good crops.
Indias land is agricultural and people are land owners, as well as farmers. So
agriculture news is important for a large population of the country.
Agriculture is one of the strongholds of the Indian economy and accounts for
14.6 per cent of the country's gross domestic product (GDP) in 2009-10, and
10.23 per cent (provisional) of the total exports
India ranks second worldwide in farm output.
Indias total export is US $ 7347.07 million in 2009-10
Indias import is US $ 4,438.755 million in 2007-08
There are more than 300 export-oriented units for floriculture.
Agriculture, including crop, forestry and agro processing constitutes the very
basis of socio economic lives of India.
Source: Apeda, general information, available at
http://www.apeda.gov.in/apedawebsite/six_head_product/floriculture.htm as accessed on 2010,
2)apeda, country profile, availabe at
http://tradejunction.apeda.com/countrysearchnew/products_imported.aspx?ctryid=99999&ctryn=INDIA as accessed
on 2009,
3)apeda, export statistics, available at http://tradejunction.apeda.com/indexp/monthexport.aspx as accessed on 2009
4)apeda, Indian data, available at http://tradejunction.apeda.com/indexp/ExportStatement.aspx?val=2 , accessed on
2009
5) GOI, agriculture, available at http://www.ibef.org/economy/agriculture.aspx as accessed on 2009
6) apeda,tradejunction available at http://tradejunction.apeda.com/IndImp/SpecAgroProdImportCommodityWise.aspx
as assessed on 2009.

OVERVIEW

Processed foods have been altered from their natural state for
safety reasons and for convenience.
Fruit and vegetable juice is also an example of a healthy processed
food. In fact, some orange juice is fortified with calcium to make it
even more nutritious. Processed foods and prepackaged meals are
very convenient and popular
Indias exports of Processed Food was 2219.533 Million US $ in
2008-9 and 1752.58 Million US $ in 2009-10 i.e 28.12% and 23.84%
respectively of total exports.
A number of new initiatives like Technology Mission for Integrated
Development of Horticulture in the North Eastern States (TMNE),
National Horticulture mission(NHM), National Food Security Mission
(NFSM), Macro management in Agriculture (MMA), Rashtriya Krishi
Vikash Yojana (RKVY), National Project on Organic Farming
(NPOF), National Project on Management of Soil Health and Fertility
(NPMSHF).

Source: Apeda, general information, available at

http://www.apeda.gov.in/apedawebsite/six_head_product/PFV_OPF.htm as accessed on 2010

PRODUCTS
PROCESSED FOOD
Dried & Preserved Vegetables
Mango pulp
Pulses
Ground nut
Jaggery & Confectionary
Guargum
Cocoa Product
Cereal Preparation
Alcoholic & Non Alcoholic
Beverages
Miscellaneous Preparation
Milled Products

AGRICULTURE
Fruits, Vegetables and their
Products
Cereal and Cereal Products
Groundnuts, Peanuts and
Walnuts
Floriculture and Floriculture
Products
Herbal and Medicinal Plants
Organic Products

Major Production Centers

FRUITS
COMMODITY
Apple
Banana
Citrus
Grapes
Gauva
Litchi
Mango
Papaya
Pineapple

STATE
Jammu & Kashmir
Maharastra
Andhra Pradesh
Maharastra
Jharkhand
Bihar
Uttar Pradesh
Andhara Pradesh
West Bengal

VEGETABLES
COMMOTIDY
Brinjal
Cabbiage
C flower
Okra
Peas
Tomato
Onion
Potato
S.potato
Tapioca

STATE
West Bengal
West Bengal
West Bengal
West Bengal
Karnataka
Karnataka
Maharastra
West Bengal
Orissa
Tamil Nadu

PLANTATION
COMMODITY
Cashewnut
Arecanut
Cocoa
Coconut

STATE
Andhra Pradesh
Karnataka
Kerela
Kerela

DOMESTIC INDUSTRY

The Indian Agriculture Industry is on the brink of a

revolution that will modernize the entire food chain, as
the total food production in India is likely to double in the
next ten years.
Total food market is US$ 69.4 billion
The Government of India has also approved proposals
for joint ventures, foreign collaborations, industrial
licenses and 100% export oriented units envisaging an
investment of US $ 4.80 billion.
The agricultural food industry employs around 65 per
cent of the population.

Source: indiamart, industry overview, available at http://agro.indiamart.com/agro-industry-overview/ as

accessed on 2009

DOMESTIC INDUSTRY

The other attractive features of the Indian agro industry that have
the capacity to lure foreigners with promising benefits are the milk
and milk products, meat and poultry segments
The Ministry of Food Processing Industries (MOFPI) has formulated
a Vision 2015 action plan. This includes trebling the size of the food
processing industry, raising the level of processing of perishables
from 6 per cent to 20 per cent, increasing value addition from 20 per
cent to 35 per cent, and enhancing Indias share in global food trade
from 1.5 per cent to 3 per cent.
The cumulative FDI received by the food processing industry from
April 2000-September 2010 stood at US$ 1,102.03 million.

Source: Apeda, processed food, Available at http://apeda.com/apedawebsite/ as accessed on 2008

STATE

DISTRICT/AREA & RESPECTIVE PRODUCTS PRODUCED

West Bengal

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

Tamil Nadu

1)
2)
3)
4)
5)
6)
7)
8)
9)
10)

Darjeeling-Pineapple,Darjeeling Tea
Uttar Dinajpur-Pineapple
Cooch Behar-Pineapple
Jalpaiguri-Pineapple
Districts of Murshidabad-Lychee,Mangoes, Vegetables
Malda-Lychee,MAngoes
24 Pargana (N)-Lychee
Districts of Hoogly-Potatoes
Burdwan-Potatoes
Midnapore (W) Potatoes
Uday Narayanpur and Howrah-Potatoes
24 Pargana (S)-Lychee, Vegetables
Nadia-Vegetables
Dharmapuri-Flowers
Districts of Madurai-Mangoes
Theni-Mangoes
Dindigul-Mangoes
Virudhunagar-Mangoes
Tirunelveli-Mangoes
Cuddalore- cashewnut
Thanjavur- cashewnut
Pudukottai- cashewnut
Sivaganga- cashewnut

Source: apeda, general information, available at

http://www.apeda.gov.in/apedawebsite/trade_promotion/Agri_Export_Zone.htm as accessed on 2009

TRENDS

EXPORTS
OF
INDIA

FRUITS & VEGETABLES EXPORTS IN 2006

Source: apeda, international data, available at http://tradejunction.apeda.com/Market%20Profile/Volume_IV/World

%20Trade%20Scenario%20of%20Crop.aspx as accessed on 2006

MOST EXPORTED PRODUCTS

INDIAS MAJOR EXPORT DESTINATIONS

Source: Apeda, agriculture trade portal, indian data, exports statistics, Generate your Own report available at
http://tradejunction.apeda.com/indexp/genReport.aspx as accessed on 2010

Source: apeda, Indian data(import data), available at

http://tradejunction.apeda.com/countrysearchnew/products_imported.aspx?ctryid=99999&ctryn=INDIA as accessed on
2009-2010

Data as accessed on 2009-10

Value in US $ million

Source: apeda, Indian data(exports), availabe at

MAJOR COMPETITORS

CHINA: On average, China produces 108,712 TMT of wheat

annually. This makes China the worlds largest wheat producer,
producing 42,856 TMT more than India, the worlds second largest
wheat producer.

THAILAND: Thailand's agriculture export, world's largest exporter

of rice, export of fisheries products and livestock products,
agricultural and food policy, agricultural credit

UNITED STATES: Agriculture is a major industry in the United

States and the country is a net exporter of food. As of the last
census of agriculture in 2007, there were 2.1 million farms, covering
an area of 922 million acres (373 million hectares), an average of
418 acres (170 hectares) per farm.

Source: U.S. Library of Congress, available at http://countrystudies.us/thailand/67.htm

EW, world agriculture, available at http://www.economywatch.com/ as accessed on 2008.

PROVISIONS IN FTP
Towns of Export Excellence [TEE]
A number of towns have emerged as dynamic industrial Excellence (TEE) clusters contributing
handsomely to Indias exports. It is necessary to grant recognition to these industrial clusters with
a view to maximizing their potential and enabling them to move higher in the value chain and tap
new Markets. Selected towns producing goods of Rs. 750 Crore or more will be notified as TEE
based on potential for growth in exports. However for TEE in Handloom, Handicraft & Agriculture
threshold limit would be Rs150 Crores.

S.NO.

Town of export
excellence

State

Product category

1.

AEKK (Aroor,
Ezhupunna,
Kodanthuruthu &
Kuthiathodu)

Kerala

Seafood

2.

Kollam (Quillon)

Kerela

Cashew products

3.

Indore

Madhya Pradesh

Soya Meal and

Soya Products

Source http://commerce.nic.in/pressrelease/pressrelease_detail.asp?id=2628

VISHESH KRISHI AND GRAM UDYOG YOJANA (VKGUY) (SPECIAL

AGRICULTURE AND VILLAGE INDUSTRY SCHEME)
Objective of VKGUY is to promote exports by providing 3% of duty credit of
FOB value. All Status Holders shall be incentivised with duty credit script
equal to 10% of FOB value of agricultural exports which can be used for duty
free import / procurement of capital goods related to infrastructure meant for
agro-processing to promote agricultural exports provided that the total
benefits for all status holders put together does not exceed Rs 100 Cr (i.e. Rs
50 Cr for each half year). And the products included under this scheme are :
(i) Agricultural Produce and their value added products;
(ii) Minor Forest Produce and their value added variants;
(iii) Gram Udyog Products;
(iv) Forest Based Products; and
(v) Other Products, as notified from time to time.
Instant Tea included for benefits under VKGUY @ 5% of FOB value of
exports

Source- http://www.ganatragroup.net/foreigntrade.html#8

EPCG SCHEME
EPCG licences issued to agro units in the agri export zones, a period of 12
years reckoned from the date of issue of the licence would be permitted for
the fulfillment of export obligation
The agro units in the agri export zones would also have the facility of
moving the capital goods imported under the EPCG within the agri export
zone
An LUT/ Bond in lieu of BG may be given for EPCG licence granted to units
in the Agri Export Zones provided the EPCG licence is taken for export of
the primary agricultural products.
Source : http://pib.nic.in/archieve/ForeignTradePolicy/ForeignTradePolicy.pdf

 Duty Credit Scrip

Duty Credit Scrip benefits are granted with an aim to compensate high transport
costs, and to offset other disadvantages. Exporters, of products notified in Appendix
37A of HBPv, shall be entitled for Duty Credit Scrip equivalent to 5% of FOB value of
exports (in free foreign exchange) for exports made from 2009 onwards.
However, for exports made w.e.f 1.7.09, some Flowers, Fruits, Vegetables and other
products, as listed in Table of Appendix7A shall be entitled to an additional duty credit
scrip equivalent to 2% of FOB value of exports; over and above the 5% or 3%
VKGUY reduced rate entitlement.

EPCG for agro units

LUT/Bond or 15% BG ( as applicable) may be given for EPCG Authorization granted to units in Agri Export
Zones provided EPCG Authorization is taken for export of primary agricultural product(s) notified in Appendix
8 or their value added variants

FOCUS PRODUCT SCHEME (FPS)

Objective is to incentivise export of such products, which have high employment intensity in rural and semi
urban areas, so as to offset infrastructure inefficiencies and other associated costs involved in marketing of
these products Exports of notified products (as in Appendix 37D of HBP v1) to all countries (including SEZ
units) shall be entitled for Duty Credit scrip equivalent to 2% of FOB value of exports for each licensing year
commencing from 1st April, 2006.

Oil Meals (Cotton, rape seed, groundnut), Castor Oil derivatives, Packed Coconut Water and Coconut Shell
worked items shall be entitled for benefits @ 2% of FOB value of exports to all markets under FPS
FOCUS MARKET SCHEME (FMS)

Objective is to offset high freight cost and other externalities to select international markets with a view to
enhance our export competitiveness in these countries. Exporters of all products to notified countries (as in
Appendix 37C of HBP v1) shall be entitled for Duty Credit scrip equivalent to 3% of FOB value of exports for
each licensing year commencing from 1st April, 2009.

Market Access Initiative

Under MAI scheme, Financial assistance is provided for export promotion activities
on focus country, focus product basis. Financial assistance is available for Export
Promotion Councils (EPCs), Industry and Trade Associations (ITAs), Agencies of
State Government, Indian Commercial Missions (ICMs) abroad and other national
level institutions/eligible entities as may be notified. A whole range of activities can be
funded under MAI scheme. These include, amongst others,
I.
Market studies/surveys,
II. Setting up of showroom / warehouse,
III. Displays in International departmental stores,
IV. Brand promotion,
V.
Reimbursement of registration charges for pharmaceuticals and expenses for
carrying out clinical trials etc., in fulfillment of statutory requirements in the buyer
country,
VI. Testing charges for engineering products abroad,
VII. Assistance for contesting Anti Dumping litigations etc.
Each of these export promotion activities can receive financial assistance from
Government ranging from 25% to 100% of total cost depending upon activity and
implementing agency.

MARKET DEVELOPMENT
ASSISTANCE
It is a scheme to encourage exporters to access n develop overseas markets
i
Participation in international trade fairs,
ii. Publicity campaigns
iii. Overseas study tours

90% of the cost of air ticket by economic class and 25% of the cost of publicity
material.

AGRI EXPORT ZONES

An Agri Export Zone is a specific geographic region in a country

demarcated for setting up agri based processing industries, mainly
for export. The term is widely used mainly in India
These zones have been set up for end to end development for
export of specific products from a geographically contiguous area.
Units in AEZ would be entitled for all the facilities available for
exports of goods in terms of provisions of the respective schemes

AGRI EXPORT ZONES

West Bengal- Pineapple,Lychee, Potatoes, Mangoes , Vegetables, darjeeling tea

Punjab- potatoes, vegetables, basmati rice
Maharashtra- Grapes&grape wine, mangoes, kesar mango, Flowers
Uttar Pradesh- Potatoes, mangoes, basmati rice and vegetables
Rajasthan- Coriander, cumin
Other states: Uttaranchal, karnataka, Tripura, Bihar, Tamil Nadu, Assam, sikkim,
MP, Orissa, Gujarat, Jharkhand, Himachal Pradesh.

Source: apeda, general information, available at http://www.apeda.gov.in/apedawebsite/trade_promotion/Agri_Export_Zone.htm as accessed

on 2009

SINGLE WINDOW SYSTEM

To reduce transaction and handling costs, a single window system to facilitate

export of perishable agricultural produce has been introduced. The system will
involve creation of multi-functional nodal agencies to be accredited by APEDA

SPS & TBT

WTO Agreements on Sanitary and Phytosanitary Measures (SPS)

and the Agreement on Technical Barriers to Trade (TBT) try to strike
a balance between these competing uses of standards in
international trade.
The SPS and TBT agreements acknowledge that governments have
the right to take necessary measures for the protection of human,
animal and plant health and allow some freedom for setting national
standards to the extent required to protect them.

PACKAGING MATERIALS as TBT

Test parameters

Methodology Adopted

Applicability

Tin, Chromium

AAS

Tin plate

Sulphide stain

Chemical

Food cans

Laquer

Physical Chemical

Tin cans

Migration tests

Chemical

Food grade plastics

Heavy metals like Pb, As,

Cd, Se, Ba,
Water vapour permeability

AAS

Coloured plastics

Humidity chamber

Plastics

Chemical FTIR DSC

Food packaging materials

Thickness gauge
Universal testing machine
Elmendrof tear tester
Dart impact tester

Plastic packages

Identification of plastic
materials
Physical tests

Source: http://www.shriraminstitute.org/ available at http://www.shriraminstitute.org/food.html

QUALITY STANDARDS

There are two organisations, the Bureau of Indian Standards (BIS) and
the Directorate of Marketing and Inspection (DMI), currently dealing with
the voluntary standardisation and certification systems in the food
sector in India.
According to industry sources, for the processed food sector BIS
certification is more important than DMI certification.

ISI MARK

The certificate given by Indian Standard Institute, that the commodity is

as per the standard quality & quantity. Every manufacturer has be
submit the each lot or batch of production to the quality inspector & he
takes some sample quantity for examination. Than the certificate issued
to producer, Than the batch despatched to market for sale.

Fruit Product Order (FPO)

Fruit Products Order -1955, was formulated with an objective to

manufacture fruit & vegetable products maintaining sanitary and
hygienic conditions in the premises and quality standards laid down
in the Order. It is mandatory for all manufacturers of fruit and
vegetable products including some non fruit products like non fruit
vinegar, syrup and sweetened aerated water to obtain a license
under this Order

ACTS & REGULATIONS

Prevention of Food Adulteration Act, 1954
Fruit Products Order, 1955
Meat Food Products Order, 1973
Vegetable Oil Products (Control) Order, 1947
Edible Oils Packaging (Regulation) Order, 1988,
Solvent Extracted Oil, De-oiled Meal and Edible Flour (Control) Order, 1967
Milk and Milk Products Order, 1992
Any order under Essential Commodities Act, 1955 relating to food.

Analysis is done as per both National and International Standards with

the following major protocols :
Bureau of Indian Standards
Agricultural Markings
Prevention of Food Adulteration Act
Fruit Product Order
Association of Official Analytical Chemists International
American Association of Cereal Chemists
American Oil Chemist's Society
American Spice Trade Association
American Dry Products Institute
American Public Health Association
SriLanka Standard Institution
In-house validated methods and procedures
Party's specifications

QUALITY SPECIFICATIONS
Quality attributes for tomatoes used for tomato paste
Attribute

Accept

Reject

Colour

Orange/red

More than 10% green

Size

Any

Shape

Any

Damage
- splitting
- insect
- mould

Less than 5%
Less than 5%
None

More than 5%
More than 5%
Any evidence of mould

Hardness

Soft to over-soft

More than 10% hard

Source: http://www.shriraminstitute.org/ available at http://www.shriraminstitute.org/food.html

PROBLEMS/CHALLENGES

India's large agricultural subsidies are hampering productivity-enhancing

investment.
Overregulation of agriculture has increased costs, price risks and uncertainty.
Inconsistent government policy. Agricultural subsidies and taxes often
changed without notice for short term political ends.
Infrastructural facilities are inadequate
Tariffs peaks, tariff escalation, commodity-specific bilateral agreements and
special exemptions remain major issues restricting market access abroad for
products
Few Examples:
Lack of harmonization of egg products standards in EU member countries
resulting into requirement of approval of production units by individual
member countries.
Ban on the import of fresh grapes from India on the basis of report of the
incidence of oriental fruit fly on grapes in Pakistan

RELEVANT ARTICLES

Impact of Liberalization on India's Agricultural Exports: A

Behavioral and Discriminant Approach.
Comparative Advantage of India in Agricultural Exports. vis--vis
Asia: A Post-reforms Analysis.
Differences remain over cash for grain.
Promoting Sustainable Agriculture in India.
Agriculture in India: Issues and Challenges.
Global agricultural trade and developing countries.

REFERENCES
1.

2.

3.

4.

5.

Apeda, general information, available at

http://www.apeda.gov.in/apedawebsite/six_head_product/floricultu
re.htm
as accessed on 2010,
apeda, country profile, availabe at
http://tradejunction.apeda.com/countrysearchnew/products_impor
ted.aspx?ctryid=99999&ctryn=INDIA
as accessed on 2009,
apeda, export statistics, available at
http://tradejunction.apeda.com/indexp/monthexport.aspx as
accessed on 2009
apeda, Indian data, available at
http://tradejunction.apeda.com/indexp/ExportStatement.aspx?
val=2, accessed on 2009
GOI, agriculture, available at
http://www.ibef.org/economy/agriculture.aspx as accessed on
2009

6.

7.

8.

9.
10.

11.

Apeda, general information, available at

http://www.apeda.gov.in/apedawebsite/six_head_product/PFV_OPF.
htm as accessed on 2010
apeda, Indian data, available at http://tradejunction.apeda.com/India
%20Production/Result_SearchState.aspx as accessed on 20092010
indiamart, industry overview, available at
http://agro.indiamart.com/agro-industry-overview/ as accessed on
2009
Apeda, processed food, Available at
http://apeda.com/apedawebsite/ as accessed on 2008
apeda, general information, available at
http://www.apeda.gov.in/apedawebsite/trade_promotion/Agri_Export
_Zone.htm as accessed on 2009
http://www.shriraminstitute.org/ available at
http://www.shriraminstitute.org/food.html

12

13

14

15

16

apeda, international data, available at

http://tradejunction.apeda.com/Market%20Profile/Volume_IV/World
%20Trade%20Scenario%20of%20Crop.aspx as accessed on 2006
apeda, Indian data(exports), availabe at
http://tradejunction.apeda.com/indexp/ExportStatement.aspx?val=2
as accessed on 2009-10
apeda, Indian data(import data), available at
http://tradejunction.apeda.com/countrysearchnew/products_import
ed.aspx?ctryid=99999&ctryn=INDIA as accessed on 2009-2010
apeda, products,available at
http://tradejunction.apeda.com/prodgallery/prodgallary.aspx as
accessed on 2009
U.S. Library of Congress, available at
http://countrystudies.us/thailand/67.htm EW, world agriculture,
available at http://www.economywatch.com/ as accessed on 2008.