Food processing remains a non-starter in UP

The food processing industry of the country’s leading agricultural state continues to be a non-starter following government apathy and neglect over the years.

In the absence of a clear policy guidelines for the food processing sector, the new units are flocking to Uttarakhand to avail of the tax benefits, while the existing units are setting shop in Andhra Pradesh.

The 2004 Uttar Pradesh food processing policy has been diluted and there are no new tax incentives, financial assistance or provision of cheap availability of land worth a mention for investors in the sector.

A senior state horticulture department official admitted that there was an urgent need to create a “positive environment” to boost investment in the sector with financial aid, training, sops and other incentives.

Besides, the lack of proper infrastructure, mainly power, road linkages and warehousing, are other major factors for the laggardness of the food processing industry.

Regional Food Research &Analysis Centre Director R P Singh told Business Standard that there were about 1,000 registered food processing units in UP.

“The new units in the last 5 years have mostly opened in western UP and the National Capital Region (NCR), since the infrastructure is comparatively better in that part of the state,” he informed.

The food processing industry is mainly engaged in the manufacture of pickles, fruit juices, pulp jam, jelly, mango powder, sauce, candy, preservatives, biscuits, oil, ice cream, milk, mushroom and meat products.

Interestingly, the industry also exports indirectly to countries like Sri Lanka and West Asia.

“Export agents/firms buy from the food processing industries in the state and export to the neighbouring countries,” Singh informed.

However, there has been no effort to collate data about the food processing industry in UP and boost the sector with proper planning and funding.

Indian Industries Association (IIA) Executive Director D S Verma lamented that the 2003 policy had waived the Mandi levy on the food processing units. “However, this norm has also been diluted, while there have not been any new initiatives to incentivise the new units.”

To provide better services to food processing industry through modernisation and transfer of technology, UP Industrial Consultants Limited (UPICO) in collaboration with Central Food Technological Research Institute, Mysore had opened a center at Kanpur to be managed by qualified and experienced technocrats connected with food processing.

The state also established a nodal agency to speed up the processing of files relating to the industry. However, the results have been far from satisfactory so far.

UP is major producer of mango, guava, leechi, onion, garlic, turmeric, banana, besides several medicinal and aromatic plants. A strong forward linkage with food processing industry would not only improve the lot of farmers and create job opportunities, but boost the state economy.