Gargi Parsai

This staggering loss has affected India's agri business

Sustainable supply chains needed to link farmer to marketing centres

MUMBAI: The decline in the farm sector will hit the food and grocery retail sector too. It is estimated that the growth rate in the food and grocery retail sector will dip to 8.8 per cent during 2009-10 from 9.5 per cent during 2008-09.

The food and grocery retail sector is worth Rs. 10.24 lakh crore. In this, the share of modern food chains is expected to rise, to 2.1 per cent, to Rs. 21,000 crore.

This is revealed in the India Food Report, 2010, released by Union Food Processing Secretary Ashok Sinha at Food Forum India-2010 here on Friday.

The report, compiled by the Images Group publications in retail businesses, says the growth is expected to fall in both retail and organised segments in 2010. The food service sector, however, grew by 9.5 per cent during 2008-09.

Mr. Sinha called for public-private partnerships to address the problem of 30 per cent fruits and vegetables going waste every year.

‘Lack of facilities'

India produces 10 per cent of the world's fruits and 13 per cent of vegetables, but loses a significant quantity for lack of sound post-harvest technologies and proper storage, handling and cold chain facilities.

“This staggering loss has severely affected India's agri business and agro economy. It is essential, therefore, to build sustainable supply chains, which will link the farmer to the processing and marketing centres.”

Mr. Sinha offered all help to captains of industry attending the two-day conclave organised by Images.

He was happy with the huge concessions announced for the industry in this year's budget, but advised the industry to “tailor their technological requirements to suit Indian conditions and farmers.”

The Indian food market was estimated at $200 billion during 2006-07 and is expected to touch $310 billion in 2015. Food retail, dominated by 5 million retail outlets, is also likely to grow from $75 billion estimated in 2007-08 to $400 billion by 2025.

The buzz at the conclave is that the Centre might allow foreign direct investment by year-end.

“The Prime Minister and the Finance Minister have given enough indications…,” said Vikram Bakshi from a pizza company.

“With the demand growing and with the growth of economy and with the supply side made easier, the private sector will have to work along side the government to take advantage of the growth potential in the sector,” Mr. Sinha observed.

‘FDI welcome'

“Foreign Direct Investment is welcome,” said Rakesh Biyani of the Future Group, but cautioned about regulations and other bottlenecks. Big bucks retails, like his group, did not impact small retail businesses.

On Thursday, the Food Forum gave away awards to achievers.