The agriculture sector has come a long way since independence. The food processing sector in the country with its vast potential has emerged as one of the major driver of economic growth. It is encouraging to note that while the country’s GDP growth rate had increase from 3.5 per cent in 2002-03 to 9 percent in 2006-07; the food processing sector has grown from 7 per cent to 13.1 per cent during the same period. India is the second largest producer of fruits and vegetables in the world. There is a huge wastage of perishable food items in the country due to lack of proper food processing facilities. However, India has tremendous potential to unleash large scale process based farm activities to exploit the emerging global business opportunities.

Several thousand crore worth of farm produce is lost every year due to inefficient post-harvest practices for storage and processing. On one hand is the growing demand for food products, which are difficult to meet due to limited resources and on the other, there exist abnormally high wastage in farm sector due to inefficient technology in storage, processing and handling. It is, therefore, imperative to introduce state of the art technology in the food-processing sector to minimize post-harvest losses.

The sector has been attracting substantial FDI among the top ten sectors getting FDI equity up to 100 per cent equity under the automatic food and infrastructure like establishment of food parks and cold chains. There are many areas for investment in this sector which include mega food parks, agri-infrastructure, supply chain aggregation, logistics and cold chain infrastructure, fruit and vegetable products, animal products, meat and dairy,   fisheries   and   seafood cereals, consumer foods/ready to  eat foods, wine and beer, machinery/packaging.  It is essential to understand the dynamic relationship that exists between productivity and progress. The basic fact is that until both the farmers as well as the processors are convinced of benefits that accrue through productivity, the productivity campaigns will remain ineffective. So the main challenge is to introduce the concepts of productivity and make it work under a variety of constraints for the sustainable growth of the industry.

The Indian food processing industry will be facing increased competition, particularly in domestic markets in addition to the uncertainties prevailing in the international markets. It is in this context that emphasis must be given to improve productivity and quality. Undoubtedly, better performing firms will have a competitive edge over others.

To address the situation and with a view to create a modern cold chain for preservation and value addition of perishables, the Ministry is launching a revamped comprehensive Cold Chain Infrastructure Scheme for creating integrated cold chain infras¬tructure at different levels. Strategic Distribution Centers (SDC) will be linked to retail supermarkets. A new scheme of Mega Food Parks in the country is proposed which is envisaged to be a well defined agri/horticultural processing zone containing state of the art processing facilities with support infrastructure and well established supply chain. The proposed scheme aims to provide a mechanism to bring together farmers, processors and retailers and link agricultural production to the market so as to ensure maximization of value addition, minimize wastages and improve farmers' income. The Mega Food Park is designed ultimately to link the fanners with the retail markets with minimizing of the intermediaries.