December 9, 2023

Food Bazaar

Get In My Food Bazaar

Lemon Price Flareup Is Another Grim Reminder To Expand, Deepen Food Processing Industry

One has heard of food riots in Africa. Marie Antoinette reportedly angered the French masses facing bread shortage with her flippant exhortation to eat cakes instead. In India, food prices have thrown out complacent governments.

Decades ago, Sushma Swaraj led BJP had the mortification of losing the Delhi assembly elections when angry voters refused to be assuaged by the rationale of a seasonal shortage of onions as the immediate cause of surging prices of the vegetable that tickles Indian taste buds no end. Now, there are reports of lemons selling for Rs 15 apiece in many parts of the country experiencing dry spells.

Fortunately, no elections are around the corner. “Bought a lemon” is a bantering expression that means the item bought is either worthless or not worth the price paid for it. In the wake of its enhanced value, although and hopefully temporary, people would not be so flippantly disdainful of lemon that spices up our food as well as quenches our thirst.

Indians are now increasingly becoming vulnerable to egregious gyrations in vegetable and food prices. Food processing industries are what the doctor had ordered for this. The industry contributes about 10 percent to our GDP, which is not bad in juxtaposition with the 20 percent share of agriculture.

Agriculture and food processing industries must coexist preferably cheek-by-jowl. What are the thrust areas? Forty percent of apples being lost to elements in Himachal Pradesh is shocking and can be reversed if food processing industries beyond breweries or distilleries like jam and apple juice makers sprout in the region. Milk and potatoes thrown on the roads during seasons of glut by irate farmers can be similarly reversed by following the AMUL producers’ cooperative model across the country.

Individual farmers tying up with PepsiCo and McDonald condemn themselves to the junior partner role whereas producers’ cooperatives give producers the bargaining and marketing power i.e. the upper hand. Unity is strength. Guntur, famous for its chilies, can take the lead in making chili pastes that can be conveniently stored and transported throughout the year. Ditto for tamarind paste.

There is no reason why farmers cannot farm their cooperatives to produce bread, potato chips, tomato purees, ketchup and what have you. And yes, bottled lemon juice too. What the government needs to do is to nudge farmers facing huge disguised unemployment to ask the young among them to work in food processing industries abutting farms and rural centers.

The government itself must play a catalytic role. First, it will give tremendous employment opportunities. Second, it will iron out seasonal shortages and spurt in prices. To wit, lemon juice squeezed into bottles would make it available round the year just as ginger paste does. Third, it minimises waste. Milk nearing use-by-date can be advantageously converted into yoghurt and buttermilk. In fact, most of the households are mini or cottage food processing industries. Mango and lemon are pickled at rural as well as some urban homes to last a year. But their contribution to this desirable activity cannot be stretched any further because they lack the wherewithal and the technology.

The government’s FDI in multi-brand retail policy hasn’t had any takers though the ongoing tussle for ownership of Big Bazaar chain does suggest that Amazon might have risen above its ecommerce fixation and may be toying with the idea of diversifying into huge bricks and mortar stores. The policy requires a minimum US $100 million investment with 50 percent thereof being in backend operations like cold storage and food processing industries. Such stores would eliminate middlemen who fob off farmers with a pittance besides integrating farmers with the urban consumption centers.

Domestic retail chains should also be encouraged to invest in backend infrastructure. Cold storage infrastructure along the route from farms to consumption centers is essential but that cannot be a substitute for food processing.

Frozen vegetables and meat aren’t connoisseurs’ delight. Freshness by itself can enhance the quality of the food. At any rate, it is not physically possible to store garlic procured during the season for offseason demand whereas garlic paste can be with preservatives. Mangoes cannot be kept in cold storage for gradual release during the offseason but pulped mango and mango juice can be sold throughout the year. While cold storage is essential, it cannot be a substitute for food processing.

— S. Murlidharan is a CA by qualification and writes on economic issues, fiscal and commercial laws. The views expressed in the article are his own.

Read his other columns here

(Edited by : Kanishka Sarkar)