How food processing industry can help tackle the rise in vegetable and fruit prices

Skyrocketing prices of fresh fruit and vegetables price in India have become a cause of concern for many parts of the country. Prices of several fresh green vegetables, potatoes, tomatoes, and onions have witnessed a significant increase in recent times, mainly due to the impact of excessive rainfall over the past few weeks.

Traders and farmers are attributing this surge to a combination of factors. The initial intense heatwave, followed by intermittent rainfall, and finally the excessive rainfall, has disrupted the vegetable supply chain, leading to a scarcity in the market.

This sudden spike in vegetable prices could impose a further financial burden on millions of households that are still recovering from the economic distress caused by the pandemic and the ensuing global economic slowdown. The fresh surge not only threatens to push up inflation numbers but also diminishes the likelihood of future rate cuts by the Reserve Bank of India.

Game-changer

The situation is affecting the cost of living for citizens, as well as the overall economic stability of the country. However, in the midst of this ongoing challenge, the food processing industry emerges as a potential game-changer to alleviate the situation. Experts believe that by bolstering the food processing sector, India can effectively combat the price rise and ensure a more stable food supply chain.

The annual output of fruits and vegetables in India stands at a substantial 300 million tonnes, yet the processing of these agricultural products remains dismally low at around 2-3 per cent. This figure is in stark contrast to the processing percentage of countries like China and the US, which stands at 25 per cent and 55 per cent respectively. This deficiency in processing capacity leads to a substantial amount of produce going to waste. By increasing the processing capacity, a significant portion of the fruits and vegetables can be converted into various processed products, reducing wastage and improving overall supply chain efficiency.

• Also read: A comprehensive approach to tackling vegetable price hike through sustainable food processing

Value-addition, diversification

The food processing industry provides opportunities for value addition and diversification of products. By processing fresh fruits and vegetables, a wide range of derivatives such as frozen fruits, dried vegetables, canned goods, and juices can be created. These value-added products have an extended shelf life but also open up new markets and export opportunities, contributing to the growth of the agricultural sector and the Indian economy at large. Processing raw produce does not compromise its nutritional value.

In fact, when using suitable packaging materials, the shelf life of the processed products extends from one week (for fresh vegetables and fruits) to up to 18 months. Furthermore, the processing industry can aid in stabilising prices by creating a buffer stock of processed goods during times of surplus production. This buffer stock can be used to meet the demand during lean periods, effectively balancing supply and demand dynamics and preventing excessive price fluctuations.

To fully harness the potential of the food processing industry, policymakers and stakeholders must collaborate to address various challenges. Providing incentives and subsidies to encourage investments in modern processing facilities, supporting research and development for new processing techniques, and facilitating the integration of farmers into processing value chains are some of the measures that can foster the growth of the sector.

The food processing industry holds the key to mitigating the vegetable and fruit price rise situation in India. By minimizing wastage, providing stable and affordable processed products, and creating new market opportunities, a strong and vibrant food processing sector can contribute significantly to ensuring food security and price stability for the nation. With the right measures and strategic investments, India can tap into the immense potential of this sector and emerge as a global leader in food processing and agricultural value-addition.

The author is Founder, Agrizy