Documentation of Success Stories of Food Processing Units in Karnataka

DOCUMENTATION OF SUCCESS STORIES OF FOOD PROCESSING UNITS IN KARNATAKA

Revised report

I Maruthi Venkata reddy B.G

Agriculture Development and Rural Training Centre (ADRTC), Institute for Social and Economic Change (ISEC), Bengaluru 560072

ACKNOWLEDGEMENTS

I am extremely grateful to the Agricultural Ministry Government of India, New Delhi, for financing this study. I am very thankful to the Acting Director of ISEC Prof. K.S James for encouraging me to work on this project and to former Director of ISEC, Prof. R.S Deshpande, who has always inspired me to work harder. My special thanks to Prof. Parmod Kumar, Head ADRT Centre, who helped me at various stages of this project. Further I thank to all my colleagues in the ADRTC for their unstinted help.

I am greatly indebted to Dr. M. Devendra Babu, for reading the earlier draft of this report and for giving valuable suggestions.

I thank Mr. Venkatareddy BG, Research Assistant for conducting fieldwork, graciously extended his co-operation in inputting the tables in the report. I profusely thank him. Finally I thank Entrepreneurs, District Industrial Centers for the information that they gave us.

The secretarial assistance by Mr.N Boopathi, and Mr. Muthuraja is thankfully acknowledged.

Dr I Maruthi Associate Professor, Agriculture Development and Rural Training Centre (ADRTC), Institute for Social and Economic Change (ISEC), Bengaluru.

CONTENTS

Page No Acknowledgement (ii) Contents (iii-vi) Executive summary (vii-xix) Chapter 1 Introduction 1-13

1.1 Background 1 1.2 Structure and composition of the food processing industries in India 4 1.3 Review of Literature 6 1.4 Objectives of the Study 11 1.5 Methodology and Data Sources 12 1.6 Overview 12

Chapter 2 Food Processing Industry in India and Karnataka 14-29

2.1 Introduction 15 2.2 Classification Of Food Processing Industry 15 2.3 Need for Food Processing Industry 17 2.4 Different Stages of Processing Food 19 2.5 Contribution of Food Processing Industry to GDP 21 2.6 Persons Employed in the Registered Food Processing units 22 2.7 Exports of Food Processing Related Items 22 2.8 Exports of Major Processed Food & Related Commodities from food 23 processing sector 2.9 Investment In Food Processing Sector 23 2.10 Food Processing Industry in Karnataka 24 2.11 Production of Major crops in Karnataka 28 2.11.1 Agriculture 28 2.11.2 Commercial crops 28 2.11.3 Horticulture 29 2.11.4 Dairy and Livestock 29 Chapter 3 Socio - Economic Characteristics of Entrepreneur s and Food Industries 30-37

3.1 Background of the Food Processing Industries 30 3.2 Ownership of Industries 31 3.3 Age Profile of the Entrepreneurs 32 3.4 Educational Background of Entrepreneurs 33 3.5 Caste background of Entrepreneurs 34

iii

3.6 Land Assets of Agro-Processing Entrepreneurs 35 3.7 Employment in Agro-Processing Industries 36

Chapter 4 Documentation of Success Stories of Food Processing units in Karnataka 38-47

4.1 Reasons/Factors for Success of Food Processing units 38 4.1.1 Quality Management 38 4.1.2 Good Customer Service 38 4.1.3 Reasonable Prices 39 4.1.4 Replacement for Damaged Products 39 4.3 Percent change in average annual income of food processing industries in 40 Karnataka 4.4 Case Studies 41 Case 1: Mahesh Cashew Industries 42 Case 2: Jain Agro Food Products 45 Case 3: Siddabasava Dhal Industries 46 Chapter 5 Problems, Prospectus and Challenges of Food-Processing units 48-56 5.1 Problems of Food-Processing Industry in India 48 5.1.1 Problems Relating to Raw Materials 48 5.1.2 Problems Relating to Marketing 48 5.1.3 Problems Relating to Processing 49 5.1.4 Financial and Fiscal Problems 49 5.1.5 Other Problems 50 5.2 Problems faced by Manufacturing Enterprises 50 5.2.1 Problems Relating to Raw Materials 50 5.2.2 Marketing Problems of Sample Food Processing units 52 5.3 Other Problems 54 5.4 Prospectus of Food Processing Units in Karnataka 56 Chapter 6 SWOT analysis of Food- Processing Industry in Karnataka 57-64 6.1 SWOT analysis of Fruit Vegetable Manufacturing Industry 58 6.2 SWOT analysis of Manufacture of Grain Mill Products Industry 60 SWOT analysis of Dairy Industry 61 6.4 SWOT analysis of Marine Industry 64 6.5 SWOT Analysis of Consumer /Packed Goods Industry 64

Chapter 7 Conclusions and Policy Recommendations 67-80 7.1 Introduction 67 7.2 Main findings 67

7.2.1. Background of Food Processing units 68 7.2.2 Ownership of Industries 68 7.2.3. Age Profile of the Entrepreneurs 68 7.2.4 Educational Background of the Entrepreneurs 68 7.2.5 Caste Background of the Entrepreneurs 69 7.2.6 Land Assets of Agro-Processing Entrepreneurs 69 7.2.7 Employment in Agro-Processing Units 69 7.3 Reasons for Success of Food Processing units 70 7.4 Problems faced by Manufacturing Enterprises 71 7.4. Problems relating to Raw Materials 71 7.5 Marketing Problems of Sample Food Units 73 7.6 Other Problems 74 7.7 SWOT analysis of food processing industries in Karnataka 75 7.8 Conclusions 76 7.9 Policy Recommendations 77 References 78

LIST OF TABLES

Table 1.1 Structure and composition of the food processing industries in India 2011-12 05

Table 2.1 Classification of Organized Food Processing Industries in India 15 Table: .2.2 Percentage of Losses Estimated for Major Produces 19 Table: 2.3 Processing details of different Sectors of Food Processing Industry 20 Table 2.4 Contribution to GDP of Food Processing Industry at 2004-05 prices (Rs crore) 21 Table 2.5 Exports of Major Processed Food & Related Commodities from Food 23 processing sector Table: 2.6 Foreign Direct Investment in Food processing sector in the India. 24 Table 2.7 size of food processing industries, capital investment, employees, value of 27 output & net Value added by manufacture 2012-13(value in lakh) in Karnataka

Table 2.8 Production of Agri-crops (in lakh MT) 28 Table 2.9 Production of these Commercial crops (in lakh MT) 28 Table 2.10 Production of Major Fruits in Karnataka. 29 Table 2.11 production statistics for major livestock products 29 Table 3.1 Distribution of Units by Year of Establishment 31 Table 3.2 Ownership Status of the Sample of Food Processing Industries 32 Table 3.3 Age Characteristics of the entrepreneurs 33 Table 3.4 Educational level of Sample Entrepreneurs 34 Table 3.5 Distribution of Entrepreneurs by their Caste 35 Table 3.6 Distribution of Entrepreneurs by Land Holding 36 Table 3.7 Distribution of Units by Size of Employment 37 Table4.1 Reasons/Factors for success of food processing industries 39 Table 4.2 Average annual turnover of food processing industries (Rs crores) 40 Table 4.3 Percent change in average annual income of food processing industries in 41 Karnataka Table 5.1: Constraints faced by the Food Processing Units in Procuring Raw Materials 51 Table 5.3 Distribution of Units on the Basis of Other Problems Table 6.1 SWOT Analysis of Fruit and Vegetables Industries 60 Table 6.2 SWOT Analysis of Manufacture of Grain Mill Products Industry 62 Table 6.3 SWOT Analysis of Dairy Industry 63 Table 6.4 SWOT Analysis of Marine Industry 65 Table 6.5 SWOT Analysis of Consumer /Packed Goods Industry 66

EXECUTIVE SUMMARY The food-processing industry in India plays a vital role in the national economic development and has potential to meet the local needs and export requirements. It helps in processing agricultural products such as field crops, pulses, horticultural crops, livestock and fisheries and converting them to edible and other usable forms. Thus, transformation of agriculture through creating forward and backward linkages with industry has been emerging as an important option to overcome the increasing challenges of creating employment opportunities for increasing labour force and sustaining the livelihood of households in rural areas. Most important point in the food-processing is that a sizeable portion of raw material processed in them being rural based it has a very high employment potential with significantly lower investment. Further the food- industry generates new demand on the farm sector for more and different agricultural outputs, which are more suitable for processing. On the other hand, development of these industries would relax wage goods constraints to economic growth by enhancing the supply of their products. In this context there is a need for improving the capacity of the food-units to harness backward linkages with agriculture and allied activities in order to efficiently convert part of the output to value added products acceptable to the domestic and international markets. This would generate employment opportunities for different types of skills through food processing, packaging, grading and distribution. Keeping the above aspects in consideration the study was carried out in the state of Karnataka. Objectives of the study Keeping the above aspects in consideration this study is carried out with the following objectives.

1. To bring in socioeconomic aspects of food processing units ,

2. To document success stories of food processing units,

3. To emphasize on the problems, prospects, challenges and concerns in the food processing industries.

vii

Methodology and Data Source

The study has been based on both primary and secondary sources of information data. The primary data is collected among a sample of different product groups of registered industries of Karnataka state. It means that a detailed list of industries/ units has been prepared and number of these units/industries has been decided on the basis of total number of industries in the selected clusters. Selection of Belgavi, Dharwad, UttarKannada, DakishnaKannda, Udupi, Hassan, Bangalore Rural, Bangalore Urban, Tumakur and Ramanagar districts has been done for detailed analysis. Again 50 success units have been selected. Apart from Primary data, Secondary and published documented data has been collected from District Industrial Centre, Federation of Karnataka Chamber of Commerce and Industry and analyzed accordingly. To make the study more meaningful and policy oriented available literature and studies have been consulted and reviewed. It was also thought proper to obtain information on the perceptions of entrepreneurs, officials of financial institutions and government agencies/departments including industry through structured questionnaires with a view to suggest the suitable policy measures. We have also interacted with the government departments for an in depth understandings their observations may be considered for evolving the strategies of the revival of sick industrial units. Primary data have been collected through interview schedule. Apart from this field observations and open ended discussion have also been equally considered and incorporated in the present study. The filled in questionnaires were thoroughly scrutinized and processed in computer for drawing out inferences, patterns, trends and conclusions. The primary data in tabular form has been discussed, interpreted and analyzed while critical appreciation of pertinent literature has been ensured in the report. The policy recommendations are based on analysis of research findings and critical review of pertinent literature.

Main Findings Background of Food Processing Units; The expansion pattern of food processing industries based on the analysis of 50 sample units reveals that 100 per cent of industries were registered under District Industrial Centre in sample districts together were started during the periods 2014-15. From table 3.1 one can see that 32 per

viii cent all categories of units were started after 2006. Followed by 26 per cent during 1992-2000, 22 per cent before 1991 and 20 per cent during 2001-05.

Ownership of Industries

Looking into the legal ownership status of industries it brings out that the industries are registered under single ownership is remarkably higher among the all product industries in each of the product groups of food- Industries. However, a large proportion of industries registered under the Shops and Establishment Act are also observed operating as the family enterprises. In all, the proportion of industries operating under a signal ownership is highest at over 80 percent, followed by partnership (12.00 %) and 8 per cent of industries are family enterprises.

Age Profile of Entrepreneurs; Age of entrepreneurs in the food processing sector as an important determining, factor for their growth expansion one can observe the pattern whether the young entrepreneurs are entering in to this sector or the traditional business community themselves in this business it is significant to observe that most of the entrepreneurs in the food-processing sector are middle aged (30 to 40 years). Their share comes to 68 per cent of the total food processing entrepreneurs. This is followed by young entrepreneurs (below 30 years) who constitute28.00 per cent and 4 per cent account for aged (45 years and above). The table thus reveals the dominance of middle aged entrepreneurs in the sector. Industry wise analysis reveals that proportion of entrepreneurs in the middle-age group is higher in industries such as marine products (100 %), Manufacture of Packed food/ consumer foods (70 %), grain mills and fruit and vegetable manufacturers (66.66 %) and 60 per cent of dairy products.

Educational Background of the Entrepreneurs Assessing into the educational background of the entrepreneurs it reflects that the different groups of food processing industries especially small scale industries do not require any more skill and professional education. Expansion of this sector can be successfully carried out by the individual having even primary education or the secondary education. From the sample nearly 26 per cent entrepreneurs have education below primary level. However, a majority i.e., 38 per cent

ix entrepreneurs are having secondary level of education while only 2 per cent entrepreneurs, have obtained technical/ professional level education.

Caste Background of the Entrepreneurs Among the different product groups of food-industries, the domination of general caste entrepreneurs has been noted and the highest at 50 per cent is in distilling, rectifying and blinding of spirit while in registered units their share reaches to the extent of 50 per cent. In same product group to 66 per cent in manufacturing of fruits and vegetables, In terms of the proportionate share of different casts of entrepreneurs in various small scale registered industries is concerned the study found that it again follows quite high at 28.00 percent in backward classes, 14.00 per cent of SC and 8.00 per cent of ST. Industry wise analysis shows that 66.66 percent of entrepreneurs in fruit and vegetable manufacturers, 60.00 per cent in Manufacture of dairy, 50.00 per cent in marine products , 44.44 per cent in manufacture of grain mill and 30.00 per cent in Manufacture of Packed food/ consumer foods.

Land Assets of Agro-Processing Entrepreneurs Economic profile of food-processing entrepreneurs is analyzed in terms of area of land assets they own. For this purpose, entrepreneurs are categorized into three groups; entrepreneurs with land holding between zero and 2.5 acres (below one hectare), between 2.5 acres and 5 acres, and entrepreneurs with land holding above 5 acres. It is observed that 66.66 per cent of the total entrepreneurs have land holding between zero and two and half acres (below one hectare). The proportions of entrepreneurs having land holding between zero and 2.5 acres varies from 40.00 manufactures of dairy Products to 72.00. Manufacture of grain mill products. The proportion of entrepreneurs having land holding between two and half and five acres of land is 22.00 per cent for the food processing industries as a whole and it varies from 11.00 per cent in manufacture of grain mill products industries to 50.00 percent in marine product industries and 12.00 per cent have land holding of more than five acres. The table, thus, reveals that majority of entrepreneurs have small size of land holdings and this indicate that economic profile of majority of food-processing entrepreneurs as a whole is not so sound.

Employment in Agro-Processing Units Food-processing industries are generally regarded as labour intensive and are expected to employ more labors and create more maydays of employment. In order to analyze the employment level in sample food processing industrial units, they are categorized into four groups namely industrial units employing 2 to 10 persons, 11 to 20 persons, 2 1 to 30 persons and above 3 I persons. It shows that 46.00 percent of the total food-processing units are able to generate employment for 11 - 20 persons each. Within this 100 per cent of the marine product units, 60 per cent dairy units, 46.66 percent manufacture of fruits & vegetables, 44.44 percent in Manufacture of grain mills and 30.00 percent in Manufacture of Packed food/ consumer foods. It is also observed that industrial units providing employment to 21-30 persons are and account for 24.00 percent of the total food -processing industrial units, 18. Per cent in 2-10 persons and finally 12.00 per cent of total food processing units generating employment for 31 above persons.

Reasons for Success of food Processing Units

The major reasons delineated for success of these units are reasonable price, skilled labour and replacement for damaged products. The extent of influence of each of these factors is brought out in following paragraphs.

Quality Management

The quality of produce is an important factor operation or success of units. The proportion of this factor in food-processing units varies from 100.00 per cent in manufacturing of marine products to 80.00 of manufacture of dairy products. However this factor is favor in Manufacture of Packed food/ consumer foods and marine products (100.00 %), Manufacture of fruits & vegetables (86.66%), Manufacture of grain mill products (83.33 %), and in Manufacture of dairy products (80.00 %). Food quality is an important food manufacturing requirement, because food consumers are susceptible to any form of contamination that may occur during the manufacturing process. Many consumers also rely on manufacturing and processing standards, particularly to know what ingredients are present, due to dietary, nutritional requirements or medical conditions.

Good customer service Customer service proves to be one of the most important keys to the success of the food industry 78.00 per cent of food-processing units have reported that good customer service is an another important factor for success of food processing units. This factor is favor in Manufacture of Packed food/ consumer foods and marine products (90. %), Manufacture of fruits & vegetables and Manufacture of dairy products (80 %) and Manufacture of grain mill products (77.77 %).

Reasonable prices

The reasonable price of a product is another factor to success of food processing units. About 64.00 per cent of the total food-processing units have reported reasonable price of as another factor to continue the business in food processing. This is a major reason for industries like manufacture of Packed food/ consumer foods (80.00%), manufacture of grain mill products (66.66 %), Manufacture of dairy products and manufacture of fruits & vegetables (60.00 %).

Replacement for Damaged Products

The replacement for damaged products is another reason for operation or success of units. About 34.00 percent of the total food-processing units have reported replacement of damaged product is another factor to continue the business in food processing. This is a major reason for industries like Manufacture of grain mill products (66.66%), Manufacture of Packed food/ consumer foods (34.00 %) and Manufacture of fruits & vegetables (13.00 %). Have reported the food-processing industries.

Percent change in average annual income of food processing industries in Karnataka

It is observed from Table 4.3 percent change in annual income of food processing industries in the state of Karnataka during 2009-10 to 2013-14. It is noticed from the table that although manufacture of fruits and vegetables had highest income under processing (0.90 crores in 2009- 10 and 6.30 crores in 2013-14) followed by Manufacture of dairy products (306.66 percent), Marine products(119.23 percent ) Manufacture of Packed food/ consumer foods(83.33 percent) and Manufacture of grain mill products (81.11 percent).

xii

SWOT analysis of food processing industries in Karnataka

SWOT analysis will help you to evaluate the current position of your operation to determine management plans for the future. It helps in determining future plans by identifying strengths and opportunities that can be used by the operation and pointing out weaknesses and threats that should be managed. While not all plans will ultimately be implemented, completing a SWOT analysis can ensure all current and potential positions of the business are considered. Those beginning a SWOT analysis should remember that there are no set guidelines for completing the analysis. Users of the final analysis should be comfortable with the format and should understand the results. For the analysis to be most effective, though, it must be carried out fairly and thoroughly. This will then put the management in a position to accurately forecast and prepare for the future to meet the farms objectives and goals.

Problems Faced by Manufacturing Enterprises

Formulation of a proper-mix of policies for the healthy and rapid development of food- processing units must take into consideration the various problems that inhibit their growth. With this in view, the sample processing units were asked to identify their problems. In this section, problems faced by sample of food-processing units in Karnataka in particular are analyzed in detail. For this purpose, problems faced by selected sample food-processing units are categorized into problems relating to raw materials, marketing problems and other problems.

Problems Relating to Raw Material There is a problem of non-availability of raw materials, high prices of raw materials, poor quality raw materials and competition among units to buy raw materials.

Non- availability Raw Materials Non availability raw materials is an important problem affecting the operation of units. The proportion of this problem affecting food-processing units varies from 54 per cent in manufacturing of grain mill products to 10. of manufacture of packed food/consumer foods. However this problem is severe in industries like rice mills (77.77 %), manufacture of fruits & vegetables (66.66 %), marine products (50.00 %), and in manufacture of Packed food/ consumer

xiii foods (10 %). This problem largely arises due to fluctuations in agricultural production due to unfavorable climate, plant diseases and other natural calamities. However, many other factors can be attributable to this problem in the case of individual commodities. Global agro industries Kalburgi (Dhal mills), Sri Dharameshwari Rice Industries (rice mill) and Ravi Raj industries in Tumkur pointed out that the problem of inadequate availability of paddy and dhal (raw material) for rice mills and dhal processors can be attributed to inadequate production in the state.

High Market Price of Raw materials

The prices of raw materials are a major problem faced by food-processing units. About 44 per cent of the total food-processing industrial units have reported high market price of raw materials as a major difficulty in obtaining raw materials. This is a major difficulty for industries like grain mills (66.66%), marine products (50 %), dairy and consumer foods (40.00 % and 20 %) in manufacturing of fruits and vegetables.

Competition among units to buy raw materials

30 per cent of processing industrial units reported competition among processing units to buy raw materials as another problem relating to raw material. This problem implies that raw material availability in the market is less than the demand for raw material. This problem is severe in the case of rice and pulse mills where 38.88 percent of grain mills face this problem. 30.00 percent Manufacture of Packed food/ consumer foods are also found to be facing this problem. Kalburgi Dhal mills and rice mills in Tumakur have pointed out that this problem pushes up the price of raw material in the market and makes raw material unavailable to small scale grain mills.

Poor Quality of Raw Materials

xiv content in paddy, presence of paddy with black rice and paddy without rice (empty paddy) in the raw material (paddy) reduce the quality of raw material (paddy), and adversely affected the quality of their product and profitability. Marketing Problems of Sample Food Processing Units Marketing problems relate to competition, credit sales, brand acceptability, mass media exposure etc. Competition The most important marketing problem common to all sample food-processing industries is competition. Food-processing units face competition from other units within the same industry, from large-scale units, from multinational companies and also from other units, which produce substitutes for the processing unit’s product. Table 5.2 reveals that 64.00 per cent of food- processing units as a whole suffer from this problem. The proportion of units facing this problem varies from 72.22 per cent in grain mills to 40 percent in dairy products making and 66.66 per cent in fruits and vegetable processing industry. However, table shows that this problem is serious in grain mills (72.22 %), manufacture of packed food/ consumer foods (60 %) and marine products 50 per cent.

Lack of Brand Goodwill Another marketing problem which the units have reported to be facing is the lack of brand goodwill. It implies that their product brand have not received much public acceptance. It reveals that 52 per cent of food processing industries as a whole are facing this problem. This problem has been reported by 60 per cent of manufacture of packed food /consumer foods, 53 per cent of manufacture of fruits and vegetables and 50 per cent of grain mills, marine product units. The units have attributed it to inadequate publicity through mass media. Units reported that they are reluctant to have media exposure because of lack of finance and high cost involved in it.

xv media as a marketing problem. This problem is faced by 60 per cent of Manufacture of Packed food/ consumer foods 46.66 percent Manufacture of fruits & vegetables, 44.44 per cent of Manufacture of grain mill products and its, 40 per cent of milk processing units.

Dependence on middleman for marketing the processed product

Middleman as one who carries all the activities involved in selling goods and services to those who buy for resale or business use. It shows that 100 per cent of marine products, 55 per cent of grain manufacturers, 46.66 per cent of manufacture of fruits & vegetables and 40 per cent of manufacture of dairy and consumer goods units have reported that they are depend on marketing of their produce through middleman.

Other Problems Irregular supply of power About 44 per cent of the total food-processing units have reported that irregular supply of power affects their operation. Food-processing units, which are located in remote areas, face this problem seriously. 55.55 per cent of the grain mills, 50.00 per cent of marine products, 40.00 per cent of bakery and dairy product units and 33.333 per cent of manufacture of fruits and vegetable industries reported. Lack of regular supply of power adversely affects the existing capacity utilization resulting in low level of production on the one hand and an increase in cost of production on the other. Lack of Labour

32 per cent of the food-processing units in five industries namely fruits and vegetable manufacturers and consumer foods (40.00 %), grain mills (33.33 %), and dairy products 20.00 percent. Have reported that lack of labour affected their operation Abhinandhan Food Processors in Belgaum. Deepak cashew industries (Udupi district) has attributed lack of labour to migration of labour from rural to urban or semi urban areas to work in shops particularly in textile shops, in transportation service sectors drivers or conductors in private buses, or to work in other private establishments in the urban or semi urban areas.

xvi

Multiplicity of Laws and Procedures

About13per cent of the food-processing units as a whole have reported difficulty in the operation of units due to multiplicity of laws, procedures and periodical interference of bureaucracy in the name inspection. This problem is faced by grain mills (44.44 %), Manufacture of Packed food and manufacture of dairy Products (20 %) and 13.33 per cent in fruits and vegetable manufacturers has reported. Global agro industries and Avinash dhal industries (Dhal industries) have reported that Government of India has banned to export of dhal to other countries like US, Singapore etc. And getting low subsidies in our state as compared neighboring states like Maharashtra and others. This requires action on the part of the government in simplifying laws and procedures in favor of food-processing industries to speed up their growth.

Conclusions

From the analysis of socio-economic characteristics of entrepreneurs, it can be concluded that that ownership of units in this sector is characterized by the dominance of sole proprietorship form of organization indicating one man show in the management of units and by partnership among family members. In view of this, it can be concluded that there is a tendency in this sector to confine ownership of the units to the family only.

Further, from the point of education, young educated youth are not much attracted to food- processing sector as new entrepreneurs. This is a matter of concern. This sector is found to be dominated by middle aged entrepreneurs and this cool borate with the above that –then as family business.

Assessing into the educational background of the entrepreneurs it reflects that the different groups of food processing Industries especially small scale industries do not require any more skill and professional education. Expansion of this sector can be successfully carried out by the individual having even primary education or the secondary education. From the analysis of employment the food-processing unit is able to generate employment for 11 - 20 persons.

Quality of product and time by delivery of the product to customers is the key factor to run continuously of any food industry

xvii

Short supply of raw materials, poor quality of raw materials and poorly developed marketing facilities, lacking power for running the units shortage of skilled labour is the important problems that comes in the way of development of this sector.

Policy Recommendations Based on the finding presented on different issues the study makes the following recommendations important for policy action.

Fruits and vegetable processing industries As Indian economy is based on agriculture, there is a need to develop proper supply chain models which may play an important role in increasing the shelf life and in turn reduce the losses and wastages in fruits and vegetables, increase in farmer income, generate employments opportunities for the local peoples, and improve the livelihood of the farmers which leads to the development of Indian economy as a whole.

Most of the processing industries reported that non-availability of suitable varieties of raw materials for processing was one of the major constraints. Thus, there is a need to address this issue by the agricultural universities and R & D institutions.

The State Government would consider, on priority, providing road links for agro- industries clusters and agro-processing units through the Marketing Development Fund (MDF) or other Schemes/Programmes.

Agro-processing and agro-business, being emerging areas with a vast growth potential, is facing a shortage of skilled manpower. The State Government would encourage Universities in the State to commence courses in food processing, packaging and agri- marketing.

Manufacture of grain mill products and Manufacture of packed food/ consumer foods

The State Government should ensure regularity in supply of power to industries.

xviii

Introduction of a scheme as entrepreneurship training and apprenticeship for ITI diploma holders seems too necessary for improving capacity building for both young generation willing to start units and skilled laborers.

Product specific industrial clusters should be promoted through providing various infrastructural facilities and developing market linkages.

Manufacture of dairy products

Training programmes on hygienic milk production, processing, packaging, and marketing should be organized.

Establishment of a few state-of-the-art labs, with appropriate accreditation to estimate contaminants, in different parts of the country would help the industry to ensure quality of dairy products of international standard.

Manufacture marine products

MPEDA can develop a department for providing marketing information to the fish processing units. This will help the industry updated with International scenario.

There is a need for market research studies to explore domestic and international markets for processed products.

xix

CHAPTER I INTRODUCTION 1.1 Background

India is one of the key food producers in the world, with the second largest arable land area. It is the largest producer of milk, pulses, sugarcane and tea in the world and the second largest producer of wheat, rice, fruits and vegetables. India’s Food Processing industry is one of the largest industries in the country - it is ranked fifth in terms of production, consumption, export and expected growth. The Indian food industry is estimated to be worth over US$ 200 billion and is expected to grow to US$ 310 billion by 2015. India is one of the world’s major food producers but accounts for only 1.7 per cent (valued at US$ 7.5 billion) of world trade in this sector – this share is slated to increase to 3 per cent (US$ 20 billion) by 2015. India is called a predominantly agrarian economy since generations and the livelihood of more than 50 per cent of Indians population is agriculture. India ranks second in the world in farm output. Agriculture and allied sectors like forestry and fisheries accounts for 13.7% of the GDP (Gross Domestic Product) in 2013 and about 50% of the total workforce (CIA Factbook: India"). Food and food products are biggest consumption category in India, with spending on food accounting for 21 percent of India’s GDP and with the market size of $181 billion.

Food processing involves any type of value addition to agricultural or horticultural produce and also includes processes such as grading, sorting and packaging which enhance shelf life of food products. Food processing sector is indispensable for the overall development of India’s economy as it provides a vital linkage and synergy between the agriculture and industry. The motive behind diversification and commercialization of farming in India is that leads to increased income for the farmers, employment generation and markets for exporting agricultural produce. The proportionate expenditure of households on food items has considerably changed after the breakthrough of processed food market in India which has shifted from staples to processed food products. Along with that liberalization, privatization and globalization of the post WTO regime have created new opportunities for growth of Indian food processing industry. Any positive change in food processing industry will also contribute towards nation’s food security.

Realizing this importance, the Central Government has accorded high priority for this sector and toward it end it has undertaken several policy measures and initiatives. It has offered a number of fiscal reliefs and incentives as well as approved a large number of joint ventures; foreign collaborations, industrial licenses and 100% export oriented units (EOU) proposals in different food processing areas. Some of the important steps in this direction are:- (i) Most of the processed food items have been exempted from the purview of licensing under the Industries (Development & Regulation) Act, 1951; (ii) Food processing industries are included in the list of priority sector for bank lending in order to ensure easy availability of credit to them; (iii) Automatic approval for foreign equity up to 100% is available for most of the processed food items, excepting alcohol and beer and those reserved for small scale sector (subject to certain conditions); (iv) In budget 2007-08, excise duty has been waived on all kinds of food mixes including instant mixes, Soya Bari (food supplements) and ready to eat packaged goods as well as on biscuits; etc.

In the process of reaping advantages of establishing food processed industries for achieving increased employment and livelihood opportunities in rural areas it would be necessary to adopt a comprehensive long term approach towards the development of various food processing activities. Such planning exercise should be aimed firstly, to examine the overall situation and pattern of existing industrial enterprises and then attempt should be made to identify most niche based product groups of enterprises which possess certain location specific advantages in its sustainable development. This would not only provide a strong base and alternative option for creation of additional employment opportunities and avenues of income for rural households owning very small size of cultivated land and landless laborers within the rural areas itself but it would help in reduction in the rate of rural-urban migration of population. Considering the importance of agro-processing industries in the development perspectives of overall rural development in general and realizing the expected role of expanding this sector for achieving increasing employment opportunities and income level and thus to overcome the emerging challenges of unemployment and poverty in rural areas of the State the present study attempted to examine the following issues:  The emerging structure, pattern and growth of different product groups of food processing industries across the district, regional and state level in Karnataka.

 Size of capital investment and its sources of financing, output and generation of value added, production technologies, employment pattern, turnover and the contribution of different product line of industries in all groups of industries.  The linkages established by industries for obtaining raw materials from the farmers and other suppliers, procurement pattern, accessibility situation, prevailing practices of price determination of different raw materials being supplied from different sources and the arrangements of marketing the final products.  The development prospects and problems in operation of enterprises and required measures to be initiated to strengthen the expansion of different groups of industries.  Evaluation of policy measures and incentives introduced by the Central and State Governments and other institutions and agencies such as Commission, APEDA etc for agro-processing industry and their usefulness in terms of the expansion and growth of different product groups of agro- based industries.  Contribution and impact of expansion of food processing industries in increasing income and employment of farm households. The present study focuses on documentation of success and failure stories of a food processing industries.

During the past few years, industrial sickness has assumed unmanageable proportions in India. It is continuously on the rise and in this include of more and more small-scale industrial units during the past few years. Sickness among small and medium industrial units is reported to be on the increase.

Actually, this phenomenon is an accepted feature of a free enterprise economy. In advanced economies the survival of the fittest and weeding out of inefficient industrial units is a natural phenomenon. Whether it is a developing or developed economy, if disappearance of non- competitive units is sporadically, it does not pose problem. But when it becomes endemic and epidemic, the problem arises. Especially in a country like India, the problem of industrial sickness cannot be left to market forces because of their adverse repercussions on the economy as a whole.

Due to sickness in the industrial sector, scarce and valuable capital goes waste. Sickness aggravates our existing problems of unemployment and underemployment. The closure of so

3 many units involves a heavy cost to the economy in terms of increasing unemployment, wastage of scarce capital and raw-materials, entrepreneurial abilities, skilled labour and reduction in the volume of production or national income of the country.

1.2 Structure and composition of the food processing industries in India

Structure and Composition of Indian Food Processing Industry the food processing or food manufacturing industry includes companies that transform livestock and agricultural products into products used for intermediate or final consumption. Processed foods are products in which a raw commodity is transformed into a processed product regardless of whether the amount of processing is minor, such as canned fruit, or more complex, such as snack foods (U.S. Census Bureau 2004, Industry Outlook for Processed Foods). Through food processing value is added to the agricultural or horticultural produce by using various techniques including grading, sorting, packaging etc., which enhance the shelf life of food products. A strong and dynamic food processing sector plays significant role in the overall economic setup of a country. The sector provides vital linkages and synergies between industry and agriculture and has been identified as a sector having immediate potential for growth of the economy. Processing also helps in generating rural employment, additionally processed fruits and vegetables are a source of earning foreign exchange e (Murthy and Dasaraju, 2011). The extent of processing in India can be categorized as follows:  Primary Processing; cleaning, grading, powdering and refining of agricultural produce, e.g., grinding wheat into flour.  Secondary Processing: basic value addition, e.g., tomato -puree, ground coffee, processing of meat products.  Tertiary Processing: high value addition products like jams, sauces, biscuits and other bakery products ready for consumption. Food processing is a large sector in India that covers activities such as agriculture, horticulture, plantation, animal husbandry and fisheries. It also includes other industries that use agricultural inputs for manufacturing of edible products. The Ministry of Food Processing, Government of India divides the industry into six segments: Dairy, fruits & vegetable processing; Grain processing; Meat & poultry processing, Fisheries; and Consumer foods including packaged foods, beverages and packaged drinking water.

In this section, an attempt is made to analyze the types in the food industrial growth of India in order to assess the process of industrialization in the country. The main source of data for the analysis of this section is Annual Survey of Industries. Table 1.1 shows the types and composition of manufacturing industries in India during 2011-12

Table 1.1. Structure and composition of the food processing industries in India 2011-12

No. of Value of Food Processing Industries No. of Persons Fixed Capital Output Factories Engaged in (Rs.Crore) (Rs.Crore) 19010 366500 17553 158213 Grain Mill & Starch products (66.88) (38.39) (21.83) (28.35) 3394 121232 18409 197325 Vegetable & Animal oils and fats (11.94) (12.69) (22.89) (35.36) 1997 147482 22420 53301 Beverages (7.02) (15.44) (27.88) (9.55) 1653 149775 10695 87015 Dairy Products (5.81) (15.68) (13.30) (15.59) 1078 62448 5060 10309 Fruits and Vegetables products (3.79) (6.54) (6.29) (1.84) 755 44462 2741 26602 Prepared Animal Feeds (2.65) (4.65) (3.40) (4.76) 390 42081 2150 15228 Fish, crustaceans etc. (1.37) (4.40) (2.67) (2.72) 146 20621 1362 10008 Meat Processing & Preserving (0.51) (2.16) (1.69) (1.79) 28423 954601 80390 558001 Total (100.00) (100.00) (100.00) (100.00) Source : Ministry of Food Processing Industries Govt. of India.

It is observed from the table 1.1 Grain Mill & Starch products industries accounted 66.88 per cent, 38.39 percent of persons employed in 2011 12 ,fixed capital of the industry is 21.83 percent and value of output was 28.35 percent. Followed by Vegetable and Animal oils and fats, Beverages, Dairy Products, Fruits and Vegetables products, Prepared Animal Feeds, Fish, crustaceans and Meat Processing and Preserving. The shares of meat processing and preserving very low in these respects compared with other food processing industries. For meat processing and preserving, its shares in that of India were 0.51 percent in terms of number of units, 1.79 percent in terms of fixed capital, 216 percent in terms of employment and 1.69 percent in net value added in 20011-12.From the above analysis of the food industrial scenario of India it is concluded that Meat Processing & Preserving is industrially backward and the process of industrialization is very low. The industrial backwardness of the India is manifested itself in the

5 form of remarkably low contribution of manufacturing sector to country income in comparison with other sectors like Grain Mill ,fruits, and dairy sectors.

1.3 Review of Literature The literature review is a text content written by authors, eminent personalities, scientists who consider the significant points pertinent to current information and facts including substantive findings, as well as theoretical and methodological assistance to a specific subject. Review of related literature help to know about the studies which have already done in the related field.

Review of Literature are the secondary source of data collection collected from different national and international Journals, Magazines, books, websites, government reports, NSSO survey and unpublished Ph D. Theses and M. Phil dissertations, Annual Reports of government organizations like (APEDA), (MFPI), (MPEDA), bulletins, food journals, management books and some collected from other sources.

Katkar’s study (1996) on ‘Status and Prospects for Food Processing Industry in India’. It is based on secondary data. It observes that although the food processing industry has attained the annual growth rate of 5.7% in 1992-93, yet a vast majority of agricultural produce is consumed to 1.6%. We are processing less than one percent of the total fruits and vegetables produced against 80% in South Africa, 65% in USA, 70% in Brazil and 83% in Malaysia. Indian processed fruits and vegetables exported constitute one eighth of those exported fresh. The lower level of Food Industry Development Index (FIDI-415) indicates dismal position of food processing industry development status mainly due to lower of various indices in comparison to developed countries. The higher production level especially of fruits and vegetables (3rd largest producer of the world) and higher Food Industry Potentiality Index (FIPI- 475.2) provides vital opportunity for the potential investors in this industry. The changing socio-economic scenario, technological development and environmental factors especially liberalization, globalization and export thrust of agricultural sector is a need to develop the required infrastructural facilities and improved technology in marketing, communication, processing, transportation and post harvest handling of agricultural produce. The government should pay due attention to make this a viable industrial

6 sector and to earn more foreign exchange by capturing international market and to meet the growing domestic demand for processed food items.

Rai et. al.(1996) study on status and potential of agro processing industries in Haryana. In the present investigation an attempt has been made to examine the potential and problems of agro- processing industries in Haryana State. The study revealed that there is tremendous scope for agro-processing industries in the state where supply of raw material, processing and marketing are not serious problems. Infrastructural facilities in the state are reasonably well developed. The future potential of developing agro-processing industries lies in wheat milling and rice milling, feed and concentrate industry, edible oil and cotton processing, sugarcane milling, fruit and vegetable processing and all the bye-product processing of the entire commodity system. The rising trend of converting the potential of main agro processing products as well as by-product need to be accelerated in future years. It would provide proper farm-industry linkage which will help development of agriculture by creating backward and forward linkage, generating more employment, adding value to farmers produce and increasing their net income.

The study was undertaken by Srinivas et. al. (1996) on ‘Economics of Agro-processing: A Case of Cashew-nut processing in Andhra Pradesh’ bring out the economics of processing of cashew- nut at different stages. All the eleven registered processing units at Vetapalem were selected for the study. Data were collected with the help of well structured and pre tested schedules. Processing of cashew-nut has been discussed with considering different stages such as drying of nuts, roasting of nuts, shelling of nuts, drying of shelled kernels, peeling, grading, conditioning, packing etc. cost incurred at various stages of processing mainly confined to labourer and material cost. It is concluded that processing is an important operation to get the final consumable product from cashew nut. The major costs are processing of cashew-nut, packing of graded kernels, shelling of roasted nuts and peeling of shelled kernels.

Bhat (1998) conducted study on the problems and prospectus of food processing industry in western Karnataka. He has studied 339 food processing units with the objectives of the nature and extent of food processing industry, opportunities available to these industries, and future prospectus of processing industries. The study found that majority of food processing units are

7 located in urban areas and their investment range is up to Rs. 1000000 or less. They have difficulties in production and marketing. Many units are totally unaware of the concession, subsidies, special incentives provided by the government. Power problem is a serious hurdle to these industries. The researcher has suggested that these industries should use proper selection system. There is need of market research activity to study the changing market environment. Traditional technology for production should be upgraded to maintain quality. There is need of centralized food testing laboratory.

Bhagavat (2001) has completed a study of 100 bakery units in Kolhapur district. This study has taken an overview of bakery industry and examines the various production problems of bakery industry. He has found that most of the units are spread over the rural and semi urban area. Only 1/5th of the bakery owners have completed training for bakery or food craft. There is a system of dual licensing policy. Only 50% of units have separate sections for carrying out different production process. In most of the units machineries still to being used. He has suggested that the legacy of traditionalistic is all pervasive throughout the bakery industry. Individual bakery units may embrace a suitable total quality management method. Individual units should work out a feasible and result-oriented financial and marketing management. There should be proper machinery maintenance of machineries of the industries. There should be a system of scientific management through maintenance of up-to-date records, inventory control, raw material management, packaging etc.

The study was undertaken by Dixit (2005) titled as ‘Role of Financial Institutions in India’s Industrial Development- Special reference to Small Scale Industries’. The main purpose of the study is to analyze the role of financial institutions in promoting and rendering financial assistance to small scale sector. The present study is mainly based on the secondary data published in annual reports. The period of the study is 1990-91 to 2000-2001. The objectives of the present study are, to review the government’s policies, to evaluate the performance of financial institutions in the development of small scale sector, to examine the role of financial institutions in the rehabilitation of sick SSI units. In order to streamline and strengthen the flow of credit to SSIs from the various financial institutions the present researcher suggest that, there is a need for creating awareness among the SSIs regarding the schemes and assistance of

8 financial institutions. The role of financial institutions in the revival of sick SSI units is unsatisfactory. The amount distributed for the rehabilitation of sick units has been always less than one percent. The amount distributed for revival of sick units is should be increase up to 5 to 10 percent of the total assistance. There is an imbalance in state wise distribution of financial assistance. Karnataka, Maharashtra, Gujarat, Tamil Nadu and Kerala together accounted for the largest share nearly 50 percent and remaining accounted for only 50 percent of total assistance. The RBI guidelines said that, 60 percent of the SSI credit should go to tiny sector. But the percentage share of tiny sector in the total credit to SSI sector was only 20 percent. The largest share of the assistance is 50 to 65 percent to new units of the total amount sanctioned. The existing units have achieved little share. There is a need to increase the amount sanctioned/ disbursed to the existing units in order to rebuild their competitive strength.

Ramakrishnappa. V. and Jagannatha Rao. R. (2006) opined that the dairy enterprise is an established sector in rural India and is playing a vital role in generating additional income and employment. In Karnataka, dairy development is a positive and significant as state contributes towards milk production, marketing, and processing of various dairy products in India. The microfinance programmes extended in dairy sector are helpful to take up dairy as main occupation among economically backward communities in the state. In this paper, an attempt was made to analyze the different aspects of microfinance scheme (New Swarnima) implemented by KBCDC. The implementation of New Swarnima Scheme, one of the most popular microfinance schemes in the state to promote dairy among backward communities, was assessed at micro level by selecting 18 beneficiaries belonging to landless labourers, marginal and small farmers in Kolar district in Karnataka state. The study found that the microfinance scheme has positive impact on income and employment generation, and has improved the natural resource management options.

Madan Lal (2007) in his article ‘Food Processing Industry poised for growth’ expressed that the Food Processing Industry in India is one of the largest in terms of production, consumption, export and growth prospects. The important sub-sectors of food processing industries are: Fruit and Vegetable Processing, Fish Processing, Milk Processing, Meat and Poultry Processing, packaged/Convenience Foods, Alcoholic Beverages and Soft drinks and Grain Processing, etc.

As a result of several policy initiatives undertaken since liberalization in July 1991, the industry has witnessed fast growth in most of the segments. As per a recent study on the food processing sector, the turnover of the total food market is approximately Rs.250, 000 crores (US$69.4 billion) out of which value-added food products comprise Rs.80, 000 crores (US$22.2 billion). Primary food processing is a major industry with lakhs of rice-mills/hullers, flour mills, pulse mills and oil-seed mills. There are several thousands of bakeries, traditional food units and fruit/vegetable/ spices processing units in unorganized sector. In the organized sector, there are over 820 flour mills, 418 fish processing units, 5,198 fruit/vegetable processing units, 171 meat processing units.

Markman (2007) in a research findings pointed out that, entrepreneurs are those who possess the knowledge, skills and abilities to be a strategic leader for their ventures, in which their actions influence the ventures’ success. The entrepreneurs formulate strategy, recognize opportunities, and transmute these opportunities into business success. Ibro, Fulton and Lowenberg-DeBoer (2006) in their survey of 400 entrepreneurs revealed that food processing vendors with more experience were more likely to be success-full.

Dhanabalan. M. (2009) opined that dairy has an important role in improving the overall economic conditions of rural India. To maintain the ecological balance, there is need for sustainable and balanced development of agriculture and allied sectors. From our first plan onwards, planners have given priority to allied sector for the economic development of the rural sector. Dairy farming is described as a small industry which provides gainful employment opportunities. It comprises of about six per cent of the national income.

Naqvi (2011) in his research report enlisted the main key factors of success of SMEs of Bahawalpur. The important determinants of success among others include improved customer service, technical know-how of the business and the past experience of the manager and the like. Zampe-takis and Kanelakis (2010) in their study emphasized that prior knowledge of the people and level of education are significant predictors of opportunity entrepreneurship. It was revealed that prior knowledge of markets, prior knowledge of ways to serve markets, and prior knowledge of customer problems are the pre-requisite of the successful entrepreneur.

Misra (2012) in the article “Striving and thriving in the Era of Globalization” depicted nine reasons as the causes for sickness in industry in India. He showed lack of demand 71.6%, shortage of working capital 48.0%, non-availability of raw material 15.1%, power shortage 21.4%, labour problems 7.4%, marketing problems 44.5%, equipment problems 10.6%, and management problems 5.5%.

Sujatha, Y.; Reddy, P. Sunilkumar and Rao, Dr. K. Prahlada; (2012) found that lack of finance: bad production policies, wrong demand & forecasting, selection of in appropriate product mix, absence of product planning, wrong market research methods and bad sales promotions, ineffective corporate management, inappropriate personnel management, personnel problem, marketing constraints, production constraints, and finance limitations are the major causes of sickness to small scale industries. Besides, they provided various remedial steps to stop such sickness.

S Saravanan and Sundaram.( 2013) states that India is experiencing shortage of capital, there came a proposal to allow (FDI) into India, especially after 1991 economic reforms. In this paper an analysis was made on FDI in India’s food processing sector and the results showed a positive trend though much has be done in the policy level as well as practical aspects

1.4 Objectives of the study Keeping the above aspects in consideration this study is carried out with the following objectives.

4. To bring in socioeconomic aspects of food processing units,

5. To document success stories of food processing units,

6. To emphasize on the problems, prospects, challenges and concerns in the food processing industries.

1.5 Methodology and Data Source

1.6 Overview

For easy grasp and understanding of the readers, the study report is divided in to six chapters. The first chapter covers introduction to food processing industries and review of literature on the studies carried out on food processing industries. It also outlines the main objectives, sampling design of the study. The next chapter is based on secondary data which outlines status of food processing industries in India and Karnataka. The third chapter discusses socio economic

12 characteristics of food processing industries, which includes age, caste, education and employment in the food processing industries. The fourth chapter discusses the reasons for running/ success of food - processing industries in the state. Chapter fifth based on the information collected from entrepreneurs summarizes the constraints/ problems, prospectus and challenges food processing industries in Karnataka. The seven and the last chapter summarizes the main findings of the report and provides policy suggestions for improvement of food processing industries.

CHAPTER 2

FOOD PROCESSING INDUSTRY IN INDIA AND KARNATAKA

2.1 Introduction Agriculture continues to be one of the cornerstones of the Indian economy. Though the share of agriculture in GDP has been declining over the years, its role remains critical as nearly 60-70% of the Indians are directly or indirectly dependent on agriculture. It is estimated that if the country has to maintain a GDP growth rate of over 8%, the agricultural sector has to grow at the rate of at least 4%. Government has initiated massive programmes for investment infusion in agriculture sector during 11th five year Plan through Rashtriya Krishi Vikas Yojana (RKVY) and National Horticulture Mission. This has lead to increase in production and productivity. In order to ensure proper return to stakeholders it is essential that suitable post harvest management be adopted to add value and reduce wastage. In this background food processing industry in India is increasingly seen as a potential source for driving rural economy as it brings synergy between industry and agriculture.

Food Processing is all about converting raw food and other farm produce into edible, usable and palatable form. It is the conversion of clean, harvested, butchered or slaughtered components into marketable food products with value addition so as to improve their quality, reliability and shelf life. Further Food processing is about preservation of food while providing greater potential for export.

Food Processing began in the prehistoric age with drying of fruits in nature or animals storing for coming winter feed need. There are crude food processing types such as over hear or fire, fermenting, sun drying and preserving with salt and later humans learnt steaming for cooking. Food preservation has become a key part for warriors ‘during wars and sailors’ as set travels across continents during last two thousand years. Industrial revolution in 17th century began to change food processing as Nicolas Appert developed a vacuum bottling 35 process to supply food to troops in the French army. Canned tins were developed by Peter Durand in 1810. These food processing technologies were largely developed to serve military needs in many countries. As population rose in the early 20th century and travel became regularly for many business people with added change in food habits led to newer development of food processing techniques

14 such as spray drying, juice concentrates, freezing, artificial sweeteners, colorants and preservatives. Instant packaged foods such as biscuits, chocolates, bakery items, variety of fruit drinks attracted higher percentage of students. As refrigerators along with microwave ovens penetrated global markets dried instant soups, reconstituted fruit juices and self cooking meals began to be developed. Thus it is clear that the former food processing techniques were limited, and involved mere salting, smoking, curing, pickling, drying and curdling, with economic progress, the development of food manufacturing has led to new technologies emerging in areas such as milling, preservation, packaging, labeling and transportation, etc., all of which help in enhancing product quality and food safety as well as bringing down costs.

2.2 Classification of Food processing industry: The food processing industry is broadly classified into two groups: 1. Primary Food Industry: This consists of rice mills, flour mills, oil-seed crushing and sugar manufacture, spice grinding etc., and 2. Processed Food Industry: This comprises units engaged in the manufacture of value added products like preserved fruits and vegetables, meat, fish and dairy products, breakfast food mixes, frozen foods, spice blends, extractives, snack foods, etc Food processing industry possesses significant backward linkages with the agricultural sector and presents tremendous potential for forward linkages with the rest of the economy.

Table 2.1 Classification of Organized Food Processing Industries in India No Categories Product range 1. Fruits and vegetables Fruit pulp, juices, canned fruits, jam, pickles, squashes, dehydrated and freeze dried vegetables, canned mushrooms. 2. Milk and milk products Sweetened condensed milk, milk powder, ghee, ice-cream, malted milk food, butter, cheese, milk based baby food items, dairy milk whitener, chilled and processed milk. 3. Meat and poultry Poultry products like eggs, egg powder, canned meat, pork and other meat products, chilled and frozen sheep and goat meat, buffalo meat. 4. Fisheries Canned and frozen forms of fish, individual quick frozen

products, minced fish products like fish sausage, cakes, cutlets, pastes, surimi, texturised products and dry fish. 5. Beer and alcoholic drinks Draught beer, canned beer, country liquor, Indian made foreign liquor (IMFL) that includes wines, whisky, rum, vodka, gin and brandy. 6. Processing of grains Flour of rice, wheat, millets and oil seeds. 7. Packed food/ consumer Pasta, bread, cakes, pastries, rusks, buns, rolls, noodles, corn food flakes, rice flakes, ready to eat, ready to cook products, biscuits, mineral and packed water, cocoa products. 8. Packed drinks All types of soft drinks, non-alcoholic, Sweetened/flavored beverages like cola, Orange, lemon etc. Source: Ministry of Food Processing, Government of India, 2008-2009

Food Processing Units develop perishable and semi-perishable agricultural commodities into storable items especially needed during the off-season. Food processing increases seasonal availability of many foods across the globe with better nutrition and food security. Food processing is a new development of ready-to-consumer products and saves time for cooking and could be cheaper. Food Processing Units can be defined in three-broad categories as: 1. Perishable foods: Those that deteriorate readily such as fruits and vegetables, unless special methods of preservation are employed.

2. Semi-Perishable foods: Those that contain natural inhibitors of spoilage such as root vegetables or those that have received some type of mild treatment which creates greater tolerance to the environmental conditions and abuses during distribution and handling such as pickled vegetables.

3. Non-perishable foods (shelf-stable): Those are non-perishable at room temperature such as cereal grains, sugar, nuts. Some have been made shelf stable by suitable means, canning, or processed to reduce their moisture content, dried fruits such as raisins. Food preservation in the broad sense refers to all the measures taken against any kind of spoilage in food.

Indian food processing sector is one of the largest sectors in the country in terms of production, consumption and export and Gross Domestic Product growth. It ranks 5th in size in the country. . It covers many activities like agriculture, horticulture, animal husbandry etc. Food Processing Industry has developed in India as a result of the diversification and commercialization of Indian agriculture. This sector acquires high priority as it reduces post-harvest losses, brings value addition in agriculture, creates high export potential, and gives greater bargaining power to the farmers for their products and improves the living standards of people. The sector accounts for around 14 percent of total industrial output and around 6 percent of the GDP. Its contribution to the GDP of the country is expected to go up to 12% by 2020. The food processing market in the country is growing at the rate of 7-8% per annum and is expected to grow at 10% in the coming years. The size of the industry is estimated at US $ 70 billion. Presently, the sector employs about 13 million people directly and about 35 million people indirectly. This industry is highly labour intensive, and currently offers employment to 2.5 lakh people per annum. 75 food processing sector in India had grown by 8% between 2006 and 2010 which is better than the growth of the manufacturing sector but Agriculture has been growing only at 2-3%. According to Piruz Khambatta, Chairman and Managing Director, Rasna at Food and Beverage conference in 2012 raised a Key statement, “Food processing can do to rural India what IT has done to urban India.” Food processing would bring prosperity and growth for rural India. Business experts and industrialists have to realize growth of food processing sector as 31% of spending done by Indians is on food. Food processing would be crucial for an agricultural country like India. Expansion of food processing is imminent with huge scientific, educational and management talent along with vibrant and developed finance market. This sector will be a boon for SMEs and lead to food security as supply varies because of inaccuracies in predictability of rains. Stable food processing level would control food prices.

2.3 Need for Food Processing Industry: In May 2011, the Food and Agriculture Organization (FAO) released a short study on ‘Global Food losses and Food Waste’. FAO said that ‘in developing countries 40% of losses occur at post-harvest and processing levels while in industrialized countries more than 40% of losses happen at retail and consumer levels.’ Until now, India’s ministry of food processing industry, ministry of commerce (Department of Industrial Policy and Promotion), Ministry of Agriculture

17 and our National Agricultural Research system have asserted that it is encouraging investment in the retail ‘back end’ (collection, cold-storage, logistics, warehousing, modern markets, etc), which will substantially reduce post-harvest food waste/loss, help farmers earn more and help control food inflation. According to DIPP paper Indian farmers realize only one-third of the total price paid by the final consumer, as against two-third by farmers in nations with a higher share of organized retail. The other reference is from the Leisa India journal. Leisa is the short form for low external input and sustainable agriculture and the journal discusses the technical and social options open to farmers who seek to improve productivity and income in an ecologically sound way. According to vision 2015 document the objective is the doubling of India’s share in global food trade, from 1.5% to 3% by 2015. “An integrated strategy for promotion of agribusiness vision, strategy and action plan for the food processing sector has also been approved by the government ,” the minister of state for Food Processing Industry, Harish Rawat, told the Rajya Sabha in a written reply in March 2011. The key word here is ‘agribusiness’ and both the central government and the ministry of food processing industries appear to consider it a matter of pride-in the face of continuing malnutrition in 17 major states- that the average annual growth rate of the food processing sector has doubled in six years: from 7% in 2004 to over 14% in 2010. The persistence of food waste argument and its proffered technological answer takes on a new importance when the central government’s ‘mega food parks’ plan is brought into the scene. The government has approved 50 such mega food parks for assistance across the country. This is the second factor vital for an understanding of the emerging new industrial food model in India. These mega food parks are designed to cluster food processing units – each will have around 30- 35 such units with a collective investment of Rs.250 crore ‘that would eventually lead to annual turnover of about Rs.450-500 crores and creation of direct and indirect employment to the extent of about 30,000 according to the MOFPI’s Mega Food Parks Scheme (MFPS) guidelines. Critical to the success and profitability of this complex enterprise is the expectation that India will have a large marketable surplus in crops-the India Brand Equity Foundation (IBEF), described as a public-private partnership between the Ministry of Commerce, Government of India and the Confederation of Indian Industry (CII) has estimated that ‘by 2012, India’s marketable surplus will increase to 870 million tons per year, 40% of which is likely to be accounted for by perishable foods, creating opportunities for the development of storage

18 infrastructure’. The expectation of a marketable surplus of this scale, and the concomitant expectation that it will be readily available for commercial use and merchant profit is the third factor vital for an understanding of the emerging new industrial food model in India. Despite the large production of food in India, food inflation and food security issues are major concerns for policy makers in the country as they affect the basic need for Indian citizens-to have sufficient, healthy and affordable food. A nation-wise study on quantitative assessment of harvest and post harvest losses for 46 agricultural produces in 106 randomly selected districts was carried out by CIPHET as follows:

Table: .2.2 Percentage of Losses Estimated for Major Produces Crop Cumulative wastage (%) Cereals 3.9-6 Pulses 4.3-6.1 Oil seeds 6 Fruits & Vegetables 5.8-18 Milk 0.8 Fisheries 2.6 Meat 2.3 Poultry 3.7 Source: A study of CIPHET, 2010 Table 2.2 reveals that most of the wastage is happening in fruits and vegetables (5.8-18%) , pulses (4.3-6.1%) and cereals(3.9-6%). With adequate processing facilities, much of this waste can be reduced thus increasing remuneration to the producer as well as ensuring greater supply to the consumer. 2.4 Different Stages of Processing of Food are: Inputs > Production > Procurement & Storage > Primary Processing > Secondary Processing > Retailing. The table 2.3 highlights the processing details of different sectors of food processing industry.

Table: 2.3 Processing details of different Sectors of Food Processing Industry Product Primary Secondary Tertiary Processing Processing Processing Fruits and Cleaning, Sorting, Slices, Pulps, Flakes, Ketchups, jam, juice, Vegetables Grading, Cutting Paste preserved & pickles, flavored Preserves, candies, chips

Grains and Sorting & Grading Flour, Broken Rice, Puff Biscuits, noodles, flakes, Seeds Malt and Milling Cakes, namkeen

Oilseeds Sorting & Grading Oil Cakes Sunflower, groundnut, mustard, soya, olive oil etc

Beverages Sorting, bleaching & Leaf, Dust and Powder Tea bags, flavored coffee, Grading soft drinks, alcoholic beverages.

Milk Grading& Cottage cheese, cream, Processed milk, spreadable Refrigerating simmered & dried milk fats (butter and cheese), and yoghurt.

Meat and Sorting and Cut, Fried, Frozen and Ready-to-eat meals Poultry Refrigerating Chilled

Marine Products Chilling and Cut, Fried, Frozen and Ready-to-eat meals Freezing Chilled

2.5 Contribution of Food processing industries to GDP The food processing sector has been growing faster than the agriculture sector which is a positive development the details of this in table 2.4, broadly reveals the contribution of food processing industries to GDP. The performance of this sector has improved significantly in the recent years. Manufacturing sector was generally growing at a higher rate than FPI till 2009-10. Performance of FPI improved substantially in 2011-12 registering a record growth of 21.6 per cent. In the year 2012-13, the growth of food processing sector decelerated along with slow growth both in agriculture and manufacturing sectors though the growth of the sector was higher than both agriculture and manufacturing sector Table 2.4 Contribution to GDP of Food Processing Industry at 2004-05 prices (Rs crore)

Sl. Particulars 2008-09 2009-10 2010-11 2011-12 2012-13 no GDP at factor cost 41,5867 45,16,07 49,18,533 52,47,530 54,82,111 ,of which 6 1 1 GDP-Agriculture* 5,88757 5,92,110 6,47,305 6,82,016 6,90,646 2 GDP: Manufacturing 6,56,302 7,30,435 7,95,152 8,54,098 8,63,876 3 GDP-FPI 60,378 58,752 67,508 82,063 84,522 Growth (%) AAGR$ 4 GDP at factor cost 6.7 8.6 8.9 6.7 4.5 7.1 5 GDP-Agriculture* -0.1 0.6 9.3 5.4 1.3 3.3 6 GDP: Manufacturing 4.3 11.3 8.9 7.4 1.1 6.6 7 GDP-FPI 5.3 -2.7 14.9 21.6 3.0 8.4 Share of FPI in Average GDP (%) 8 GDP FPI as a share 10.3 9.9 10.4 12.0 12.2 11.0 of GDP in Agriculture* 9 GDP FPI as a share 9.2 8.0 8.5 9.6 9.8 9.0 of GDP in Manufacturing

Source: National Accounts Statisitcs-2014; * Excludes Forestry & Logging; $: Five Years Average Annual Growth Rate GDP: Sum of GVA (value of output less the value of input used up in the process of production) of all Resident producer units of the economy during the reference period.

2.6 Persons Employed in Registered Food Processing Units Food Processing Industry is one of the major employment intensive segments constituting 12.13 per cent of employment generated in all Registered Factory sector in 2011-12. According to the latest Annual Survey of Industries (ASI) for 2011-12, the total number of persons engaged in registered food processing sector is 17.77 lakh. During the last 5 years ending 2011-12, employment in registered food processing sector has been increasing at an Annual Average growth rate of 3.79 per cent. Unregistered food processing sector supports employment to 47.9 lakh workers as per the NSSO 67th Round, 2010-11

2.7 Exports of Food Processing related items All agricultural produce when exported undergo an element of processing. Hence all edible agricultural commodities exported are included in the export data. The value of exports in the sector has been showing an increasing trend with Average Annual Growth Rate (AAGR) of 20.53 per cent for five years ending 2013-14. The value of processed food exports during 2013-14 (Provisional results) was of the order of US $ 37.79 Billion (total exports US $ 312 Billion) constituting 12.1 per cent of India’s total exports. The trends in exports of processed food & related commodities, is given below(fig 2.1): Fig 2.1 Export of processed Food & Related Commodities (US $ Million)

37,798 40,000 36,212 31,762 35,000 30,000 25,000 20,427 20,000 14,787 15,000 10,000 5,000 0 2009-10 2010-11 2011-12 2012-13 2013-14

Source: DGCI&S, Kolkata; P: Provisional Results

2.7 Exports of major processed food & related commodities from food processing sector The exports of major processed food & related commodities from Food processing sector, is given Table 2.5.It shows that 13.3 percent of marine products,12.90 percent share of basmati rice and 11.9 percent of meat and meat products are the major there export exports from India to other countries.

Table 2.5 Exports of Major Processed Food & Related Commodities from Food processing sector Sl.no Items of 2012-13 2013-14 (P) 2013-14 (P) (US $ Million) (%) Growth (%) Share

Total exports 3,00401 3,12,621 4.07 - Exports-FPI, of which 36,212 37,798 4.38 12.1 1 Marine products 3,464.08 5,014.89 44.77 13.3 2 Rice – Basmati 3,564.04 4,866.33 36.54 12.9 3 Meat& meat products 3,291.98 4,481.35 36.13 11.9 4 Rice–other than Basmati 2,651.97 2,875.67 8.44 7.6 5 Cashew 746.97 842.39 12.77 2.2 6 Fresh vegetables 605.23 842.30 39.17 2.2 7 Fresh fruits 607.79 726.76 19.57 1.9 Source: DGCI&S, Kolkata; P: Provisional Results

2.8 Investment in Food Processing Sector Foreign Direct Investment (FDI) is permissible for all the processed food products up to 100 per cent on automatic route except for items reserved for Micro and Small Enterprises (MSEs) subject to applicable laws/ regulations, securities and other conditioners For manufacture of items reserved for Micro Small Medium enterprises, FDI is permissible under automatic route up to 24 per cent of the capital. If foreign investment is more than 24 per cent, Industrial License under Industries (Development & Regulation), Act 1951 is required a huge increase in FDI in India is observed over the year (table 2.6). During 2007-08 in FDI in FPS was Rs.279 crore and some has gone up to Rs 25,107 crores in the year 2013-14.

Table: 2.6 Foreign Direct Investment in Food processing sector in the India.

S. No. Year (April- March) FDI (Rs. Crore) FDI (US $ Million)

1 2007-08 279.01 70.17 2 2008-09 455.59 102.71 3 2009-10 1,314.23 278.89 4 2010-11 858.03 188.67 5 2011-12 826.16 170.21 6 2012-13 2193.65 401.46 7 2013-14 25,106.78 3,982.88

Source: Department of Industrial Policy and Promotion (DIPP) Govt of India.

In terms of fixed capital, FP sector is growing at an annual average growth rate of 20.35 per cent during five years ending 2011-12. As per the latest, ASI 2011-12, the Fixed Capital in FP Industry stood at Rs. 1,45,038 crore.

2.10 Food Processing Industry in Karnataka

There were approximately 1550 food products and beverage manufacturing units registered in Karnataka state till end of 2011-12. Total investment in these units was estimated at Rs. 23,405 lakh and employment generated from these units was in excess of 15000.Various Agri-export zones have been earmarked in the state for products like gherkin, rose onion, flowers and vanilla. To be precise, eight zones have been earmarked for gherkin, three for rose onion, six for flowers and six for vanilla. Ministry of Food Processing Industries (MOFPI) has sanctioned one Mega Food Park project under its Mega Food Parks Scheme in Karnataka. The project is located in Tumakur and the inauguration of the park has been done on 24th September, 2014 by Hon’ble Prime Minister. Apart from MOFPI’s Mega Food Parks Scheme, the state Govt. also has a Food Parks Scheme under which food parks are being established in 6 districts including Bangalore (Rural), Tumakur, Shivamoga, Davangere, Bijapur and Belgaum. The state government is also planning to set up a spice park at Byadagi in Haveri district.MoFPI has so far sanctioned five cold chain projects in the state under its “Scheme for Cold Chain, Value Addition and Preservation Infrastructure”. Under the scheme for Setting up of New/ Modernization of Existing

Abattoirs of Ministry of Food Processing Industries (MoFPI), Karnataka has been sanctioned 3 Abattoirs Projects so far - City Municipal Council Chitradurga, Mysore City Corporation and Hospet City Municipal Council by the Approval Committee, commercial operations is expected to commence shortly. Production of major crops in karanataka

The State of Karnataka is blessed with rich bio-diversity, ten agro climatic zones and nine distinct soil types, *is the only State where most varieties of fruits are available *is the leader in floriculture *contributes 70% of the India’s Coffee *is the largest producer of spices, aromatic and medicinal crops *is the second largest milk producing state in the country.

Due to factors like access to fruits and vegetables, industry friendly policies and the manpower availability, the state is emerging as a Food and Beverage destination. To effectively utilize the existing resources, minimize the post harvest losses and further value addition, Food Parks are established across the State. Government of Karnataka has established Food Karnataka Limited, a Special Purpose Vehicle, as the Nodal Agency for development of infrastructure to establish Food Processing Industries in the State.

2.10.1 Economy of Karnataka Karnataka is one of the high economic growth states in India with the expected GSDP (Gross State Domestic Product) growth of 8.2% in the fiscal year 2010–2011. The total expected GSDP of Karnataka in 2010–2011was about Rs.2719.56 billion. Per capita GSDP during 2008–2009 was US$1034.9. Karnataka recorded the highest growth rates in terms of GDP and per capita GDP in the last decade compared to other states. In 2008–09, the tertiary sector contributed the most to the GSDP amounting to US$31.6 billion (55 percent), followed by the secondary sector, contributing US$17 billion (29 per cent), and the primary sector‘s contribution amounting to US$9.5 billion (16 per cent). With an overall GDP growth of 56.2% and a per capita GDP growth of 43.9% in the last decade, Karnataka surpassed all other states in India, pushing Karnataka's per capita income in Indian Rupee terms to sixth place. Karnataka received US$2,026.4 million worth of Foreign Direct Investment for fiscal year 2008–09 placing it at

25 third spot among states in India. At the end of 2004, the unemployment rate of Karnataka was 4.57% compared to a national rate of 5.99%. For the fiscal year 2006–07 the inflation rate of Karnataka was 4.4% which was less than the national average.

2.10.2 The Vision of Karnataka Industrial Policy 2014-19 The vision of Karnataka Industrial Policy 2014-19 is to build a prosperous Karnataka through inclusive, sustainable and balanced industrial development thereby creating large employment opportunities.

2.10.3 The objectives of the Policy (i) To maintain an industrial growth rate of 12 % per annum. (ii) To enhance the contribution of manufacturing sector to the State GDP from present level of 16.87% to 20% by end of policy period (iii) To attract investment of ` Rs 5.00 lakh crore (iv) To create employment opportunities for 15 lakh persons (v) To create an environment to enhance ease of doing business in the State. Government desires to achieve these objectives through the following policy measures: (i) Creation of quality infrastructure with comprehensive facilities. (ii) Human resource development through capacity building and skill up gradation. (iii) Simplification of facilitation mechanism and procedural reforms. (iv)Thrust for Hyderabad Karnataka area. (v) Special thrust for encouraging SC/ST entrepreneurs, Women entrepreneurs, Non Resident Kannadigas (NRKs) etc. (vi) Encouragement for export promotion. (vii) Support for R&D and Digital Direct Manufacturing (viii) Encouragement for Anchor Industries (ix) Attractive incentives and concessions

Table 2.7 size of food processing industries, capital investment, employees, value of output & net Value added by manufacture 2012-13(value in lakh) in Karnataka

Characteristics 1 2 3 4 5 6 Number of Factories (In No.) 99 41 775 92 118 675

Factories in Operation (In No.) 71 38 647 82 581 99

Fixed Capital 22866 156782 68186 186248 1001419 20578 16533 Physical Working Capital 28395 153588 35711 61104 1033490

Working Capital 9366 159946 11753 103727 452892 7410

Invested Capital 51260 310370 103897 247352 2034908 37112 Gross Value of Addition to 6357 8155 33437 25008 69049 284056 Fixed Capital 220 Rent Paid for Fixed Assets 345 839 1190 1383 8617

Outstanding Loan 15454 125164 36335 161991 745266 14351

Interest Paid 3791 18696 2550 14826 113105 2665 21 Rent Received for Fixed Assets 44 153 340 725 1249

Interest Received 932 939 643 805 3854 83 Gross Value of Plant & 10875 8472 52960 52310 144385 1042389 Machinary Value of Product and By- 54560 159269 744276 590193 454436 2310073 Product

Total Output 162663 1126216 651368 473247 2676048 64285

Fuels Consumed 3667 19480 12589 12764 111783 1413

Materials Consumed 139338 663977 504083 247361 1681431 41874

Total Inputs 149373 1060846 605389 308317 2200470 55149

Gross Value Added 13290 65370 45979 164930 475578 9136

Depreciation 1985 12444 5870 11471 74090 1674

Net Value Added 11305 52926 40108 153459 401488 7462

Net Fixed Capital Formation 3954 20075 18145 24185 97445 5898

Gross Fixed Capital Formation 5628 32519 24015 35657 171535 7884

Addition in stock of 11322 40263 12283 5280 151287 880

(a) Materials,Fuels etc. 375 33055 2512 467 ‐10690 237

(b) Semi Finished Goods 0 ‐148 65 921 ‐3094 ‐234

Gross Capital Formation 19205 72782 36298 40937 322822 6509

Income 8101 34358 37338 138527 284518 4665

Profit 1251 22989 8888 111710 130597 ‐498 Source: compiled from various reports of annual survey of industries.

1: Processing and preserving of fruit and vegetables 2: Processing and preserving of fish, crustaceans and mollusks and products thereof 3: Manufacture of grain mill products, starches and starch product 4: Manufacture of dairy products 5: Manufacture of beverages 6: Manufacture of other food products 2.11. Production of Major crops in Karnataka.

2.11.1 Agriculture

Total production of food grains (cereals and pulses) in the state during 2012-13 was being estimated at 125 lakh (metric tons)

Table 2.8: Production of Agri-crops (in lakh MT)

Crop/Group 2012-13 2011-12 Cereals 111.64 108.22 Pulses 13.36 10.61 Total Food grains 125 118.83

2.11.2 Commercial crops

Commercial crops such as oilseeds, cotton, sugarcane and tobacco roughly are prominent cash crops grown in the state.

Table 2.9: Production of these Commercial crops (in lakh MT)

Crop/Group 2012-13 2011-12

Oilseeds 9.50 9.24

Cotton 10.91 12.79

Sugarcane 303.20 400.33

Tobacco 0.94 1.06

Source –Karnataka state agricultural department

2.11.3 Horticulture

During 2012-13, production of horticulture crops stood at 172.13 lakh metric tones. The state is the largest producer of coffee and cocoa in the country, 2nd largest producer of flowers and grapes, 3rd largest in plantation crops production, 4th largest in spices production and 5th largest in fruits production.

Fruits: According to the advance estimates by National Horticulture Board for 2013-14, fruit production in the state is estimated at 66.52 lakh MT.

Table 2.10: Production of Major Fruits in Karnataka.

Crop/Group Production (in lakh M.T.)

2012-13 2013-14 Banana 25.29 26.76 Mango 17.95 17.56 Papaya 4.60 4.76 Citrus 3.99 3.79 Grapes 3.20 3.02 Source -National Horticulture Board for 2013-14

2.11.4 Dairy and Livestock

Karnataka has livestock population of 3.29 crore and poultry population of 4.24 crore as per the 18th Livestock Census, 2007. Major livestock products are milk, eggs and meat. (table 5.7)

Table 2.11 production statistics for major livestock products

Product 2011-12 2012-13 Milk 5448 3242 Egg 347 221 Meat 139553 94858 Inland fish 199053 85640 Marine fish 347383 160028 Source- 18th Livestock Censu

CHAPTER 3

SOCIO - ECONOMIC CHARACTERISTICS OF ENTREPRENEUR S AND FOOD INDUSTRIES

In continuation and the support of the analysis on expansion pattern and different indicators of the performance shown in regard to different product group of food industries in the chapter the study further attempts to present the background characteristics in matters of expansion pattern and its origin, ownership, factors motivated in establishment and pattern and background of entrepreneurs of different product groups of registered food-industries. This part of analysis is based on primary data obtained among a sample of 50 food processing industries.

The existing food industries in the state may be broadly categorized according to their type and size structure. The first category of them is as village industries which are owned and run at household level mainly in rural areas. They form very little capital investment and a high level of manual labour, mainly family labour and are operating without registration with any authority.

The second category of food processing units are operating as small scale industries with medium level of capital investment and semi automation and are registered with Small Scale

Industries Act.

3.1. Background of the Food Processing Industries The expansion pattern of food processing industries based on the analysis of a sample of 50 units covered in the present study reveals that 32 per cent all categories of units have been started after

2006, 26 per cent during 1992-2000, 22 per cent before 1991 and 20 per cent during 2001-05.

Table 3.1 Distribution of Units by Year of Establishment

Sl. Product group Year of Establishment no Before 1992-2000 2001-2005 2006 & Total 1991 After 1. Manufacture of fruits & 4 5 2 4 15 vegetables (26.66) (33.33) (13.33) (26.66) (100.00)

2. Manufacture of dairy - 1 1 3 5 products (20.00) (20.00) (60.00) (100.00)

3. Manufacture of grain mill 6 3 4 5 18 products (33.33) (16.66) (22.22) (27.77) (100.00) 4. Marine products - - 1 1 2 (50.00) (50.00) (100.00) 5. Manufacture of Packed 1 4 2 3 10 food/ consumer foods (10.00) (40.00) (20.00) (30.00) (100.00) 6 All groups 11 13 10 16 50 (22.00) (26.00) (20.00) (32.00) (100.00) Note : (figures in parentheses indicates the percentages of total)

3.2 Ownership of Industries

The detail sample of ownership of food processing industries is presented in Table 3.2. Looking into the legal ownership situation of industries it depicted that the industries are registered under single ownership is remarkably higher among all product industries in each of the product groups of food- Industries. However, fairly large proportion of industries registered under the Shops and

Establishment Act are also observed operating as the family enterprises. In all, the proportion of industries operating under a signal ownership is highest at over 80 per cent, followed by partnership (12.00 %) and 8 per cent of industries are family enterprises.

Table 3.2 Ownership Status of the Sample of Food Processing Industries

Sl. Product Group Single Family Partnership Total no ownership enterprise 1. Manufacture of fruits & 12 1 2 15 vegetables (80.00) (6.66) (13.33) (100.00)

2. Manufacture of dairy 5 - - 5 products (100.00) (100.00) 3. Manufacture of grain mill 14 2 2 18 products (77.77) (11.11) (11.11) (100.00) 4. Marine products 2 - - 2 (100.00) (100.00) 5. Manufacture of Packed 7 1 2 10 food/ consumer foods (70.00) (10.00) (20.00) (100.00) All groups 40 4 6 50 (80.00) (8.00) (12.00) (100.00) Note : (figures in parentheses indicates the percentages of total)

3.3. Age Profile of the Entrepreneurs

In the proceeding paragraphs the age structure of sample entrepreneurs in the food-processing sector. For this purpose, sample entrepreneurs are categorized into three groups namely- young

(below 30 years), middle-aged (31 years to 45 years) and old (above 46 years). The Table 3.3 gives their distribution on the basis of their age. The Table reveals that most of the entrepreneurs in the food-processing sector are middle aged. Their share is 68.00 per cent of the total food processing entrepreneurs. This is followed by young entrepreneurs who constitute 28.00 percent of the total entrepreneurs and 4.00 per cent of old aged entrepreneurs. The table thus reveals the dominance of middle aged entrepreneurs in the sector.

Industry wise analysis reveals that proportion of entrepreneurs in the middle-age group is higher in industries such as marine products (100.00 per cent), Manufacture of Packed food/ consumer foods (70.00 per cent), grain mills and fruit and vegetable manufacturers (66.66 per cent) and

60.00 percent of dairy products.

Table 3.3Age Characteristics of the entrepreneurs

Sl. Product group Age (years) no 31-45 46+ Total Below Above 30 1. Manufacture of fruits & 4 10 1 15 vegetables (26.66) (66.66) (6.66) (100.00)

2. Manufacture of dairy 2 3 - 5 products (40.00) (60.00) (100.00) 3. Manufacture of grain mill 5 12 1 18 products (27.77) (66.66) (5.55) (100.00)

4. Marine products - 2 - 2 (100.00) (100.00) 5. Manufacture of packed 3 7 10 food/ consumer foods (30.00) (70.00) (100.00) All groups 14 34 2 50 (28.00) (68.00) (4.00) (100.00) Note : (figures in parentheses indicates the percentages of total)

3.4 Educational Background of Entrepreneurs Assessing into the educational background of the entrepreneurs it reflects that the different groups of food processing industries especially small scale industries do not require any more skill and professional education. Expansion of this sector can be successfully carried out by the individual having even primary education or the secondary education. It is well reflected from analysis presented in Table 3.4 that nearly 26 per cent entrepreneurs in food processing industries are processing below primary level of education. However, a majority of 38 per cent of entrepreneurs have secondary level education while only 2 per cent entrepreneurs have technical/ professional level of education.

Table 3.4 Educational level of Sample Entrepreneurs

Sl. Product group Education level No Illiterate Primary Secondary Graduation Technical/ Total Professional education 1. Manufacture of - 4 5 5 1 15(100.00) fruits & vegetables (26.66) (33.33) (33.33) (6.66)

2. Manufacture of - 1 1 3 - 5 dairy (20.00) (20.00) (60.00) (100.00) products 3. Manufacture of - 5 9 3 1 18 grain mill (27.77) (50.00) (16.66) (5.55) (100.00) products

4. Marine products - - - 2 - 2 (100.00) (100.00) 5. Manufacture of 2 1 4 3 - 10 Packed food/ (20.00) (10.00) (40.00) (30.00) (100.00) consumer foods All groups 2 11 19 16 2 50 (4.00) (22.00) (38.00) (32.00) (4.00) (100.00) Note : (figures in parentheses indicates the percentages of total)

3.5 Caste background of Entrepreneurs

Among the different product groups of food-industries, the dominance of General category entrepreneurs may be seen in Table 3.5 (50 %) within this group 66 per cent are in manufacturing of fruits and vegetables. In terms of the proportionate share of different castes of in various small scale registered industries 28.00 per cent in backward classes, 14.00 per cent SC and 8.00 per cent of ST.

Industry - wise analysis shows that 66.66 per cent of entrepreneurs are in fruits and vegetable manufacturers, 60.00 per cent in Manufacture of dairy products, 50.00 per cent in marine products, 44.44 per cent in Manufacture of grain mill and 30.00 percent in Manufacture of

Packed food/ consumer foods.

Table 3.5 Distribution of Entrepreneurs by their Caste

Sl. Product group Caste of Entrepreneur No General SC ST Backward Total castes 1. Manufacture of 10 1 - 4 15 fruits & vegetables (66.66) (6.66) (26.66) (100.00)

2. Manufacture of 3 - 1 1 5 dairy (60.00) (20.00) (20.00) (100.00) products 3. Manufacture of 8 4 2 4 18 grain mill (44.44) (22.22) (11.11) (22.22) (100.00) products 4. Marine products 1 - - 1 2 (50.00) (50.00) (100.00) 5. Manufacture of 3 2 1 4 10 Packed food/ (30.00) (20.00) (10.00) (40.00) (100.00) consumer foods All groups 25 7 4 14 50 (50.00) (14.00)) (8.00) (28.00) (100.00) Note : (figures in parentheses indicates the percentages of total)

3.6 Land Assets of Agro-Processing Entrepreneurs

Economic profile of food-processing entrepreneurs is analyzed in terms of area of land assets they own. For this purpose, entrepreneurs are categorized into three groups-entrepreneurs with land holding between zero and 2.5 acres (below one hectare), between 2.5 acres and 5 acres, and entrepreneurs with land holding above 5 acres. Distribution of entrepreneurs by size of their land holding is given in table 3.6.

It is seen from Table 3.6 that 66.66 per cent of the total entrepreneurs have land holding between zero and two and half acres (below one hectare). The proportions of entrepreneurs having land holding between zero and 2.5 acres varies from 40 per cent Manufacture of dairy Products to 72 per cent in Manufacture of grain mill products. The proportion of entrepreneurs having land holding between 2.5 and 5 acres is 22 per cent for the food processing industries as a whole and

35 it varies from 11.00 percent in Manufacture of grain mill products industries to 50 per cent in marine product industries and 12 per cent have land holding of more than five acres. The table, thus, reveals that majority of entrepreneurs have small size of land holding and this indicate that economic profile of majority of food-processing entrepreneurs as a whole is not so sound.

Table 3.6: Distribution of Entrepreneurs by Land Holding

Sl. Product group Land holding No . Up to 2.5 2.5-5 Above 5 Total Acres 1. Manufacture of 10 3 2 15 fruits & vegetables (66.66) (20.00) (13.33) (100.00)

2. Manufacture of 2 2 1 5 dairy (40.00) (40.00) (20.00) (100.00) products 3. Manufacture of 13 2 3 18 grain mill (72.22) (11.11) (16.66) (100.00) products 4. Marine products 1 1 - 2 (50.00) (50.00) (100.00) 5. Manufacture of 7 3 - 10 Packed food/ (70.00) (30.00) (100.00) consumer foods All groups 33 11 6 50 (66.66) (22.00) (12.00) (100.00) Note : (figures in parentheses indicates the percentages of total)

3.7 Employment in Agro-Processing Industries

Food-processing industries are generally regarded as labour intensive and are expected to employ more laborers and create more maydays of employment.

In order to analyze the employment level in the sample food processing industrial units,they are categorized into four groups namely the units employing 2 to 10 persons; 11 to 20 persons, 21 to

30 persons and above 31 persons. The distribution of units by the size of employment is brought out in table 3.7.

Table 3.7 shows that 46 per cent of the total food-processing units have been able to generate employment for 11 -20 persons each. Within this 100 per cent of the marine product units, 60 per cent dairy units, 46.66 per cent manufacture of fruits & vegetables, 44.44 per cent in manufacture of grain mills and 30.00 percent in Manufacture of Packed food/ consumer foods. It is also observed that industrial units providing employment to 2 1-30 persons are and account for

24 per cent of the total food -processing industrial units, 18 per cent in 2-10 persons and finally

12.00 percent of total food processing units generating employment for 31 above persons.

Table 3.7 Distribution of Units by Size of Employment

Sl. Product group Number of persons employed No 2-10 11-20 2 1-30 31 above Total Manufacture of 3 7 3 2 15 1. fruits & vegetables (20.00) (46.66) (20.00) (13.33 (100.00)

2. Manufacture of 1 3 1 - 5 dairy (20.00) (60.00) (100.00) (100.00) products 3. Manufacture of 4 8 3 3 18 grain mill (22.22) (44.44) (16.66) (16.66) (100.00) products 4. Marine products - 2 - - 2 (100.00) (100.00) 5. Manufacture of 1 3 5 1 10 Packed food/ (10.00) (30.00) (50.00) (10.00) (100.00) consumer foods All groups 9 23 12 6 50 (18.00) (46.00) (24.00) (12.00) (100.00) Note : (figures in parentheses indicates the percentages of total)

CHAPTER 4 DOCUMENTATION OF SUCCESS STORIES OF FOOD PROCESSING UNITS IN KARNATAKA

4.1 Reasons for Success of Food Processing Units

In this chapter, an attempt is made to analyze the reasons for success of food processing units face. Broadly the reasons relates to quality management, good customer service, Reasonable prices, skilled labour and replacement for damaged products on the extent of interesting the success is given in Table4.1

4.1.1 Quality Management

Table 4.1 unfolds that quality of produce is an important factor for operation or success of units. The proportion of this factor in food-processing units varies from 100 per cent in manufacturing of marine products to 80.00 of manufacture of dairy products. However this factor is favor in Manufacture of Packed food/ consumer foods and marine products (100.00 %), Manufacture of fruits & vegetables (86.66 %), Manufacture of grain mill products (83.33 %), and in Manufacture of dairy products (80.00 %). Food quality is an important food manufacturing requirement, because food consumers are susceptible to any form of contamination that may occur during the manufacturing process. Many consumers also rely on manufacturing and processing standards, particularly to know what ingredients are present, due to dietary, nutritional requirements or medical conditions.

4.1.2 Good customer service Customer service proves to be one of the most important keys to the success of the food industry 78.00 percent of food-processing units have reported that good customer service is an another important factor for success of food processing units. This factor is favor in Manufacture of Packed food/ consumer foods and marine products (90.00 %), Manufacture of fruits & vegetables and Manufacture of dairy products (80.00 %) and Manufacture of grain mill products (77.77 %).

Table4.1Reasons/Factors for success of food processing industries

Sl. Reasons No Product Group Good Reasonabl Skilled Replacement Quality customer e price labour for damaged Total management service products

1 Manufacture of fruits 13 12 9 7 2 15 & vegetables (86.66) (80.00) (60.00) (46.66) (13.33) 2 Manufacture of dairy 4 4 3 3 - 5 products (80.00) (80.00 (60.00) (36.00)

3 Manufacture of grain 15 14 12 9 12 18 mill products (83.33) (77.77) (66.66) (50.00) (66.66) 4 Marine products 2 - - 2 - 2 (100.00) (100.00) 5 Manufacture of Packed 10 9 8 5 3 10 food/ consumer foods (100.00) (90.00) (80.00) (50.00) (30.00) Total 44 39 32 26 17 50 (88.00) (78.00) (64.00) (52.00) (34.00) Note : (figures in parentheses indicates the percentages of total)

4.1.3 Reasonable Price

Table 4.1 reveals that reasonable price of a product is another factor for the success in food processing units. The table shows that 64.00 per cent of the total food-processing units have reported reasonable price of as another factor to continue the business in food processing. This is a major reason for industries like Manufacture of Packed food/ consumer foods (80.00%), Manufacture of grain mill products (66.66 %), Manufacture of dairy products and Manufacture of fruits & vegetables (60.00 %).

4.1.4 Replacement for Damaged Products

Table 4.1 shows that replacement for damaged products is another reason for operation or success of units. The table shows that 34.00 per cent of the total food-processing units have reported replacement of damaged product is another factor to continue the business in food processing. This is a major reason for industries like Manufacture of grain mill products (66.66 %), Manufacture of Packed food/ consumer foods (34.00 percent) and manufacture of fruits & vegetables (13.00%).

Table 4.2 Average annual turnover of food processing industries (Rs crores)

Sl. Average annual turnover of the industries (Rs crores) No Product Group 2009-10 2010-11 2011-12 2012-13 2013-14 1 Manufacture of fruits & 0.90 1.56 3.8 5.20 6.30 vegetables 2 Manufacture of dairy 3.00 5.20 7.25 10.00 12.20 products 3 Manufacture of grain 4.40 5.50 6.26 7.50 8.00 mill products 4 Marine products 6.50 8.22 10.00 12.50. 14.25

5 Manufacture of Packed 0.90 0.97 1.30 1.50 1.65 food/ consumer foods

4.3 Percent change in average annual income of food processing industries in Karnataka

Table 4.3 percent change in average annual income of food processing industries in Karnataka

Sl. Rs (in crores) No Product Group 2009-10 2013-14 Percent change 1 Manufacture of fruits & 0.90 6.30 600 vegetables

2 Manufacture of dairy 3.00 12.20 306.66 products

3 Manufacture of grain mill 4.40 8.00 81.81 products

4 Marine products 6.50 14.25 119.23

5 Manufacture of Packed 0.90 1.65 83.33 food/ consumer foods

4.4 Case Studies

Beside the above, the following case studies reveal the reasons for success of the food processing units in Karnataka

Case 1: Success story of Mahesh Cashew Industries

The credit of establishing the first cashew processing industry at Nellikatte in Moodubelle in 1999 under the name of Mahesh Cashew Industries belongs to Belle Nagaraj Kamath. Earlier, Nagaraj Kamath’s family had a grocery shop and gradually began to deal with raw cashew nuts. Their area of operation was right up to Bhatkal and Moodubidre-Kinnigoli acquiring raw nuts from the shops and supplying to B.R. Kamath and Sons Cashew Factory at Karkala, considered to be the largest in Karnataka.

Having been in the procurement of the raw cashew nuts business for quite a long time, Belle Nagaraj Kamath, who had studied up to PUC in St. Lawrence PU College at Moodubelle and was a commerce graduate (B.Com) from the MGM College, Udupi, decided to start his own processing cashew factory under the Khadi Gramodyog Scheme with government subsidy.

Belle Nagaraj Kamath says that, as he himself had come up in life with great economic difficulties and practically rose from nothing, he had a dream of providing employment to the poorer and marginalised section of the village population by starting some kind of gainful enterprise. He could fulfil this dream by establishing the Mahesh Cashew Industries and later another cashew factory named Ashwini Cashew Industries at Arasikatte at Bhantakal. In both these cashew factories, Nagaraj could provided employment to around 250 persons, most of whom are women.

According to Nagaraj, the cashew nut processing operations are carried out throughout the year. The raw nuts required for the processing are procured locally and from the states of Kerala, Karnataka, Goa and Maharashtra. Nagaraj also imports raw nuts from other countries such as Indonesia, Vietnam, South Africa and Tanzania. On an average, the Mahesh Cashew Industries process around 40 bags of raw cashews nuts weighing about 3,500 Kgs. The processed and graded cashew kernels are then filled in 65 tins of 10 Kgs each per day.

Nagaraj pointed out that the cashew nut processing operation has certain important stages. At the first stage, the raw cashew nuts are sun dried for two days and then stored. In the second stage, the required amount of nuts per day is steam-boiled. In the third stage, the women who work in the cutting operation take the nuts from the boiler room to the cutting section and separate the kernels from the nut-shells.

The cutting is done machines and the women’s have to be quite careful during this operation. They take necessary precaution by applying castor oil to their hands and some of them even use gloves. After the process of cutting the kernels are separated from the nut-shells and the nut- shells are used as raw material for cashew nut oil mills.

In the fourth stage, the kernels are roasted in hot-chambers which look like huge cupboards through electric power with heat up to 80 degree Celsius. The fifth is the pealing stage in which the kernel is separated from the thin husk. Some of the women who are unable to spend an entire day in the factory can carry fixed amount of roasted cashew nuts for pealing and return on the next day and take home another fresh lot.

The sixth stage is the grading stage during which the cashew kernel is sorted out according to its quality. According to Nagaraj, as per the quality, the cashew kernel can be graded into 35 varieties. In the final stage, the cashew kernels are packed in tins according to their qualities indicated by embossed code letters and numbers indicating the quality of nuts contained in the tin. They are then sealed and labeled. Two tins containing the same quality of cashew nuts are then packed in a carton and kept ready for sending to the market by the dealer. The processed cashew from the Mahesh Cashew Industries is marketed in Bangalore, Mumbai and Delhi. There is also provision for retail selling of smaller packets of cashew nuts in the factory.

Belle Nagaraj Kamath says that there are around 150 cashew processing units in the Udupi District alone. These cashew factories are a boon for the villagers, especially for girls and women as they are given preference in the cashew processing units. They are given all monetary and other facilities. Transport is provided for picking up and dropping them at their residences. The workers are provided cheaper food through canteen facility. They are given monetary incentives such as Provident Fund (PF), Dearness Allowance (DA) and Bonus. They are also eligible for Employees State Insurance Scheme (ESIS) in case of illness. The payment to the workers is done on weekly basis.

Belle Nagaraj Kamath a fine entrepreneur who has a human touch. Soft spoken and unassuming, Nagaraj had been active in cooperative movement. He was once the president of the Belle Cooperative Agricultural Bank (CA Bank). He was also member of the belle Grama Panchayat. As the president of the Old Students Association of the Church Aided 43 Higher Primary School, Nagaraj had worked for the betterment of the school.

In 1995, Nagaraj married Namitha Kamath and has two lovely sons-Nikhil (13 years) and Gram Panchayat. As the President of the Old Students Association of the Church Aided Higher Primary School, Nagaraj had worked for the betterment of the school.

In 1995, Nagaraj married Namitha Kamath and has two lovely sons-Nikhil (13 years) and Vishwas (9 years) both studying in the St. Mary’s English medium School in Udupi.

Bellevision, while congratulating Belle Nagaraj Kamath for his entrepreneurship appreciates his attempt to provide employment to the poorer and marginalized section of the villagers and wishes him success in his future endeavors.

Case 2: Jain Agro Food Products

M/s Jain Agro Food Products, from Assam is the first applicant for acquiring the technology and has succeeded in setting up the first industry in India at Maddur, Karnataka in 2000. It was the beginning of a new era in disseminating a natural drink in consumer packs. At the beginning, Mr. Ajay Jain, the hard working and ambitious young dynamic personality and the proprietor of the unit faced a lot of production and distribution problems. “Initially our brand, ‘Cocojal’ was neither an accepted product by any super markets in the country nor I could find any agent for distribution. I was willing to give the distribution on credit basis in order to keep the factory running to avoid rusting deterioration of the machineries. I could not even utilize 10 per cent capacity of the factory which has not only resulted in default of the repayment schedule of the huge loan taken from the Federal Bank,” Mr. Jain said. Finally after 5 years of untiring and incessant efforts with strong confidence, Mr. Jain could establish not only a strong consumer base for his product but also to push his product among the major buyers and hence acquired strong buoyancy in both domestic and international markets. “To-day, I am distributing my brand to various pioneer consuming sectors like, Indian Railway, Indian Army, besides, placing my product to leading Super Market Chains like Nilgiris, Food World etc. My product is also available in the leading supermarkets of Gulf.” Shri. Jain added. “The support from the Coconut Development Board in the form of financial grant and the aggressive product promotions were really a relief and greatly contributed for the accomplishment of my difficult task,” he complemented.

Today packed and preserved tender coconut has niche market under different brands. Thirteen entrepreneurs in the country spread over different States have procured the technology from the Board and two more units have already commenced commercial production. Apart from M/s. Jain Agro Food Products Pvt. Ltd., in Karnataka, M/s. Shakthi Coconut Products, Tamil Nadu and Chaithanya Food Products Pvt. Ltd., Kerala have already set up their units and entered in to this beverage markets. M/s. Sakthi Coco Products and M/s. Chaithanya Food Products Ltd have set up their units in 2002 availing financial assistance from the Board under Technology Mission on Coconut for the adoption of technology.

Case 3: Success story of Siddabasava Dhal Industries

M/s.Siddabasava dhal Industries, Kalburgi is a partnership concern, doing dhal industries business since 2005 by taking the Dhal industries on Lease, the leased dhal unit is set up at Shed C-15, 1st Industrial Area, Kapnoor, Kalaburgi

After being successful run the Leased dhal industry for 3 years, the partnership concern has been allotted a industrial plot of 1 Acres at Plot No. 2 (P), KIADB Industrial Area, 2nd Phase, Kalaburgi by Karnataka Industrial Area Development Board.

Siddabasava Dall Industry has decided to setup a New dhal Industry at the allotted plot by KIADB. The cost of the project estimated at Rs.82.50 Lakh. The unit proposed to manufacture Dhal namely, Toor Dall and Bengal Gram. The total capacity of the project is 2000 Metric tones per annum. The Unit works for 8 hours shift for 250 days in a year.

This is a Partnership firm consist of experienced entrepreneurs, All the Four Partners of the firm is already running a Leased Dhal Unit successfully for the Past 3 Years of so.

One of the senior partners Shri. Shivaputrappa Patil is having vast experience in the field of Business, has ventured Puller earth business for 10 years in partnership with others partner under and name and style “INDIAN EARTHS”. He has also ventured the business of Stone Quarry at Talikoti, in Vijapura district Karnataka.

Other Two partners Sri. Chandrashekar Kobal and Sri. Gangadhar Kobai hails from Business family, who are activity involved for past more than 10 years in a family owned partnership firm “PANCHANCHRYA TRADING CO., Commission Agents in Foods Grains and pulses” and for past 3 years, they are administrating successfully present Leased Dhal Industries

With vast background experience in the field of business and successfully running the dhal units for past 3 years. All the partners in the Firm as every much confidence and sincerely in their effort to setup and run their own Dhal industries instead of a Leased out dhal unit.

The availability of raw materials is very good in Kalaburgi District and also in the neighboring districts, Bidar, Bijapur, Belgaum, Raichur and Dharwad. Etc., Hence, the unit will not suffer from shortage of Raw Materials Considering the Demand for pulses and good availability of raw material as well as the entrepreneurs background would result in running up the unit successfully in the factors also.

Infrastructural facilities

Location:The unit is proposed to come up in the Plot No 2(2), at K.I.A.D.B. Kapnoor Industrial Area, 2 Phase, Humanabad Road -Kalburgi measuring one acre. The area of the plot is sufficient for handling the manufacturing and storing of materials and finished goods.

The unit has got location advantage like good Broad gauge Railway connection throughout India. In addition State High Way Bidar-Srirangapattanam passes through city of Kalburgi, Mumbai- Hyderabad Highway is also nearby to transport the manufactured dhal to the major cities like Hyderabad, Mumbai and also to Northern parts of India.

Power: The Proprietor of this unit requires about 50 HP Power, Since it is a industrial area develop Karnataka Industrial Board, there arc sufficient supply of Power to the unit.

Water: The Unit requires about 10 KL of water per day for the production of dhal and also for human consumption etc., The water supply will be made available from the K.I.A.D.B. In additional to that, a bore well has been drilled in the premises, the yield of water from bore well is 2”, which is sufficient for the Dall Industry.

Effluents: The unit does not generate any harmful effluents which might require treatment before its disposal.

Manufacturing Process: It is proposed to procure the modern dhal mill for manufacturing dhal from pulses. The modern dhal mill can give yield of 78.82% of dhal at lesser time and cost of processing compared to traditional processes. Besides, the possible increased yield, the process is capable operation throughout the year and is completely independent at climatic conditions. The brief description of the process is given below.

A conditioning technique of heat treatment and moisture adjustment of the cleaned size graded grains in specially designed unit losses the husk while making it tri able and brittle and the kernel becomes hard. This is a continuous operation replacing the sun drying steps and carried out indoors. The loosened husk is removed by machine to suit the nature and milling characteristics of the pulses.

These machines work either on abrasion or attrition principal and given highest dehusking in a single operation. Dehusked whole pulse obtained from the dehusked and cleaned whole grains are then split under appropriate conditions using Nylon Splitter.

Plant and Machinery: The details of the Plant and Machinery required are estimated at Rs.32 Lakhs.

Raw Materials: Major raw materials required are Toor (whole) and Bengal gram. The unit requires 2000 metric tons of Toor per annum. The total cost of raw materials works out to 4.20 Crores for 100% capacity utilization for one year.

Packing Materials: The major packing materials required is gunny bags of 50 Kg. and 100 Kg capacity for packing the processed dall and husk.

CHAPTER 5

PROBLEMS, PROSPECTS AND CHALLENGE OF FOOD PROCESSING UNITS

Food processing units as a whole have been facing various problems according to the category and type of the unit. This chapter is divided into two sections. In section 1, an investigation is made into the problems faced by food processing industries in general in India and in section 2, problems faced by sample food processing industries in Karnataka in particular are analyzed in detail.

5.1 Problems of Food Processing Industries in India Problems faced by food-processing industries in general in India have been categorized into problems relating to raw materials, problems relating to marketing, problems relating to processing and financial and fiscal problems.

5.1.1 Problems Relating to Raw Materials In India, one of the major problems in food-processing sector is the inadequate and suitability of raw materials. Because of this there is under unitization of the existing capacity. Chasha has observed the following constraints on the fruit and vegetable processing industries: (a) Non- availability or paucity of processing varieties of fruits and vegetables, (b) short period of raw material availability, (c) excessive cost of raw materials. Lakdawala and Sandesara's study also observed that small agro-industries are under a handicap in obtaining raw materials of requisite quality at reasonable price. According to Sekhon, Rangi and Kaur, the major problems faced by rice mills in Punjab were poor quality of raw materials due to higher moisture content which poses problem in producing good quality rice, and short duration availability of raw material which poses problems such as higher prices due to competition among the buyers in the market. The main problem Indian block rubber industry (Indian Technically Specified Rubber Industry) faces is the non-availability of fish field coagulum as raw material.

5.1.2 Problems Relating to Marketing Food -processing industries face many problems in marketing their products. Most of the industries face severe competition from larger firms and they find it difficult to face competition in view of the higher cost of production and non standardized quality of the produce and due to

48 shortage of funds, these industries are unable to use wide media publicity. The most important constraint on marketing relates to market development. Value added products from intensive Processing require larger expenditure on market development. Besides the cost of packaging of processed products is very high in India due to high prices of packaging materials. Poor sales promotion and advertising campaigns due to financial constraints, and competition from multinational companies with aggressive marketing support and high price discounts are serious marketing problems faced by agro-processing units in India.

5.1.3 Problems Relating to Processing Constraints on processing relate to obsolete technology. In the absence of modern equipment and advanced technology, processing units are unable to produce high quality products and processing of by- products for exports. Iqbal, in his study on agro-based industry, has observed that agro-industries are confronted with acute shortage of modem machines and technology. Inadequate technology has been found to be a major constraint which hinders the progress of fruit and vegetable processing industries.

5.1.4Financial and Fiscal Problems Inadequate capital for modernization and rehabilitation and high rate of interest on working capital from commercial banks are the major financial constraints of food-processing industries. Shehrawat and Makhija have observed that difficulty in procuring fixed capital and as well as working capital from different agencies and lack of working capital constituted the very serious financial problems of agro processing industries." Nare has conducted a study of 100 small scale bakery units in Belgavi district. He found in his study that 68 percent of the units have taken bank and credit security loan. Only 11 percent of the units have obtained loan through government schemes. The opinions of entrepreneur about capital are as (i) there is no any special provision by the government for financial assistance and also low rate of interest from nationalized banks (ii) there are no separate marketing departments in these units. Marketing system is as a channel of distribution, i.e. 1) Direct sale, 2) sale through retailers and wholesalers. 38 percent of the units sell their product at local or Taluk level only. 83 per cent of the units do not prefer advertisement as the sales promotional activity. The sales of these units are only in terms of cash basis. It is due to maintaining the smooth cash flow and requirement of working capital. There is lack of technology up gradation. Pant and Meena have observed that

49 lack of credit as serious financial problem faced by agro-processing industries. Due to lack of sufficient working capital, processing units face difficulty in keeping stock of adequate raw materials and utilize cheap and inferior materials which affect the quality of their finished products. High tax on processed / packaged product is the major fiscal problem faced by the processing industries. In India, processed / packaged food products have been considered luxury items, and therefore, they have been subjected to high tax incidence at various stages of processing.

5.1.5 Other Problems Besides the inadequate supply of credit and raw material, agro-processing industries face other problems which include lack of storage facilities, inadequate supply of labour, and electricity throughout the year.

5.2 Problems faced by Manufacturing Enterprises: Analysis based on Primary Level Data Formulation of a proper-mix of policies for the healthy and rapid development of food- processing units must take into consideration the various problems that inhibit their growth. With this in view, the sample processing units were asked to identify their problems. In this section, problems faced by sample of food-processing units in Karnataka in particular are analyzed in detail. For this purpose, problems faced by sample food-processing units are categorized into problems relating to raw materials, marketing problems and other problems.

5.2.1 Problems relating to Raw Material There is a problem of non-availability of raw materials, high market price of raw materials, poor quality raw materials and competition among units to buy raw materials distribution of units on the basis of problems relating to raw materials, they face is given in table 5.1

Non -availability Raw Materials Table 5.1 shows that non availability of raw materials is an important problem affecting the operation of units. The proportion of this problem affecting food-processing units varies from 54.00 percent in manufacturing of grain mill products to 10.00 of manufacture of packed food/consumer foods. However this problem is severe in industries like rice mills (77.77 %),

Manufacture of fruits & vegetables (66.66 %), Marine products (50.00 %), and in manufacture of Packed food/ consumer foods (10%). This problem largely arises due to fluctuations in agricultural production due to unfavorable climate, plant diseases and other natural calamities. However, many other factors can be attributable to this problem in the case of individual commodities. Global agro industries Kalburgi (Dhal mills), Sri Dharameshwari Rice Industries (rice mill) and Ravi Raj Industries in Tumakur pointed out that the problem of inadequate availability of paddy and dhal (raw material) for rice mills and dhal processors can be attributed to inadequate production in the state. Table 5.1: Constraints faced by the Food Processing Units in Procuring Raw Materials

Sl. Type of constraints No Product group Non- High market Competitio Poor quality availability of Price of Raw n raw materials Total raw materials materials among units to buy raw materials

1 Manufacture of fruits & 10 3 4 2 15 vegetables (66.66) (20.00) (26.66) (13.33) 2 Manufacture of dairy 1 2 1 1 5 products (20.00) (40.00) (20.00) (20.00)

3 Manufacture of grain mill 14 12 7 5 18 products (77.77) (66.66) (38.88) (27.77) 4 Marine products 1 1 - - 2 (50.00) (50.00) 5 Manufacture of Packed 1 4 3 2 10 food/ consumer foods (10.00) (40.00) (30.00) (20.00) Total 27 22 16 10 50 (54.00) (44.00) (30.00) (20.00) Note : (figures in parentheses indicates the percentages of total)

High Market Price of Raw materials

Table 5.1 reveals that high market price of raw materials is a major problem of food-processing units face in obtaining raw materials. Table shows that 44.00 per cent of the total food- processing industrial units have reported high market price of raw materials as a major difficulty in obtaining raw materials. This is a major difficulty for industries like grain mills (66.66%),

51 marine products (50 %), dairy and consumer foods (40.00 % and 20 % in manufacturing of fruits and vegetables).

Competition among Units to buy Raw Materials

30.00 per cent of processing industrial units reported competition among processing units to buy raw materials as another problem relating to raw material. This problem implies that raw material availability in the market is less than the demand for raw material. This problem is severe in the case of rice and pulse mills where 38.88 per cent of grain mills face this problem. 30.00 per cent Manufacture of Packed food/ consumer foods are also found to be facing this problem Kalburgi dhal mills and rice mills in Tumakur have pointed out that this problem pushes up the price of raw material in the market and makes raw materials unavailable to small scale grain mills.

Poor Quality of Raw Materials

20.00 per cent of food-processing units among five food-processing industries, grain mills, reported that poor quality of agricultural raw materials adversely affected the quality of their products and the profitability of operation. This problem is severe for grain mills (27.77 %). Priyanka, Avinash Dhal industries have reported that due to various diseases affecting pulse quality is poor which reduces the profitability of their operation. Tumkur rice mills have reported that high moisture content in paddy, presence of paddy with black rice and paddy without rice (empty paddy) in the raw material (paddy) reduce the quality of raw material (paddy), and adversely affected the quality of their product and profitability.

5.2.2 Marketing Problems of Sample Food Processing Units Marketing problems relate to competition, credit sales, brand acceptability, mass media exposure etc. Distribution of units on the basis of marketing problems they face is given in table 5.2 Competition Table 5.2 clearly shows that the most important marketing problem common to all sample food- processing industries is competition. Food-processing units face competition from other units within the same industry, from large-scale units, from multi national companies and also from

other units, which produce substitutes for the processing unit’s product. Table 5.2 reveals that 64.00 per cent of food-processing units as a whole suffer from this problem. The proportion of units facing this problem varies from 72.22 per cent in grain mills to 40 per cent in dairy products making and 66.66 per cent in fruits and vegetable processing industry. However, table shows that this problem is serious in grain mills (72.22 %), Manufacture of Packed food/ consumer foods (60%) and marine products 50 per cent.

Table 5.2 Constraints Faced by the Food Processing Units in Marketing of Processed Products in Domestic Market

Sl. Type of constraints No Product group Competition Lack of Inadequate brand publicity Dependence on Total goodwill through middleman for marketing mass the processed product media 1 Manufacture of 10 8 7 5 15 fruits & vegetables (66.66) (53.33) (46.66) (46.66) 2 Manufacture of 2 2 2 2 5 dairy (40.00) (40.00) (40.00) (40.00) products 3 Manufacture of 13 9 8 6 18 grain mill products (72.22) (50.00) (44.44) (55.55)

4 Marine products 1 1 - 2 2 (50.00) (50.00) (100.00) 5 Manufacture of 6 6 6 4 10 Packed food/ (60.00) (60.00) (60.00) (40.00) consumer foods Total 32 26 23 19 50 (64.00) (52.00) (46.00) (38.00) Note : (figures in parentheses indicates the percentages of total)

Lack of Brand Goodwill Another marketing problem which the units have reported to be facing is the lack of brand goodwill. It implies that their product brand have not received much public acceptance. Table 5.2 reveals that 52.00 per cent of food processing industries as a whole are facing this problem. This problem has been reported by 60.00 per cent of manufacture of packed food /consumer foods, 53.00 per cent of manufacture of fruits and vegetables and 50.00 per cent of grain mills, marine

53 product units. The units have attributed it to inadequate publicity through mass media. Units reported that they are reluctant to have media exposure because of lack of finance and high cost involved in it.

Inadequate Publicity through Mass Media Mass media exposure is an essential ingredient for the smooth growth of an industry. It helps entrepreneurs to plan their activities in accordance with market trends, introduce goods to suit consumers' tastes and get consumers informed of their product through advertising. Table 5.2 shows that 46.00 per cent of food-processing units as a whole have reported inadequate publicity through mass media as a marketing problem. This problem is faced by 60.00 per cent of Manufacture of Packed food/ consumer foods 46.66 per cent Manufacture of fruits & vegetables, 44.44 per cent of Manufacture of grain mill products and its, 40.00 per cent of milk processing units.

Dependence on middleman for marketing the processed product

Middleman as one who carries all the activities involved in selling goods and services to those who buy for resale or business use. Table 5.2 shows that 100.00 per cent of marine products, 55.00 per cent of grain manufacturers, 46.66 percent of Manufacture of fruits & vegetables and 40.00 per cent of manufacture of dairy and consumer goods units have reported that they are depend on marketing of their produce through middleman.

5.3 Other Problems Distribution of units on the basis of other problems affecting operation of food-processing industries is given in table 5.3.

Irregular supply of power Table 5.3 shows that 44.00 per cent of the total food-processing units have reported that irregular supply of power affect their operation. Food-processing units, which are located in remote areas, face this problem seriously. 55.55 per cent of the grain mills, 50.00 per cent of marine products, 40.00 per cent of bakery and dairy product units and 33.333 per cent of manufacture of fruits and vegetable industries reported. Lack of regular supply of power adversely affects the existing

54 capacity utilization resulting in low level of production on the one hand and an increase in cost of production on the other.

Table 5.3: Distribution of Units on the Basis of Other Problems

Sl. Type of constraints No Product group Irregular Lack of Multiplicity TOTAL Supply of Labour of Laws and Power Procedures Manufacture of fruits 5 5 2 15 & vegetables (33.33) (40.00) (13.33) Manufacture of dairy 2 1 1 5 products (40.00) (20.00) (20.00) Manufacture of grain 10 6 8 18 mill products (55.55) (33.33) (44.44)

Marine products 1 - - 2 (50.00) Manufacture of 4 4 2 10 Packed food/ (40.00) (40.00) (20.00) consumer foods Total 22 16 13 50 (44.00) (32.00) (26.00) Note : (figures in parentheses indicates the percentages of total)

Lack of Labour

Table 5.3 shows that 32.00 percent of the food-processing units in five industries namely fruits and vegetable manufacturers and consumer foods (40.00 %), grain mills (33.33%), and dairy products 20.00 percent. Have reported that lack of labour affected their operation Abhinandhan Food Processors in Belgaum. Deepak cashew industries (Udupi district) has attributed lack of labour to migration of labour from rural to urban or semi urban areas to work in shops particularly in textile shops, in transportation service sectors drivers or conductors in private buses, or to work in other private establishments in the urban or semi urban areas.

Multiplicity of Laws and Procedures

Table 5.3 shows that 13.00 percent of the food-processing units as a whole have reported difficulty in the operation of units due to multiplicity of laws, procedures and periodical

55 interference of bureaucracy in the name inspection. This problem is faced by grain mills (44.44 %), Manufacture of Packed food and Manufacture of dairy Products (20.00 %) and 13.33 per cent in fruits and vegetable manufacturers has reported. Global agro industries and Avinash dhal industries (Dhal industries) have reported that Government of India has banned to export of dhal to other countries like US, Singapore etc. And getting low subsidies in our state as compared neighbor states like Maharashtra and others. This requires action on the part of the government in simplifying laws and procedures in favor of food-processing industries to speed up their growth.

5.4 Prospectus of Food Processing Units in Karnataka

5.4.1 Food Production and Processing: The scenario

There were approximately 1550 food products and beverage manufacturing units registered in the state till end of 2011-12. The total investment in these units was estimated at Rs. 23,405 lakh and employment generated in these units was in excess of 15000. Various agri-export zones have been earmarked in the state for products like gherkin, Rose onion, flowers and vanilla. To be precise, eight zones have been earmarked for gherkin, three for rose onion, six for flowers and six for vanilla. has sanctioned one Mega Food Park project under its Mega Food Parks Scheme in Karnataka. The project is located in Tumakur and was the park inaugurated on 24th September, 2014 by Hon’ble Prime Minister.Apart from MoFPI’s Mega Food Parks Scheme, the state Govt. also has a Food Parks Scheme under which food parks are being established in 6 districts including Bangalore (Rural), Tumakur, Shivamoga, Davangere, Vijapura and Belgavi. The state government is also planning to set up a spice park at Byadagi in Haveri district.MoFPI has so far sanctioned five cold chain projects in the state under its “Scheme for Cold Chain, Value Addition and Preservation Infrastructure”. Under the scheme for Setting up of New/ Modernization of Existing Abattoirs of Karnataka has been sanctioned 3 Abattoirs Projects so far - City Municipal Council Chitradurga, Mysore City Corporation and Hospet City Municipal Council by the Approval Committee, commercial operations is expected to commence shortly.

CHAPTER 6

SWOT Analysis of Food- Processing Industry in Karnataka

6.1 Introduction

The SWOT (strengths, weaknesses, opportunities and threats) analysis is a measurement tool applied in business to understand the positive and negative factors that may exists in the cource of operation, in other words it stands for the analysis of internal strengths and weaknesses of an operation and external opportunities and threats to the operation. Below is a description of each of these elements that should be considered when performing a SWOT analysis.

Strengths The first element of a SWOT analysis describes the strengths of an operation. The strengths include what an operation does well, and should be viewed from both own point of view as well as from the point of view of people with whom it come in contact. In some cases an organization’s strengths are very obvious, for example, being a low cost producer. In other cases, it is a matter of perspective, for instance the product is of high quality. It is important to note that operations that are in a bad position also have strengths. Whether these strengths are adequate should be determined through further analysis. Weaknesses The other internal element of the SWOT analysis describes the weaknesses of an operation. Examining weaknesses include identifying what an operation does not do well. As with the strengths, weaknesses should be examined from both own perspective and from the perspective of those outside the operation. It is also possible for weaknesses to be obvious such as a limitation of resources or be more of a perspective issue such as a lack of teamwork. All operations, regardless of size or profitability have weaknesses. How badly these weaknesses will affect the operation should be left to further analysis. Opportunities The first external element of the SWOT analysis is opportunities. The opportunities include any favorable situation in the business’s environment that the operation may realize gains from. These could range from diversification and the use of new technologies to market trends and

57 relationship developments. It is important to note that all operations have some opportunities: identifying these opportunities is the sign of a good analyst.

Threats The final element of the SWOT analysis is the external threats that the operation faces. Regardless of size or profitability, all operations face threats. These threats could range from lower international prices to key relationships that are not going well. Whatever the threat, the operation should have a plan in place to resolve the problem.

6.2 SWOT Analysis of Fruit and Vegetables Industries

Karnataka occupies a prominent place in the horticulture map of the country. Horticultural crops occupy an area of 18.00 lakh hectares and a production of 136.38 lakh tonnesin the year 2013- 14. Although the area comprises only 14.44 per cent of the net cultivated area in the state, the total income generated from the horticulture sector accounts to over 40 per cent of the total income derived from the combined agriculture sector. This accounts for 17 per cent of the agricultural share of GDP in the state. Horticulture provides excellent opportunities in raising the income of the farmers even in the dry tracts. A significant shift towards horticulture is evident in the state with an increase an area and production. For instance, an area of about 58,000 hectares has been brought under horticultural crops through the watershed programmes. Horticulture provides higher unit productivity and offers great scope for value addition and this sector is taking inroads throughout the length and breadth of the state. Karnataka having the highest acreage under dry farming in the country next only to Rajasthan, has a great potential to grow high value but less water demanding horticultural crops.

As per the study survey a maximum number of respondents ranked abundant availability of raw materials, vast network of manufacturing facilities, supportive producers, good global demand and vast domestic market for their processed produce. Contract farming involves agricultural production being carried out on the basis of an agreement between the processor and farmers. Industries specify the quality they require and also fix the price for each crop in advance benefiting both as the better rate and processers get best quality. The weakness mentioned by the processors of the fruit and vegetables were that that lack of adequate quality control and testing

58 methods, high requirement of working capital and seasonality of raw material and perishability nature. Inadequate infrastructure is the top most problem hindering the growth of the sector, support infrastructure which is the biggest bottleneck in expanding the food processing sector, in terms of both investment and exports includes: long and fragmented supply chain, inadequate cold storage and warehousing facilities, road, rail and port infrastructure. Also, lack of modern logistics infrastructure such as logistics parks, integrated cold chain solutions, last mile connectivity, dependence on road over rail, customized transportation, technology adoption and government support via incentivizing private public partnerships are some of the lacunae that exist in supply chain and logistics sector in India.

Large crop and material base offering a vast potential for agro processing activities, setting of SEZ/AEZ and food parks for providing added incentive to develop green field projects Integration of development in contemporary technologies such as electronics, material science, bio-technology etc, offer vast scope for rapid improvement and opening of global markets were the important opportunities identified in fruit and vegetable processing industries. Fruit and vegetable processers responded that affordability and cultural preferences of fresh food, high inventory carrying cost, high taxation and high packaging cost were the major threats of the industry. The summary of the SWOT analysis is provided in the following Table 6.1

Table 6.1: SWOT Analysis of Fruit and Vegetables Industries

Strengths Weaknesses

* Low availability of adequate infrastructural * Abundant availability of raw materials. facilities

*Vast network of manufacturing facilities all over *Lack of adequate quality control and testing the country. methods as per international standards.

*Supportive producers. *High working capital requirement.

*High global demand. *Inadequately developed linkages between R&D labs and industry. *Vast domestic market. *Seasonality of raw material.

*Perishability of raw materials. Opportunities Threats

*Large crop and material base offering a vast *Affordability and cultural preferences of fresh potential for agro processing activities. food

*Setting of up SEZ/AEZ and food parks for *High inventory carrying cost providing added incentive to develop green field projects. *High taxation

*Integration of development in contemporary *High packaging cost technologies such as electronics, material science, bio-technology etc. offer vast scope for rapid improvement and progress.

*Opening of global markets

6.3 SWOT Analysis of Manufacture of Grain Mill Products Industry

Karnataka’s food grain production is set to witness a marginal dip of 2.3 per cent to 13 million tonnes for the 2014-15 over the previous year. The fall in production is mainly due to a deficit rainfall and dry spell during the second fortnight of June, the first week of July, August and September in major parts of north and south interior districts last year. This affected the rain-fed crops over an area of 1.82 million hectares. Major crops that were affected included red gram,

60 soyabean, maize, green gram, groundnut, ragi, bajra, sunflower, cotton and sugarcane. Cumulative rainfall from June 1 to September 30, 2014 was 833.37 mm as against a normal rainfall of 838.70 mm, a drop of one per cent, according to Economic Survey of Karnataka 2014- 15.

As per the study survey a maximum number of respondents ranked skilled for traditional technology, technological infrastructure and good demand for the product, the weaknesses are control by MSP (minimum support price) of paddy, and lack of skilled labouers and shortage of raw materials, the opportunities like cost reduction and quality enhancement by use of appropriate technology large domestic /international market and tremendous growth potential with institutional and policy support and threats are poor monsoons, Government policies and levy of taxes and duties in comparison to neighboring states may further lead to closure /shift of industries to neighboring states. This problem largely arises due to fluctuations in agricultural production due to unfavorable climate, plant diseases and other natural calamities. However, many other factors can be attributable to this problem in the case of individual commodities. Global agro industries Kalaburagi (Dhal mill), Sri Dharameshwari Rice Industries (rice mill) and Ravi Raj Industries in Tumakur pointed out that the problem of inadequate availability of paddy and dhal (raw material) for rice mills and dhal processors can be attributed to inadequate production in the state. Abhinandhan Food Processors in Belgaum and Deepak cashew industries (Udupi district) has reported that lack of skilled labour affected their operation. The summery of SWOT is given in Table 6.2.

6.4 SWOT Analysis of Dairy Industry

The Karnataka Milk Federation ( KMF) is the largest Cooperative Dairy Federation in South India, owned and managed by milk producers of Karnataka State. KMF has over 2.32 million milk producers in over 13157 Dairy Cooperative Societies at village level, functioning under 14 District Cooperative Milk Unions in the State. Quality Excellence from Cow to Consumer” – is the motto of the Federation to obtain better-quality milk and milk products from the value chain (procurement to processing to marketing). Thus milk and milk products, under brand name, are unmatched in quality made available to consumers at most competitive prices.

Table 6.2. SWOT Analysis of Manufacture of Grain Mill Products Industry

Strengths Weaknesses

* Controlled MSP of paddy and compulsion of levy * Workers mostly skilled for traditional technology rice supply.

*Technological infrastructure availability *Lack of skilled labourers.

*Good demand for the products. *Shortage of raw materials

*Adopting new technology.

*Strong labour force.

*Good market relationship Opportunities Threats

*Cost reduction and quality enhancement by use *Poor monsoons. of appropriate technology *Government policies.

*Large domestic /international market availability *Imposition of taxes and levies in comparison to neighboring states may further lead to closure/shift *Tremendous growth potential with Institutional and of industries to neighboring states. Policy support. *skill base needs up gradation to adopt latest Technology and management systems.

In a way Nandini Milk and Milk Products are “Spreading wealth of health”. Karnataka Milk Federation sells about 31 lakh litres of milk in the state and the rest is converted into powder, curd and ice creams. With abundant milk production, the Karnataka Milk Federation is now planning to export surplus milk powder to bring stability in the prices. Industry has identified six countries for exporting milk powder and a licence is expected any time. Based on the observations in the milk dairies, the researcher has carried out a SWOT analysis. The strengths and weaknesses pertain to the factors in the internal environment. The opportunities and threats pertain to the factors in the external environment. The strengths and weaknesses have been analyzed on the basis of interviewing the dairy personnel and the physical observations made by the researcher. The opportunities and threats have been analyzed on the basis of interviewing the

62 dairy personnel and also through secondary research. The summary of SWOT relating to dairy industry is presented in Table 6.3.

Table 6.3 SWOT Analysis of Dairy Industry

Strengths Weaknesses

*Nandini milk enjoys good brand recall in the minds *The shelf life at the customer end is low since of the milk consumers in Karnataka. It has become a they are not able to transport at low temperatures household name in Karnataka. till the point of consumption.

*In the present market situation, experience matters a *The smaller dairies are yet to adopt quality lot. Dairy movement started in 1965in Karnataka and management systems and other world class KMF possesses a good knowledge of the market. manufacturing practices.

*Enhanced milk production with consequently *Tropical climate conditions. increased availability of milk processing. *Seasonal fluctuations in milk production *Large number of dairy plants in public and pattern. cooperative sector besides several others coming up in the private sector.

*Improved transportation facilities for movement of milk and milk products.

*Improved purchasing power of the consumer. Opportunities Threats

*Great improved export potential for milk * Inflow of foreign products to the in Indian products of western as well as traditional types. market.

*Increasing demand for fluid milk as well as value *Poor microbiological quality of milk increased added products. competition.

*Market information intelligence system for milk and * Products from neighbouring states freely milk products. entering Karnataka

*There is a growing market demand with the growth in population as well as improvement in the standard of living of the people.

*The surplus milk can be used for making sweets which can be exported to many countries.

6.5 SWOT Analysis of Marine Industry

Karnataka state has 300 km of coastline and 27,000 sq km continental shelf area, rich in pelagic fishery resources. Traditionally, Karnataka coast is known as “mackerel coast”. The marine fisheries resource potential of the state has been estimated at 4.25 lakh metric tonnes, of which 2.25 lakh metric tons come from inshore areas up to a depth of 70 m and the remaining 2.0 lakh metric tonnes hail from off shore/deep sea zone. The state has 5.60 lakh hectares of inland water resources comprising 1.72 lakh ha of major and 1.21 lakh hectares of Gram Panchayat / small tanks 2.67 lakh ha of reservoirs, besides 5,813 km length of rivers which provide immense scope for development of inland fisheries. The fish production, both from the marine and inland sector of the state has been increasing over the years. The demand for marine products has led to increase in prices also. The Table 6.4 shows That there exists well known local species, high survival rates in all stages of production, restocking can secure protection of depleting stocks are the major strengths of the industry the industries they have little experience and lack of latest technology are the major weaknesses, coming to the opportunities for the industry there exists that highly commercial species, good growth potential and there is a good demand for marine products across the world. The threats of the industry are existing lake spawning stocks at risk due to environmental conditions sea water level may increase due to global warming and more market competitions.

6.6 SWOT Analysis of Consumer /Packed Goods Industry

Increasing influence from consumer food service chains such as Starbucks resulted in changes in the eating preference of consumers over the review period. Many consumers have started to have baked goods such as croissants or bread for breakfast or for evening snacks. Additionally, baked goods such as croissants and bread continue to be considered as convenient breakfast options. As a result, 2015 current value sales grew by 10%. Baked goods remained mainly led by artisanal manufacturers in 2015. Indian baked goods continued to be highly fragmented during 2015 and remained flooded by small or independent players.

Table 6.4 SWOT Analysis of Marine Industry

Strengths Weaknesses

* Well known local species * Little experience on aquaculture and quality.

*High survival rates in all stages of production. *Very little known on the world / European market. *Restocking can secure protection of depleting stocks. *Lack of latest technology for processing of fish and other marine products. *National local market for white fish products.

Opportunities Threats

*Highly commercial species. *Existing lake spawning stocks at risk due to environmental conditions. *Good growth potential. *Sea water level may increase due to global *High value species of both fish meat and roe. warming.

*Worldwide market. *Market competitions.

*Clarification of the fishery rights of released fishes.

The leading branded players within baked goods in 2015 were Britannia Industries Ltd, Hindustan Unilever Ltd and Monginis Foods Ltd. The results of the SWOT analysis of consumer and packed goods industry is presented in table 6.5.The major strengths of packed goods industry are providing products of excellent quality, providing a staple product and providing good customer services. As for as weaknesses are concerned there is high competition among the industries, high input cost and lack of skills, both technical baking and business/entrepreneurial skills. Coming to the opportunities available to the industry are scope for market expansion, Improving the quality of human resources through training was a worthwhile opportunity and There are networking opportunities and it is possible to establish strategic alliances especially with the supply of raw materials, and reduction in the costs. Competition and High cost of raw materials in relation to the price that the market is prepared to pay for the finished product are the major threats among all the food processing industries.

Table 6.5 SWOT Analysis of Consumer /Packed Goods Industry

Strengths Weaknesses

* Competition. * Providing products of excellent quality *High input costs. *Providing a staple product *Lack of skills - both technical baking and *Providing good customer services business/ entrepreneurial skills.

*Meeting customer demands *Lack of infrastructure (especially in remote areas) such as: Telephones, Transport for raw materials *Often a family business and loyal family support and products. was available *Poor knowledge and understanding of market *Almost all sales over the counter, thus reducing forces and marketing of products delivery costs

*Knowledge of their specific target market. Opportunities Threats

*Scope for market expansion *Competition * Scope to the quality of human resources through training. *High cost of raw materials in relation to the price that the market is prepared to pay for *Networking opportunities and it IS possible to the finished product establish strategic alliances especially with the supply of raw materials, and reduction of costs. *The cost of setting up with equipment is high and usually beyond the financial capabilities of most bakers.

*Inability to always comply with health, hygiene and safety regulations can reduce clientele and cause losses of market share and even product

CHAPTER 7 CONCLUSIONS AND POLICY RECOMMENDATIONS

7.1 Introduction The food-processing industry in India plays a vital role in the national economic development and has potential to meet the local needs and export requirements. It helps in processing agricultural products such as field crops, pulses, horticultural crops, livestock and fisheries and converting them to edible and other usable forms. Thus, transformation of agriculture through creating forward and backward linkages with industry has been emerging as an important option to overcome the increasing challenges of creating employment opportunities for increasing labour force and sustaining the livelihood of households in rural areas. Most important point in the food-processing is that a sizeable portion of raw material processed in them being rural based it has a very high employment potential with significantly lower investment. Further the food- industry generates new demand on the farm sector for more and different agricultural outputs, which are more suitable for processing. On the other hand, development of these industries would relax wage goods constraints to economic growth by enhancing the supply of their products. In this context there is a need for improving the capacity of the food-units to harness backward linkages with agriculture and allied activities in order to efficiently convert part of the output to value added products acceptable to the domestic and international markets. This would generate employment opportunities for different types of skills through food processing, packaging, grading and distribution. Keeping the above aspects in consideration the study was carried out in the state of Karnataka.

7.2 Main Findings 7.2.1. Background of Food Processing Units; The expansion pattern of food processing industries based on the analysis of 50 sample units reveals that 100 per cent of industries were registered under District Industrial Centre in sample districts together were started during the periods 2014-15. From table 3.1 one can see that 32 per cent all categories of units were started after 2006. Followed by 26 per cent during 1992-2000, 22 per cent before 1991 and 20 per cent during 2001-05.

7.2.2 Ownership of Industries

7.2.3. Age Profile of Entrepreneurs; Age of entrepreneurs in the food processing sector as an important determining, factor for their growth expansion one can observe the pattern whether the young entrepreneurs are entering in to this sector or the traditional business community themselves in this business it is significant to observe that most of the entrepreneurs in the food-processing sector are middle aged (30 to 40 years). Their share comes to 68 per cent of the total food processing entrepreneurs. This is followed by young entrepreneurs (below 30 years) who constitute28.00 per cent and 4 per cent account for aged (45 years and above). The table thus reveals the dominance of middle aged entrepreneurs in the sector. Industry wise analysis reveals that proportion of entrepreneurs in the middle-age group is higher in industries such as marine products (100 %), Manufacture of Packed food/ consumer foods (70 %), grain mills and fruit and vegetable manufacturers (66.66 %) and 60 per cent of dairy products.

7.2.4 Educational Background of the Entrepreneurs Assessing into the educational background of the entrepreneurs it reflects that the different groups of food processing industries especially small scale industries do not require any more skill and professional education. Expansion of this sector can be successfully carried out by the individual having even primary education or the secondary education. From the sample nearly 26 per cent entrepreneurs have education below primary level. However, a majority i.e., 38 per cent entrepreneurs are having secondary level of education while only 2 per cent entrepreneurs, have obtained technical/ professional level education.

7.2.5 Caste Background of the Entrepreneurs Among the different product groups of food-industries, the domination of general caste entrepreneurs has been noted and the highest at 50 per cent is in distilling, rectifying and blinding of spirit while in registered units their share reaches to the extent of 50 per cent. In same product group to 66 per cent in manufacturing of fruits and vegetables, In terms of the proportionate share of different casts of entrepreneurs in various small scale registered industries is concerned the study found that it again follows quite high at 28.00 percent in backward classes, 14.00 per cent of SC and 8.00 per cent of ST. Industry wise analysis shows that 66.66 percent of entrepreneurs in fruit and vegetable manufacturers, 60.00 per cent in Manufacture of dairy, 50.00 per cent in marine products , 44.44 per cent in manufacture of grain mill and 30.00 per cent in Manufacture of Packed food/ consumer foods.

7.2.6 Land Assets of Agro-Processing Entrepreneurs Economic profile of food-processing entrepreneurs is analyzed in terms of area of land assets they own. For this purpose, entrepreneurs are categorized into three groups; entrepreneurs with land holding between zero and 2.5 acres (below one hectare), between 2.5 acres and 5 acres, and entrepreneurs with land holding above 5 acres. It is observed that 66.66 per cent of the total entrepreneurs have land holding between zero and two and half acres (below one hectare). The proportions of entrepreneurs having land holding between zero and 2.5 acres varies from 40.00 manufactures of dairy Products to 72.00. Manufacture of grain mill products. The proportion of entrepreneurs having land holding between two and half and five acres of land is 22.00 per cent for the food processing industries as a whole and it varies from 11.00 per cent in manufacture of grain mill products industries to 50.00 percent in marine product industries and 12.00 per cent have land holding of more than five acres. The table, thus, reveals that majority of entrepreneurs have small size of land holdings and this indicate that economic profile of majority of food-processing entrepreneurs as a whole is not so sound.

7.2.7 Employment in Agro-Processing Units Food-processing industries are generally regarded as labour intensive and are expected to employ more labors and create more maydays of employment.

In order to analyze the employment level in sample food processing industrial units, they are categorized into four groups namely industrial units employing 2 to 10 persons, 11 to 20 persons, 2 1 to 30 persons and above 3 I persons. It shows that 46.00 percent of the total food-processing units are able to generate employment for 11 - 20 persons each. Within this 100 per cent of the marine product units, 60 per cent dairy units, 46.66 percent manufacture of fruits & vegetables, 44.44 percent in Manufacture of grain mills and 30.00 percent in Manufacture of Packed food/ consumer foods. It is also observed that industrial units providing employment to 21-30 persons are and account for 24.00 percent of the total food -processing industrial units, 18. Per cent in 2-10 persons and finally 12.00 per cent of total food processing units generating employment for 31 above persons.

7.3 Reasons for Success of food Processing Units

7.3.1 Quality Management

7.3.2 Good customer service Customer service proves to be one of the most important keys to the success of the food industry 78.00 per cent of food-processing units have reported that good customer service is an another

70 important factor for success of food processing units. This factor is favor in Manufacture of Packed food/ consumer foods and marine products (90. %), Manufacture of fruits & vegetables and Manufacture of dairy products (80 %) and Manufacture of grain mill products (77.77 %).

7.3.3 Reasonable prices

7.3.4 Replacement for Damaged Products

7.4 Problems Faced by Manufacturing Enterprises Formulation of a proper-mix of policies for the healthy and rapid development of food- processing units must take into consideration the various problems that inhibit their growth. With this in view, the sample processing units were asked to identify their problems. In this section, problems faced by sample of food-processing units in Karnataka in particular are analyzed in detail. For this purpose, problems faced by selected sample food-processing units are categorized into problems relating to raw materials, marketing problems and other problems.

7.4.1Problems Relating to Raw Material There is a problem of non-availability of raw materials, high prices of raw materials, poor quality raw materials and competition among units to buy raw materials.

7.4.1.1 Non- availability Raw Materials Non availability raw materials is an important problem affecting the operation of units. The proportion of this problem affecting food-processing units varies from 54 per cent in manufacturing of grain mill products to 10. of manufacture of packed food/consumer foods. However this problem is severe in industries like rice mills (77.77 %), manufacture of fruits & vegetables (66.66 %), marine products (50.00 %), and in manufacture of Packed food/ consumer foods (10 %). This problem largely arises due to fluctuations in agricultural production due to unfavorable climate, plant diseases and other natural calamities. However, many other factors can be attributable to this problem in the case of individual commodities. Global agro industries Kalburgi (Dhal mills), Sri Dharameshwari Rice Industries (rice mill) and Ravi Raj industries in Tumkur pointed out that the problem of inadequate availability of paddy and dhal (raw material) for rice mills and dhal processors can be attributed to inadequate production in the state.

7.4.1.2 High Market Price of Raw materials

7.4.1.3 Competition among units to buy raw materials

7.4.1.4 Poor Quality of Raw Materials

20 per cent of food-processing units among five food-processing industries, grain mills, reported that poor quality of agricultural raw material adversely affected the quality of their products and the profitability of operation. This problem is severe for grain mills (27.77 %). Priyanka, Avinash dhal industries have reported that due to various diseases affecting pulse quality is poor which reduces the profitability of their operation. Tumakur rice mills have reported that high moisture content in paddy, presence of paddy with black rice and paddy without rice (empty paddy) in the raw material (paddy) reduce the quality of raw material (paddy), and adversely affected the quality of their product and profitability.

7.5 Marketing Problems of Sample Food Processing Units Marketing problems relate to competition, credit sales, brand acceptability, mass media exposure etc. 7.5.1 Competition The most important marketing problem common to all sample food-processing industries is competition. Food-processing units face competition from other units within the same industry, from large-scale units, from multinational companies and also from other units, which produce substitutes for the processing unit’s product. Table 5.2 reveals that 64.00 per cent of food- processing units as a whole suffer from this problem. The proportion of units facing this problem varies from 72.22 per cent in grain mills to 40 percent in dairy products making and 66.66 per cent in fruits and vegetable processing industry. However, table shows that this problem is serious in grain mills (72.22 %), manufacture of packed food/ consumer foods (60 %) and marine products 50 per cent.

7.5.2 Lack of Brand Goodwill Another marketing problem which the units have reported to be facing is the lack of brand goodwill. It implies that their product brand have not received much public acceptance. It reveals that 52 per cent of food processing industries as a whole are facing this problem. This problem has been reported by 60 per cent of manufacture of packed food /consumer foods, 53 per cent of manufacture of fruits and vegetables and 50 per cent of grain mills, marine product units. The

73 units have attributed it to inadequate publicity through mass media. Units reported that they are reluctant to have media exposure because of lack of finance and high cost involved in it.

7.5.3 Inadequate Publicity through Mass Media Mass media exposure is an essential ingredient for the smooth growth of an industry. It helps entrepreneurs to plan their activities in accordance with market trends, introduce goods to suit consumers' tastes and get consumers informed of their product through advertising. It shows that 46 per cent of food-processing units as a whole have reported inadequate publicity through mass media as a marketing problem. This problem is faced by 60 per cent of Manufacture of Packed food/ consumer foods 46.66 percent Manufacture of fruits & vegetables, 44.44 per cent of Manufacture of grain mill products and its, 40 per cent of milk processing units.

7.5.4 Dependence on middleman for marketing the processed product

7.6 Other Problems 7.6.1 Irregular supply of power About 44 per cent of the total food-processing units have reported that irregular supply of power affects their operation. Food-processing units, which are located in remote areas, face this problem seriously. 55.55 per cent of the grain mills, 50.00 per cent of marine products, 40.00 per cent of bakery and dairy product units and 33.333 per cent of manufacture of fruits and vegetable industries reported. Lack of regular supply of power adversely affects the existing capacity utilization resulting in low level of production on the one hand and an increase in cost of production on the other.

7.6.2 Lack of Labour

7.6.3 Multiplicity of Laws and Procedures

6.1 SWOT analysis of food processing industries in Karnataka

7.7 Conclusions

Quality of product and time by delivery of the product to customers is the key factor to run continuously of any food industry

7.8 Policy Recommendations Based on the finding presented on different issues the study makes the following recommendations important for policy action.

the losses and wastages in fruits and vegetables, increase in farmer income, generate employments opportunities for the local peoples, and improve the livelihood of the farmers which leads to the development of Indian economy as a whole.

Manufacture of grain mill products and Manufacture of packed food/ consumer foods

The State Government should ensure regularity in supply of power to industries.

Product specific industrial clusters should be promoted through providing various infrastructural facilities and developing market linkages.

Manufacture of dairy products

Training programmes on hygienic milk production, processing, packaging, and marketing should be organized.

Manufacture marine products

MPEDA can develop a department for providing marketing information to the fish processing units. This will help the industry updated with International scenario.

There is a need for market research studies to explore domestic and international markets for processed products.

References

A brief report on food processing sector in India 2013. Retrieved from https://www.google.co.in/?gfe_rd=cr&ei=4p1pVK3iG8fM8gedi4DgBA&gws_rd=ssl#q= A+breif+report+on+food+processing+sector+in+Inida+2013

A report on Food Processing Market & Opportunities from Indian Brand Equity Foundation. Retrieved from http://www.ibef.org/industry/indian-food-industry.aspx

Bhat, S. I. (July 1998), ‘Problems and prospects of food processing industry in western Karnataka.’ Unpublished PhD Thesis submitted to Shivaji University, Kolhapur.

Bhagvat, N. B. (2001), ‘Study of Bakery Industry in Kolhapur district with special reference to production, financial and marketing problems’, Unpublished Ph.D Thesis submitted to Shivaji University, Kolhapur.

B.A. Iqbal, Financing of Agm Based Industries in Utter Pradesh Since 195 1. (Unpublished) Aligarh Muslim University, Aligarh.

Dr. Dhanabalan. M. (2009) “Productive Efficiency of Milk Production In Tamil Nadu”, Indian Journal of Marketing, Volume XXXIX, Number 12, P-21.

D.C.Pant and Girdhari La1 Meena, "A Comparative Study of Processing of Chilli in Jouhpur District of Rajasthan", Indian Journal of Agricultural Economics, Vol. 58, No. 3, July - September, 2003, P. 607.

D.T. Lakdawala and J.C. Sandesara, Small Industries in Big City. University of Bombay, Bombay, 1960, PP. 14-15.

Dixit, Annapurna (2005), ‘Role of financial institutions in India’s industrial development- special reference to small scale industries.’ –Unpublished Ph.D. thesis in economics – Banaras Hindu University. U. P.

Jabir Ali , Surendra P. Singh and Enefiok Ekanem (2009). Efficiency and Productivity Changes in the Indian Food Processing Industry: Determinants and Policy Implications. International Food and Agribusiness Management Review, 12(1)

Food Processing, Ministry of External Affairs, Government of India, Investment and Technology Promosion (ITP) Division, Retrieved from http://www.indiainbusiness.nic.in/industry-infrastructure/industrial-sectors/food- process.htm

Food Processing, BUSINESS GOV.IN, Retrieved from http://business.gov.in/Industry_services/food_processing.php

.Ibro, G., Fulton, J. and Lowenberg-DeBoer, J. (2006). Factors affecting success for women entrepreneurs in West Africa: The case of Kossai, a value added cowpea product, American Agricultural Economics Association Annual Meeting, Long Beach, California, July 23-26.

India export statistics, APEDA. Retrieved from http://agriexchange.apeda.gov.in/indexp/reportlist.aspx

Industry in India: Challenges and Opportunities. Journal of Food Distribution Research 43(1)

Katkar, R. K. (1996), ‘Status and prospects for Food processing Industry in India.’-Indian journal of Agricultural Marketing – vol-10 (1) – Jan- April 1996.

Khot, B. A. (1992), ‘Industrial development of Sangali district.’ Unpublished PhD Thesis submitted to Shivaji University, Kolhapur

K.L. Chasha, "Horticultural Research for Development of Fruit and Vegetable Processing Industry", Keynote Adddress at the 45th Annual Conference of the All India Food Processors Association, Bangalore, August 2 6, 1989.

M.K. Sekhin, P.S.Kangi and Manjeet Kaur, "Rice Processing Industry in Punjab: Problems and Their Remedies", Indian Journal of Agricultural Economics, Vol. 58, No. 3, July- September, 2003, P.552.

Markman, G.D. (2007). Entrepreneurs’ competencies, in Baum, J.R., Frese, M. and Baron, R.A. (eds), The Psychology of Entrepreneurship, Lawrence, Earlbaum Associates Publishers, London, pp. 67-92.

Marine products export, MPEDA. Retrieved from http://www.mpeda.com/inner_home.asp? pg=trends

Misra and Shivani (2012). Small Scale Industries: Striving and Thriving in the Era of Globalization. International Journal of Enterprise Computing and Business Systems, Vol. 2, Issue 2, 56-73.

Murthy K.S. and D. Himachalam. May (2011). “Problems of Fruit Processing Industry in Andhra Pradesh – A Case Study of Select Units in Chittoor District”. International Journal of Re- search in Commerce & Management, Volume 2, Issue No. 5.

Nare, P. D. (2002), ‘A study of bakery industry y in Belgaum district (with special reference to financial and marketing problems).’ Unpublished PhD Thesis submitted to Shivaji University, Kolhapur.

Naqvi, S.W.H. (2011). Critical success and failure factors of entrepreneurial organizations: Study of SMEs in Bahawalpur, Journal of Public Administration and Governance, Vol.1 (2), pp.17-22.

Pramod Kumar, (2010) Structure and performance of food processing industry in India. Journal of Indian School of Political Economy, 22:1-4.

Roodagi, P. B. (2007), ‘Problems and Prospects of SSI in Dharwad district.’ Unpublished PhD Thesis submitted to Shivaji University, Kolhapur.

Rai, K. N., Karwasra, J.C. and Singh, S. P. (1996),’Status and potential of Agro-processing industries in Haryana’- Indian Journal of Agricultural Marketing Vol. 10 (1) - Jan- April1996.

Rais M, Acharya S, and Sharma N (2013) Food Processing Industry in India: S&T Capability, Skills and Employment Opportunities. J Food Process Technol 4: 260.

Rajeevan N and Sulphey (2012). A Study on the Position of Small and Medium Enterprises in Kerala Vis A Vis the National Scenario. International Journal of Research in Commerce, Economics & Management, Vol. 2, Issue 3,57-60.

Ramakrishnappa. V. and Jagannatha Rao. R. (2006), “Emerging microfinance issues in dairy development: a case study from Karnataka, India”, International Journal of Agricultural Resources, Governance and Ecology, Vol. 5, Issue 4, Pp. 399-412.

Shah Narendra, CTARA* & K V Venkatesh Opportunities for the Food Processing Industry in India, Department of Chemical Engineering

Surendra P. Singha, Fisseha Tegegneb and Enefiok Ekenemc (2012). The Food Processing Industry in India: Challenges and Opportunities 2012, Journal OF Food Distribution Research,vol. 43, issue 1

Srinivas, T., Rajan, V. T. and Shareef, S. M. (1996), ‘Economics of Agroprocessing: A Case of cashew nut processing in Andhra Pradesh.’-Indian journal of Agricultural Marketing. - Vol-10(2) Jan-April 1996

Sujatha, Y.; Reddy, P. Sunilkumar and Rao, Dr. K. Prahlada. (2012). Small Scale Industries Common Causes of Sickness and Probable Remedies. International Journal of Current Research, Vol. 4, Issue, 01, 146-148.

S Saravanan, Dr. V MohanaaSundaram.( 2013), An Analysis of FDI in Indian Food Processing Industry. Volum 3, Issue 3

Zampetakis, L.A. and Kanelakis, G. (2010). Opportunity entrepreneurship in the rural sector: evidence from Greece, Journal of Research in Marketing and Entrepreneurship, Vol. 12 (2), pp. 122-142.