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Daily Category  (Food Processing )

World Food Day

Context:

World Food Day is celebrated on 16 October every year by the United Nations Food and Agriculture Organisation (FAO).

World Food Day:

  • In 1979, the Food and Agriculture Organization designated 16 October as World Food Day in 1979. 
    • Initially, World Food Day was launched to commemorate the establishment of FAO in 1945.
  • It promotes global awareness and action for those who suffer from hunger and for the need to ensure healthy diets for all.
  • In the current on-going pandemic this year, the day is celebrated with the theme – ‘Grow, nourish, sustain. Together. Our actions are our future."

Significance:

  • World Food Day creates many programs and activities to highlight and take necessary actions for food security and good nutrition for all, with a special focus on poor and vulnerable communities around the world.
  • Currently, more than 815 million people do not have enough to eat. Some 155 million children under the age of five (23 %) are chronically malnourished and stunted and may endure the effects of it for the rest of their lives. 
  • One in two infant deaths worldwide is caused by hunger.
  • It calls for global solidarity to help all populations, and especially the most vulnerable, to recover from the crisis, and to make food systems more resilient and robust so they can withstand increasing volatility and climate shocks, deliver affordable and sustainable healthy diets for all, and decent livelihoods for food system workers.

Food and Agriculture Organization (FAO):

  • It is a neutral intergovernmental organization established in 1945.
  • It is a specialized agency of the United Nations that leads international efforts to defeat hunger.
  • Its goal is to achieve food security for all and make sure that people have regular access to enough high-quality food to lead active healthy lives.
  • Headquarter: Rome.

Source: PIB

Minimum Support Price (MSP) for Farmers

Context:

The recently enacted law that dismantles the monopoly of APMC (agricultural produce market committee) mandis may not have faced serious farmer opposition had it included a provision safeguarding the continuance of the existing minimum support price (MSP)-based procurement regime.

What does the law say about MSP?

  • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill does not give any statutory backing to MSP. There isn’t even a mention of either “MSP” or “procurement” in the Bill passed by both Houses of Parliament.
  • Recently, the protest by farmers over the three farm bills has a direct connection with the Minimum Support Price - Public Distribution System (MSP-PDS) regime.

Minimum Support Price (MSP):

  • MSP is a “minimum price” for any crop that the government considers as remunerative for farmers.
  • It is also the price that government agencies pay whenever they procure the particular crop.
  • The Centre currently fixes MSPs for 23 farm commodities i.e.:
    • 7 cereals: paddy, wheat, maize, bajra, jowar, ragi and barley
    • 5 pulses: chana, arhar/tur, urad, moong and masur
    • 7 oilseeds: rapeseed-mustard, groundnut, soya bean, sunflower, sesamum, safflower and nigerseed
    • 4 commercial crops: cotton, sugarcane, copra and raw jute.
  • The centre is not legally bound to pay the MSPs even if the open market rates for the said produce are ruling below their announced floor prices.

Announcement:

  • MSP is announced at the beginning of the sowing season for certain crops on recommendations by Commission for Agricultural Costs and Prices(CACP) and announced by Cabinet Committee on Economic Affairs (CCEA) chaired by the PM of India.

How are MSPs determined?

  • The Centre fixes MSPs for every Kharif and Rabi season based on the recommendations of the Commission of Agricultural Costs and Prices (CACP).
  • While calculating the Minimum Support Prices (MSPs), the CACP consider the following costs:
    • A2: Covers all cash and in-kind expenses incurred by farmers on seeds, fertilizers, chemicals, hired labour, fuel, irrigation etc.;
    • FL: Actual costs plus an imputed value of unpaid family labour; and
    • C2: Includes A2+FL along with revenues forgone on owned land (rent) and fixed capital assets (interests).

Source: Indian Express

The Essential Commodities (Amendment) Bill, 2020

Context:

Parliament has passed The Essential Commodities (Amendment) Bill, 2020. The Bill replaces an Ordinance promulgated in June 2020 and amends the Essential Commodities Act, 1955.

Background:

  • The Essential Commodities Act, 1955 was used to curb inflation by allowing the Centre to enable control by state governments of trade in a wide variety of commodities.
  • The states imposed stock limits to restrict the movement of any commodity deemed essential. It helped to discourage the hoarding of items, including food commodities, such as pulses, edible oils, and vegetables.
    • However, the Economic Survey 2019-20 highlighted that government intervention under the ECA 1955 often distorted agricultural trade while being totally ineffective in curbing inflation.

Details:

  • The Bill was passed in Rajya Sabha by a voice vote, in the absence of the Opposition, which boycotted proceedings.
  • The Bill aims to remove fears among private investors of excessive regulatory interference in their business operations.
  • The bill removes cereal, pulses, oilseed, edible oil, onion, and potatoes from the list of essential commodities.
  • It ensures that the interests of consumers are safeguarded by regulating agricultural foodstuff in situations such as war, famine, extraordinary price rise, and natural calamity.
    • However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted from such regulation so as to ensure that investments in agriculture are not discouraged.

Significance:

  • The freedom to produce, hold, move, distribute, and supply will lead to harnessing economies of scale and attract private sector/foreign direct investment into the agriculture sector.
  • It will help drive up investment in cold storage and modernization of the food supply chain.
  • The government, while liberalizing the regulatory environment, has also ensured that the interests of consumers are safeguarded. It has been provided in the amendment that in situations such as war, famine, extraordinary price rise, and natural calamity, such agricultural foodstuff can be regulated.
  • This amendment prevents wastage of agricultural produce due to a lack of storage facilities.
  • With the Food Corporation of India controlling stocks before, there were less investment and buyers. Farmers often hoarded for six months to get a better price, and their products often rotted. The possibility of export will benefit farmers.”
  • The Bill ensures farm sector transformation and a stable regime while increasing farmer income, 

Source: Indian Express

PM Formalization of Micro Food Processing Enterprises (PM FME) scheme

Context:

Ministry for Food Processing Industries has launched the PM Formalization of Micro Food Processing Enterprises (PM FME) scheme on 29th June 2020 as a part of “Atmanirbhar Bharat Abhiyan”.

  • There are about 25 lakh (98% ) unregistered food processing enterprises. Nearly 66 % of these enterprises are located in rural areas.

About the Scheme:

Objectives: The main objective is the transition of theses units from the unorganized sector to the formal sector. The scheme also aims to increase access to finance and revenue for food processing enterprises.

Salient features:

  • Centrally Sponsored Scheme: The expenditure would be shared in 
    • 60:40 ratio between central and state.
    • 90:10 ratio with North Eastern and the Himalayan States 
    • 60:40 ratio with UTs with the legislature
    • 100% by Centre for other UTs.
  • Duration: The scheme will be implemented over a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore.  2,00,000 micro-enterprises are to be assisted with credit-linked subsidies.
  •  Support for Individual micro-units: Micro units will get credit-linked subsidy @ 35% of the eligible project cost with a ceiling of Rs.10 lakh.
    • The beneficiary contribution will be a minimum of 10% and a balance from the loan.    
  • Support to FPOs/SHGs/Cooperatives: Seed capital to SHGs (@Rs. 4 lakh per SHG) for the loan to members for working capital and small tools.
    • Grant will be provided to FPOs for backward/ forward linkages, common infrastructure, packaging, marketing & branding.
  • Monitoring: The Scheme would be monitored by an Inter-Ministerial Empowered Committee under the Chairmanship of Minister.
    • A State/ UT Level Committee (SLC) chaired by the Chief Secretary will also monitor the scheme at the state level. 
  • Implementation: The States/ UTs will prepare Annual Action Plans covering many activities for implementation of the scheme, which will be approved by the Government.
  •  State/ UT Nodal Department & Agency: The State/ UT Government will notify a Nodal Department and Agency for the implementation of the Scheme.
    • State/ UT Nodal Agency would be responsible for the implementation of the scheme at the State/ UT level.
    • The agency will also take care of the preparation and validation of State/ UT Level Upgradation Plan, Cluster Development Plan, engaging and monitoring the work of resource groups at the district/ regional level, etc.
  • National Portal: A National level portal would be set-up wherein the applicants/ individual enterprise could apply to participate in the Scheme. All the scheme activities would be undertaken on the National portal.

Benefits: 

  • Better integration with organized markets. Increased access to common services like sorting, grading, processing, packaging, storage, etc.
  • The Scheme has the capacity to generate a total investment of Rs 35,000 crore and provide employment to 9 lakh skilled and semi-skilled workers.
  • The scheme also benefits 8 lakh units through access to information, training, better exposure, and formalization. 
  • The scheme also gives increased access to credit by existing micro food processing units, women entrepreneurs, and entrepreneurs in the Aspirational Districts.
  • Credit linked subsidy support and hand-holding will be extended to 2,00,000 micro-enterprises for expansion and upgradation.

Way forward: 
The food processing sector faces different kinds of challenges like the inability to access credit, high cost of institutional credit, lack of advanced technology, inability to integrate with the food supply chain, and compliance with the health & safety standards. Strengthening this sector will lead to a reduction in unemployment, wastage, poverty, etc. The scheme will also aid in achieving the overarching objective of doubling farmers' income.

Source: PIB