Contract farming not feasible for SMEs, said MA Tejani of All India Food Processors' Association

The concept of contract farming, promoted by Centre, is not feasible for SMEs since their needs are not huge, said MA Tejani, president of All India Food Processors’ Association and managing director of Gits Foods.

 

Although, he appreciated the concept of mega food parks in India, but raised questions on its lucrativeness for the SME entrepreneurs.

 

 

What is the role that All India Food Processors' Association (AIFPA) aims to play in India's SME sector?
 

MA Tejani: AIFPA is the oldest organisation exclusively representing food processing industry in India. It was established in 1943 to promote the growth of food processing industry in India both by providing policy inputs to central and state governments and also providing technical, legal and other services to members through seminars, workshops and other programs/ events. AIFPA is a member on various government departments/ wings/ councils/ authorities/ bureau related to food processing and aims to provide required inputs to these bodies and keeping in view the interest of food processors and consumers.

 

 

What are the current projects being undertaken by All India Food Processors' Association (AIFPA)?
 

MA Tejani: The burning issue of the day is implementation of FSSA Act and Rules. There are myriad complexities and contradictions which AIFPA is actively taking up with the FSSA Authority and related ministry such as MOFPI, Agriculture ministry etc. Apart from the above, the usual activities of supporting the food industry continue apace.

 

 

How do you think that the Indian SMEs are performing in the food processing industry in the present global meltdown?
 

MA Tejani: It is difficult to assess the performance of SME in food processing industry with regards to export in absence of data. But generally speaking, the negative impact on export of processed foods if any would be marginal as food is a supreme necessity.

 

 

What are the key challenges faced by the SMEs who are working in the food processing sector?
 

MA Tejani: The key challenges have been and still are lack of adequate infrastructure and availability of agri-horticultural produce of processing varieties and distinct from table varieties. Other impediments on addition to FSSA Act are APMC Acts, Mathade Act Octroi etc.
 

Contract farming which is being encouraged by government is not possible for SMEs because their requirements are not large enough. Also, because the industry is widely dispersed throughout the country, consolidated buying is not possible. Regulators try to impose their personal will/authority irrespective of merit of any particular issue. Some of the food processors are yet to install HACCP food safety management system.

 

 

Kindly throw some light on the importance of mega food parks in the food processing industry?
 

MA Tejani: The concept of food parks and mega food parks is excellent. However, the actual establishment and implementation does not appear to have been successful till date for various reasons including viability.
 

It is evident that established food processing units would by and large not relocate from the existing places to a food park / Mega Food Park. Since the later are located quite far away from urban centers and lack the facilities available in cities such as housing, entertainment, education along with the difficulty of getting and retaining qualified and skilled personnel.
 

Mega Food Parks may not be very attractive to prospective SME entrepreneurs. Only time will tell the extent to which Mega Food Parks become successful. The example of SEZ’s is there for all to see.

 

 

Do you think government is taking appropriate steps to enhance the productivity of the food processing industry?
 

MA Tejani: A great deal has been done by the government to encourage growth of food processing industry in India. A special ministry has been established for the purpose. But business scenario is dynamic and fast changing so policy decisions to eliminate obstacles and provide incentives have to be continually monitored and speedily implemented. A National Food Processing Industry Development Council has been established in the current year under Chairmanship of Shri Sharad Pawar Union Agricultural Minister but action is yet to begin on the identified issues.

 

 

What's your reaction to government's reform initiatives such as FDI in multi brand retail sector? How will it impact the food processing industry?
 

MA Tejani: It would be premature to comment on the likely impact on food processing industry due to arrival of FDI in multi-brand retail sector. It is well known that big box retailers tend to exploit their suppliers and squeeze the supplies for higher margins to cover their high operational costs. This is proven by Indian big box retailers. It all depends upon the level of commitment, transparency, honesty and sincerity in implementation of FDI in multi brand in the short and long runs. In case, we lack in any of the above factors at any level the purpose of implementing FDI in multi brand would be lost.

 

 

Kindly share the roadmap of All India Food Processors' Association (AIFPA) for the ongoing financial year 2012-13
 

MA Tejani: AIFPA is working to enhance its footprints in India as an exclusive and dedicated representative of food processing industry unlike other industry bodies which have sections or departments pertaining to food processing. AIFPA has no other interest or function apart from promoting food processing industry.