20,000 micro food processing units to be set up in India’s Telangana State to boost farmer incomes

INDIA – Economic outcomes of Farmers in India’s Telangana state is set to improve following a recent initiative by the region’s government to support the setting up of  over 20,000 micro food processing units.

The micro food processing units with a cumulative investment of more than US$200M will be set up through a partnership between the region’s state government and Our Food Pvt Ltd.

Under the partnership, farming entrepreneurs in rural India will be provided with end-to-end solutions for setting up food processing units.

These include loans from banks, setting up of processing machinery, and operational training on the effective management of the micro food processing units.

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Our Food will also help the farmers to sell their produce to bulk buyers directly or to sell it through the company’s brand.

In a statement, Our Food said the agreement with the government will augment the process of setting up food processing units in the vicinity of the farms and will also generate rural employment and immensely improve farmer’s income.

CEO of Our Food  Mr. Balareddy said that the company has already developed eight different machine types to process agricultural produce such as rice, pulses, spices, groundnut, millets, turmeric and a few vegetables.

Balareddy further added that the company was looking at setting up 5,000 units per year in the State in line with its mission to decentralize the food processing industry.

Our Food is backed by 3Lines Venture Capital which Balareddy says has been instrumental in accelerating its growth through seed investment in our journey since 2017 to position the business to scale.

“Decentralizing the food processing is the future of agri-industry, which is also a very hard problem that needs unmatched execution at the field level and a deep business knowledge,” said Krishna Kunapuli, Founder of 3Lines.

Telangana state’s move to partner with Our Foods to uplift farmer incomes come when the Prime Minister Narendra Modi’s government  is in a standoff with the country’s farmers over deregulation of the agricultural sector.

Modi’s government maintains that the new regulations which invites private investment in the sector will help encourage growth and increase farmers’ incomes. 

The laws push for contract farming, wherein farmers enter into legally binding agreements with large corporations and private players.

Farmers say this will place them in an unequal power relation, as a failure to deliver crops due to harvest loss could even mean loss of land. 

Additionally they fear the legislation will exacerbate existing stresses in the agricultural sector, which has experienced stagnant growth for six years and decades of rising debt.

Instead of the “repressive laws”, what farmers want is greater regulation of the sector and for price protection to be offered for a more diverse range of crops to incentivize their cultivation.

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