Punjab needs a food-processing push

WHEN the Prime Minister inaugurated World Food India 2025, the sheer scale was breath-taking: over 90 countries, more than 2,000 exhibitors and billions in investment pitches showcasing the future of food processing and value addition. Amidst this, one question stood out for us in Punjab: How can a state that feeds India remain a marginal player in food processing?

Punjab stands tall as India's breadbasket. It contributes nearly half of the country's wheat procurement, dominates basmati exports, leads in kinnow production and maintains strong yields in maize. Cotton, sugarcane, pulses and chillies add further depth to this rich basket.

Despite its agricultural abundance, Punjab processes barely 15 per cent of its produce. The gap is glaring: kinnows rot for want of juice plants, cold storage covers only a sliver of horticultural output and nearly a quarter of crops perish after harvest. Grains pile up in mandis; tomatoes get a fleeting 40-day window for survival; maize and cotton are shipped to processors elsewhere. Worst, 20 million tonnes of stubble goes up in smoke each year — enough fuel for a Rs 5,000-crore biomass economy.

Punjab's paradox is clear: it lacks not grain but the momentum to turn its harvests into value — and with that it loses value, GDP, jobs and the chance to move farmers from survival to surplus.

This lag is not accidental; it stems from policy priorities, the Green Revolution legacy and structural hurdles that have limited diversification and private investments

For decades, Punjab's farm policy has revolved around free power, subsidies and the safety net of MSP. This has shielded farmers with stable yields and secure incomes, but has confined the state to a narrow crop mix. Wheat and rice, overwhelmingly bought by government, became both a lifeline and a limitation. MSP has created a closed market with slim margins for the crops covered under it; for other crops, it has meant neglect. Thus, diversification has stalled and Punjab's vast produce has remained raw, preventing it from taking the leap into processing and value addition.

Another hand at play was the Green Revolution, when Punjab stood at the cusp of transformation. The Green Revolution accelerated after 1966-67 with high-yield wheat varieties, MSP-backed procurement and subsidised inputs, making Punjab the breadbasket of India by the 1970s. Alongside, the Government of Punjab set up the Punjab Agro Industries Corporation (PAIC) in 1966 with the vision to promote agro-based industries, diversify crops and build processing and marketing linkages. While cultivation flourished, PAIC's mandate faltered, owing to weak infrastructure and low investor appetite.

At the time, this failure went unnoticed as stable yields and assured procurement kept farmers secure. But today, that missed opportunity of building a strong processing ecosystem is evident, with Punjab left merely as a producer state, rather than a value-adding agri-industrial hub.

Policy awakenings arrived late and shrinking landholdings blunted their promise. Fragmented plots blocked scale; projects faltered in the maze of licences, subsidies, tenancy laws and sluggish approvals. Safeguards strangled investment. While states like Maharashtra built fruit and sugar chains and Gujarat turned oilseeds into industry, Punjab's bounty stayed trapped in fields — a producer without the power of processing.

Recent policies, like the PMFME scheme (2020) and the State Level Upgradation Plan, and incentives like GST reimbursements, subsidies and single-window clearances are proof that processing and value addition have finally entered the policy vocabulary.

There are some success stories — Verka in dairy, Markfed in food products and a few private ventures in meat and poultry. Beyond these examples, the picture is stark.

The stakes are not just at the state level. The ICAR has estimated India's post-harvest losses at nearly Rs 92,000 crore a year. At a time when India is seeking export leverage, Punjab's weak processing ecosystem undercuts the country's strategic position.

Himachal and Uttarakhand have built apple and vegetable clusters and Amul has reshaped Gujarat's dairy through cooperative branding. Punjab, too, has shown flickers of this promise.

Punjab needs a food revolution, extending the legacy of the Green Revolution into value chains. For this, it is imperative to step in tandem with the Centre.

The most impactful step is to fully utilise PMKSY's Rs 6,520-crore allocation for 50 irradiation centres and 100 food labs while creating crop and district-specific agro-processing clusters with mobile cold rooms, irradiation units, grading, packaging and storage — allowing even small farmers to compete.

Unlocking the scale needs single-window clearances, faster certifications, concessional credit, grants and leveraging incentives under the Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME), National Horticulture Board, Agriculture Infrastructure Fund (AIF), PLI, biomass.

Cooperatives and FPOs should be strengthened to build backward linkages and cooperative processing models. PAU must drive varietal innovation for high-Brix, processing-grade crops, supported by R&D into climate-resilient varieties to reduce dependence on outside sourcing. Green solutions like stubble pelletisation and renewable energy can keep the processing sustainable.

Equally vital is a tech-driven ecosystem — traceability, digital markets, AI supply chains, skilled workers alongside smart strategy for branding leveraging GI tags and ensuring quality compliance to capture premium markets.

The promise of agro-processing is nothing short of transformational. Wheat milled into flour, rice reimagined into signature varieties, fruits bottled into juices —each step lifts farmers’ incomes by 20-30 per cent.

Beyond commerce, processing fulfils the SDGs - cutting waste, creating dignified work and promoting sustainable consumption. With IoT-enabled cold chains, AI supply networks and blockchain traceability, investment will follow. Backed by the PM-FME scheme and Punjab's Industrial and Investment Policy, this pathway can multiply rural prosperity, steadying local economies.

The moment has come to move from fields to factories, grain to gain and from produce to prosperity.

Vikramjit Singh Sahney is Rajya Sabha MP from Punjab.