Due to high interdependence with other activities, agro-industry can play a very important role in accelerating economic activity and creating employment in the country. The by-products or waste products from food processing can be used as feed or fuel for other industries. For example, animal feed industries can utilise several agro-industrial by-products, such as oilseed cakes and blood, carcass and bone meal. Similarly, waste from fibre crops is used as paper pulp or fuel.
Food processing can also add value to a country's exports. Currently, rice contributes around 50 percent of the country's total food exports of US $4.0-4.5 bn per annum. A focus on building up food processing capacity and smoothing out export logistics can greatly augment export earnings for the country.
The report said that a close co-ordination with the processing industry allows farmers to earn a higher and stable income as (a) the use of technology and acquired knowledge improves yields and lowers post harvest losses; (b) the better use of soil and water resources and control of pests and diseases reduces output volatility both in terms of quality and quantity; (c) farmers receive a premium for value added to their produce; (d) the realised prices are higher as contract farming brings down the number of intermediaries.
According to report, a vibrant food processing industry is important for a developing country for its strong backward and forward linkages. "It can enhance farm incomes by offering a ready market for farm products, reducing post-harvest losses and generating off-farm employment. More importantly, the food processing industry can be an important source of export earnings for the country," it added.
In Pakistan, the food processing industry has come a long way from traditional processed food items to higher value added products, customised to consumers taste and preference. More importantly, the industry still holds significant potential for growth due to the country's strong agriculture base. However, in order to harness this potential, the industry needs a level playing field (where every entity is properly documented and taxed); adequate protection of innovations; minimum quality standards; and a setting that allow firms and growers to achieve benefits from economies of scale.