Easier bank credit to the food processing industry could in turn lead to better livelihood to farmers and doubling of their income, Minister for Railways and Coal Piyush Goyal said on Sunday.

Addressing a session on ‘Innovative Financing’ at World Food India, the Minister said the categorisation of the food processing sector for bank credit should be reviewed as it could in turn help double farmers’ income.

Goyal further pointed out that the small and medium enterprises are sometimes the “worst hit” and have to sometimes pay the highest rate of interest with many banks reluctant to lend after being faced by mounting bad loans. “The rate at which this sector (food processing industry) gets credit is equally important as at what rate the farmer gets credit,” Goyal stressed. He also noted that innovative financing does not mean just getting a subsidy.

It could also mean more efforts such as greater engagement with farmers in terms of technology and confidence building, choosing optimum products that can be grown and value added in India’s food processing sector and also focussing on areas like organic farming, he said

“The time has come that food processing goes to the farmers and actively engages with the farmer and takes technology to them,” Goyal said.

The food processing industry in India is estimated to require fixed capital of $60 billion in the next five years, said Rajesh Srivastava, Chairman and Managing Director, Rabo Equity Advisors.

However, bank credit to the sector, exclusive of beverages is estimated at just $10-12 billion, Goyal said.

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