bangalore in developed markets close to 80 per cent of vegetables and fruits is processed in india the worlds third largest fruit producer and the second largest vegetable producer this figure is as low as about 2 per centthe consequences of that is severe enormous wastage of these highly perishable products estimated at anything between 30 and 50 per cent extreme volatility in prices and unhappy farmersthe importance of food processing is recognised at some of the highest official levels union finance minister jaswant singh made the point earlier this week in bangalore that value addition in agriculture through food processing is the key to the farm sectors and indias prosperitydespite such recognition the sector has shown few signs of really taking offmajor food processors in southern india say the reason for that is primarily the high levies by state governments and the indifferent attitude of financial institutions kerala imposes a 26 per cent sales tax on processed food products and karnataka nearly 18 per cent there are also levies both central excise and sales tax on the packaging material we use since there are no levies on fresh fruits and vegetables with which we compete we are always at a big disadvantage says nagaraj rao jagdale md of jagdale industries which owns the bejois fruit drink brand and the president of the all india food processors associationm s parekh a consultant in food processing who has earlier worked with companies like iqf foods ub and hll says the seasonality of the business and the associated risks make banks wary of funding working capital requirements companies are forced to resort to expensive loans from other sources he saysmaking resources available to the sector is clearly the big issue creating infrastructure in terms of setting up cold storage and processing capabilities close to the growing areas and rapid transport involves large sums of money processors also depend largely on imported machinery that are very expensive selling branded processed products in the domestic market would additionally involve huge marketing expenditurethe industry is one that could work wonders for the farmer by ensuring consistent prices for him guiding him on what to grow how much to grow and how to ensure consistent quality but as of today that promise is nowhere near being fulfilled