The Parliamentary Standing Committee on Agriculture, Animal Husbandry and Food Processing has called for a greater role for cooperatives, Farmer Producer Organisations (FPOs) and Self-Help Groups (SHGs) in India’s food processing ecosystem, particularly in food testing, value addition and collective marketing.
The recommendations are part of the Committee’s 45th Report on the Ministry of Food Processing Industries’ Demands for Grants for 2026-27. The report was presented in the Lok Sabha and laid in the Rajya Sabha on Wednesday by Committee Chairman Charanjit Singh Channi.
On food testing infrastructure, the Committee noted that 205 projects have been sanctioned under the scheme for setting up or upgrading food testing laboratories, of which 173 have been completed and made operational. An Expression of Interest (EoI) for setting up 100 new NABL-accredited food testing laboratories was floated in November 2025.
The Committee observed that small and micro food processing units, particularly in rural and semi-urban areas, often depend on accredited laboratories to meet domestic and international food safety standards. It said cooperatives, FPOs, SHGs and State-level federations, because of their grassroots presence, can help bring testing facilities closer to farmers and small processors.
The panel recommended that applications from cooperatives and similar collective institutions be encouraged while considering proposals under the EoI.
The Government said the Food Safety and Quality Assurance Infrastructure (FSQAI) scheme is demand-driven, with proposals assessed on demand, technical feasibility, financial viability and compliance with guidelines.
It also highlighted relaxations for FPOs, including a 10% promoter-equity requirement in specified categories. Financial assistance for equipment is available up to Rs 5 crore per project.
The Committee also recommended promoting food processing units through cooperatives, FPOs and SHGs to increase the collective participation of small and marginal farmers.
The Government said cooperatives are eligible under the PM Formalisation of Micro Food Processing Enterprises (PMFME) Scheme for a 35% credit-linked subsidy, capped at Rs 10 lakh. Common infrastructure projects promoted by cooperatives, FPOs and SHGs can receive 35% subsidy up to Rs 3 crore.
The scheme also provides branding and marketing support of up to 50% of eligible project cost to groups including cooperatives, besides capacity-building support for aggregation, value addition and collective marketing. Tie-ups with retail chains and the GeM platform are also being used to improve market access.
The Committee further urged stronger support for cold chains, food preservation and value addition to reduce post-harvest losses and improve farmer incomes.
It also recommended wider dissemination of low-cost milk adulteration detection kits developed by NIFTEM-K through cooperatives and testing laboratories after validation, in coordination with FSSAI and State authorities. NIFTEM-K has completed validation, while an Inter-Laboratory Comparison study by the FSSAI laboratory at Ghaziabad is pending.
The report also calls for stronger divisional-level testing laboratories, simpler procedures, better credit and market access, and expanded value addition across the supply chain.
