Food Processing: Understanding Common Threads

Debdatta Saha ()
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Debdatta Saha: South Asian University

Chapter Chapter 2 in Economics of the Food Processing Industry, 2020, pp 13-52 from Springer

Abstract: Abstract Food processing has been studied in mainstream economics from the standpoint of an industrial activity, which has strong backward linkages with agriculture. We start the generalized notion of arbitrage as the central economic theory for establishing a successful industry in food processing. This, we find, is not sufficient to explain different regional outcomes in this industry. The industry has many sub-sectors, such as grain or meat-based or those linked with fruit and vegetable processing. These subcomponents in the processed foods industry generate value as we move from basic to advanced processing. This chapter discusses in brief the history of this industry and goes on to introduce the notion of a product network in processed food manufacturing. It provides brief snapshots of a collection of these. Details regarding technologies, costs and other supply-side signatures in these networks are studied. This exercise is needed to understand the real challenge in starting a successful business in processed foods: moving through the value chain in these product networks. This is a general discussion on the processed foods industry, but we build the case for studying this industry through a more specific lens: that of particular product networks in specific regions. We also discuss some of the new advances in food processing: food parks, e-commerce in food, food safety standards and labelling. In passing, we introduce and discuss the role of the agents in this industry who actively shape outcomes in this industry: the government, the private entrepreneur as well as the consumer.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:thechp:978-981-13-8554-4_2

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DOI: 10.1007/978-981-13-8554-4_2

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