New Delhi, Aug. 30: The food processing ministry will be initiating talks with financial institutions to support a development fund designed to provide financial resources to the industry.

The parliamentary standing committee attached to the ministry of food processing has asked it to enforce the conditions enunciated in the memoranda of understanding (MoUs) that were signed with them.

The move is designed to address the very low ratio for conversion of food into processed items in the country.

In its latest report on demands for grants, the committee has asked the ministry to ensure that the MoUs that it has signed with the institutions are implemented in letter and spirit.

The ministry had recently entered into memorandum of understandings with Export-Import Bank of India, ICICI Bank, National Bank for Agricultural and Rural Development (Nabard) and Small Industries Development Bank of India (Sidbi).

The development fund for the processed food sector was conceived four years ago with an initial corpus of Rs 20 crore. It now needs additional funding.

The basic idea of a processed food development fund was initiated by the ministry in collaboration with Sidbi.

Initially, these MOUs were operated within the norms of the approved schemes of the ministry. State Bank of India has also evinced interest in entering into a similar MoU.

The parliamentary standing committee has desired that the other schemes of the ministry be also covered by similar MoUs at the earliest so that the food-processing sector isn’t starved of finance.

The objective was to facilitate provision of credit to projects in the food-processing sector in a focused manner.

It also envisaged provision of financial assistance to the small-scale industries to enable them set up units in the processed food sector.

Experts in the food processing industry are of the view that one of the prime reasons for a low conversion ratio of processed food, (especially those which are fruit-based) is because most Indians still prefer to have fresh fruit.