1.      INTRODUCTION

1.1.    Background

Maize (Zea mays) is one  of the important Kharif crops of Himachal Pradesh. The major area under maize is rain fed and there is no substitute for this crop during rainy season. The quality of maize grown in the state is very good. It is an important crop of the state both as staple food as well as for feed. The farmers are compelled to sell their produce to the traders at throw away prices due to lack of local demand and excess production. The trends in production, consumption and marketing of this crop have drawn the attention of the State Government for finding out  the value addition locally. They planned to promote  processing of this crop in to value added products. Some efforts were also made to set up a processing plant in the state but the same could not materialized. 

Keeping this in view, the Himachal Pradesh State Directorate of Agriculture, Shimla assigned NABARD Consultancy Service a study to assess the feasibility of maize processing in the State with the following objectives.
(1)               To assess the production and marketable surplus of maize.
(2)               To identify the suitable technology.
(3)               To assess the techno-economic feasibility and location for setting up processing unit. 

The broad terms of reference for the study were as under:

1.2     Terms of Reference

1.          To assess the district wise production and marketable surplus of maize in the State.

2.       To survey the existing resources / institutions / organisation and various linkages existing in various parts of the area.

3.          To identify / recommend possible products of maize based on the quality.

4.       To identify / recommend suitable technologies for processing of maize and suggest suitable locations for setting up such units, keeping in view the forward and backward linkages including marketing.

5.      To assess the financial implications and suggest means of finance and financing pattern.

6.      To assess techno - economic feasibility and financial viability of the project for securing financial assistance from different sources such as loans from banks and financial institutions and grant from Ministry of Food Processing Industries, GoI and other agencies.

7.                  Identify the agencies and suggest strategies for implementation of the project.

The study was completed in two phases. The first phase of the study was conducted in Maharashtra to identify suitable technology for processing of maize to value added products.  The technology followed by the existing units in the state were studied.  Phase II of the study was taken up in Himachal Pradesh to assess the marketable surplus of maize and also ascertain the feasibility of setting up of maize processing unit(s).

1.4     Methodology

The primary data were collected from the existing units, traders of maize products, farmers, consultants, suppliers of plant and machinery, units consuming maize products as raw material and various officials of State Govt. Departments of Agriculture, Himachal Pradesh Krishi Vishvavidyalaya, Industries and Pollution Control Board and some professionals who have worked in this sector. The study was completed in two phases. 

Phase I- The study covered the existing maize processing units at Dhule (Maharashtra),  Ahmedabad (Gujarat) and units consuming maize products at Baddi, Himachal Pradesh.  

Phase II- Covered field study in  four major maize producing districts in Himachal Pradesh, namely Una, Hamirpur, Mandi  and Kangra. 

The owners of the existing maize processing units in Gujarat and Maharashtra and farmers in Himachal Pradesh were interviewed individually and also group discussions were held with farmers wherever possible. In addition, discussions were held with the Indian Starch Manufacturing Association, Mumbai and Indian Maize Development Association, New Delhi to know the common issues connected with the maize processing industry. 

The secondary data were collected from various Departments of State Government in H P, like Director of Agriculture, Director Industries and State Pollution Control Board.

1.5     Reference Year

The year 2002-03 was taken as reference year for the study. However, some data/information pertain to 2003-04. Vital and important inferences were made based on the latest information/data. 

1.6     Data Analysis

Data were analysed using Lotus 123/ Excel work sheets. Other methods and procedures followed in the study were discussed in the respective chapters. 

1.7     Limitations of the Study

?         Data availability from the secondary sources was sometimes not consistent with actual field level data and  from other sources.

?         The information collected from the owners of the units and farmers is based on personal interviews and hence may not be comparable with the official records/ books of accounts.

2.        AN OVER VIEW OF INDIAN MAIZE (Zea mays)

Maize (Zea mays) is classified into dent, flint, waxy, sweet and pop corn categories. Dent corn (Zea mays var. indentata) also known as field corn, containing both hard and soft starch, becomes indented at maturity. Flint corn (Zea mays var. indurata)  having hard, horny, rounded or short and flat kernels; with the soft and starchy endosperm is enclosed by hard outer layer. Both of these varieties are used for industrial purposes.  Popcorn (Zea mays var. everta) has  small pointed and rounded kernels with very hard endosperm which on exposure to dry heat  popped or evereted by the expulsion of the contained moisture and forming a white starchy mass many times the size of the original kernel. Sweet corn (Zea saccharata or Zea  rugosa)  is distinguished by kernels containing a high percentage of sugar in the milk stage and therefore suitable for table use.

Indian maize has white, red, purple, brown or multicoloured kernels and is characteristically dent corn. The dent corn is useful for starch processing  by wet milling method. The area and production details of this cereal crop is given as under: 

2.1     Production of Maize

The total area under maize cultivation in the world is 139 million hectares with a production of 598 million MT ( mMT ). USA is the world's largest producer and exporter of maize with an out put of 240  mMT from an area of 29 million hectares. Other major producers are China (125 mMT), European Union (39 mMT), Brazil (37 mMT), Mexico (19 mMT), Argentina (14 mMT) and India (11 mMT). 

Among all cereals, maize occupies the fifth largest in area, fourth largest in output and third largest in yield. India is the tenth largest producer with a production of 11.10  mMT from an area of 6.6 million ha. The average yield in India is 1.77 MT/ha which is very low as against 7 MT/ha in temperate areas of developed economies and 3.8 MT/ha of global average. 

Maize is cultivated in almost all states in the country. Bihar is the leading producer in India followed by Rajasthan, Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Karnataka and Himachal Pradesh. The crop is grown both in Kharif and Rabi seasons in India with a share of 85 per cent and 15 per cent, respectively. 

In Himachal Pradesh, it is grown only in Kharif season, mainly under rain fed conditions. The total production of maize for the last three years in Himachal Pradesh is presented in Annexure I. The data indicate that maize is a major Kharif crop in Himachal Pradesh cultivated in an area of  3.0 lakh ha, which is over 70 per cent of the total cultivated area of 4.30 lakh ha. The average annual production in the state is over 6.0 lakh MT, which is more than 80 per cent of total Kharif production of 7.78 lakh MT of food grains.  As per a rough estimate based on a farm gate price of Rs.4/kg, the  produce of the State is worth Rs.240 crore per year. 

Analysis of time series data for the last 10 years, reveal that there was not much variation in the  area under maize, but the production had suddenly declined during 2002-03 to 4.79 lakh MT from 7.68 lakh MT due to severe draught. Further, the CAGR indicates  that  there was no growth in the area and production of maize in the State due to stabilised cropping pattern. There was marginal increase in area and production in Bilaspur district. Though not very significant, a negative CAGR had been observed in all other districts, indicating that no further expansion in area is possible in these districts. The major share of production comes from Mandi, Kangra, Chamba and Sirmaur districts. The average yield of maize in Himachal Pradesh is 2.0- 2.5 MT / ha.  Sirmour district has the highest productivity of 2.3 MT / ha followed by Mandi with 2 MT / ha. The productivity level of other districts range between 1.5-2.0 MT / ha, indicating thereby the scope to improve the productivity by adopting improved agronomic practices. 

2.2     Utilisation pattern of maize

The major share of maize produced in the developed countries is either utilised for production of ethanol or production of feed for livestock. Globally maize accounts for 15 per cent of the world's proteins and 19 per cent of the calories derived from food crops. 

Maize produced in India is utilised for human consumption (33%), starch production (9%), poultry feed (46.5%), brewery (0.5%) and animal feed (11%). There are no precise data available on the utilisation pattern in Himachal Pradesh. However, the discussions with farmers and policy makers indicate that only 20 per cent of maize is utilised for human and animal consumption in the state. The remaining 80 per cent is supplied to the processing factories especially  poultry and animal feed plants located in other states. 

2.3     Assessment of  Market Surplus of Maize

The market surplus in respect of food grains in India as compared to other crops is quite low between 5-10 per cent.  But the consumption of maize in Himachal Pradesh for food has declined over a period of time. The use of maize in daily diet has been replaced by wheat and rice. The shift  in consumption pattern is attributed to the increase in purchasing power of the local people and prevalent public distribution system of Government.  The district- wise market surplus of maize arrived at by discussions with farmers and Agriculture Department officials is given as under: 

Table.1. Estimation of market surplus of maize in Himachal Pradesh

                                                                                    Assessment year 2002-03

For the assessment year 2002-03, there was a market surplus of 2.36 lakh MT in 4 major maize producing districts in the state, even despite of low production during this year due to drought.  Keeping in view the market surplus of 65 to 70 per cent, the average annual surplus for the state works out to 4.0 lakh MT per annum.  

2.4     Marketing of Maize in Himachal Pradesh

The marketing of food grains in the state is not strictly regulated. There are no operating food grain markets in the state. As there are no notified markets, farmers sell the crop to the local traders. In districts like Una, Kangra and Hamirpur, traders from adjoining states collect maize from the farmers directly. These traders offer very low prices and also cheat farmers in weighment. The maize purchased from the farmers in Himachal Pradesh is supplied to animal and poultry feed units in adjoining states, like Punjab and Haryana. The starch units of Punjab and Uttar Pradesh also procure raw material from this state directly from the farmers and traders. 

Himachal Pradesh supplies nearly 4.0-5.0 lakh MT of maize to other states every year after meeting its own requirement of food and feed.

2.5     Farm Gate Price of Maize

The market price of Indian Maize fluctuate between Rs 350/- per quintal  to Rs. 750/- per quintal in different states and  different seasons. The price is generally high for Rabi season maize than Kharif season maize. The price fluctuation is due to seasonality of production creating a demand and supply gap during off season. In order to reduce the demand supply gap, maize is also imported from other countries.

In Himachal Pradesh, the price  fluctuation is not very wide. The price generally hovers around Rs.350/- per quintal to Rs.500/- per quintal during peak and lean seasons, respectively. The farmers in Una and Hamirpur districts get relatively higher price than Mandi and Kangra districts. The  main reason for this is that it is easier to transport the produce from Una and Hamirpur to Punjab than from Mandi and Kangra. The district-wise farm gate prices at which the traders purchase maize are given in the Table below:

 Table.2. Changes in farm gate price of maize in Himachal Pradesh

 2.6     Problems in Maize Production in Himachal Pradesh

The maize crop in the state have some inherent problems, which limit its cultivation and  production. The important factors being

?         Rising income levels leading  to a shift of consumer preference from coarse cereals (maize) to fine grains (wheat and rice).

?         Increased monkey menace during the recent years compelling the farmers to switch over to some other crops like paddy, vegetables etc., especially in irrigated areas.

?         Lack of systematic/ regulated marketing.

?         Negligible processing facilities.

?         Dependency on rain fed conditions.

?         Least preference by farmers in view of lower returns.

?         Unfavorable weather conditions like untimely rainfall and thunder storms causing lodging of the crop.

?         Temperate climate of Himachal Pradesh does not favour its cultivation during Rabi Season.

The above problems, though difficult to overcome,  can be reduced considerably  by combined efforts of farmers, policy makers and Government departments through a combination of developmental and policy measures. Spring season cultivation with irrigation could be tried. Newer single cross hybrids should be tried.

3.      STATUS OF MAIZE PROCESSING

Maize is one of the staple foods of poor families. Traditionally, the grain is converted into flour in mills for making bread. Immature cobs are roasted and eaten all over the country. It is an important raw material for animal and poultry feed  and corn flakes manufacturing units. But the quantity of maize utilised by these units is limited as the existing  units are of small scale nature. They make only a few products having limited demand. Hence, an alternative large scale unit which can process a large quantity of maize to different value added products is required to be set up.  

3.1     Methods of Maize Processing

Maize is usually processed by two distinct processes, namely wet milling and dry milling.   Dry milling produces grits, corn flour and minimum amount of corn meal. The technology has been standardised by Central Food Technological Research Institute (CFTRI), Mysore. The technical know how is available with CFTRI on price. The service for turn key project is also available with the institute. Dry milling units have a crushing capacity of 10 MT/day with a project cost of Rs.20 lakh. Such units can be set up any where in the state depending upon the availability of raw material, power and suitable land. 

3.1.1    Dry Milling  

The maize kernels are screened, tempered with hot water/steam to loosen the germ and bran. Then it is degerminated to remove the germ. The husk is separated by means of aspirators. The degermed maize is dried to a moisture content of 15-15.5 per cent followed by sifting. It then is subjected to milling to produce grits, meal and flour. The germs separated  is dried and passed through an expeller to produce the corn oil. The different products that result from dry milling are as under : 

CFTRI has developed a mini mill for dry milling of maize. The grits is the main product of dry milling process, which is used as porridge by boiling domestically. The processing units use grits for manufacture of products like ready-to-eat snacks (corn flakes), wall paper paste and manufacture of glucose by direct hydrolysis. The process flow of dry milling is as under: 

Cleaning => Conditioning => Degerminating => Drying & Cooling => Grading & Grinding => Sifting & Classifying => Purifying => Drying => Packaging 

1.2       Wet Milling

Maize is generally processed to manufacture corn starch by wet milling method the world over. The by-products of starch manufacture, like corn oil, corn steep liquor, gluten etc. are the important value added products.

The grain is unloaded from the trucks directly in receiving area or stored in silos. The material is fed to the cleaning section by a feed conveyor. The cleaning section is housed in 3 floors, where the material is screened for debris such as sand, stones and any other foreign particles. The clean material is then sent to steeping section. It is received in a  tank where it is washed with hot water first and subsequently steeped in water containing sulfur-dioxide @ 0.2 per cent for 70 hrs at 52^oC. Steeping softens the kernels and also removes some solubles. Sulphur dioxide act as preservative. The steep water produced in this process is then concentrated and fortified with vitamins, minerals to produce corn steep liquor. It is then subjected to primary and secondary grinding, wherein the germ and husk are separated. The degermed maize is passed through a fibre washing section where the fibre (husk) is separated by pressure washing. Now the mixture consists of gluten and starch. The gluten is separated from starch by centrifugal separation. The starch slurry is then passed through a 12 stage hydroclone washing system, wherein the  starch is washed and concentrated simultaneously. Starch slurry usually has a moisture content of 42 per cent. The starch slurry thus obtained is diverted to various production lines for manufacture of liquid glucose and  modified starches such as dextrose, dextrose mono hydrate etc. The wet starch is then dried by hot air by passing through a drier.  The dry starch has a moisture content of 11-12 per cent. 

The slurry containing gluten is passed through a rotary vacuum filter in which a portion of the moisture is removed  followed by drying in a hot air drier.  The dried gluten thus obtained has a moisture content of 12 per cent. The gluten is mainly used for  poultry feed. 

The average recovery of various products and co-products of maize during the wet milling are

                                Starch    -   60-62 %

                                Gluten   -    8-9 %

                                Germ     -    6-7 %

                                Husk      -    22-24 % 

3.1.3    Manufacture of Corn Flakes

The corn flakes is one of the important value added products manufactured out of yellow and white maize. It is generally eaten as a breakfast cereal but the demand for this product is limited to hotels and big cities. It is a product of dry milling, which is manufactured by flaking of the major grain after extraction of germ. The flaked grain is either roasted for manufacture of corn flakes, breakfast cereal or fried to manufacture corn flakes served as snack foods. The raw flakes are also used for manufacture of beer. There are only a few companies like Mohan Meakin, Gaziabad and Kellogs, whose brands of corn flakes are very popular in Indian market. A brief process flow of corn flakes is given as under: 

Receiving => Cleaning & Polishing => Milling => Bran => Cooking under pressure => flavouring => Agitation (lump breaking) => Drying => Sweating => Flaking => Roasting/ Frying => Grading => Packing

 The corn grains after cleaning and polishing are milled to remove the germ and bran. Germ is utilised for extraction of corn oil. The bran is cooked under pressure in rotary steam cooker and mixed with flavouring material. The cooking is completed when the material turns out to a uniform translucent colour. The cooked material is carried to an agitator or lump breaker and finally dried in drier to moisture level of about 15 per cent to 20 per cent. The dried material is kept in tempering tanks for few hours to permit the residual moisture to become equally distributed, which is known as sweating. This is very essential to have uniform pressing for the flakes. The tempered material is next passed though a heavy duty flaking machine. The flakes are then immediately transferred to gas fired rotary ovens for roasting. While rotating, the flakes are continuously carried forward until they are dropped into conveyer. The roasted flakes are subjected to inspection, preferably on conveyers or tables. Then properly roasted flakes are graded and transferred to the packing bins immediately because flakes are hygroscopic. They are then packed in  water resistant polythene packages or food grade waxed paper packages. 

A corn flakes unit of 300 MT per annum will require an investment of Rs.50 lakh. The plant and machinery is available in India. As the demand for this product in the state is limited, the units may have to market their products mainly outside the state. 

3.2     Limiting Factors for Maize Processing in Himachal Pradesh

?         Non availability of regular supply of required quantity of water in some districts.

?         Consumption of maize as a staple food by local population and limited preference for processed products.

?         No organised marketing or bulk procurement and consequent lack of bulk purchase scope for the industry.

?         Availability of maize in only one season.

?         Slow growth of demand for starch in the state

?         Poor rail connectivity

?         High transportation cost both for raw materials and finished goods due to hilly terrain makes it less competitive.

                            4.    STATUS OF CORN STARCH INDUSTRY

4.1            World Scenario

There has been a positive trend during the past two decade in the wet milling industry. Corn has been the major source of starch (83%) followed by potato (6%), Cassava (6%), wheat (4%) and rice (1%). Maize is utilised mainly for ethanol production in the developed countries like US and EU, whereas in the rest of the world, it is either used as a staple human food or manufacture of starch and its derivatives.

The global production of starch from all sources was 48.5 mMT in the year 2000. US with  the largest starch industry contributes 51 per cent followed by EU (17%) and the rest by others. During the same period 39.4 mMT of starch was derived from maize, whereas potato and wheat contributed 2.6 and 4.1 mMT, respectively. 

The world demand for starch products is growing at an annual rate of 4 per cent. The demand for starch syrups is higher than dry starches in developed countries, whereas in developing countries, the situation is reverse. Due to the steady growing demand, the total world output of dry starches and syrups were estimated to reach 71 mMT and 37  mMT, respectively by 2010. 

EU is the major exporter of both native and modified starches, followed by US and Thailand. The largest starch consumers are US, EU, China and India. The world per capita demand for starch is 8.4 kg/annum, whereas India's per capita demand is 0.4 kg/annum. 

4.2     Indian Scenario

The wet milling industry in India is limited to certain pockets such as Gujarat, Maharashtra, Madhya Pradesh, Punjab, Karnataka and Chattisgarh. There are about 17 wet milling units with a crushing capacity of about 3400 MT of maize/day. The state-wise number of wet milling units and the installed capacity is given in the Table.3. below: 

                        Table.3. Wet Milling units in India