In my experience, the other problem is also due to the fact that the processed food industry essentially competes with human consumption for the same raw material. Given this, processed fruit and vegetables will always be more expensive than fresh. India also does not have much of a processable surplus of fruit and vegetables.
The other problem, as has already been noted, is due to a lack of capital investment in the supply chain. Once that is organized, and it needs some scale to be effective, we can expect to see more marketable produce reaching the market and a greater surplus to process, a surplus that would have otherwise been lost to waste. In regard to Reliance and other such ventures, I wouldn't put too much faith in their model. I've seen it on the ground and it's far more glamorous on paper. It's an extremely difficult task to accomplish and will take a few years before it has a real impact on market quantities, qualities and price. Of course, the level of fragmentation of land holding is a whole other problem. One that the c-operative model can help rationalize and that Safal [1] and others are trying to remedy. But it's been hard work. [1] http://doesthisthat.blogspot.com/2006/09/safal-market.html
