Problem & Prospects of Agro-Processing Industry in India

What is Agro-Processing?

Agro Processing consists of the post-harvest activities entailing the processing of raw materials (field crops, tree crops) derived from agricultural sector, and their subsequent preservation for consumption. This also include processing of livestock and fisheries and converting them to edible and other usable forms. The agro processing is dependent both on the industrial development and the crops harvested (or agricultural produce).

Agro Processing industry in India

Food and food products are the largest consumption category in India, with a market size of USD 181 billion. The sector ranks fifth in the world in exports, production and consumption. Domestically, the spending on food and food products amounts to nearly 21% of the gross domestic product of the country and constitutes the largest portion of the Indian consumer spending more than a 31% share of wallet. Going forward, the Indian domestic food market is expected to grow by nearly 40% of the current market size by 2015, to touch USD 258 billion by 2015. (FICCI-EY report, 2009).

The agro industry of India is categorized in the following types:-

1. Village Industries owned and run by rural households requiring very little capital investment and a high level of manual labor. Some of the examples are pickles, papad, etc.

2. Small scale industry characterized by medium investment and semi-automation. Some of the examples include edible oil, rice mills, etc.

3. Large scale industry involving large investment and a high level of automation. Some of the examples include sugar, jute, cotton mills, etc.

Problems

There are some major challenges or problems associated with the sector. Some of these are discussed below:-

Inadequate infrastructural facilities (like unreliable assured power supply)

For creating industrial culture in any reason infrastructural facilities are required without these no industrial enterprise can survive and sustain for long. As regards infrastructural problems of Patiala district is concerned no any industrial estates have been created by the state government. Many industries have been set up by the entrepreneurs as their own efforts and availability of land. Due to this there is not ant proper connectivity among these industries. In the surveyed units it has been found that among agro-based processing units, the various infrastructure problems for entrepreneurs are distance from warehouse having highest weighted average score and gave 1st ranking to this problem. Entrepreneurs are also facing the problem of costly transportation cost due to the availability of ware houses in far flung and remote location from