Agro-Processing Industries: Potential, Constraints and Task Ahead

Srivastava Uma Kant

IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: An agro-industry is an enterprise that processes bio-mass, i.e. agricultural raw materials, which include ground and tree crops as well as livestock and fisheries, to create edible or usable forms, improve storage and shelf life, create easily transportable forms, enhance nutritive value, and extract chemicals for other uses. As the products of agro-industries are both edible and non-edible, the agro-industries can be classified as agro-food insutries (or merely food processing industries) and agro-non-food industries. The agro-industry provides the crucial farm-industry linkage which helps accelerate agricultural development by creating backward linkages (supply of credit, inputs and other production enhancement services) and forward linkages (processing and marketing), adding value tot he farmer’s produce, generating employment opportunities, and increasing the farmer’s net income. This in turn motivates the farmer for better productivity and further opens up possibilities of industrial development. The agro-industry generates new demand on the farm sector for more and different agricultural outputs which are more suitable for processing. An agro-processing plant can open up new crop and livestock opportunities to the farmer and thus increase the farm income and employment. The paper identifies following major issues to be discussed and researched: 1. Organizational Patterns for Agro-Processing. 2. R&D Inputs and Technology Upgradation. 3. Market Development. 4. Need for Confessional Finance and Larger Margin Money for Working Capital. 5. Tax Incidence. 6. Linkage Agro-industry with Planning for Agro-Climate Regions. 7. Strengthening of the Data Base. 8. Need for Further Research.

Date: 1989-10-01
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