Value Addition in Agriculture and Allied Sectors

Saikumar.B.C, Manjunatha.A.V, Chengappa.P.G and N.Nagaraj

Journal of Global Economy, 2010, vol. 6, issue 4, 311-327

Abstract: India is one of the World’s major food producers contributing less than 1.5 percent of international food trade. This implies that there is a vast scope for investment in agro processing for better value addition and job creation. In year 2000, the sales turnover of Indian food industries is Rs. 140,000 crores with higher percentage of employment generation potential as compared with other sectors i.e., 54,000 persons get direct employment per Rs.100 million of investment in the food sector as compared to 48,000 in textiles and 25,000 in paper industry. Currently in India, value addition to raw materials at different stages includes primary processing with 75 percent, whereas secondary and tertiary processing together accounts only 25 percent. Value of Indian food industry has increased from Rs.3.09 trillion in 1993- 94 to 3.99 trillion in 2000 –01. Indian food processing earnings was 20 US $ billion in 1995-96 and expected to increase to 60 US $ billion by the end of 2006. Turn over of the total Indian food market is 2,50,000 crore per year contributing 1.5 percent to the global processed food trade. Annual consumption of value added foods alone would grow to Rs.2, 25,000 crore by 2007 will be larger than manufacturing sector. Agro-Food Processing industries can reduce losses to the tune of Rs.8000 crore by increasing value addition from current level of 7 percent to 35 percent. Present rate of 2 percent of commercial processing can be increased to 10 percent by 2010 by investing Rs.15, 000 crore this creates additional employment directly for 77 lakh people and indirectly for 3 crore people.

Keywords: Indian Economy; Agriculrure processing; Value addition; business economics (search for similar items in EconPapers)
JEL-codes: D4 M2 M4 Q1 (search for similar items in EconPapers)
Date: 2010
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