India is rich in natural resources such as minerals, forests, oceans, soil, and rivers. These resources along with growing skilled manpower, have given opportunities for producing and providing various essential requirements for our day-to-day life and leading an improved standard of living.
Since Independence, through intensive geological survey, a large number of mineral resources located in different parts of the country have been mined and utilised for the setting up of various mineral-based industries. These industries have promoted significant socio-economic developments and provided a lot of employment opportunities for our people.
On the other hand, though with some scientific and technological inputs our agricultural, animal husbandry, and marine produce have increased substantially. However, the required infrastructure, application of better technology, and skilled manpower for developing related agro-industries have not made any significant advancement compared to other developed countries. For example, it is reported that, while about 14 per cent of the total workforce in developed countries is engaged in the agro-industrial sectors, in India, only about 3 per cent find employment in this vital sector.
Nearly 70 per cent of people in India live in rural areas and mostly depend on agriculture for their livelihood. In the developed world, due to mechanisation and modern technology in the agricultural sector, comparatively much fewer labourers are engaged in food production, making it less expensive. Further, in these countries, a network of agro-based industries provides better employment opportunities and thus enhances their living standard. It is widely realised that in India, poverty elimination by providing the right type of employment and affecting economic development in a similar manner in rural areas is essential.
In India, in recent years, though agricultural production in different sectors is increasing at a comparatively faster rate, due to outdated harvesting and storage practices, nearly 25 to 30 per cent of agricultural produce is wasted.
For developing agro-industries, the first and foremost task should be to have enough good-grade raw material. An environment-friendly process for cultivation to produce more crops should take into consideration improving the fertility of the soil by mostly using organic fertilisers like compost and also using organic pesticides.
It may be mentioned here that, application of too many chemical fertilisers and pesticides as being done nowadays, is causing a lot of harm to the soil, the nearby water bodies also the flora and fauna.
The amount of organic waste generated from domestic, agricultural and other sources can be processed to produce sufficient amounts of compost to meet the requirements of farmers in the locality. Sewage sludge and human excreta should also be suitably processed to be used as manure.
Further, by undertaking large-scale plantation of trees like neem, karanj and cultivating haldi (turmeric), garlic, etc., sufficient amount of organic pesticides can be produced to be utilised for agricultural purposes. The other problem faced by the farmers is a dearth of water for irrigation in the summer and winter seasons. Through harvesting rainwater both on the surface and in-ground on small scale at suitable sites near agricultural fields, it would be possible to meet the water requirements throughout the year for irrigation and also for subsequent food processing units.
Problems of Agro Industries
The agro industries in India are facing several problems related to the availability of proper infrastructure, storage facilities, skilled personnel, appropriate technology, financial assistance, and market.
Most of the educated youth of India because of their limited knowledge about the scope of agro industries and financial and other related problems including production technology, storage, etc. do not venture to start any such industry.
Further, they are also completely unaware of the market situation, the mechanism to sell their products in nearby areas, and availing assistance of government and other concerned agencies. Smaller agro industries also face stiff competition for marketing their products, particularly when bigger industries come into the picture.
Sometimes, entrepreneurs have to go through a lot of difficulties and pay more to avail infrastructural facilities including land, proper equipment, suitable transportation system, etc. in time and also face a lot of problems for procuring the proper raw material and sending the finished products to the open market.
Many times, agro industries face management problems due to the absence of professional managers in their units and sometimes lack of cooperation of the partners due to vested interest. This may cause litigation among the partners and result in malfunctioning of the units.
In some cases, the entrepreneurs divert funds to some other areas like building houses, conducting a marriage in the family, etc, affecting production due to financial constraints. Sometimes, agro-based industries do not employ the right number of skilled manpower and this affects the quality and productivity as well as profitability.
Further, in some cases, dissatisfaction due to want of proper work culture in the unit, results in idle manpower causing high production costs. The use of outdated technology results in inferior products and high costs. The inferior products thus produced do not receive good market. In addition to these, many times, particularly small agro industries face problems like non-availability of raw material and also the dispatch of committed finished goods in time. Further, production is affected considerably due to a lack of storing space.
Steps for Promoting Agro Industries
To promote agro-industries, it is necessary to rectify certain existing problems. In this regard, some suggestions need due to be considered.
(1) It has been reported that the production of rice, wheat, sugarcane, and milk in India in recent years, has been quite satisfactory. However, on account of poor post-harvest management, the losses in agricultural production in the country are very high. It has been estimated that the post-production losses in food commodities are to the tune of Rs 75 to 100 thousand crores per annum. These losses are caused during storage, handling, and transportation. It is reported that the extent of losses can be brought down to less than 50 per cent of the existing level by adopting proper agro-processing technology and transfer system and the rest 50 per cent can also be saved by developing proper infrastructural facilities like grain storage structures, cold stores, and processing systems.
(2) To facilitate the creation of a favourable atmosphere for agro industries, financial assistance, supply of proper raw materials, infrastructure, appropriate technology, skilled manpower, prompt transportation, and marketing of finished goods are essential.
(3) At the village or panchayat level, unemployed persons should be identified and trained in skill development centers to be employed in different agro industries, which are to be set up in the area.
(4) The government should take an active part in developing a transparent mechanism to promote these industries. Keeping in view the existing problems, the State Government should take into account the past experience regarding the failure of many agro industries in their area and take necessary measures to rectify those, otherwise, entrepreneurs and unemployed youth will not come forward with confidence to participate in this endeavour.
(5) For each specific agro-based unit, “Package Deal” by the state government may go a long way in promoting these industries in a successful manner. The ‘Package Deal’ for a particular industry should comprise necessary permission for land, providing infrastructural facilities, finance, water, electricity, supply of raw materials, appropriate technology for production of finish goods, transportation and their marketing. This would help considerably small entrepreneurs to start the industries in a minimum period without much delay and financial escalation.
(6) Besides providing market facilities to these industries, both in India and abroad, the government should provide the most recent technology in respective areas and extend quality control facilities. To improve the technology for agro industries keeping in view the global trend, the government should motivate the science and technology organisations in the country to take up R&D work in different agro processing areas.
To expedite the growth of agro industries, it is suggested to set up District Agro Industries Corporation (DAIC). This corporation should be responsible for identifying agro-industries projects particularly based on the raw materials available in the region while creating necessary infrastructural facilities, identifying and training local entrepreneurs.
The DAIC should not only monitor implementation of projects but also assist the entrepreneurs in getting raw material, infrastructure facilities, and services, transport and market for the products. In this way, agriculture and agro industries should go side by side and provide enough employment opportunities and thus improve the socio-economic conditions of the villagers. In this task, the local as well as state, and central governments have a great role to play.
By adopting eco-friendly “Processes for the Production of Crops” along with applying suitable post harvest technology and setting up related agro-industries, it can be possible to improve the socio-economic conditions of rural people and thus inhibit the inflow of the unemployed rural mass to urban areas.
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