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Agro Industries & Farmer’s Income

Agro-based industries include manufacture of food, beverages and tobacco, textiles, wearing apparels, leather industries, manufacturing of wood and wood products, printing and publishing, manufacturing of rubber products.

Why is the growth of agro-industries important?

1. In India, about 48.9% of workers’ major livelihood support comes from agriculture.

2. About 70% of the population lives in rural areas.

3. Agro-industrialisation should be infused in the urban-rural continuum.

4. They can be used to absorb the additional agricultural production that cannot be consumed afresh/raw.

5. It provides a shift in the agricultural sector to address the risks of food inflation, seasonal and short-term price spikes in some commodities that cause economic instability in the system.

6. They can enhance the income of farmers in rural households.

How beneficial are agro-food processing industries?

1. It generates direct and indirect employment through its forward and backward linkages, especially in rural areas.

2. Reduces post-harvest losses and wastes.

3. Uses by-products more efficiently.

4. Increases rural income.

5. Promotes consumer welfare by increasing the availability of agricultural consumer goods.

What food processing industries do?

1. Wide range of activities utilizing farm, animal and forestry-based products as raw materials.

2. Processing of plantation crops like tea, coffee and cashew nuts.

3. Processing of milk and milk products.

4. Processing of fruits and vegetables.

5. It also includes dairy products, confectionary, marine products, etc.

Which are the steps taken to promote them?

1. Ministry of Food Processing Industries brought out Food Processing Policy of India in 2018 that included the best practices across states and the world.

2. The Government has emphasised to make India Global Food Factory and Global Food Market and thus opened up immense opportunities for food processing sector.

3. Several initiatives have been announced for ushering into zero post-harvest wastage by creating a national food grid and national cold chain grid.

4. 100% FDI in multi-brand retail has been allowed.

5. Initiatives for attracting incentives including capital subsidies, tax rebates, and reduced custom and excise duties, etc are provided.

Where do we need to focus?

1. Selection of appropriate scale and technology of production to improve the efficiency of processing and create a number of potentially useful by-products.

2. Up gradation of existing technology.

3. Development of Cold storage facilities and food parks.

4. Establishment of suitable linkages between products and consumers.

5. Establishment of suitable institutional arrangements like contract farming, producer’s organizations and cooperatives.

6. Investment in infrastructure comprising roads, electricity and communication.