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Agro Industry Scenario An Introduction The agro industry is regarded as an extended arm of agriculture. The development of the agro industry can help stabilise and make agriculture more lucrative and create employment opportunities both at the production and marketing stages. The broad-based development of the agro-products industry will improve both the social and physical infrastructure of India. Since it would cause diversification and commercialization of agriculture, it will thus enhance the incomes of farmers and create food surpluses. The agro-industry mainly comprises of the postharvest activities of processing and preserving agricultural products for intermediate or final consumption. It is a well-recognized fact across the world, particularly in the context of industrial development, that the importance of agroindustries is relative to agriculture increases as economies develop. It should be emphasized that food is not just produce. Food also encompasses a wide variety of processed products. It is in this sense that the agro-industry is an important and vital part of the manufacturing sector in developing countries and the means for building industrial capacities. The agro Industry is broadly categorised in the following types: (i) Village Industries owned and run by rural households with very little capital investment and a

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Rose Jasmine and more>> Fertilizers Bio Fertilizer Chemical Fertilizer Agriculture Fertilizer Urea Fertilizer more>> Beverages & Juices Black Tea Coffee Mango Juice Apple Juice and more>> Fodder Alfalfa Barley Birdsfoot Trefoil Brassica and more>>

high level of manual labour; products include pickles, papad, etc. (ii) Small scale industry characterized by medium investment and semi-automation; products include edible oil, rice mills, etc. (iii) Large scale industry involving large investment and a high level of automation; products include sugar, jute, cotton mills, etc. The development of agro-based industries commenced during pre-independence days. Cotton mills, sugar mills, jute mills were fostered in the corporate sector. During the postIndependence days, with a view to rendering more employment and using local resources, small scale and village industries were favored. The increasing environmental concerns will give further stimulus to agro based industries. Jute and cotton bags, which have begun to be replaced by plastic bags, have made a comeback. It is the right time to engage in mass production of low cost jute/cotton bags to replace plastic bags. The agro industry helps in processing agricultural products such as field crops, tree crops, livestock and fisheries and converting them to edible and other usable forms. The private sector is yet to actualize the full potential of the agro industry. The global market is mammoth for sugar, coffee, tea and processed foods such as sauce, jelly, honey, etc. The market for processed meat, spices and fruits is equally gigantic. Only with mass

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production coupled with modern technology and intensive marketing can the domestic market as well as the export market be exploited to the fullest extent. It is therefore imperative that food manufacturers understand changing consumer preferences, technology,With modernization, innovation and incorporation of latest trends and technology in the entire food chain as well as agro-production, the total production capacity of agro products in India and the world is likely to double by the next decade. India is the second largest producer of food in the world. Whether it is canned food, processed food, food grains, dairy products, frozen food, fish, meat, poultry, the Indian agro industry has a huge potential, the significance and growth of which will never cease. Sea fishing, aqua culture, milk and milk products, meat and poultry are some of the agro sectors that have shown marked growth over the years. linkages between members of the food supply chains and prevailing policies and business environments to take advantage of the global market. DELETE

INTRODUCTIONd preparation of agricultural , performs a number of crucial functions that support development and poverty alleviation. This paper argues therefore that agriculture in connection with industry needs to be recognised by senior-level policy makers and industry leaders as a competitive, value-adding business sector, that has a positive development impact and contributes to economic growth. Rather than focusing on agricultural productivity only, policy makers must consider the competitiveness of the entire agro-value chain. A comprehensive approach could include e.g. supporting small agro-producers and SMEs, enabling market access and developing a supportive institutional environment. IMPORTANCE OF AGRO-INDUSTRY FOR DEVELOPMENT 1. Employment and income generation Agro-industry plays a fundamental role in employment creation and income generation. Particularly the food and beverages processing sector remains important at all levels of economic development. 3 Within the EU it is a leading employer with 13% of employment in manufacturing, in the US it is the third most important sector with 9% of total manufacturing employment. Taking only into account countries where data is available the ILO calculates global employment in the formal food and beverages sector at 22 million. However, one should bear in mind that in developing countries an estimated average of 60% of workers in food and beverages are employed in the informal economy. In addition to the direct employment effect, vibrant agro-industry is found to generate employment in downstream and upstream sectors such as agriculture, commerce and services. Agro-industry can play a strategic role in pro-poor growth strategies, particularly in

developing countries where 75% of the poor live in rural areas. As possibilities for income generation are restricted in rural areas, rural non-farm earnings from trading, agro-processing, manufacturing, commercial, and service activities constitute a significant part of household income. For developing countries as a whole, non-farm earnings account for 30 to 45% of rural household income. They complement agricultural wages and serve household risk diversification and the evening out of consumption patterns. With low capital requirements and undemanding local marketing channels the rural non-farm economy offers opportunities for poor households (particularly women headed households), small-scale farmers and other smallholders, representing an important instrument for rural poverty alleviation. The development of agro-industry can also have an important impact on the local agricultural sector as well as the livelihoods of small holder farmers, provided they can produce on a stable basis, supplying regular quantity and quality.

2 According to the International Standard Industrial Classification (ISIC) agro-industry consists of: i) food and beverages; ii) tobacco products; iii) paper and wood products; iv) textiles, footwear and apparel; v) leather products; and vi) rubber products. 3 The following is based on Wilkinson and Rocha (2008).3 Box 1. In the Dominican Republic, women comprise roughly 50% of the labor force employed in horticulture processing; in Mexico, the share of women engaged in packaging is 80-90%; in Zimbabwe women represent 91% of horticultural workers; in Chilean fruit production,

female employment increased almost 300% between 1982 and 1992, an impressive pattern when compared to a national growth rate of 70% for the female labor force; and in Ecuador, Kenya and Uganda, women represent respectively 70%, 75%, and 85% of workers in horticulture, to name but a few examples. Source: Wilkinson and Rocha (2008). In terms of employment composition, rural industries (manufacturing) account for approximately one fifth of rural non-farm employment, consisting mostly of occupations in agro-industries. Indirectly, however, other activities such as commerce and retailing, construction, equipment manufacture, transport, logistics and trade are typically associated with agro-related manufactures and agribusiness. Table 1. Composition of Rural Non-Farm Employment by World Regions Source: Haggblade, Hazell and Reardon (2005). The importance of agroindustry for employment is further emphasised by high and increasing levels of female involvement, especially in the non-traditional, high-value agro-chains (i.e. horticulture, fruits and fish products). Female employment in such sectors can range between 50 and 90% (Box 1). However, strong gender segmentation in

production and processing tends to consign women to more vulnerable forms of work (casual, temporary and seasonal), lower paid and more labour-intensive preparation and/or processing. 2. Contribution to GDP and manufacturing An extended definition of the agro-processing sector which includes not only agroindustries but also distribution and trading activities, would roughly account for more than a third of the GDP in Indonesia, Chile, Brazil and Thailand, and between 20 and 25% in Sub-Saharan countries. The entire food system, including the production of primary goods and commodities, marketing and retailing, would account for more than 50% of developing countries GDP (based on World Bank, FAO and UNIDO databases). 4 Box 2. The agro-processing sector contributes more than 50% of total manufacturing value added in low income countries, 36% lower middle and 32% upper middle income countries. Or, put differently, agroindustry contributes a share of 61% to total manufacturing in agriculturebased countries, 42% in countries in transformation and 37% in urbanised developing countries (WDR 2008). Source: Wilkinson and Rocha (2008) Box 3. Many experiences in Latin America, Asia and Africa (e.g. Brazil, Chile, China, Kenya, Mexico, South Africa, Taiwan and Thailand) have demonstrated the potential of agro-based SMEs for value-adding,

employment generation and improvement of farm and rural non-farm income, food security and rural living standards. In Africa, where a weakening and even collapse of public services has resulted in dysfunctional input and output markets and a breakdown in the delivery of agricultural services to smallscale farmers, local agro-enterprises are also increasingly filling crucial institutional gaps, particularly for commercial crops. Trends illustrate that there are large value-adding opportunities in agro-industry relative to agriculture. In low and middle income countries (see World Bank classification of developing countries according to income) the food processing sector is typically one of the largest industrial activities in terms of value-adding. Using the UNIDO Industrial Statistics Database 2005, agro-processing value added as a share of GDP amounts to 4.3% for low income countries and 5% for lower middle and upper middle income countries. This, however, neglects artisan production and the informal sector, which are particularly important in low income countries. We can therefore safely assume that the figures heavily underestimate the true extent of agro-industrys contribution to GDP in those countries. Within manufacturing, the agro-processing sector occupies a significant position in overall turnover and value added in developing countries though huge heterogeneity may exist among them. On average, productivity levels in food processing are above the manufacturing

average, making it one of the more efficient economic sectors in least developed countries (classified according to the Human Development Index). Incremental investment here could benefit the overall competitive position of the countries in question (based on UNIDO Industrial Statistics Database 2005). 3. Promotion of socio-economic development Strong synergies can exist between agro-industry, agriculture and poverty alleviation. Agro-industry provides capital and services to farmers (e.g. seeds and equipment, training, production and market information), promotes entrepreneurship, raises demand for agricultural products and connects farmers with markets through the handling, processing, marketing and distribution of agricultural products. As a result, productivity and quality of agricultural production, farm returns, economic stability for rural households, food security and innovation throughout the value chain can be enhanced. Efficient agro-industry can therefore spur agricultural growth, and accompanied by a strong link with smallholders reduce rural poverty. As economies become more sophisticated, economic structures are transformed and capital and labour are transferred from agriculture to the expanding agro-industrial and related service sectors. Accordingly, the agribusiness-to-agriculture ratio increases. In the U.S. agribusiness contributes 13 times more to GDP than agricultural activities; in urbanized developing countries the ratio remains at 3.3; in transforming countries it falls below 2 and in agriculture-based countries it reaches

merely 0.6 (Wilkinson and Rocha, 2008). Crucially, the contribution of activities which define an increasing agribusinessto-agriculture ratio (e.g. agro-related 5 industries and distribution services) is highly correlated with basic measures of socioeconomic development. Although such relationship can be expected, it is particularly strong for countries at low levels of human development, mostly agriculture-based countries. (The ultimate allocation of wealth produced by the value chain, however, will depend, amongst others, on the bargaining powers of intermediaries, agro-food processors and farmers). Figure 1. Correlation between Human Development and the Agribusiness-to-Agriculture Ratio 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Human Development Index - HDI Agribusiness-to-Agriculture Ratio Higher correlation for low HDI countries Aagriculture-based

countries United States Urbanized countries Source of data: Jaffee et al (2003) and Human Development Statistics (UN) 4. Stabilization and regeneration The development of rural agro-industries can play a major strategic role in stabilising and regenerating countries and in consolidating rural and regional development. It can do this by providing employment and supporting wealth creation and economic growth in a decentralised manner in areas that have been affected by internal conflicts, natural catastrophes or out-migration resulting from uneven regional development. Developing agro-industry in such areas promotes a more balanced, decentralised growth within the country by generating productive employment alternatives. It thus not only reduces migration, especially of young unskilled labour into crowded cities, but it can even reverse migration trends by offering new employment opportunities in those affected areas, thereby alleviating social pressures and demands on public services within the city. 5. Integration into global markets By introducing and accelerating technical innovations, promoting entrepreneurship and improving business practices along the chain, agro-based SMEs not only provide access to new domestic market outlets, but can essentially act as a launching pad for the integration of developing countries into global markets. Developing countries have a natural comparative advantage in global markets in many agro-industry sectors. They have shown that they can be competitive in traditional tropical crops, but also in non-traditional exports and in components of the

animal protein complex. Non-traditional food exports such as fruits, horticulture and 6 Box 4. It has been estimated that agricultural production may fall by 30 to 40% in India and 20% or more in Africa and Latin America by 2080. The area most severely affected by declining agricultural production will be SubSaharan Africa, where countries like Sudan and Senegal could face agricultural collapse with a food production decline of more than 50%. Source: Cline (2007) fish products, as well as livestock products, have already become an important part of exports. However, due to protective trade regimes and distorted tariffs in developed countries, developing countries have been unable to increase their overall market share in world agricultural trade (including agricultural raw materials, fisheries, processed food, beverages and high-value products) since the 1980s. Despite continuing barriers to trade, it is believed that developing countries can identify and explore export market opportunities by developing their agro-industry. The markets for organic, fair trade and origin products, for instance, are high-value outlets for agricultural products and demand from developed and some middleincome developing countries has been growing strongly over recent years. With the help of a competitive agro-industry that increases value-added and improves product safety and quality, the efficiency of technical processes and business practices, access to such potentially lucrative speciality markets would be facilitated. Crucial for successful integration into global agro-markets, however, are also issues such as adherence to standards, quality consistency, volume requirements and timely delivery.

CHANGING ENVIRONMENT FOR AGRO-INDUSTRY Emissions of carbon dioxide, methane and other greenhouse gases are changing the future world climate and raise new challenges for agriculture (e.g. via solar radiation, temperature and precipitation). Climate change, including global warming and increased climate variability, is considered to significantly impact on food supply and food security. The effects include a shift in climate and agricultural zones towards the poles, changes in production and precipitation patterns and increased vulnerability of the landless and the poor. In terms of global food supply, stability will be affected by an increase in climate variability and extreme weather events, as well as higher crop vulnerabilities to infection, pests and weeds as a result of changing weather patterns. Figure 2. Multi-model Averages and Assessed Ranges for Surface Warming Source: IPCC (2007) Developing countries are considered vulnerable to climate change due to their location in mostly lower and warmer latitudes. Furthermore, their resources to deal with the effects of climate change are usually inadequate. The most negative impact will therefore be in areas where food production is already deficient today. 7 Figure 3. Projected Impacts of Climate Change Source: Stern (2007) As fears over climate change increase and oil prices continue to rise, bio-fuel production in Europe, Asia and the Americas has surged. While offering an alternative to fossil fuels, the expansion may be controversial in some regions both

environmentally and politically. By converting food to energy crops (e.g. wheat, soy, palm oil, corn and sugarcane), bio-fuel production is often considered one of the drivers of food cost inflation and food security deterioration. Other factors that have been identified as drivers include increasing demand for food, rising energy costs, speculation in commodity markets, droughts in Australia, frosts in the American Midwest, and market distortions caused by agricultural subsidies in high-income countries. Past months have seen further unprecedented increases in food prices. As of March 2008 prices for corn, rice, soya and wheat were, respectively, 31%, 74%, 87% and 130% higher than a year earlier. This seriously affects food security in poorer countries, especially those importing staple food (e.g. West Africa) and those with a large number of landless labourers (e.g. Bangladesh). According to World Bank estimates, food inflation threatens to push at least 100 million people into poverty. Alarmingly too, it has already triggered social and political unrest, e.g. in Cote dIvoire, Egypt, Haiti and Burkina Faso, and threatens to undermine many UN stabilization efforts. The implications for the agro-food industry are evident: raw material sourcing will become a greater challenge with food price inflation and in areas where food production is negatively affected by climate change or where demand for bio-fuel raw materials is strong. At the same time, the contribution of the agro-food industry to raising food security in those developing countries will be ever more important. As the bulk of the output of agro-industries in developing countries is destined for the domestic market, their performance needs to be improved for domestic food supply. Through enhancing efficiency in agro-industries, costs can be reduced to be competitive with imported commodities and/or to contribute to the reduction of

soaring food prices in the local market. 8 NEW GROWTH OPPORTUNITIES FOR AGRO-INDUSTRY? 1. Markets in developing countries Already around 80% of global food and beverage sales consist of processed products, with 60% being consumed in high income countries (Wilkinson and Rocha, 2008). Although households in developing countries spend a large share of total expenditures on food, most is on non-processed products (Figure 4). In 2002, per capita retail sales of packaged food in high income countries were more than 15 times the value found for low income countries. But growth in consumption of packaged food is fastest in the developing countries: 7% in upper middle, 28% in lower middle and 13% in low income countries, compared to just 2 to 3% per year in high income countries (19962002). Such high growth can be expected to continue: Ongoing population growth and growth in per capita consumption (changing diet and increasing variety and quality of products with rising incomes) drive demand for processed foods and services embodied within the products. Increased ownership of refrigerators and microwave ovens promote greater household purchases of perishable and frozen foodstuffs, and higher consumption of prepared foods and ready meals. Internationalisation of retail supports a shift in consumption patterns. Urbanisation (population growth in developing countries is increasingly an urban phenomenon) increases the importance of food preservation and convenience. Further demographic changes (e.g. increasing participation of women in the labour market, ageing of the population and rising importance of single-person households) will drive sales of ready meals, convenience food and food services. Figure 4. Food Share of Total Expenditures by Group of Countries (2002)

Source: Regmi and Gehlhar (2005), based on Euromonitor. Despite these healthy growth prospects, domestic agro-industrial development might be threatened by increasing imports. Deregulation and the integration of developing country markets into global trade and investments also mean that growth of the domestic market does not necessarily translate into increased domestic industrial activity. In fact, least developed countries have become on average significant net food importers. 9 2. Niche and speciality markets Although a major share of agro-industrial output in developing countries is consumed domestically, various niche and speciality export markets can provide further opportunity for an agro-industry expansion in developing countries: Organic food and drink world market was estimated at US$24 billion in 2005, the EU accounting for 52% and the U.S. for 42%. Together they accounted for almost 95% of global sales, of which approximately 40% were imported. Despite a slow-down since the 1990s, the sectors current growth rate is still estimated at between 8-12% per year in Europe and 14-20% in the U.S (Wilkinson and Rocha, 2008). Fair trade, which evolved from the coffee sector, is much smaller with approximately 1.6 billion in 2006 (Wilkinson and Rocha, 2008). Fair trade standards exist for food products such as tea, coffee, cocoa, honey, juices, wine grapes, fruit and vegetables, nuts and spices, and non-food products such as flowers, plants and seed cotton. Origin-based products associate quality with social and cultural values relating to collective local development. Many new features are incorporated, such as indigenous products, non-food products and products associated with the values

of sustainability. Functional or nutritionally enhanced foods are expected to be a major source of market opportunities in the long-term. They respond to increasing preoccupations with health issues and food safety, which have generated such modified products and acted as a major innovation driver in the food industry. These various niche markets certainly provide important export opportunities and development stimuli for agro-industry in developing countries. It may, however, be questioned whether they can provide a viable perspective for an entire sector. 3. New technologies As competition in markets for traditional products increases and pressures to meet the growing demand for food rise, agro-industries will need to increase the application of existing technologies and develop new ones which maximise the use of raw material inputs. A number of practical technologies, which are already widely used in the agroindustries of high income countries, can be transferred and adapted in developing regions: e.g. packaging, pre-processing at farm levels, traceability technologies, cold stores and chains, as well as the information and communication technologies underlying inter-firm logistics and business planning. In terms of new technologies, biotechnology, for instance, has the potential to produce crops better suited for changing climate, soil, as well as processing conditions (e.g. higher starch content, better quality proteins, or modified oils and fats). New industrial materials will be derived from biomass (plants and bacteria), which may, as economies of production change, replace part of todays fossil-based, synthetic materials and plastics. Similarly, numerous other energy efficient, environmentally friendly technologies, including bio-processing, non-thermal, and drying 10 technologies, will be increasingly important in preserving scarce natural resources, improving food availability and promoting social and economic sustainability.

The transition to a knowledge-based bio-economy is already underway in many parts of the world, fuelled by massive investments and new policy measures to sustain the new industries. The development of global agro-industrial complexes will dictate additional changes in technological patterns. Developing countries must consider introducing innovative technologies, including the manufacture of high value biorelated products such as speciality chemicals, tailor made enzymes, vaccines, drugs and bio-pesticides, if consistent with the overall development strategy. But this will require new levels of international cooperation to bring about the technological competencies, environmental, energy and processing improvements needed to compete. Otherwise, both domestic and foreign markets will risk being closed to the developing world. HOW TO CREATE AN ENABLING ENVIRONMENT FOR AGRO-INDUSTRY The natural advantages of many agriculture-based countries have not always been realised in terms of competitive agro-industrial and economic development. Some of the reasons are inadequate government spending on education, R&D and infrastructure, a non-conducive investment climate, and poor access to technologies and energy. Creating a pro-productivity business environment and a supportive policy framework are key prerequisites for successful domestic and export-oriented agro-industry. Policy makers need to look at the large policy context, but there are also aspects that are distinct for agro-industries (see FAO, 2008). The following are major elements of an enabling business environment: Macro policies o Stabilization policies aim at minimising macroeconomic shocks. They include fiscal and monetary reforms as well as the creation of functioning regulatory institutions. Macroeconomic stability is crucial for investment and financial support policies in agro-industry development and for aggregate demand.

o Allocation policies should balance the structure of expenditures on agriculture, R&D, education and infrastructure, all of which are important components of a competitive agro-industry environment. E.g., in terms of infrastructure, access to financial assets, input and output markets, to energy and information are fundamental challenges. o Re-distribution policies should prioritise education and human resource development in order to provide the skill base necessary to develop a competitive agro-industry. o Demand policies can support consumption where needed. Sector specific policies should address sector specific institutions and regulatory frameworks, which are not necessarily contingent upon macroeconomic approaches and can be implemented independently, e.g.: o Strengthening of links between SMEs, agricultural producers or small holder producer organisations and cooperatives, other market intermediaries such as traders, processors or transporters, and rural or urban businesses. 11 o Quality and food safety regulations. o Market distortions, lack of information and uncertain property rights. o Investment and basic services: specifically, there is the need to address infrastructure and basic services constraints to SME growth such as the poor quality of the rural roads needed to link SMEs to markets, inadequate water and electricity supplies and ineffective communication networks. THE ROLE OF THE UN SYSTEM AND THE INTERNATIONAL COMMUNITY The UN and the international community can respond to the various challenges ahead. Governments can be supported at the technical level and be advised on policy aspects. This would require a high level of commitment from assisted countries, in particular

strict standards of governance and integration within key Ministries. The UN believes that it is through such cooperation that a broader base of inter-related policies and institutional support and coherence may be framed and thus the aim of diversifying the production base away from primary products in favour of adding value through further processing may be reached. UNIDO, as the Agency within the UN system responsible for the promotion of sustainable industrial growth, is of the opinion that particularly agro-industries can play a key role in the overall development process by creating jobs and private wealth and thereby accelerating and sustaining growth. UNIDO is convinced that at the core of the achievement of long-term poverty reduction is private wealth creation based on industrial development, coupled with vibrant entrepreneurship, and diversification FAO has the mandate within the UN system for the development of the agricultural sector, including agro-industry aspects of agricultural sector development. The Rural Infrastructure and Agro-Industries Division advocates and supports the development ofentrepreneurship in agricultural support services. It assists with appropriate policies, strategies and methodologies for strengthening agricultural support systems and the delivery of services and technologies for production and post-production activities. IFADs mandate is to enable poor rural people to overcome poverty. One of IFADs strategic objectives for promoting agriculture and rural development is to create opportunities for rural off-farm employment and enterprise development. Crucial to attaining such objective is the availability and strength of local financial services. To prosper and grow, MSEs must have access to commercial banks, micro-finance institutions, micro-leasing companies, etc., as well as infrastructure (rural roads, water, electricity) and communication services.

To realize the fundamental contribution that agro-industries can make to the lives of so many in this world who have so little, however, it is important to identify how the UN family (UNIDO, FAO, IFAD and other agencies) and their development partners in Governments and civil society around the world can all work better together. Most crucially, a number of strategies must be developed within the framework of concrete and effective international cooperation, e.g.: 12 strategic policy on agro-industrial competitiveness; policies for inclusion of small agro-producers in supply chains; support for SMEs through capacity-building, clustering and technology transfer; participation in development of technical and monitoring services for achieving market access; provision of services for building up capabilities for sustainable market access; development of consumer protection policies;

active role in harmonizing and ensuring the transparency of quality standards;

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Agriculture industry of India

26/02/2011 By Sathyanarayanan
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Agriculture Industry of India

Understanding Agriculture Industry One can understand the agriculture or agro industry as the offshoot of agriculture. Development in the agricultural industry is crucial to make agriculture more profitable and generate more employment opportunities both in the levels of production and sales. The comprehensive development realized in the

agriculture industry will help enhance both the physical and social infrastructure in the subcontinent. Commercialization and diversification of agriculture will further add up to the income of the farmers and give way to food surpluses. One can see the agro-industry mainly consisting of the post-harvest activities including processing and preserving of agricultural products for the purpose of midway or final consumption. Around the world, it is well understood especially in the segment of industrial expansion that the whole essence of agro-industries is connected to agriculture production as economies are seen developing. It needs to be stressed that food is not only that grows in the fields, it also refers to a variety of products that are processed from the harvest. Over and above, in developing countries like India, agriculture industry is a very important arm of the manufacturing industry to build on the industrial capabilities. Agriculture Industry can be widely grouped under the following kinds. Village industries comprise those that are run with minimal industries with very little machinery and a maximum of manual labor manufacturing products like papad, pickle etc. Small scale industries refer to those that are managed with a medium level of investment and machinery like oil mills and rice mills for instance. Large scale industries involve huge investments and extreme levels of automation producing commodities like jute, sugar and cotton products. Agriculture industry of India From the time of its Independence, agriculture has been the most important deciding factor of Indias economy. backbone of Indias economy. Agriculture segment in India alone was responsible for not less than 18% of Indias GDP in addition to offering jobs to about 60% of Indias entire population. Services related to the agriculture industry in India could make up a bulk of 62% to the countrys GDP. However, irrespective of its immense contribution to the GDP, it only employed 28% of the total population of the nation. The volume of exports has been increasing between 2001 to 2009, making up a 200% increase during this time. On the other hand, for the past three years, imports have not changed much. The enormous growth in the agriculture products segment has helped India significantly increase the production of food. Despite the commendable growth in agriculture and agriculture products mentioned above, there has been a fall in the total volume of exports of agriculture products from India since 2004 to 2009 from 12.7% to 10.23%. Statistics also reveal that the average daily food consumption in India per head is blow 2,500 kilocalorie per day which implies that there is a sizeable room available for growth. In addition, it is also noted that the population of India will be on a steady growth over the next thirty years at the rate of 1 percent per year. However, there are no chances for India to take over Chinas position as a major engine growth in the global agricultural demand owing to the fact that the cultural traditions in the nation advocate and promote vegetarianism, which will hold back the nations demand for animal feeds and meet much below what is noticed in China. Experts in the arena reveal that the Indian Agriculture Industry is poised towards a great revolution that will modernize the whole food chain since the total volume of food production in the sub continent is most likely to double over the next ten years period. Recent studies show that the value of the total food market in India at present is about Rs.250000 crore (US $ 69.4 billion). In this figure, the size of value-added food products alone makes up Rs.80000 crore (US $ 22.2

billion). Most importantly, the Indian government has sanctioned approval for a number of joint ventures and collaborations with foreign firms besides licensing several industries and fully export units anticipating an investment of about Rs.19100 crore (US $ 4.80 billion) in the segment. Out of this figure, the foreign investments alone are expected to be more than Rs. 9100 crore (US $ 18.2 Billion). The agricultural food industry also is gaining more significance on account of Indias substantial agrarian economy, which is responsible for the countrys 35% of GDP while the sector has also given employment to more than 65 per cent of Indias population. With respect to foreign investments and also a number of joint- ventures and collaborations with foreign firms, the consumer food segment in India has always remained the top priority. Over and above, there are also several other attractive features in the Indian agriculture industry that are capable of luring foreigners with promising benefits like deep sea fishing, aqua culturing, milk and dairy products manufacturing, poultry segments and meat. The notable feature of the Indian agriculture industry can be listed as export prospects, competitive pricing and international standards. These features are responsible for generating enormous trade opportunities in the Indian agriculture industry. In addition, this portal has also served as the gateway for all the exporters and importers in and out of the country to satisfy their requirements and make use of the benefits of buy sell business leads and other trade opportunities connected to the agriculture products industry. With a country of more than a billion people, entrepreneurs can choose from a wide variety of areas in the agriculture products segment in the country ranging across food grains, canned, dairy, processed, fisheries, frozen food, meat, poultry, alcoholic beverages and soft drinks. Agriculture is the backbone of Indias rural economy around which both the socio-economic privileges and deprivations surround. Any small change in the structure of this segment in India will invariably pronounce its impact on the nations present pattern of social equality. During the 50 years period following the independence of the nation, the growth of Indias agriculture was recorded at an impressive rate of 2.7 % per annum of which not less than two-third is brought about by the gains in crop productivity. Since the country attained independence, the nation has been applying a thoroughly need based strategy in the agriculture sector eventually intensifying the same after mid sixties with a chief focus on meeting the nutrition needs of the countrys exploding population so as to make the nation self reliant with respect to food production. In India, agriculture has been able to demonstrate a growth of more than four times during the planned area of development raising the figure from just 51 million tonnes in 1950-51 to 199.1 million tonnes in 1997-98. Starting from sixties, the growth witnessed in the sector is phenomenal aptly aided by several factors like extensive usage of high yielding varieties of seed, fertilizers and pesticides, especially in well irrigated areas. History and present day status of Agriculture industry of India In the Indian sub continent, agriculture has a long history of more than 10,000 years with majority of the population solely dependent on the industry. Consequently this sector has played a significant role in the overall socio economic development of the nation. The Annual Report 2009-2010 pertaining to this sector released by the Ministry of Agriculture has revealed that the total geographical area of India is 328.7 million hectares and about 140.3 million hectares of this is net sown area with 193.7 million hectares found to be the gross cropped area. Among all the nations of the world, India is the largest producer of fresh fruits with some of the top ones in the list including sesame seeds, ginger, turmeric, fennel, badian, jute, cashew nuts, pulses, mangoes, chillies and

peppers. India has claimed the second largest population of cattle with about 281million cattle. The country also has reserved the second position in the production of commodities like cashew, garlic, cardamom, onions, tomatoes, coconut, cabbage, cotton seed, fresh vegetables, ground nut, wheat, rice sugarcane, tea, green peas, cauliflower, potato and inland fish. India has been producing tobacco, coconut, rapeseed and tomatoes in huge amount entitling itself to be called as the third largest producer of these products. The Indian Agriculture Research Institute (INRI) established in 1905 has a commendable achievement of bringing about the Indian Green Revolution of the 1970s. The Indian Council of Agricultural Research (ICAR) is today the apex body in agriculture and the connected arena in the country responsible for looking after all the researches and education in the segment. The union minister of Agriculture is also the president of ICAR. The Indian Agriculture Statistics Research Institute supervises and evolves new techniques, and designs the various experiments in addition to analysing data in agriculture. The organization functions with the chief objective of maximizing the produce from animal and plant breed. Though the Government of India has set up Farmers Commission to evaluate the agriculture program, the farmers in the nation are facing some problems. The World Bank has brought out that the allocation of water for agriculture is insufficient besides being unsustainable. Also, the irrigation infrastructure in the nation is found deteriorating. At some places in the country, the overuse of water is at present being compensated by pumping facility. However, since these are falling on account of underground water every year, this is again a limited resource. Also, most farmers in India are illiterate, socially economically backward or not capable of developing new ideas. They are poorly equipped to implement quick and progressive actions. Farmers confront the problems of finance. They lack adequate marketing services for selling their farm produce. However, since agriculture has been the Indian business handed over by the tradition, the future of agriculture in the nation is bright. The Indian Government has been demonstrating a very active interest in the agriculture sector by giving the highest priority to it. The allocation made by the Tenth Plan was considerably lower than the 11th Plan with the Ministry of Agriculture allotting an amount of US$19 billion during the Eleventh Five Year Plan. Agriculture is one of the strongholds of the country accounting for about 14.6 percent of the nations gross domestic product (GDP) during the period 2009-2010, and a provisional percent of the complete volume of export which was 10.23 percent. Moreover, the agriculture sector has been offering an employment opportunity to not less than 52 to 55 percent of the work force in India. The Centre for Monitoring Indian Economy (CMIE) has revealed that the farm output In India is bound to increase by 10 percent to 114 million ton (MT) over the Kharif season, while during the winter ( Rabbi season), it will increase by 2 percent making it around 116.6 MT. The Agricultural and processed Food Products Export Development Authority (APEDA) has stated that Indias exports of fruits, vegetables, cereals and processed food products was worth US$ 1.14billion during April May 2010-11 period. About 70 percent of the Indias agriculture and processed food is being exported to countries including Middle East, Asia, Africa, and South America. This data has revealed that the Indian Economy is governed by the Agriculture Industry to a large extent, which is dependent on the uncertainties of rainfall and a set of other natural forces. Remarkable developments of the agro-based industries in India started during the pre-independence days. The corporate sector fosters cotton mills, sugar mills and jute mills. During the post-Independence period, an impetus was given to the small scale and village industries in order to generate more employment opportunity and to make the optimum use of the available local resources.

It is estimated that the rising concerns over the environment around the globe will stimulate the agro based industries. In view of replacing plastic bags, jute and cotton bags have made a comeback. This is considered the appropriate time to start the large scale commercial production of low cost jute and cotton bags to replace plastic bags. The agro industry in the country helps in processing the agricultural products including field crops, tree crops, fisheries and livestock thereby converting them to consumable and other usable forms. However, the private sector is yet to unleash the full potential of the agro industry. The global market is actively open for commodities like sugar, coffee, tea and processed foods like honey, sauce and jelly. The market in the country for processed meat, fruits and spices is equally huge. The domestic and the export market in the nation can be exploited to its fullest extent only by bringing together mass production, modern technology and intensive marketing strategies. It is an imperative that the food manufacturers in India are made fully aware of the changing consumer preferences. Modernization, innovation and incorporation of the latest technologies in the agriculture industry over the next decade is bound to revolutionize the entire food chain and the agroproduction thereby doubling the capacity of manufacturing agro products in India. On the whole, India is the second largest producer of food on the globe. Indian agriculture industry enjoys a huge potential with respect to canned food, frozen food, processed food, food grains, dairy products, fish, meat and poultry, the growth of which will never cease over all times to come. Also, areas like sea fishing, milk and milk products, meat, aqua culture and poultry are some of the agro based sectors that have demonstrated a significant growth over the past few years. Strong links between the members of the food supply chains, existing policies and the prevailing business environment are sure to take advantage of the potential opportunity available in the global market today. Agriculture industry: Exports from India The list of major destinations to which Indian agricultural products are exported includes the following. The floriculture products from the nation are exported to USA, Japan, UK, Netherlands and Germany. Fruits and Vegetable Seeds are exported in a sizeable quantity to Pakistan, Bangladesh, USA, Japan & Netherlands. Bangladesh, Malaysia, Sri Lanka, UAE, Pakistan & Nepal import fresh onions from India. A long list of other fresh vegetables is exported from India to UAE, Bangladesh, Pakistan, Nepal and Sri Lanka. While the nation exports walnuts to Spain, Egypt, Germany, UK and Netherlands, fresh Mangoes are sent to UAE, Bangladesh, UK, Saudi Arabia & Nepal. The country sends fresh Grapes to Netherlands, UK, UAE, Bangladesh and Belgium, while other range of fresh fruits is exported to Bangladesh, UAE, Netherlands, Nepal and Saudi Arabia. Dried & Preserved Vegetables grown in the country are consumed by Russia, France, USA, Germany and Spain, while India exports a good amount of mango Pulp to countries including Saudi Arabia, Netherlands, UAE, Yemen, Arab Republic and Kuwait. Pickles and Chutneys made in the country are highly sought by Russia, USA, Belgium, Netherlands and France, while processed fruits from India are in great demand in countries including USA, Netherlands, UK, UAE & Saudi Arabia. Buffalo Meat is exported by India to Malaysia, Philippines, Saudi Arabia, Jordan and Angola, while sheep and Goat Meat is exported to Saudi Arabia, UAE, Qatar, Oman & Kuwait. Indias poultry Products are in great demand in UAE, Kuwait, Oman, Germany and Japan. Dairy Products are exported from India to Bangladesh, Algeria, UAE, Yamen, Arab Republic and Egypt.

Animal Casings from the nation are sent to Germany, Portugal, France, Spain & Italy. India exports processed meat to countries like Seychelles, UAE, Hong Kong, Germany and USA. Groundnuts are imported from India by Indonesia, Malaysia, Philippines, UK and Singapore. Guar Gum of India is highly sought after in USA, China, Germany, Italy and Netherlands. Jaggery and Confectionery from India are exported to Portugal, USA, Bangladesh, Pakistan and Nepal. Cocoa Products are imported from India by Nepal, Netherlands, Malaysia, Yamen Arab Republic & UAE, while the country sends its cereal preparations to USA, UK, Nepal, Sri Lanka & UAE. Indias alcoholic beverages are in great demand in countries like Jamaica, Thailand, UAE, Angola and Bhutan, while the milled products of the country enjoy a great market in USA, UK, Indonesia, Maldives and UAE. Some of the countries that import rice in large quantities from India include Saudi Arabia, Kuwait, UK, UAE and Yamen Arab Rep in addition to Nigeria, Bangladesh, South Africa, UAE and Ivory Coast. Wheat is exported from India to Bangladesh, Philippines, UAE, Sudan and Myanmar, while countries including Bangladesh, Sri Lanka, Sudan, Benin and Thailand import the range of other cereals from the country. Natural Honey is exported from India to USA, Germany, Saudi Arabia, UK & UAE, while pulses are imported by countries like Bangladesh, Sri Lanka, Pakistan, UAE & Nepal. Indian Agriculture Products Industry: Overview Across a number of sectors in agriculture, India enjoys the credit of being one of the largest producers including milk and dairy products. Indian agriculture is renowned for its enormous product diversity. A great deal of export prospects for Indian agricultural products ensues from the fact that the agrarian commodities produced in the country are complementary in nature as against the western countries. India is at present at the brink of making a revolution that will eventually modernize the food chain since the country is bound to see the doubling of the total agricultural production over the next ten years. Recent studies show that the total volume of turnover in the Indian food industry amounts to over Rs.250000 crore (US $ 69.4 billion), of which, the contribution made by value-added food products is not less than Rs.80000 crore (US $ 22.2 billion). Over and above, the Indian government has also sanctioned a number of proposals featuring joint ventures, collaborations with foreign firms, industrial licenses and fully export oriented units requiring an investment of Rs.19100 crore (US $ 4.80 billion. Out of this, the value of foreign investment will be more than Rs. 9100 crore (US $ 18.2 Billion). The agricultural food industry in India is highly significant in terms of accounting for the countrys 35% of GDP and generating an employment opportunity to about 65 % of the population. The consumer food segment has a top priority in terms of featuring several joint- ventures and foreign collaborations in addition to inviting foreign investment. Some of the attractive benefits in the Indian food industry that have allured foreign investors include aqua culture, deep sea fishing and milk and dairy products besides meat and poultry segments. In the processed food segment, India exports a good volume of hides and skins. Though the country exports semi-processed items to a large extent, it also exports fully processed bulk shipments of coffee and tea without branding or packing. A few years back a number of firms were struggling to market their packaged food products. But, these days, it has become very easy to establish a firm footing in the Indian market owing to a younger population, enhanced incomes, evolving technologies and a fast developing middle class, estimated to be more than 50 million

households. On an average, an Indian citizen spends about 53 per cent of his income on food. There is a huge domestic market for processed foods in the country which is growing rapidly in tandem with the economy, which is at present worth about $90 billion. Experts state that the processed food manufacturers in India need to demonstrate a persistent stand besides adapting their products to the preferences of Indian culture. A number of large companies including ITC, HLL and Nestle stepped into the Indian market long ago and deeply penetrated into the domestic market. There are a few observations to be learnt from these success stories that will help in capturing the higher end of the domestic market besides grabbing a fair share of the export market. The model proposed by experts based on these observations include the strategies including large scale investment and adoption of the latest technologies, Intensive marketing efforts combined with tieups with foreign firms and creating a brand name. Dairy products make up a very important arena in the Indian agricultural industry endowed with a huge potential. Though the nation has made enormous progress in the production and processing of milk and dairy products over the past twenty years, the fact needs to be ackn want of facilities with respect to cold storage and modern processii Scope of Indian Agriculture Products Industry Experts in the agricultural industry arena have assured that India is all set to play a huge role in the global markets especially in terms of agriculture products in the near future. Shortly, the nation is expected to establish its strong position among the world nations as the largest producers and exporters of rice. At present, the country is the The country is expected to strengthen its position among the worlds leading exporters of rice. Presently India is the 2nd largest producer of rice following China and the 3rd largest exporter of rice following Thailand and Vietnam. However, recent reports have revealed that agriculture while playing an important role in the Indian economy is actually declining as visible from the fact that the overall GDP dropped from 30 % in the early nineties, to below 17.5 % in 2006. India is the global leader in a range of specialist products including buffalo milk, spices and bananas in addition to mangoes, chickpeas etc.. These are in fact viewed with great importance in the Indian diet, at the same time exported. Ahead of China, India is the 5th largest cultivator of biotech crops in the world. In the year 2006 alone, not less than 2.3 million farmers in the country cultivated genetically modified crops in about 3.8 million hectares of land. The primary GM crop in India is Bt Cotton which was introduced in the country in the year 2002. The future growth in the agriculture sector in India must ensue from advanced technologies that are cost effective and in conformity with the natural climatic regime of the country. The nation needs to evolve appropriate technologies to meet the needs of rain fed areas. Sustained efforts are also essential in the fields of improving seeds and yields. Improvements are also needs in data for improvised research, results, and sustainable activities in planning in order to bridge the gap between knowledge and practice. The nation must conduct surveys for Judicious land use and evolve effective management practices besides ensuring sustainable use of all the available natural resources. The progress ahead of the nation in the agriculture industry include modernization and innovation besides taking steps to incorporate the latest trends and technology into the whole food chain and also agro-production. With these efforts, the total production capacity of agriculture products in India is bound to double over the next decade. India needs to bank on its abundant natural resources and a vast experience in the field of

agriculture over the nations long past to enhance the prospects of its agriculture industry that shall play a vital role in revolutionizing the countrys economy

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