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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

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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 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

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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 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. Processed Food Segment The processing level of the agro industry may be at the primary, secondary or tertiary stage. In the case of hides and skins, India exports largely semi-processed items whereas in coffee/tea, the exports are mostly in secondary stage by way of fully processed bulk shipments without branding/packing. Exports at the tertiary stage mean branding and packaging the product that are ready for use by the consumer. A few years ago, companies struggled to sell packaged foods. But now it is much easier to break into the Indian market because of a younger population, higher incomes, new technologies and a growing middle class, estimated at 50 million households. An average Indian spends around 53 per cent of his/her income on food. The domestic market for processed foods is not only huge but is growing fast in tandem with the economy. It is estimated to be worth $90 billion. Processed Food

Manufacturing companies are required to be persistent and must adapt products to the Indian cultural preferences. Many big companies like ITC, HLL, Nestle entered the Indian market a long time ago and have made a deep penetration in the market. From these success stories we can learn some lessons in order to capture the higher end of the local market and get a fair share of the export market. The model is structured around the following:* Large scale investment and adoption of the latest technologies * Intensive marketing efforts * Perhaps, a foreign tie-up can be beneficial * Brand name. The levels of processing and manufacturing can be classified into three groups, namely manual, mechanical and chemical or a combination thereof. In choosing the process, the main considerations are the nature of the raw materials, technology of processing, and packing. Other Segments Dairy product is another area where there is enormous potential. No doubt the country has made tremendous strides in the last 20 years in production and processing of milk and milk products. But the fact remains that only

15 per cent of all the milk produced is processed. Today, a large number of people suffer from diabetic or cardiac ailments and availability of fat free milk, fat free curd and sugar free food is poor. A simple product like soya milk is not produced in adequate quantity. Fish and shrimp have good export potential but there is an immense lack of cold storage and modern processing facilities. For instance fish production is around six million tonnes a year and the frozen storage capacity spread over 500 units is only one lakh tonnes. Another area is herbal medicine. It is being increasingly realized the world over that herbal drugs do not have any side effects. India has a good number of tried and tested herbal products in use and what is required is rigorous quality control, proper packaging and a brand name. The government and modern retailers are addressing these issues with new laws on packaging and labeling as well as greater investment in the supply chain. The Progress Ahead* 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.

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