January 27, 2023
Riddhi Thakrar

Overview & Information Regarding Agro-Based Industries In India

Organizations with a direct or indirect connection to agriculture are known as agro-based businesses. It includes a range of commercial, industrial, and manufacturing tasks derived from agricultural commodities, as well as tasks and services used for farm production.

Agro-based companies are those that source their basic materials from agricultural production of both plants and animals. Additionally, they increase the value of agricultural production by preparing it and creating goods that can be sold and used. India's textiles, sugar, vegetable oil, tea, coffee, and leather goods sectors are a few examples of regions with agro-based businesses.

Knowing the scope and scenario of the agro-based industries

Given that India's economy is mostly based on agriculture, the potential for agro-based enterprises is rather large. In India, the agricultural sector contributes roughly 18% of GDP, according to statistics for the year 2020.  Additionally, the agriculture industry alone employs 42% of the population in India. Because of a variety of factors, the percentage of the population engaged in the agriculture industry has been decreasing every year. The majority of the population still works in it, making it the largest sector.

Because of its enormous development potential, socioeconomic effects, particularly on generating employment, and general ability to remain recession-proof, agro-based industry is seen as the dawning sector in the Indian economy. Additionally, the society is reliant on agro-based industry and agriculture to a degree of about 70%.

Agro-processing employs, directly or indirectly, over 14% of the entire workforce in industrialized nations, according to some estimations, whereas just 3% of the population of India works in this industry. The data that was previously mentioned shows how underdeveloped this industry is and how much room there is for growth.

Importance of agro-based industries in India

As discussed, India is an agrarian country, where the majority of the population is dependent on the agricultural sector. So as discussing the importance of the agricultural industry, the following can be said regarding its importance:

1. Aids in boosting industrial output.

2. Job opportunities for tribal people living in remote and underdeveloped areas and landless agricultural labor.

3. Support the growth and stability of the rural economy by diversifying industries and reducing reliance on agriculture.

4. By offering reliable income sources and support, we can guarantee the reduction of poverty.

5. Earn the nation's critical foreign currency.

6. Enhance the quality of life in rural communities.

7. Aid in dwindling the stark disparities in wealth and income distribution.

8. Are simple to set up.

9. Aid in preventing the waste of agriculturally produced perishables.

10. Encourages balanced industrial and agricultural growth.

What is the need for agro-based industries in India?

When discussing the need for agro-based industries in I the following can be said regarding it:

1. Increases the prosperity of the rural livelihoods.

2. Realizing the possibilities of the rural economic structure, where there are many raw materials to choose from.

3. Give rural residents a chance to find work.

4. Increase income and, as a result, people's standard of living, which in turn opens the door for demand-based industries.

5. Instead of concentrating industries in one location, give them the chance to spread out.

6. Fix the issue of dealers and intermediaries taking advantage of the farming community.

7. Farmers might be guaranteed higher prices for their goods.

8. Encourage the planting of various crops in more and more places to boost agricultural output and the economy of the country.

9. Agricultural products' distribution costs can be reduced, which will assist keep the price of completed items down.

10. Avoid wasting agricultural items that are perishable.

11. Depending on their aptitude for the establishment of agro-industries, assist in developing underdeveloped areas.

12. Stop people from moving between rural to urban regions.

13. to promote balanced growth in both industry and agriculture.

So, these are the reasons for India that the development and need for agro-based industries are required.

Challenges faced in agro-based industries in India

Since India is a developing country, there are many challenges that are faced by the Indian economy in the agro-based industry sector. These challenges are described as follows:

1. Entrepreneurs lack access to appropriate mentoring.

2. Some degree of risk-taking is involved.

3. Crops or cropping patterns have changed

4. Crop variety changes as a result of technological advancement

5. A monsoon failure could affect the supply of basic materials.

6. The diversity of agricultural products and the lack of an appropriate approach to choosing the industries that are best suited to a particular region.

7. A periodic supply of agricultural products may cause the units' capacity to be underutilized because they won't be operating all year.

8. Fruit and vegetable-based industries might not always receive the same variety but might receive another kind.

9. Uncertainty over anticipated market demands

10. Lack of knowledge regarding the size and complexity of the industry.

11. The district's different development agencies are not properly integrated.

12. For contemporary and advanced agro-industries, proper direction and training are lacking.

13. Because modern small enterprises require a lot of money, the availability of financing will be a major issue.

14. Promotional actions including running protracted campaigns, picking industries, and telling business owners about prospects are insufficient.

All these challenges can be overcome by the supporting manner and also the other advancements such that it is easy for all to manage and develop this sector.

In the approaching decades, India's economy would be driven by agro-based businesses. Moreover, creating competitive agro-industries is essential for creating jobs and earning prospects as the government works to double farmers' incomes, decrease employment reliance on the agricultural industry, and increase labor contribution.


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