Agro- based industries are being promoted by the government through several schemes as they play a crucial role in boosting the country’s economy. These industries are full of high potential as employment generators especially in the rural India and also perform a number of crucial functions that support development and poverty alleviation. Agro-based industries consist of the processing, preservation and preparation of agricultural production for intermediate and final consumption.
Ways to increase farmer’s income:
The available vast potential of India could be potentially exploited through:
1) Selection of appropriate scale and technology of production
2) Up gradation of technology of existing units
3) Establishment of suitable linkages between products and consumers at home and abroad
4) Establishment of suitable institutional arrangements.
Types of Agro-based Industries-
Based on the input-output linkages and the interdependence between agriculture and industry, agro-industries can be of two types-
(a) Processing industries or agro-based industries- the agencies supporting agriculture by way of designing and manufacturing inputs for production and productivity growth of the primary sector are termed as agro industries.
(b) Input supply industries or agro-industries- these are the agro-based industries which process and add value to such agri-resources which contain ground and tree crops, fruits and vegetables, etc., as well as livestock for their day-to-day operations.
As per the International Standard Industrial Classification (ISIC) framework, agro-based industry consists of the manufacturing/processing of food and beverages, textile, footwear and apparel, leather, rubber, paper and wood and tobacco products.
Categories of Agro-based industries:
In India, the agro-based industries can be grouped under three categories-
(a) Agri-processing units covering fruit and vegetable processing units, dairy plants, rice mills, dal mills, etc.
(b) Agri-manufacturing units covering sugar, dairy, bakery, textile units, etc
(c) Agri-input manufacturing units covering mechanization of agriculture, agriculture implements, seed industries, irrigation equipment, fertilizer, pesticides, etc.
Agro-based industries lose their competitive edge due to unfair trade practices adopted by exporters of other countries. Such practices manifest in two forms-
Farmer Producer Organization-
The FPOs have emerged as an interface between small farmers and the external world by providing forward and backward linkages, giving them required voice, market access, bargaining power, economy of scale and better prices.
Structure and organization of FPOs vary from country to country depending upon the legal and policy framework of the country.