The liberalized food manufacturing sectors, as well as other forms of agribusinesses, could play an important role in stimulating agricultural growth.
Amongst various agro-industries, food manufacturing is more material-intensive, and thus possessed a greater potential to revitalize agricultural growth by strengthening forward and backward linkages with farmers, and speed up the process of commercialization and diversification of agricultural production.
Also, food processing industries, to reduce their own transaction costs, often tend to be located nearer to the source of raw material, and thus can create income opportunities for the rural people.
Hence, accelerating agricultural growth through diversification and development of agro-processing is a major policy challenge.
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.