The localization of agro-based food processing industries in North West India is a multifaceted phenomenon shaped by a confluence of geographical, economic, and socio-cultural factors. Firstly, the region’s abundant agricultural resources, including fertile soil and favorable climatic conditions, serve as a foundation for the cultivation of diverse crops, making it an ideal hub for agro-processing. The proximity to major agricultural belts ensures a steady supply of raw materials, reducing transportation costs and facilitating efficient production. Additionally, the availability of water resources, primarily from the Indus River and its tributaries, contributes to irrigation and supports agro-based activities. Economic incentives, such as government policies promoting industrial growth and investment in the region, further attract entrepreneurs to establish food processing units. Moreover, the rich cultural heritage and culinary diversity of North West India create a demand for processed food products, fostering a local market for the industry. In essence, the localization of agro-based food processing industries in this region is a result of a harmonious interplay of geographical advantages, economic policies, and cultural preferences.
Tag: Developmental issues..
Decoding the Question:
- In the Introduction, try to briefly write about the agro-based food processing industries.
- In Body, Write various factors for localization of agro-based food processing industries in North West India.
- In Conclusion, try to write about the importance of agro-based food processing industries.
Answer:
Agro-based food processing industries are those industries which take agricultural products as raw materials and process it to make more profitable commercial products for human and animal consumption. India’s foodgrain production of 2019-20 is about 291.56 million tonnes, most of which comes from the Green-Revolution zone of North-West India.
Factors for Localization of Agro-based Food Processing Industries in North West India:
- Abundant Agricultural Produce: North West India, comprising states like Punjab, Haryana, Rajasthan, and parts of Uttar Pradesh and Gujarat, is known for its abundant agricultural produce. This availability of raw materials attracts agro-based food processing industries to set up units in the region.
Example: Punjab contributes about 19% of India’s total wheat production. Haryana is a major producer of basmati rice, accounting for around 70% of the country’s total basmati rice production and Rajasthan is a significant producer of oilseeds, producing around 14% of India’s total oilseed output.
- Proximity to Agricultural Sources: The proximity of food processing units to agricultural sources ensures a steady supply of fresh produce. This reduces transportation costs and post-harvest losses, making it economically viable for industries to operate in the region.
Example: The NCR, comprising Delhi and neighbouring areas in Uttar Pradesh and Haryana, is one of the largest urban agglomerations in India, offering a significant market for food products.
- Infrastructure and Connectivity: The presence of well-developed transportation networks, including road, rail, and air connectivity, facilitates the efficient movement of raw materials and finished goods. Good infrastructure encourages the localization of food processing industries in the region.
Example: The region has an extensive road network of over 2.3 million kilometres, providing excellent connectivity for transportation of goods.
- Access to Markets: North West India is strategically located with access to both domestic and international markets. The region’s proximity to major cities and ports enhances market reach for processed food products, making it an attractive location for food processing units.
Example: Delhi, a major city in the NCR, is one of India’s largest consumer markets. It ranked as the second-most populous urban agglomeration in the world in 2022.
- Government Support and Incentives: Favourable government policies and incentives aimed at promoting agro-based industries encourage businesses to invest in the region. Subsidies, tax benefits, and ease of doing business measures further facilitate the localization of food processing industries.
Example: Punjab Bureau of Investment Promotion, Haryana Enterprises Promotion Centre, Rajasthan State Industrial Development and Investment Corporation incentives such as capital subsidies, interest subsidies, and exemption from stamp duty for agro-based food processing industries.
- Skilled Labor Pool: The presence of a skilled labour pool in the region, particularly in agro-processing and related industries, supports the establishment and functioning of food processing units.
Example: Punjab,Haryana and Rajasthan have a growing pool of skilled workers in agro-processing due to government initiatives for skill development and vocational training.
- Regional Specialisation: Some regions in North West India may have specific advantages or expertise in certain agro-processing activities. Such regional specialisation drives the localization of particular food processing industries.
Example: Punjab specialises in wheat processing, contributing significantly to the production of wheat products like flour, semolina, and wheat bran and Haryana’s expertise lies in dairy processing, with a high number of milk processing units and dairy cooperatives
Challenges of Agro-Based Food Processing Industries in North West India:
- Seasonal Nature of Agricultural Produce: According to the Food and Agriculture Organization (FAO), India experiences significant post-harvest losses, with estimates suggesting that about 30% of fruits and vegetables are lost annually due to inadequate post-harvest infrastructure and handling practices.
Example: In Punjab, a major agricultural region in North West India, the cultivation of paddy and wheat is prominent during specific seasons.
- Post-Harvest Losses: The Indian Institute of Packaging (IIP) reported that post-harvest losses in India amount to Rs 92,651 crore (approximately USD 12.5 billion) annually. These losses affect various crops, including fruits, vegetables, and grains, impacting the availability of raw materials for food processing industries.
Example: In Rajasthan, which is known for its production of various fruits and vegetables, inadequate post-harvest handling and storage facilities lead to substantial losses
- Infrastructure Constraints: According to the World Bank’s Logistics Performance Index, India’s infrastructure ranked 70th out of 160 countries in 2018, indicating challenges in areas like transportation and storage facilities, which can hinder agro-based food processing industries’ smooth functioning.
Example: In parts of Uttar Pradesh and Gujarat, where agricultural productivity is high, inadequate transportation networks and storage facilities can be a challenge for agro-based food processing industries.
- Access to Finance: The Reserve Bank of India’s (RBI) data reveals that small and medium-sized enterprises (SMEs) face challenges in accessing finance, and credit availability for the food processing sector remains lower compared to other industries.
Example: Small and medium-sized agro-processing units in Haryana often struggle to secure sufficient financial support for technological upgradation and expansion.
- Technological Obsolescence: A study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) highlighted that around 50% of food processing units in India still use outdated technology and machinery, affecting their efficiency and competitiveness.
Example: In certain regions of Haryana, older food processing units continue to use traditional methods for processing and packaging, which can lead to inefficiencies and higher production costs.
- Regulatory Compliance: The Food Safety and Standards Authority of India (FSSAI) reported that only about 30% of food processing units in India comply with food safety and quality regulations, indicating a need for improved adherence to standards.
Example: In Gujarat, some food processing units may face challenges in obtaining necessary certifications and adhering to food safety standards.
Conclusion:
Hence,the agro-based food processing industries provide vital linkages and synergies between producer, manufacturer and consumers. Pradhan Mantri Kisan Sampada Yojana (PMKSY), Food Safety and Standards Authority of India (FSSAI), National Horticulture Mission (NHM), Micro, Small, and Medium Enterprises (MSME) Act and Integrated Cold Chain and Value Addition Infrastructure (ICVAI) Scheme helps in reducing wastage, increase market based & shelf life, better income opportunities to farmers and ensure both food and nutritional security for people. Similar enabling conditions like North-west India, can be created in other regions also to promote growth and development.
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