Scope and Importance of Agro-enterprises
Enterprises with a variety of industrial, manufacturing and processing activities

By Dr RM Prasad
Agriculture is the primary source of employment in India, especially in the rural areas. It is estimated that nearly 57 per cent of total employment and 73 per cent of rural employment is generated in the agricultural sector (NSSO). The share of the agricultural workforce has declined gradually during the last two decades with diversification of the rural employment into non agricultural activities. Still, compared to other sectors, agricultural sector continues to show a reasonable potential to absorb workers, given its existing large employment base, although with fluctuating trends. It is now increasingly clear that the capacity of the agricultural sector to absorb the increasing labour force is limited and there is a need to diversify to other non-farm and off-farm employment in rural areas. Promotion of agro-enterprises is one of the viable options.

Variety of Agro-enterprises
Agro-enterprises cover a variety of industrial, manufacturing and processing activities based on
agricultural raw materials and also activities and services that serve as inputs for agricultural production. The concept of agro-enterprises highlights the proximity and affinity between agriculture and industry. Agro-enterprises in rural areas can also help minimise the wastes in processing of the agricultural inputs and outputs. Promotion of micro-enterprises in and around the venue of production of crops such as tomato, pineapple, mango, etc could help in minimising the seasonal loss to a large extent. So also, industries based on by-products of crops such as paddy, banana, sugarcane, etc would help in generating wealth out of waste and also generating job
opportunities in the rural areas.

Agro-enterprises could be classified as:

• Agro-inputs manufacturing units: eg. pumpsets, incubators, farm machineries
  
• Agro produce manufacturing units: eg. newsprint from bamboo, alcohol from molasses
  
• Agro-produce processing units: eg. food processing units of fruits and vegetables
  
• Agro-service units: eg. repair of tools and machineries, collection centres

Scope of Agro-enterprises
There is immense scope for establishing food industry units based on available raw materials, and some of the promising units are:

• Rice based units - Rice mills, rice bran oil, puffed and flaked rice units
  
• Oil seeds - Groundnut oil, cotton seed oil, protein rich energy foods like salted pea nuts, pea nut candy, etc
  
• Fruits and vegetables - Banana, pineapple, mango processing plants, tamarind, citrus plants, vegetable processing plants
  
• Spices - Oleoresins from spices, curry powders
  
• Tuber crops - Sago, vermicelli, etc from tapioca, starch powder
  
• Poultry and dairy products - sausage, ice creams, yoghurts
  
• Fisheries products - Fish oil, fish powder
  
• Bakery products - Jam, pickles, cutlets

Food processing industries has emerged as an important agro enterprise. It is generally agreed that the Indian middle class and the size of the urban market for processed foods are large enough for economies of scale in the food processing industry. The food products can be classified as processed and preserved, baked and dehydrated. There is a huge wastage of perishable food items in the country due to lack of proper food processing facilities and the level of processing is only about 2.20 per cent. However, India has tremendous potential to unleash large scale process based farm activities to exploit the emerging global business opportunities.

The food processing industry has great export and employment potential. The comparative edge enjoyed in terms of raw materials and labour offers lucrative opportunities. But India is yet to make headway on this front. It is estimated that several thousand crore worth of farm produce is lost every year due to inefficient post harvest practices for storage and processing. There exists a high wastage in the farm sector due to inefficient technology in storage, processing and post harvest handling. The Ministry of Food Processing Industries has initiated many measures to deal with the major constraints faced by the food industry and is confident of providing the necessary momentum for the rapid growth of the food processing sector and usher in a new era in the Indian economy.

State Initiatives
Some of the important initiatives of the Ministry are:
Cold Chain: To create modern cold chain for preservation and value addition of perishable commodities, the Ministry is launching a revamped comprehensive Cold Chain Infrastructure scheme for creating integrated cold chains at different levels - farm level primary processing centre-cum-cold chain, collection/aggregation centres and Strategic Distribution Centres (SDC). The SDC will have integrated infrastructure facilities like material handling equipments, refrigeration, freezing facility, frozen storage, modern packaging facilities, ancillary equipments like X-ray, weigh bridge, etc. The SDCs will be linked to retail super markets.

Mega Food Parks: They are envisaged to be well defined agri/horticultural processing zones containing state-of-the-art processing facilities with support infrastructure and well established supply chain. This facility aims to provide a mechanism to bring together farmers, processors and retailers and link agricultural production to the market so as to ensure maximisation of value addition, minimise wastage and improve farmers’ income. The Mega food park is designed to link the farmers with retail markets with minimising of the intermediaries.

Abattoirs: Considering the grave issues of hygienic and scientific slaughtering as well as optimum utilisation of by-products relating to the meat industry, the Ministry has launched a scheme for modernisation of existing abattoirs with a view to eliminating waste, contamination and cruelty to animals.
Capacity Building: The Ministry has also taken up quality assurance, R&D, HACCP, Human Resource Development and establishment of laboratories to support the Food Safety and Standards Act. A National Institute of Food Technology Entrepreneurship and Management (NIFTEM) to produce world class manpower has been set up at Kundli, Sonepat, Haryana. It is projected as a world class institution, which would work actively in assisting the various stakeholders (entrepreneurs, foodindustry, exporters, policy makers, Government, etc) in setting food standards, business incubation and information sharing. There will be sectoral theme centres and cross-sectoral theme centres. NIFTEM will provide core courses in the area of “Food Science” and “Food Technology”.

Paddy, wheat, maize and sorghum are the four major cereals in India which are grown and mainly consumed in the form of products obtained from primary processing, such as rice from paddy and ‘atta’ (flour) from wheat. Products from secondary processing are yet to gain mass acceptability in the country, possibly due to non-availability, taste and price factors. But with increasing purchasing power, burgeoning middle class population, increasing number of women in the work force, media influence, etc, cereal processing, both primary and secondary, are gaining much momentum to cater to changing lifestyles. It is estimated that the modern mills would start processing value-added secondary products from rice, wheat, maize and sorghum. The secondary processing of sorghum is expected to produce alcohol and sugar from sorghum starch, and value added animal and poultry feeds from sorghum. About 90 per cent of the rice bran would be utilised for oil extraction and protein extraction from bran also will be commercialised. Production of alcohol from damaged wheat and extraction of gluten and starch from wheat would be practiced soon.

The fruits are processed into various products such as fruit juices and concentrates (pulp), canned fruit, dehydrated fruit, jams, jellies, etc. Although India is the largest producer of fruits in the world, it is estimated that more than 20-22 per cent of the total production of fruits is lost due to spoilage at various post harvest stages. It is estimated that less than 5 per cent of total fruits produced only is processed. Around 20 per cent of the processed fruits is meant for exports, and the rest caters to the defence, institutional sectors and household consumption. Mango and mango based products constitute 50 per cent of exports.

India is the second largest producer of vegetables in the world and it is estimated that around 20-25 per cent of the total vegetables produced is lost due to poor post harvest practices. Only less than 2 per cent of the total vegetables produced in the country is commercially processed as compared to more than 70 per cent in Brazil and USA.

The fruits and vegetables are mostly harvested by hands or hand tools, sorting and grading are done on a very negligible scale, and that too based on only visual inspection. While pre-cooling (cold chain) and surface coating are prevalent in other countries, we lag behind in adoption of such technologies, including packaging and irradiation technologies. Frozen and dehydrated products, fruit juices, pickles and other forms of preserves are emerging as popular processed products. Change in consumer taste, food habits and life style, convenience, nutritional value and purchasing power are the likely reasons for preference of processed products. To catch up with the demand for such processed products, there exists strong need for extension education and training of farmers on technologies related to processing and value addition.

Dairy enterprises provide job opportunities to 80 million farm families and women account for more than 70 per cent of the labour force in dairy farming enterprise. Poultry also provides employment to the tune of about two million. There are many processing related enterprises in the dairy sector, which includes pasteurisation units, milk cooling units, ice cream units, cream separators, chilling units, khoa making units, etc. Similarly, there are many poultry related enterprises like feed mixing units, poultry dressing units, broiler units, hatchery units, egg powder units, etc. that can be profitably run by the farmers.

Conclusion
The scope for agro-based enterprises in India is very wide and large ranging from simple processing units like rice mills, flour mills, oil mills, etc to sophisticated, high-tech and high value added products like essential oils, pulp units, beverages, confectionary, etc. Some of the enterprises have high export potential for earning substantial foreign exchange. The immense potential for such agro-based enterprises have to be fully tapped by our farmers by acquiring necessary skills and expertise available in the food processing sector.

— Dr. R.M. Prasad is Senior Fellow at National Institute of Rural Development, Hyderabad

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