Discuss the factors for localisation of agro-based food processing industries of North-West India. (UPSC IAS Mains 2019 General Studies Paper – 1)
Agro-based food processing industry, aptly recognised as ‘sunrise industry’, is described as one that adds value to agricultural raw materials. This value addition converts the raw agricultural products into marketable, easy-to-use or edible products like corn flakes, chips, ready to serve drinks, etc. The Indian food processing industry accounts for 32% of the country’s total food market. It is one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. However, the North-West India showcases a better-developed agro-based food processing industry. The factors for this localisation are as follows:
- Geography: The region is blessed with a diverse agro-climatic zones, fertile soil and undulating plains. These support a multitude of crops, vegetables and fruits round the year which provide ample raw material.
- Raw material: Availability of diverse raw materials viz. cereals, fruits, vegetables and livestock provide attractive base for food processing industry in this region. For instance, Punjab accounts for 17% of rice and 11% of wheat production of India. This region also has the distinction of having the largest population of livestock and largest producer of milk in India.
- Infrastructure: Well-connected transportation network, subsidised electricity, irrigation facilities (such as Indira Gandhi canal and Bhakhra Nangal) and ample warehousing and storage facilities contribute to flourishing agro-based industries in the region.
- Agricultural marketing: This region has well-developed agri-export zones, market yards, organised APMCs and mandis, etc. which have provided a conducive environment for the establishment of agro-based industries.
- Socio-economic status: The population of the region has good literacy rate, including financial literacy, and enjoys an efficient banking network. This helps channel easy availability of credit and capital investment.
- Policy support: The Punjab government operates an agricultural mega project policy to facilitate investment in the food processing sector. Additionally, large landholdings, single window clearance, permission to set up private sub e-markets, amendment to APMC Act, etc. have enabled agro-based industries in this region to flourish.
- Capacity building and R&D: Capacity building of the manpower in food processing sector in India is spearheaded by the National Institute of Food Technology Entrepreneurship and Management which is located in Sonepat, Haryana. Likewise, a prominent institution for research and development to improve agricultural productivity and business opportunities is the Indian Institute of Maize Research located in Ludhiana, Punjab.
The initiatives taken at the Union level like permitting 100% FDI through the automatic route in food processing sector and Scheme for Mega Food Parks under the Ministry of Food Processing Industries are conducive steps. However, the challenges for the industry remain such as fluctuations in the availability of raw material due to climate change, inadequate implementation of the APMC Act, multiplicity of ministries and laws to regulate food value chain, etc.
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