Agro Products in India

The agro products and food processing industry sector in India is one of the largest in terms of production, consumption, export and growth prospects. The government has accorded them a high priority, with a number of fiscal relief's and incentives, to encourage commercialisation and value addition to agricultural produce; for minimizing pre/post harvest wastage, generating employment and export growth. 

Important sub sectors in agro-products and food processing industries are: Fruit & Vegetable Processing, Fish processing, Milk Processing, Meat & Poultry Processing, Packaged/Convenience Foods, Alcoholic beverages & Soft drinks and Grain Processing etc.

As a result of several policy initiatives undertaken since liberalisation in August 1991, the industry has witnessed fast growth in most of the segments. As per a recent study on the agro products and food processing sector, the turnover of the total food market is approximately Rs. 250,000 crores (US $ 69.4 billion) out of which value-added food products comprise RS 80,000 crores (US $ 22.2 billion) 

Since liberalisation in Aug '91 till Dec '98 proposals for projects of over RS 72,000 crores (US.18  billion) have been proposed in various segments of the food and agro-processing industry. Besides this, Govt. has also approved proposals for joint ventures, foreign collaboration, industrial licences and 100% export oriented units envisaging an investment of Rs. 18.700 crores (US $ 4.70 billion) during the same period. Out of this, foreign investment is over Rs. 8800 crores (US $ 2.2 billion). 

Agro products and processed food exports were at over Rs. 11,000 crores (US $ 2.75 billion ) in 1997-98, and constituted about 10 percent of total exports from the country. Out of these exports, rice accounted for 29%, whereas marine products accounted for over 42%. 

Primary food processing is a major industry with lakhs of rice-mills/hullers, flour mills, pulse mills and oil-seed mills. There are several thousands of bakeries, traditional food units and fruit/veg./spice processing units in unorganised sector. 

In the organised sector, there are over 820 flour mills, 409 fish processing units, 4932 fruit/veg processing units, 114 meat processing units, 138 sweetened and aerated water (soft drinks) units, 90 milk product units, 429 sugar mills, 725 solvent extraction units and several other food processing factories. 

India is the world's second largest producer of fruits & vegetables, but hardly 2% of the produce is processed. India is the land of spices producing all varieties worth over Rs. 3500 crores (US $ 900 million) amounting to 25-30% of world production, which is processed for value-addition and export. It grows 22 million tonnes of oilseeds covering most of the varieties. Other important plantation products include tea, coffee, cocoa and cashew. 

It has large marine product and processing potential with varied fish resources along the 8041 km. long coastline, 28000 km. of rivers and millions of hectares of reservoirs & brackish water. India's livestock population is largest in the world with 50% of world's buffaloes and 20% of cattles, but only about 1% of total meat production is converted to value added products. 

Size of the semi-processed and ready to eat packaged food industry is over Rs. 4000 crores (US $ 1 billion) and is growing at over 20%. 

Agriculture and agro products remains the most important sector of the Indian economy. They contributes nearly one third of  the GDP and accounts for 64% of the workforce. Progress in the agriculture sector is one of the  most  important achievements of India's development strategy. Indian agriculture is in the private sector, but the government has actively supported its development through the creation of infra-structure and a system of  price incentives and subsidies. In terms of irrigated area and consumption of fertilizers and pesticides, India ranks amongst the top few countries of the world. 

Indian agriculture is beginning to appear globally competitive. Two important policy changes have made this possible. The first is the deliberate reduction in the high degree of protection earlier accorded to the manufacturing sector - which has improved the relative profitability of the agriculture sector. The second is, letting the farming community receive market prices so as to bring about more equitable terms of trade for this sector.