agro project.docx

8/9/2019 agro project.docx

1/64

CONTENTS

CONTENTS PAGESPREFACE

CONTENTS

LIST OF TABLES

EXECUTIVE SUMMARY

Introduction; Status of Agro –Industry, its Problems andConstraints

Policy Development and Grot! of Agro" Processing Industry

: #b$ectives and t!e %et!odology: Structure and Grot! of Agro" Industries

: &ac'ground C!aracteristics of Agro Industries

: Pattern of Investment, Profitability and Employment

: (ec!nological Structure and )in'ages in Supply of *a %aterials

and %ar'eting

: +inancial Incentives and Subsidies and its Impact

: Contribution in Income and Employment of +armers

: Problems and Perspectives of Development

: Conclusions and Policy *ecommendations

*eferences


2/64

EXECUTIVE SUMMARY

I. Introduction/Ob!cti"!#:

In t!e process of reaping advantages of establis!ing agro"based industries for

ac!ieving increasing employment and liveli!ood opportunities in rural areas it ould

be necessary to adopt a compre!ensive long term approac! toards t!e development

of various food processing activities Suc! planning e-ercise s!ould be aimed firstly

to e-amine t!e overall situation and pattern of e-isting industrial enterprises and t!en

attempt s!ould made to identify most nic!e based product groups of enterprises !ic!

possess certain location specific advantages in its sustainable development (!is

ould not only provide a strong base and alternative option for creation of additional

employment opportunities and avenues of income for rural !ouse!olds oning very

small si.e of cultivated land and landless labourers it!in t!e rural areas itself but it

ould !elp in reduction in t!e rate of rural"urban migration of population

Considering t!e importance of agro"processing industries in t!e development perspectives of overall rural development in general and reali.ing t!e e-pected role of

e-panding t!is sector for ac!ieving increasing employment opportunities and income

level and t!us to overcome t!e emerging c!allenges of unemployment and poverty in

rural areas of t!e State t!e present study attempted to e-amine t!e folloing issues/

(!e emerging structure, pattern and grot! of different product groups of food

processing industries across t!e district, regional and state level in 0P

Si.e of capital investment and its sources of financing, output, generation of

value added, production tec!nologies, employment pattern, turnover and t!e

contribution of different product line of industries in all groups of industries

(!e lin'ages establis!ed by industries for obtaining ra material from t!e

farmers and ot!er suppliers, procurement pattern, accessibility situation,

prevailing practices of prices determination of different ra materials being

supplied from different sources and t!e arrangements of mar'eting t!e final

products

(!e development prospects and problems in operation of enterprises and

re1uired measures to be initiated to strengt!en t!e e-pansion of different

groups of industries


3/64

Evaluation of policy measures and incentives introduced by t!e central and

state Governments and ot!er institutions and agencies suc! as 2!adi

Gramod!yog &oard 3 commission, APEDA etc for agro"processing industry

and t!eir usefulness in terms of t!e e-pansion and grot! of different product

groups of agro" based industries

Contribution and impact of e-pansion of agro processing industries in

increasing income and employment of farm !ouse!olds

Assessment of t!e e-tent of astage of farm produces vis"4"vis levels of

processing for different !orticulture and vegetable products

AI.M!t$odo%o&' (nd t$! #()*%! d!#i&n: (!e study !as been based on bot! secondary

and primary data (!e primary data as collected among a sample of different

product groups of 567 registered and 568 un"registered industries and 857 diversified

and 9:7 non"diversified farm !ouse!olds across t!e nine agro"climatic regions of t!e

state Collection of primary data from bot! units and farm !ouse!olds as carried out

it! t!e !elp of structured intervie sc!edule (!e secondary data for t!e years 577"

7 and 577:"78 as obtained from t!e ASI documents and ot!er sources of State and

Central Government

III. Findin/Conc%u#ion#: %ain findings of t!e present study are as follos;

+. Structur! (nd ,ro-t$:

A bul' of


4/64


5/64


6/64

0. Structur! o E)*%o')!nt: (!e agro processing industries of bot! t!e categories

ere seen employing different s'illed and uns'illed as paid or'ers and unpaid

family or'ers as ell as men and omen or'ers in different stages of production

functions

(!e si.e of employment per unit !as increased from 8 or'ers in 5776 to 57

or'ers in 57

S!are of un"s'illed or'ers constituted over percent as against = percent

office or'ers and = percent s'illed or'ers in total or'force &ut

or'force per unit !as been increasing in bot! t!e groups of units

Employment !as been groing at t!e rate of < percent per annum but it !as

been increasing more s!arply in un"registered units t!an in registered units

1.T!c$no%o&' Ad(*t(tion: 69 percent of agro"units, comprising 6< percent registered

and 65 percent un"registered units ere using second !and mac!ines in production

processes due to reasons as !ig! purc!ase cost, lac'ing finances, less supply and not

accessibility in local mar'ets of modern mac!ines

%ec!ani.ed and semi"mec!ani.es form of tec!nologies ere commonly

adopted in cleaning and as!ing of ra materials in a ma$ority of 69 percent

units, consisting 85 percent registered and 9< percent un"registered units (!e

grading of ra material according to its 1uality and si.e as carried out

manually in


7/64

alue of ra material per unit as obtained from farmer under t!e pre"arranged

system as *s 9::7 la'! and under un"arranged basis as *s 97=: percent output as sold to t!e !olesalers

#ver =< percent units, largely un"registered units ere facing one or t!e ot!er

form of mar'eting problem

)ac'ing mar'eting netor' in local areas, getting un"reasonable prices for

products, !ig! ta-es, over interference of local officials !ile selling products

t!roug! different c!annels and late payment of produces from t!e part of

buying ere t!e main problems of mar'eting goods

5. I)*(ct o Fin(nci(% Inc!nti"!# (nd Sub#idi!#: (!e state Government !ad

establis!ed Directorate of Industries, 0ttar Prades! Small Industries Corporation

0PSIC; Prades!iya Industrial and Investment Corporation of 0ttar Prades! )imited

0ttar Prades! +inancial Corporation 0P+C; 0ttar Prades! State Industrial

Development Corporation 0PSIDC for managing different industrial promotion

measures and sc!emes to promote industrial activities in t!e state

(!e role of different institutions in offering subsidi.ed financial incentives for promoting agro"processing industries !as been indicated very ea' in t!e

state #nly 5< percent of t!e sample industrial units !ave availed financial

facility from different financial institutions

@early :9 percent and 95 percent units !ad obtained financial assistance for

or'ing capital and purc!asing mac!inery and ot!er e1uipments respectively

Commercial ban's !ad been t!e main source of financing >5 percent agro"

industries (!e contribution of state oned financial institutions !as been in

offering incentives to only = percent registered agro"industries


8/64

A ma$ority of percent units ere provided financial assistance of less t!an

*s 6 la'!

As t!e conse1uences of lac'ing initiatives from t!e Government oned

financial institutions in offering financial assistance, t!e agro" units ere

bearing a very !ig! production cost by ay of paying a very !ig! rate of

interest against t!e financial assistance received from t!e &an's

#ut of 5< 0nits !o availed financial assistance, only 7 percent and =

percent entrepreneurs reported t!at it !elped in reduction in fi-ed cost of

production and ma'ing li1uidity available at lo cost

Anot!er, 58 percent units ere benefited in increasing t!e si.e of employment

And 5< units ere found t!e opportunity in increasing output

Providing financial assistance in any form !as been positively en!ancing bot!

t!e si.e of output and income per or'er

Grot! in value of gross output per or'er as ell net income per or'er for

units !o availed financial assistance as !ig!er as compared to units t!ose

!ad not availed any financial assistance Even, t!e net income per or'er for

latter category of units !as declined from *s 76 t!ousand to *s79

t!ousand as against t!e increase from *s 7 t!ousand to *s 7>7 for former

category of units

6. Contribution A&ro7indu#tri!# in ,!n!r(tion o Inco)! (nd E)*%o')!nt o

F(r)!r#: Impact of e-pansion of agro units in creation of income and opportunity for

people in particular areas !ere concerned units are located !as been e-amined

t!roug! ta'ing a sample of 7=7 farm !ouse!olds, consisting 857 diversified and 9:7

non"diversified farm !ouse!olds from t!e nearby areas of different agro"units in =

sample districtsAverage family si.e of sample farm !ouse!olds as of :< members and

average age of t!e oners of farms as


9/64

9= percent and 9 percent farmers !ad secondary and elementary level of

education !ile only 6 percent farmers mainly !o oned land of belo 56

acres ere illiterate

>: percent farmers !ad agriculture as t!eir principle occupation and its s!are

in total income of farm !ouse!olds as 85 percent Average si.e of cultivated

land per farm !ouse!old accounted only 95: acres

alue of output of farm produces per !ouse!old as *s >> t!ousand and 88

percent of it as sold out by t!e farm !ouse!olds

alue of net returns per acre toget!er of all crops as *s9 t!ousand !ic!

varied !ig!est at *s9> t!ousand for vegetables3 spices to loest at *s =

t!ousand for cereals

Per !ectare returns in groing different crops accounted relatively muc!

!ig!er for diversified !ouse!olds as compared to non" diversified !ouse!olds

accounting for *s 9 t!ousand and *s = t!ousands respectively because t!e

former groups ere selling a larger part of t!eir different agricultural produces

t!an t!e latter groups of farmers

Value of per !ouse!old sale of agricultural produces as *s 6


10/64

Supply of agricultural produces to t!e processors !as positively impacted in

increasing income of =: percent diversified farmers as against only 6 percent

un"diversified farmers

Boever, its gain in increasing income as largely gone in favor of medium

farm category of diversified farmers and least to !ig!est farm category of

diversified farmers

(!e farming as generally underta'en t!oug! employing family unpaid

or'force !ile only t!e larger farmers ere employing bot! family

or'force and !ired or'force

(!e s!are of !ired or'force in total or'ers accounted 85 percent but t!e

same as over 86 percent for diversified farms as against 66 percent for

undiversified farms

As a result of supply of agricultural produces to t!e processers, t!e increase in

employment of diversified farmers !as been to t!e e-tent of :> percent for

larger farmers folloed 9 percent for farmers oned 7 to 57 acres lands

!ile it !as increased loest at 7:> percent for farmers oned belo 6 acres

of land si.es

Impact of establis!ment of agro"processing in nearby areas of sample villages

and t!e supply of agricultural produces to concerned units !as also

increasingly motivated to t!e farmers by ay of s!ifting land from t!e

cultivation of traditional food crops to t!e commercial crops as per t!e

re1uirement of located agro"industries in nearby villages

++. E)!r&in& Prob%!)# (nd P!r#*!cti"!# o 8!"!%o*)!nt: Inade1uacy in t!e supply of

ra material from different sources and poorly developed mar'eting facilities, lac'ing

financial facilities for running t!e units, irregular supply of poer, access to only poor

1uality of ra materials, s!ortage of s'illed labour ere t!e important factor limiting

t!e scope of development of t!is sector

=: percent entrepreneurs recommended for ma'ing regularity in poer supply

in industrial areas

:: percent entrepreneurs recommended for minimi.ing t!e cost of various

mac!ines t!oug! providing incentives in its purc!ases

Providing financial support in capital investment, procurement of ra

material and transportation of goods at selling, initiating protection policy to


11/64

reduce competition in selling goods, reduction in t!e rate of various ta-es

especially A( and development of efficient mar'eting c!annels and proper

mar'eting arrangements for selling industrial produces ere t!e remaining

recommendations of t!e entrepreneurs of sample units


12/64

(!e State Government s!ould ensure regularity in supply of poer in

industrial areas

(!e State Government s!ould introduced policies for providing subsidised

financial incentives in t!e form of capital subsidy cum loan at starting of t!e

units especially in industrially bac'ard districts

Introduction of a sc!eme as entrepreneurs!ip training and apprentices!ip for

II( diploma !olders seems necessary for improving capacity building for bot!

young generation illing to start agro"units and s'illed labours respectively

(!e transportation subsidy on procurement of ra materials from different

destinations s!ould be introduced for minimising t!e cost of production

(!e provision of social security for all categories of or'ers at enterprise

level s!ould be made mandatory to attract rural"urban migration

(!ere is a need for s'ill development programme for un"s'illed labour from

t!e labour dept to increase t!e supply of s'illed labourforce

*etirement benefits sc!eme for or'ers can control t!e movement of or'ers

from one to t!e ot!er units as t!ey leave parent unit after ac1uiring different

occupation specific basic s'ill and training

+ree !and is given to unit to remove nuisance creating or'ers in unit

I(Is s!ould be strengt!ened to impart s'ill formation among !uman resources

as per t!e re1uirement of units located in particular areas

ocational training courses in t!e form of apprentice sc!eme for s'ill

formation among t!e students of I(I s!ould be imparted t!roug! large units

)abour las s!ould be it!dran on matters of removing non"productive and

problem creating labours

(!ere is a need to improve la and order situation in industrial areas

In failure, sic'ness of unit?s govt s!ould provide its claim out of assets

available 3 remained it! unit to oners

%ultiple formalities of ban's in e-tending loan s!ould be reduced

(ec!nology up gradation in certain matters of production processes !ic!

cannot reduce employment is re1uired to ma'e products more competitive

Product specific industrial clusters s!ould be promoted t!oug! providing

various infrastructural facilities and developing mar'et lin'ages in t!e

suggested clusters


13/64


14/64

value added products acceptable to t!e domestic and international mar'ets (!is

ould generate employment opportunities for different types of s'ills t!roug! food

processing, pac'aging, grading and distribution At t!e same time t!is ill transfer a

si.e margin to farmers t!roug! mar'et lin'ages

Similarly, t!ere is a need to establis! and strengt!ened t!e vertical and !ori.ontal,

bac'ard and forard lin'ages among t!e farmers, processors and *FD

organi.ations to improve economic efficiency and reali.e t!e economies of scale

Since t!e ee' integration of t!e farmers and processors 'eeps t!e farmers oblivious

of t!e 1uality and 1uantity of t!e processors and !ence t!e farmer?s emp!asis remains

concentrated on 1uantity of production It is e-pected t!at t!e promotion of vertical

and !ori.ontal integration among mar'eting co"operatives, farmer?s organi.ations,

SBGs and food c!ain stores ould be vital to improve value addition c!ain

In t!e process of reaping advantages of establis!ing agro"based industries for

ac!ieving increasingly creation of employment and liveli!ood opportunities it ould

be necessary to adopt a compre!ensive long term approac! toards t!e development

of various food processing activities Suc! planning e-ercise s!ould be aimed firstly

to e-amine t!e overall situation and pattern of e-isting industrial enterprises and t!en

attempt s!ould made to identify most nic!e based product groups of enterprises !ic!

possess certain location specific advantages in its sustainable development (!is

ould not only provide a strong base and alternative option for creation of additional

employment opportunities and avenues of income for rural !ouse!olds oning very

small si.e of cultivated land and landless labourers it!in t!e rural areas itself but it

ould !elp in reduction in t!e rate of rural"urban migration of population

India is t!e second largest producer of food in t!e orld !et!er it is canned food,

processed food, food grains, dairy products, fro.en food, fis!, meat, poultry, t!e

Indian agro industry !as a !uge potential, t!e significance and grot! of !ic! ill

never cease It ran'ed second position in t!e production of fruits and vegetables in t!e

orld In 577="7>, India?s e-port of fres! fruits and vegetables as estimated at 0S H

78> billion and processed fruits and vegetables it stood at 0S H 7:= billion Also

India !as been recogni.ed as t!e land of spices contributing to about 56 percent of t!eorld production )i'eise India is number one mil' producing country in t!e orld

5


15/64


16/64

percent, value addition from 57 percent to 96 percent and s!are in global food trade

from : percent to 9 percent (!e level of processing of fruits and vegetables is

envisaged to increase to 6 percent by 576

(!e agro industry is regarded as an e-tended arm of agriculture (!e development of

t!e agro industry can !elp stabili.e and ma'e agriculture more lucrative and create

employment opportunities bot! at t!e production and mar'eting stages (!e broad"

based development of t!e agro"products industry ill improve bot! t!e social and

p!ysical infrastructure of India Since it ould cause diversification and

commerciali.ation of agriculture, it ill t!us en!ance t!e incomes of farmers and

create food surpluses

(!e agro"industry mainly comprises of t!e post"!arvest activities of processing and

preserving agricultural products for intermediate or final consumption It is a ell"

recogni.ed fact across t!e orld, particularly in t!e conte-t of industrial development

t!at t!e importance of agro"industries is relative to agriculture increases as economies

develop It s!ould be emp!asi.ed t!at food? is not $ust produce +ood also

encompasses a ide variety of processed products It is in t!is sense t!at t!e agro"

industry is an important and vital part of t!e manufacturing sector in developing

countries and t!e means for building industrial capacities

Boever, a bul' of agro" processing industries falls in t!e category of tiny and small

scale units operating largely in un"organi.ed sector it! lo science and tec!nology

input and !eavily eig!ted in favor of lo value"added products t!oug! t!e

contribution of suc! !ouse!old based food processing activities !ave been playing a

dominating role in t!e rural economic system in almost all t!e regions of t!e country

since long (!e study by C!ad!a and Sa!u, 5779 reveal t!at t!e small scale and un"

organi.ed sectors, !aving only local presence it!out muc! access to tec!nology

netor', accounts for >>< percent of t!e units, =:= percent of employment and 9:<

percent of output of t!e industry Boever, little information is available in matters

related to t!e mode of establis!ing and grot! structure, potential and sustainability

aspects, nature and e-tent of participation of different communities, possibilities of

e-pansion of certain enterprises !ic! possess location specific comparativeadvantage and opportunities for t!eir development, 'inds of factors influencing t!e


17/64

efficiency and grot! pattern of different rural industrial activities %oreover,

information is not readily available regarding t!e e-tent and level of contribution of

various rural industries in t!e total income of rural !ouse!olds and its e-pected

contribution to be derived in future in t!e perspectives of regional development

#n t!e ot!er, t!e small"scale farming in India rarely provides sufficient means of

survival in many rural areas It is t!erefore imperative to e-plore alternative income

generating opportunities to support poor families !o can no longer fend for

t!emselves from t!e land"based activities alone *ecent researc! demonstrates t!at

rural !ouse!olds depend on a diverse portfolio of activities and income sources Some

!ouse!olds are loo'ing toards activities suc! as food processing as a means to

en!ance t!e liveli!ood t!ey can ac!ieve from a limited area of land Simalenga,

>>: In t!is conte-t t!e small"scale food processing activities represent a potential

source of liveli!ood for rural poor (!e overall potential of agro"processing is !uge as

it can/

Increase t!e value of crops of poor farmers and t!us yield !ig!er returns;

E-pand mar'eting opportunities;

Improve liveli!oods of people;

E-tend s!elf"life of commodities;

Improve palatability of commodities;

En!ance food security;

#vercome seasonality and peris! ability constraints; and

Empoer omen !o are often involved in agro"processing

Similarly, agro processing offers great scope for conversion of farm produce to

consumer commodities and in t!e process reduces astage, increase s!elf" life

resulting in value addition and !ig!er income transfer to t!e farmers from different

classes of consumers, as t!e processed commodities !as ider mar'et C!engappa

577< Agro"industries !ave also been vieed as a safety valve t!at needs to be built

it!in rural areas to absorb surplus labour and provide relief to t!e problem of large

scale disguised unemployment At t!e same time Srivastava >=> points out t!at t!e

agro"industry provides t!e crucial farm industry lin'ages !ic! !elps accelerate

agricultural development by creating bac'ard lin'ages supply of credit, inputs and

ot!er production en!ancement services 7 and forard lin'ages processing and

6


18/64


19/64

in bringing under processing of ot!er agro"based non"food commodities Srivastava

>=> Similarly, it indicated by C!engappa 577=>

Even, as far as t!e 0ttar Prades! is concerned, it !as certain advantages and

opportunities !ic! positively favor t!e e-pansion of various agro"processing

industries in its different regions Boever, despite several initiatives underta'en at

policy level to transform t!e given advantages in ac!ieving t!e e-pansion of certain

agro"processing industries t!e ac!ievement level in t!is regard !as been recogni.ed

far belo t!e level of its e-pectations Alt!oug!, t!e s!are of 0P in total countries

output generated from agro"processing is 1uite significant and in fact, it is

8


20/64

consistently increasing over t!e years Boever, some of t!e main constraints arising

in t!e grot! of agro"processing industries in t!e state are as follos/

i A very lo level of investment in agriculture sector itself is t!e most critical

constraints in restricting t!e grot! of agriculture sector and surplus food

production to be used in food processing industries It is distressing to note

t!at t!e per capita Plan outlay in 0ttar Prades! is t!e loest among all states

A more disturbing fact is also t!at t!e public investment in agriculture in

different +ive Jear Plans !as decreased in t!e State

ii 0nanted !eavy controls on levy, movement and stoc'ing of sugar and

molasses, stagnant recovery rates maintained in sugar production, t!e practices

of groing traditional sugarcane crops and certain ot!er factor mig!t be

adversely affecting t!e grot! of sugar and '!andsari industries

iii)ac'ing initiatives to identify t!e area specific potential product group of

agro"processing industries !ic! possess certain bac'ard and forard

development and t!en to introduce industry specific development measures

favoring its !ealt!y and sustainable grot!

iv(!e agro"processing based on t!e products of potato, fruits and vegetables is

usually underta'en in unorgani.ed sector in rural areas !ere t!e facilities of

transportation, mar'eting and cold storage are !ardly available So

inaccessibility to t!ese facilities and inade1uacy of *FD facilities !ave been

increasingly restricting t!e grot! of t!is sector in rural areas

v (!e important constraints !ave also been recogni.ed in terms of lac'ing

vertical and !ori.ontal, bac'ard and forard lin'ages among t!e farmers t!e

processors and *FD organi.ations to tide over t!e impediments, to improve

upon t!e economic efficiency and in better reali.ing t!e economies of scale in

agro"processing sector

vi%oreover, t!e factors !ampering overall industrial grot!, not in specific to

agro"processing industries in 0ttar Prades! include/ lo competitiveness due

to une-ploited economies of scale, poor incentives and la and order

situation, inade1uate infrastructure and c!oice of location

=


21/64

POLICY 8EVELOPMENT AN8 ,RO


22/64

and prepare action plans for promoting activities in t!eir respective areas t!roug!

preference in Government purc!ase and distribution of ra materials, fiscal and

monetary concessions, and supportive administrative policies (!ere as, !oever, no

special category of industries called agro"industries

(!e +irst +ive Jear Plan made a distinction beteen village industries, small

industries and crafts illage industries ere defined in terms of activities !ic! are,

in t!e main, an integral part of t!e village economy (!e small industries and crafts

ere distinguis!ed on t!e basis of i traditional s'ills and crafts, and ii t!e ones

!ic! !ave recent origin and !ave an intimate connection it! t!e corresponding

large scale industries First Five Year Plan)

In addition to stressing t!e role of !eavy industry, t!e Second Plan also assigned a

special place to rural, cottage and small industries It envisaged t!at t!e e-panding

demand for consumer goods sector ould be met from outside t!e large units (!is

ould reduce pressure on t!e capital and t!e limited savings of t!e economy and t!e

strategy ould fit in ell it! t!e need to e-pand employment opportunities (!e

ob$ectives of t!e Second Plan programmes and t!e Industrial Policy *esolution, >6:,

ere to create /immediate and permanent employment on a large scale at a relatively

small capital cost, meet a substantial part of t!e increased demand for consumer goods

and simple producersK goods, facilitate mobili.ation !ic! mig!t ot!erise remain

inade1uately utili.ed and bring about integration of t!e development of t!ese

industries it! t!e rural economy, on t!e one !and, and large scale industry, on t!e

ot!er (!ey also offer a met!od of ensuring more e1uitable distribution of t!e national

income and avoiding some of t!e problems t!at un"planned urbani.ation tends to

create it! improvements in tec!ni1ues and organi.ation, t!ese industries offer

possibilities of groing into an efficient and progressive decentrali.ed sector of t!e

economy, providing opportunities of ore and income all over t!e country9n of

resources of capital and s'ill, Second +ive Jear Plan, pp "


23/64

%obili.e rural communities and see' diversification of rural economy in a manner

t!at contributes to t!e elfare of t!e landless and t!e ea'er sections of village

communities

*ural industriali.ation as t!en seen to !ave to components, namely i location,

and ii lin'ages it! large industries as ancillaries (!e *ural Industries Programmes

ere to cover all 'inds of small industries and processing industries based on

agriculture It as recogni.ed t!at/

it! t!e increase in t!e production of cereals, pulses and a number of cas! crops li'e

sugarcane and oilseeds visuali.ed in t!e (!ird Plan, t!ere ill be considerable scope

for t!e e-pansion of processing industries in rural areas

it! a vie to providing fuller employment and strengt!ening and diversifying t!e

rural economy, it ill be desirable to develop t!ese industries to t!e ma-imum e-tent

in t!e decentrali.ed and small scale sector and on a cooperative basis (!ird Plan pp


24/64


25/64


26/64

s1uas!es, and are reported to !ave ac1uired rice"milling facilities &roo'e &ond, an

associate of t!e )evers, !as entered mar'eting of masalas Among t!e ne entrants to

t!e edible oil industry are I(C and &ritannia Parle, t!e mar'et leader in t!e soft

drin's segment, !ic! !ad foug!t toot! and nail against t!e entry of Pepsi, as

obliged to abandon its fig!t it! (@Cs and $oin !ands it! Coca"Cola It appears t!at

t!e it!draal of restrictions on t!e use of foreign brand names !as speeded up t!e

process of domination of t!e Indian consumer goods mar'et by transnational

corporations 0@C(AD >8=, p i- (!e entry of t!e 0S based (@Cs !as coincided

it! t!e Indian policy to give !ig! priority to private foreign direct investments and

revision of t!e licensing policies to permit entry of large Indian companies and (@Cs

into t!e food processing industry 0@ID# >=9

(!e establis!ment of t!e ne %inistry of +ood Processing Industries %+PI at t!e

Centre is an indication of t!e GovernmentKs t!in'ing +or t!e purpose of ac!ieving

grot! of agro"processing industry in t!e country t!e %inistry of food processing as

set up in Luly >== to give an impetus to development of food processing sector in t!e

country (!e ministry is concerned it! formulation and implementation of t!e

policies and plans for t!e food processing industries it!in t!e overall national

priorities and ob$ectives (!e ministry acts as a catalyst for bringing in greater

investment into t!is sector, guiding and !elping t!e industry, and creating a conducive

environment for !ealt!y grot! of t!e food processing industry (!e ministry continue

to perform its assigned tas' and act as a prime force for creating strong and effective

food processing sector it! a vie to create increased $ob opportunities in rural areas,

enabling t!e farmers to reap benefit from modern tec!nology, create surplus for

e-ports and stimulating demand for processed food In t!e post liberali.ation era t!e

role of t!e ministry !as undergone substantial c!ange

(!e ministry furt!er reorgani.ed itself to act as a catalyst for getting larger

investments in food processing sector, increasing e-ports and creating a general

atmosp!ere for !ealt!y grot! of t!e food processing industries (!e %inistry !as

also been running an aareness campaign targeted at end consumers to assure t!em

on t!e safety and 1uality standards of t!e processed food products A concerted

campaign toards promotion of processed food products !as been found necessary to


27/64

remove in!ibitions of large number of consumers in t!e country regarding 1uality and

safety issues

In addition to t!e campaign, !ic! !as received an encouraging response from

people, t!e ministry !as been instrumental in ensuring passing of +ood Safety F

Standards &ill, 577: and creation of a +ood Safety and Standards Aut!ority of India

+SSAI in 577= (!e creation of +SSAI, or'ing under t!e ministry of !ealt! and

family elfare, is aimed at creating a regime !ic! ould ensure ad!erence to global

standards of safety for t!e industry, li'ely to furt!er increase t!e confidence of t!e

consumers and lead to greater mar'et si.e for t!e Industry (!e ministry !as also been

trying to promote bac'ard lin'ages and supply c!ain infrastructure for food

processing units

(!e %inistry !as t!us come out it! revised sc!emes for t!e t!

+ive Jear Plan

!ic! as more integrated and in particular address supply c!ain issues (!e Sc!eme

for %ega +ood Par's, t!e flags!ip programme of t!e ministry, is no based on cluster

approac! and follos MBub and Spo'eN model for ensuring ade1uate supply of ra

materials for food processing units to be located in t!e %ega +ood Par's (!e

ob$ective of t!e sc!eme is to provide nitrated and complete cold c!ain and

preservation infrastructure facilities it!out any brea', from t!e farm gate to t!e

consumers, Pre"cooling facilities at production sites, reefer vans, and mobile cooling

units also need to be assisted under t!e Integrated Cold C!ain pro$ects Integrated cold

c!ain and preservation infrastructure can be set up by individuals or groups of

entrepreneurs it! business interest in cold c!ain solutions and also by t!ose !o

manage supply c!ain (!ey ill enable lin'ing groups of producers to t!e processers

and mar'et t!roug! ell e1uipped supply c!ain and cold c!ain

%oreover, t!e main ob$ectives of t!e %inistry of +ood Processing Industries are/

to ta'e t!e lead and act as a prime force in creating a strong and effective food

processing %inistry is t!at t!e food industry !as ade1uate mar'et potential

it!in India and a large sector;

to successfully create a mode of operation and management in t!e food

processing sector t!at ould ensure increased incomes accruing directly tot!e producers, !o are in t!e main concentrated in t!e rural areas;

6


28/64

to create increased $ob opportunities in t!e rural areas it! specific reference

to omen and unemployed yout!s by development of primary produce

t!roug! a netor' of processing units in t!e various sectors;

to bring t!e poer of modern tec!nology and mar'eting tec!ni1ues in t!e aid

of t!e farmers;

to ta'e t!e initiative in mobili.ing cost effective tec!nologies for storage,

processing and mar'eting of agricultural produce;

to t!in' in terms of organi.ational restructuring of t!e domestic mar'et so

t!at overall demand is stimulated !ic!, in turn, ill lead to t!e grot! of t!e

food processing sector; and

to ensure t!at ade1uate surpluses are created consistent it! price and 1uality

to furt!er e-ports and earn valuable foreign e-c!ange for t!e country by

providing critical inputs to t!e industry to foster production for e-ports


29/64


30/64

*eduction in general CE@A( rate on all goods from : per cent to < per

cent

E-cise duty e-emption on tea and coffee pre"mi-es, mil' containing edible

nuts it! sugar or ot!er ingredients and puffed rice goods of mass

consumption from : per cent

E-cise duty reduced on specified pac'aging material from : per cent to = per

cent #(S cans, aseptic bags and aseptic pac'aging paper

E-cise duty on certain varieties of pac'ing paper reduced from 5 per cent to =

per cent

E-cise duty reduced on brea'fast cereals : per cent to = per cent

(o furt!er encourage cold c!ain facilities, refrigeration e1uipment consisting

of compressors, condensers, evaporators etc above to"tone refrigeration

utili.ing poer of 67 2 and above, e-empted on end"use basis

Po%ic' M!(#ur!# in Bud&!t >??67+?9

In respect of t!e * F D sector, t!e benefit on 67 per cent eig!ed deduction

under Clause of sub"section 5 A& of Section96 of Income (a- Act ill

no cover food processing industry also

+ringe &enefit ta- on food processing is abolis!ed0nder Section =7"IA"IIA, deduction is alloed on t!e profit deriving from t!e

business of processing, preservation and pac'aging of fruits and vegetables

only (!is ill no be e-tended to all ne food processing units based on all

peris!ables li'e mil', poultry, meat products and not $ust fruit and vegetable

products only

E-tension of investment"lin'ed ta- incentives to businesses of setting up and

operating cold c!ains; are!ousing facilities for storing agricultural produce

Po%ic' M!(#ur!# in Bud&!t >?+?7++9

(!e second element of t!e strategy relates to reduction of significant

astages in storage as ell as in t!e operations of t!e e-isting food supply

c!ains in t!e country (!is needs to be addressed As t!e Prime %inister

!as said recently, Me need greater competition and t!erefore need to ta'e

a firm vie on opening up of t!e retail tradeN It ill !elp in bringing

=


31/64

don t!e considerable difference beteen t!e farm gate prices, !olesale

prices and retail prices

(!e fourt! element of t!e strategy aims at lending a furt!er impetus to t!e

development of food processing sector by providing state"of –t!e are

infrastructure In addition to t!e ten mega food par' pro$ects already being

set up, t!e Government !as decided to set up five more suc! par's

As a part of t!e farm to mar'et initiative, E-ternal Commercial

&orroings ill !encefort! be available for cold storage or cold room

facility, including for farm level pre"cooling, for preservation or storage of

agricultural and agro produce, marine products and meat C!anges in t!e

definition of infrastructure under t!e EC& policy are being made

In supporting t!e strategy outlined for development of agriculture earlier in

my speec!, I propose to address a fe 'ey areas t!at call for focused

attention (!ese are/

i A strong supply c!ain for peris!able farm produce to reac!

consumption and processing centers promptly;

ii Infrastructure and tec!nology to convert suc! produce into value

added products; and

iii Infusion of tec!nology to augment agricultural production

Similar attention needs to be paid to related sectors suc! as apiary,

!orticulture, dairy, poultry, meat, marine and a1uaculture

Po%ici!# or 8!"!%o*)!nt o Food *roc!##in& Indu#tr' in Utt(r Pr(d!#$

In addition to t!e initiation of various policies by t!e Central Government, t!e state of

0ttar Prades! also continued to !ave been initiating variety of promotional measures

for overall industrial development in general and in specific to Agro"based processing

industries under its overall industrial policy Important e-isting policies for

development of agro"based industries in t!e state are as follos/

Encouragement of fruits, vegetables, mus!room, mil', floer, meat, poultry,

fis!, grains and oilseeds based industries

5 Incentives under t!e trade ta- e-emption and deferment sc!emes

9 E-emption from 6 percent capping provision in trade ta- for 5 categories of

industries it! investment above 56 million rupees

>


32/64

>6 and Padmanab!an 577 (!e e-cise

duty on food processing items as removed in >> and again imposed in

57


33/64

>>8 (!is as again removed in 577 (!e concept of food par's, agri"e-port .ones

AEO, !uman resource development !ave been initiated besides several incentives

(!e concept of agro"e-port Oone as started in t!e e-im policy 577"75 by t!e

Government of India to loo' at agricultural produce in a compre!ensive manner"rig!t

from farm to t!e palate" so as to be able to deliver an appropriately priced and

attractively pac'age 1uality product for sale in t!e international mar'et So far,


34/64

OB@ECTIVES AN8 T=E MET=O8OLO,Y

In t!e above !ig!lig!ted bac'ground it as proposed to be carrying out a detail study

on different issues related to Agro"processing Industries in t!e state of 0ttar Prades!

!ere t!e agriculture and allied activities form t!e base of t!e economy and provide a

ma$or source of employment of labourforce and t!e generation of income for

!ouse!olds in rural areas 0ttar Prades! is ell"'non for its agricultural potential in

t!e country !erein different food grains, pulses and various !ig! value crops suc! as

sugarcane, fruits vegetables etc are gron around t!e year in all t!e cropping seasons

in different regions of t!e state (!e state ran's on t!e top in terms of production of

!eat, sugarcane, mai.e, vegetables, and potato and livestoc' products, including

mil' among t!e ma$or states in t!e country In terms of rice production, t!e state !olds

second position after est &engal (!e varied agro"climatic conditions available in

different regions provide favorable condition for boosting up t!e production of

various food and non"food items (!e real advantages of all t!ese can be reaped

t!roug! e-pansion of various agro"processing industries in t!e state Among ot!er

favorable conditions for t!e e-pansion of agro"processing industries in t!e state

mention may be made of t!e folloing

a )arge consumer base it!in t!e state and t!e neig!boring states, especially Del!i

b An opportunity to tie"up fruit and vegetable sector it! KsafalK

c Strong base of diary products and its lin'ages it! different

institutions3corporate sectors !ic! are e-tensively involve in manufacturing of dairy

products

d Availability of ade1uate ra material from farm sector

e Accessibility of rural areas it! mar'eting centers

(!e strong agricultural base of t!e economy and comparative advantages available in

different regions of t!e state of 0ttar Prades! indicate t!at promoting t!e e-pansion of

55


35/64

various potential and nic!e based food processing industries among t!e clusters of

different surplus food and non"food groing villages and among t!e villages to t!e

close pro-imity to rural tons could possibly be a meaningful approac! for creating

additional employment opportunities for increasing labourforce and increasing

income of farm !ouse!olds in rural areas

.+. T$! Ob!cti"!# o t$! Stud'9

Considering t!e importance of agro"processing industries in t!e development

perspectives of overall rural development in general and reali.ing t!e e-pected role of

e-panding t!is sector for ac!ieving increasing employment opportunities and income

level to overcome t!e emerging c!allenges of unemployment and poverty in rural

areas of t!e State t!e present study attempted to e-amine t!e folloing issues /

i (!e emerging structure, pattern and grot! of different product groups of food

processing industries across t!e district, regional and state level in 0P

ii Si.e of capital investment and its sources of financing, output, and generation of

value added, production tec!nologies, employment pattern, turnover and t!e contribution

of different product line of industries in all groups of industries

iii (!e lin'ages establis!ed by industries for obtaining ra material from t!e

farmers and ot!er suppliers, procurement pattern, accessibility situation, prevailing

practices of prices determination of different ra materials being supplied from

different sources and t!e arrangements of mar'eting t!e final products

iv (!e development prospects and problems in operation of enterprises and

re1uired measures to be initiated to strengt!en t!e e-pansion of different groups of

industries

v Evaluation of policy measures and incentives introduced by t!e central and state

Governments and ot!er institutions and agencies suc! as 2!adi Gramod!yog &oard 3

commission, APEDA etc for agro"processing industry and t!eir usefulness in terms of

t!e e-pansion and grot! of different product groups of agro" based industries

59


36/64

vi Contribution and impact of e-pansion of agro processing industries in increasing

income and employment of farm !ouse!olds

vii Assessment of t!e e-tent of astage of farm produce vis"4"vis levels of

processing for different !orticulture and vegetable products

.>. M!t$odo%o&' (nd t$! #()*%! d!#i&n9

(!e study !as been based on bot! secondary and primary data (!e primary data as

collected among a sample of different product groups of bot! registered and non"

registered industries and diversified and non"diversified groups of farm !ouse!olds

across t!e nine agro"climatic regions of t!e state In all t!e study identified to

districts from eac! agro" .one !ic! ere dominating in terms of t!e concentration of

!ig!est number of Agro Processing Industries in among tall t!e districts in particular

Agro"Oone collect primary data covering to districts from eac! of t!e < agro"

climatic .ones of t!e State (!e total agro processing registered units in t!e eig!t

agro".ones ere 5


37/64

T(b%!7.+

8i#tribution o unit# b' *roduct &rou* ro) di!r!nt A&ro7on!

on!/ T(r(i

M (

i n * u r i

A & r (

D $ i r i L ( 3 $ i ) * u r

D ( n * u r N ( & ( r

B ( n

d (

@ (

% o u n

B ! $ r (

i c $

, o r (

3 $ * u r

C $ ( n

d ( u

% i

B ( r (

b ( n

3 i

M i r ( * u r

T o t (

%

+1+ 5 " " : 9 < 9 > 6 5 5 5 " 9 "

R!&i#t!r!d % 5 " " " " " " " " " >Un7 % 5 " 5 " " " " " " " " 7

R!&i#t!r!d

+1 9 11 : 5 > 6 5< 65 5 5 6 9 8 < 5 8 5:

R!&i#t!r!d : : 5 5 8 < 7 5: 5 " < 6 = 8 " < 76Un7 8 6 < " = < < 8 < 5: " 5 = > 8 5 9

R!&i#t!r!d+10 9 &' 55 : < 55 5 9 6 9 " 5 : 8 : : " " 57=

R!&i#t!r!d 8 1( 8 5 6 9 5 59 9 " 6 9 9 " " 79Un7 : 18 6 < > > 5= " " 6 5 9 9 " " 76

R!&i#t!r!d

+11 1 5 : " 5 " 5 < " " " " 5 " " " " 57

R!&i#t!r!d % 5 5 " " 5 " " " " " " " " 7Un7 " 1 " < " " 5 " " " " " " " " 7

R!&i#t!r!d

A%% unit# 9 4( 9< 95 9: 95 > 5 > :5 < : 9 55 5< 59 9 8 678

R!&i#t!r!d : & 9 57 6 8 7 7 6 > 67 5> < 8 9 5 9 568

R!&i#t!r!d

56


38/64

years 577"7 and 577:"78 as obtained from t!e ASI documents and ot!er sources of

State and Central Government (!e details regarding t!e e-isting number and ot!er

re1uired information about non" registered agro"processing units as collected from

t!e Directorate of Industries, 2!adi &oard and ot!er state Government departments

(!e details of t!e sample of different product groups of units covered in t!e study are

as follos;

.. M(or V(ri(b%!# or 8(t( Co%%!ction (nd it# An(%'#i#9

(!e re1uired secondary data related to si.e, numbers of units production structure,

capital investment pattern, output, value added by different product groups of agro"

industries and ot!er relevant information as collected from t!e department of

industry and different ISI reports (!e information regarding t!e industrial policies

!ic! ere initiated during t!e past as obtained from different documents of t!e

industry department, %inistry of +ood Processing and different financial and

industrial promotion institutions (!e re1uired primary data from different product

groups of sample units and farm !ouse!olds as collected t!roug! a set of structural

1uestionnaires (!ereafter t!e entry of bot! secondary and primary data as carried

out t!roug! developing different sets of SPS and formats and accordingly t!e data

analysis as carried out it! t!e !elp of computer

.0. R!%!"(nc! o t$! Stud'9

Since t!e agriculture based economy of t!e state !ave significant advantages for

developing various agro"processing industries bot! at !ouse!old and non"!ouse!old

level 0nfortunately t!e state !as been lagging far be!ind to ot!er states in terms of

t!e development of various agro"industries due to one or t!e ot!er reasons Presently,

little information is readily available in matter related to t!e mode of establis!ing and

grot! structure, potential and sustainability aspect, nature and e-tent of participation

of different communities, possibility of e-pansion of certain enterprises !ic! possess

location specific comparative advantages and opportunities for t!eir development,

'inds of factors influencing t!e efficiency and grot! pattern of different industrialactivities in t!e state of 0ttar Prades! Analy.ing t!e above important variables in

5:


39/64

detail t!e proposed study s!all recommend a concrete approac! for developing a

compre!ensive plan for e-pansion of different agro based industries in t!e state (!is

e-ercise ould not only provide a strong base and alternative option for creation of

additional employment opportunities and avenues of income for rural !ouse!olds but

it ould !elp in reduction in t!e rate of rural"urban migration of population

58


40/64

C=APTER 7 IV

STRUCTURE AN8 ,RO


41/64

0.+. Contribution o A&ro7Indu#tri!#9 (!e general pattern of industriali.ation in

0ttar Prades! !as ta'en place in an organic manner, especially in small –scale sector

Boever suc! !as not been appeared in matter of t!e development of Agro"processing

industries It !as reflected by t!e fact t!at in spite of


42/64

!ig! as =< percent Boever, t!e respective s!are of dairy based agro"industries is

loest at < percent

In terms of t!e capital investment, t!e s!are of agro"industrial sector in overall

industrial sector in t!e state !as been noted at 5> percent t!roug! it varied

significantly for different products of agro"industries; accounting !ig!est from 8<

percent for manufacture of sugar and ot!er food items to loest at < percent for dairy

products (!e contribution of t!is sector in total industrial sector in generation of

output and gross value added accounted for 5 percent and > percent respectively In

bot! t!e respects t!e contribution of manufacture of sugar and ot!er food products is

noted very remar'able (!e s!are of agro"industries in t!e net income generated from

all industrial sector toget!er accounted for only = percent &ecause, t!e industriesinvolved in t!e processing of vegetables, animal oils and fats, dairy products, grain

milling and animal feeds are operating in total loss it! a negative contribution

ranging from 8< percent to 99 percent in all agro"processing sector

(!e significance of agro"processing industries is also revealed by t!e fact t!at it

ma'es a si.eable contribution in t!e creation of employment opportunities in t!e state

It is evident by t!e fact t!at t!e contribution of t!is sector in all industrial sector in

matters of creation of employment is noted relatively muc! !ig!er t!an its

contribution in gross output, gross value added and net income value additions A total

of 6: la'! or'force is employed in different agro"processing industries in t!e

State (!e s!are is employment of agro"processing industries to overall industrial

sector accounted nearly 59 per cent Again t!e industrial activities in t!e product line

of sugar and ot!er food products !ave been contributing a dominating role in

providing employment (!e s!are of concerned products in total industrial

employment !as been reported nearly > per cent !ile t!e corresponding s!are of

remaining agro"processing industries ranged loest from


43/64

T(b%! 0.>

S$(r! o 8i!r!nt *roduct &rou*# o A&ro Indu#tri!# in C(*it(% In"!#t)!nt;

out*ut; "(%u! (dd!d (nd E)*%o')!nt durin& >??27?4

alue in la'! *s and employment in numbers

Industry Industry classification @o of (otal (otal @et alue Employ"code units Invested #utput Added ment

Capital6 %anufacture of vegetables =< ;;86=; < =6=5: 9=77 la'! and *s 6 la'! at *s5 la'! in non"agro" processing

industries respectively Even t!e differences in si.e of per unit employment among

bot! categories of industries are not very large indicating t!at it averages 8< or'ers

in no"ago"industries as against :6 or'ers in agro"industries

9


44/64

Similarly, loo'ing into t!e si.e structure of different agro"industries t!e analysis

reflects t!at and in per unitfor sugar and ot!er food products, closely folloed by

*s758 la'! for distilling, rectifying and blending of spirit and a loest value of

merely *s>5 la'! for grain milling products and animal feeds (!e industries in t!e

product groups of sugar and ot!er food items ere large as compared to ot!er agro"

processing industries as t!e per unit value of fi-ed capital for former group of

industries accounted to *s66 la'! as against *s5>6 la'! toget!er for all agro"

processing industries It !as been noted as loer at *s9: la'! for grain milling

products and animal feeds

In case of different product group of agro industries, t!e si.e of capital investment as

ell as value of output per unit !ave been noted significantly muc! !ig!er in almost

t!e

T(b%! 0.

P!r unit #i! o c(*it(% in"!#t)!nt; out*ut; n!t "(%u!(dd!d (nd !)*%o')!nt

alue in la'! *s and employment in numbers

Industry Industry classification @o of (otal (otal @et alue Employ"code units Invested #utput Added ment

Capital

6 %anufacture of vegetables, ;=< :9> 569 %anufacture of grain mill ;75; ;6< 9 ;6 57>7 8<Source; &ased on calculations dran from table"5

product groups of agro –industries e-cept in manufacturing of vegetables, animal oils

and fats as compared to non"agro" industries as a !ole &ut t!e si.e of net income

generated from all t!e Agro" industries !as been reported remar'ably at loer level

t!an non"agro industries as a !ole #n t!e ot!er !and, t!e employment elasticity is

noted !ig!er in manufacturing of dairy products, sugar and ot!er sugar related

products and drilling, rectifying and blending of spirit as compared to non"agroindustries

95


45/64

As far as t!e si.e structure of different agro" industries itself reveals t!at t!e si.e of

capital per unit is noted !ig!est at *s 6=< la'! for distilling, rectifying and blending

of spirit units folloed by *s 6


46/64

T(b%!70.0

R!&ion -i#! di!r!nt indu#tri(% &rou*# o A&ro7*roc!##in& unit#

Sl District F @IC Group and Product group of industries

6 65 69 6< 66 (otal

@o Agro *egions *egistered%eat, fis!, Dairy Grain milling #t!er food &everages+ruits products products, products 0nits

vegetables, oils starc!es and animal

Ffats feeds (arai and &!abar = < ;76 598 8 98;


47/64

products (!eir concentration is noted !ig!est again in Central region folloed by in

(arai b!aber

b. Conc!ntr(tion o unit# (cro## t$! di#trict#9

(!e district level data s!os t!at t!e agro"processing industries are evenly located in

different districts of t!e state Boever, t!e agro industries in t!e product line of

%eat, fis!, +ruits, vegetables, oils and fats are largely concentrated in Agra folloed

by 2anpur @agar and 2anpur De!at !ile t!e concentration of dairy units constitutes

!ig!est at 7 percent in &uland S!a!ar closely folloed by > percent again in Agra

(!e Grain milling products, starc!es and animal feeds units !ic! ere most

dominating product groups of agro " industiries in t!e state are largely confined in

district *ampur folloed by S!a!$anpur and Pilib!it &ut, t!e concentration of ot!er

food products is seen in &i$nor =< units folloed by 2!eri )a'!impur >< units

and %u..afer @agar == units (!e units confined in t!e production of beverages are

!ig!est in Gautam &ud! @agar and %u..afar @agar

96


48/64

T(b%!70.1

Conc!ntr(tion o A&ro indu#tri!# (cro## t$! di#trict# in UP

8i#trict A&ro NIC ,rou* (nd Puduct &rou* o indu#tri!#

R!&ion# +1+ +1> +1 +10 +11 (otal

0nits%eat, fis!, Dairy Grain milling #t!er food &everagesfruits products products, productsvegetables, starc!es and

oils Ffats animal feeds

+. T(r(i (nd B$(b(r

i Sa!aranpur < < ii &i$nor " " > =< 9 >:

iii Pilib!it < " :7 ;7 ; 86iv S!rarasti " " ; " " ;

on! Tot(% 5 0 +?1 >4 4 4+>.

i %u.affar 6 < : == 8 7

@agar ii %eerut 9 : ;6


49/64

1. C!ntr(% on!

i Sa!$anpur 6 " :; 99 ; ;77ii 2anpur ;: 8 6; :7 6 ;9>

@agar iii 2anpur ;6 5> " 5 ; ;;v &asti ; " ; 9 " 6vi Sant 2abir ; " < 6 " ;7

@agar

vii Sidd!art! " " " " ; @agar

viii Gonda 5 " ;5 5 5 ;=i- &e!raic! 5 " 5< 6 7 9;- &alrampur ; " > 5 ; ;9

on! Tot(% 5 + 6+ 16 4 +22

98


50/64

5. E(#t!rn on!

i A.amgar! " " 5 5 " <

ii %au " " 5 ; ; <

iii &alia " " ; ; " 5

iv Pratapgar! "

" 5 " "

5v +ai.abad 5 55 > 5 9:vi Ambed'ar ; " 5: " " 58

@agar

vii &araban'i 9 5= = ; 6

6. Vind$'(n on!

i %ir.apur " " : " " :

ii Soneb!adra " " ; " "

on! Tot(% 7 7 4 7 7 4A%% U.P. +50 60 +?>+ 664 +?2 >0?>

4.10 E.6+F 0>.1+ 0+.1+ 0.0+ +??.??

0.0. R!&ion(% Conc!ntr(tion in P(tt!rn o C(*it(% In"!#t)!nt; Out*ut; V(%u!

Add!d (nd E)*%o')!nt9

(!e pattern in t!e s!are of capital investment, gross value of output, net value added

and employment in agro"industries across different agro"regions !as been visuali.ed,

by and large in accordance to t!e s!are of industrial units in all agro"industries

toget!er in particular agro"region (!is !as reflected by t!e fact t!at a ma$or s!are of

capital investment of agro – industrial sector !as gone mainly in agriculturally ell

developed

9=


51/64

T(b%! 0.2

R!&ion(% Conc!ntr(tion on t$! P(tt!rn o C(*it(% In"!#t)!nt;Out*ut; V(%u! Add!d (nd E)*%o')!nt

alue in la'! *s

AG*# O#@E Invested Capital Gross #utput @et alue Added Employment

5777"7; 577:"78 5777"7; 577:"78 5777"7; 577:"78 5777"7; 577:"78

(arai and b!abar ;86997 9569:: 578:76 9>6758 9=88; := ;9>7 ;5>>: ;>=69=;9 9=>99 7

85> 5::= ;>>> 9765 ;:97 5=87 ;=6


52/64

.ones t!roug! contributing 59 percent net income from t!is sector during 577"7

@o its s!are !as gone don to 8 percent during 577:"78

As far as t!e contribution of different Agro" .one in creation of employment is

concerned t!e study finds t!at t!e Central .one !as been dominating among different

.ones in t!is regard beginning from 5777" Alt!oug! t!e s!are in employment in

concerned .one !as found declined from 58 percent in 577"7 to 59 percent in 577:"

78(!e facts are also t!at t!e relative s!are in total employment creation from agro

industrial sector !as been positively increasing in almost t!e .ones especially in

estern, %id"estern, Sout! estern plain and eastern .ones during t!e recent past

0.1. ,ro-t$ in C(*it(% In"!#t)!nt; Out*ut; V(%u! Add!d (nd E)*%o')!nt9

)oo'ing into t!e performance structure of agro"industries in terms of different

indicators across t!e agro".ones of t!e state t!e study found t!at t!e capital

investment in agro "

processing industries !as been significantly increasing in almost t!e .ones over t!e

years #nly e-ception as t!e case of &unel'!and and ind!yan agro".ones t!e

capital investment in t!is sector !as declined during 577:"5778 over t!e year 5777"

7 In all, t!e investment in agro"industrial sector !as increased to t!e e-tent of over

>< percent during 5777"7 to 577:"78 Even t!e trend of grot! in capital investment

in t!is sector reported as !ig! as >> percent in estern plain folloed 9 percent in

Central .one during t!e same period

Even, t!e gross value of output of agro" based industrial products !as been increasing

at fairly !ig!er level t!an t!e grot! of capital investment in t!e state (!e grot! of

gross output in t!is sector !as increased over 7< percent during t!e period 5777"7 to

577:" 78 Boever, among different agro".ones, t!e corresponding grot! trend !as

varied !ig!est from 5 percent in sout! estern .one to a negative grot! of =8

percent in &undel'!and (!e stri'ing features t!at emerging are t!at in spite of

ac!ieving a fairly !ig! grot! rate in value of gross output in agro"based industrial

products t!e net value added from t!is sector !as s!on a decreasing trend of over 96

percent at t!e state level during 5777"7 to 577:"78 %oreover, it can be argued t!at

e-pansion of different agro"based industries !as been most profitable venture in Agro"

.one li'e ind!yan but t!e level of e-pansion of t!is sector in particular .one !as not


53/64

been encouraged so far Similarly, t!e e-pansion of t!is sector seems to be rat!er

profitable business in (arai &!abar, estern plain and %id estern .ones of t!e state

Since, t!e grot! in net income being derived from agro processing industries among

t!ese .ones accounted varying !ig!est from :8 percent in (arai &!abar to loest at

over : percent points in %id estern .one A very !ig! negative grot! in t!e net

income from t!is sector !as been found in &undel'!and 97 percent folloed by

Eastern .one 5758 :897 895

estern plain ;>==7 555


54/64

0.2. E)!r&in& C$(n&!# in Contribution o A&ro7Indu#tri!#9 +urt!er t!e study !as

attempted to e-amine t!e e-tent to !ic! t!e contribution of Agro" processing vis"a

vi. t!e non"agro"industries in matters of capital investment, output, value addition and

employment !as been ta'ing place in t!e state over a period of time ie beteen t!e

periods 5777"7 and 577:"78 In t!is regard t!e study finds t!at t!e s!are of agro"

industries in all industries toget!er of t!e state !as been remar'ably increasing !ile

t!e same !as been narroing don for non"agro"industries during t!e recent past

Similar is pattern !as been visuali.ed in t!e contribution of Agro"industries in matters

related to capital investment &ut contribution of non"agro industries in t!e overall

industrial sector !as been reported moving it! a declining contribution of Agro"

industries in matters of value of output, gross value added , net value added and

employment in t!e state

T(b%!70.5

C$(n&!# in #$(r! o A&ro7B(#!d Indu#tri!# in t$!ir Si!; C(*it(% In"!#t)!nt;

Out*ut V(%u! (dd!d (nd Inco)! to Tot(% Indu#tri(% S!ctor 8urin& >???7?+

>??27?4

alue in *s )a'! and employment in

@os

SI Indicators Agro"&ased Industries @on"Agro &ased All Industries

@o Industries

5777"7 577:"788 5777"7 577:"78 5777"7 577:"78

@o of 0nits 5775 588 :>77 ;7>8> >97;

;=59 56=; =;8: 8


55/64

product groups of agro" industries !as considerably increased during t!e last seven

years Boever, a most set bac' in t!e conte-t of declining trend is seen only in

regard to manufacturing of vegetables, animal oils and fats Even t!e contribution of

units in particular product line !as declined in matters of capital investment, gross

value of output and net value additions t!oug! it moved up over one point percent in

generation of

T(b%! 0.6

Product -i#! C$(n&!# in S$(r! o C(*it(% In"!#t)!nt; Out*ut V(%u! (dd!d in

A&ro7B(#!d Indu#tri!# durin& >???7?+ >??27?4

alue in *s )a'! and employment in

@osIndry Industry @o of units (otal Invested (otal #utput @et alue Added Employment

Code Classification Capital5777"7; 577:"78 5777"7; 577:"78 5777"7; 577:"78 5777"7; 577:"78 5777"7; 577:"78

6 %anufacture :5 =< =97=9 ;;86=; 97:6 ;68997 5 ::


56/64

manufacturing of vegetables, animal oils, fats, dairy products, grain milling and

animal feeds in t!e value addition to t!e overall industrial sector of t!e state Avery

significant sign are t!at despite declining s!are in capital investment and gross output

t!e s!are of employment in t!e product groups of vegetables, animal oils, fats, grain

milling products and animal feeds !as been increasing considerably over t!e years,

t!oug! t!e non"agro industrial sector !as been leading over agro sector of industries in

t!is conte-t

0.4. Tr!nd# in ,ro-t$ o A&ro indu#tri!#9

+urt!er, loo'ing into t!e e-pansion pattern of agro industries beteen t!e periods

5777"7 to 577:"78 it reveals t!at t!ese units are groing at a faster rate as compared

to ot!er non"agro industries in t!e state As t!e grot! rate of agro industries

accounted over nearly 57 percent as against > percent for non agro industries during

t!is period Even, bot! t!e rate of investment in former category of industries is

groing at !ig!er level t!an t!e latter category of industries &ut t!e reversal is t!e

situation prevailing in terms of t!e rate of t!e grot! in value of output, net value

added and employment generation among t!ese to categories of industries

+urt!er, it revealed t!at all t!e agro"product groups of industries toget!er !as s!on a

remar'able grot! trend in t!e past Among t!em, a !ig!est grot! rate !as ac!ieved

by manufacture of dairy products ??+7>??4

Industry Industry Classification (rends in Grot!

Code 0nits (otal Invested (otal #utput @et Employ-Capital value added ment

;6; %anufacture of vegetables, 96= 18.87;69 %anufacture of grain mill 8>7 >=>> 97>> "8>79 212.72

products and animal feeds;6< %anufacture of sugar and 5787 =>=5 5=5 ;7 ;:7;: 28.57

blending of spirits

(otal Agro"based Industries >>9 =6;5 =;5= 7< 9=55 7>9= ;6::


57/64

vegetables, animal oils and fats &ut t!e rate of grot! in capital investment reac!es

as !ig! as >> percent for manufacture of grain milling products and animal feeds

folloed by >7 percent for manufacture of sugar and its related products to minimum

of


58/64

C=APTER7 V

BACD,ROUN8 C=ARACTERISTICS OF A,RO7IN8USTRIES

In continuation and t!e support of t!e analysis on e-pansion pattern and different

indicators of t!e performance s!on in regard to different product group of Agro

based industries in t!e last c!apter t!e study furt!er attempts to present t!e

bac'ground c!aracteristics in matters of e-pansion pattern and its origin, oners!ip,

factor motivated in establis!ment and pattern and bac'ground of entrepreneurs of

different product groups of registered and un"registered agro"industries (!is part of

analysis is based on primary data obtained among a sample of 678 agro" processing

industries, comprising 567 registered and 568 un"registered different product groups

of agro"processing industries covered from a sample of = districts spread over in

nine agro"climatic .ones of 0ttar Prades!

(!e e-isting agro"industries in t!e state may be broadly categori.ed according to t!eir

type and si.e structure (!e fist category of t!em is as village industries !ic! oned

and run at !ouse!old level mainly in rural areas (!ey form very little capitalinvestment and a !ig! level of manual labour, mainly family labour and are operating

it!out registration it! any aut!ority (!e second category of agro"processing units

are operating as small scale industries it! medium level of capital investment and

semi automation and are registered it! Small Scale Industries Act (!e t!ird

category of units comprises large industry involving large investment and a !ig! level

of automation and is registered under t!e factory Act

1.+. B(c3&round o t$! A&ro7Indu#tri!#9

i. EG*(n#ion P(tt!rn9 (!e e-pansion pattern of Agro"industries based on t!e analysis

of a sample of 678 units covered in t!e present study reveals t!at a ma$ority of a little

over one t!ird of agro" processing industries, consisting 97 percent registered and 98

percent un"registered industries in sample districts toget!er ere started during t!e

periods 577"76 !ile a second ma$ority of 5= percent bot! categories of units ere

started during >>5"5777 #nly, : percent units comprising 5 percent registered and

percent un"


59/64

T(b%! 1.+

8i#tribution o unit# b' '!(r o !#t(b%i#$)!nt

Product GroupJear of establis!ment

&efore >>5"5777 577" 577: (otal

>> 5776 Above%anufacture of vegetables, > ;< ;: 6 :9 >< 8; 568;;5= 5


60/64

ii. Mod! o R!&i#tr(tion9 Agro"processing Industries are registered under different

Acts for t!e purpose of t!eir proper operation t!roug! obtaining various basic

facilities to run t!e unit and certain financial incentives and subsidies from different

Government

T(b%! 1.>

8i#tribution o r!&i#t!r!d unit# R!&i#t!r!d und!r di!r!nt Act

Product Group+actory SSI 2!adi S!ops F

Act Act board3comm establis!ment (otal

ission Act%anufacture of ; ;= < 59vegetables, animals oils ;7777

and fats

%anufacture of dairy = ; > products ===> ;;;; ;7777

%anufacture of grain ;6 :< < 55 76mill products and ;6 9= 57>6 ;7777

animals feeds%anufacture of sugar > 86 < ;6 79

and ot!er food items =8


61/64

iii. O-n!r#$i* o Indu#tri!#; )oo'ing into t!e legal oners!ip situation of Agro"

industries it depicted t!at bot! registered and un"registered industries are registered

under single oners!ip but t!e proportion of suc! industries is remar'ably !ig!er

among t!e un"registered industries as compared to registered industries in eac! of t!e

product groups of Agro" Industries Boever, a sufficient proportion of industries

registered under t!e S!ops and Establis!ment Act are also observed operating as t!e

family enterprises In all, t!e proportion of Agro" industries operating under a signal

oners!ip are !ig!est at over 8> percent Among t!em t!e proportion of un"registered

industries accounted =: percent as against 85 percent for registered industries +urt!er,

it noted t!at only t!e registered units are operating as private and public limited

company and co"operative society Alt!oug! t!e s!are of suc! industries altoget!er

accounted only 9 percent in t!e total units covered in t!e study Also, oners!ip of

almost t!e product group of non"registered Agro" Industries, e-cepting t!e case of

sugar and sugar based manufacturing industries !as not been indicated as family

enterprise !ile suc! as not in case of registered Agro industries

T(b%! 1.

L!&(% O-n!r#$i* St(tu# o t$! Indu#tri!#

Product Group Single +amily Partner" Private Co" Publiconers!ip enterprise s!ip )imited operative )imited (otal

%anufacture of 558 558 558 ;7777

oils and fats*egistered 5 " ; ; " " 59

>;97

dairy products 7777 ;7777*egistered > " " " " " >

7777 ;77770n"*egistered 7 " " " " " ;77777 ;7777

%anufacture of ;:= ;= 57 8 " 9 5;:

grain mill 888= =99 >5: 95 ;7777 products and

animals feeds*egistered :6 ;7 57 8 " 9 ;76

:;>7 >65 >76 ::8 5=: ;77770n"*egistered ;79 = " " " " ;;;

>585 85= ;7777%anufacture of ;66 97 57 5 ; " 57=

sugar and ot!er 8


62/64

898> ;96> >8; >8 ;77770n"*egistered 8> ;: ;7 " " " ;76

865 >8 757 76> ;7777

*egistered ;=; 5< 9; ;7 ; 9 56785:7 57777

0n"*egistered ==777 55777 " " " ;7;7777

M(nu(ctur! o &r(in )i%% *roduct# (nd (ni)(%# !!d#

(otal ;:;8


63/64

i". Ori&in o t$! Indu#tr'9 As far as t!e origin of different agro"industries is

concerned a over!elming ma$ority of over = percent industries !ave been noted

first generation agro" industries !ic! are eit!er started or purc!ased by t!e present

entrepreneurs of respective industries Boever, among t!em t!e s!are of un"registered industries revealed relatively !ig!er t!an t!e case of registered industries

#t!er second ma$orities of 6 percent Agro" industries comprising : percent

registered and 6 percent un"registered industries are second generation industries

!ic! are establis!ed by t!e fat!er of t!e present entrepreneurs #nly 9 percent and

one percent units are establis!ed by ot!er relatives and grand fat!er of t!e present

entrepreneurs

Boever, among t!e first generation industries a very !ig! proportion of cent percent

folloed by == percent of t!em are confined in t!e product group of distilling

rectifying and blending of Spirits and manufacture of sugar and ot!er food items

respectively Even a very remar'able number of over >5 percent sugar and sugar

related food manufacturing non"registered industries are first generation units

Similarly, t!e second generation industries are !ig!est among t!e manufacturing of

vegetables, animal oils and fats 59 percent folloed by 57 percent among

manufacture of grain milling and animal feeds (!e study !oever, did not find anytraditional agro"based industries operating in any sample district (able"6


64/64

T(b%! 71.1

F(ctor (!ct!d t$! !#t(b%i#$)!nt o unit (t t$i# %oc(tion

Product Group)ocation

Easy Access to Easy access to Access to (a- Personal ot!ers (otalaccess to manpoer Government )ocal incentives +actor units

ra financing %ar'et and%anufacture of 96 5 5 98 " ;: < 66 " 9 ; >

==== ;;;; ;7777 9999 7770n"*egistered > ; " > " 9 " ;7

>777 ;777 >777 9777 ;7777%anufacture of ; = ;96 6 >5 98 5;:grain mill =8;9 ;=7: 987 :565 59; 89 ;7777

products and*egistered =9 97 8 89 < 76 5=68 ::: :>65 9=7 9>77 5; ; =9 5 5= ;7 ;76

=68; 5777 7>6 8>77 5::: >65 ;7777Distilling 57 ;5 9 ;= 9 9 57

rectifying and 7777 :777 ;677 >777 ;677 677 ;7777

blending of *egistered ;7 5 5 > 5 5 ;7

7777 5777 5777 >777 5777 5777 ;7777

0n"*egistered 7 ;7 ; > ; ; ;7

7777 ;7777 ;777 >777 ;777 777 ;7777All 0nits 9>: ;;77 = 98; = ;86 == 678

8=;7 5;:> 966 89;8 ;68 9 6 ;>9 6 =; 97 567

=

agro project.docx

Documents