Module VIII

Agriculture and Business: Role of Agriculture in Economic DevelopmentTrends in Agricultural ProductionAgro based Industries Dependence of Business on AgricultureCorporate India Initiatives

Agriculture and Business

• Agriculture is the mainstay of the Indian economy because of its high share in employment and livelihood creation. It supports more than half a billion people providing employment to 52 per cent of the workforce

• Agriculture in India has a significant history. Today, India ranks second worldwide in farm output. Agriculture and allied sectors like forestry and fisheries accounted for 16.6% of the GDP in 2009, about 50% of the total workforce. The economic contribution of agriculture to India's GDP is steadily declining with the country's broad-based economic growth. Still, agriculture is demographically the broadest economic sector and plays a significant role in the overall socio-economic fabric of India.

Role of Agriculture in Economic Development

1. Share in national income2. Source of employment3. Industrial Development4. International trade5. Development of tertiary sector6. Revenue to the government7. International importance8. Internal trade (90% of our population spends

60% of their income on purchase of food items)

Problems of Indian Agriculture

• General problems• Institutional problems• Technical problems

General problems

1. Overcrowding in agriculture2. Discouraging rural atmosphere3. Inadequate non-farm services4. Crop losses

Institutional problems

1. Defective tenancy reforms2. Lack of credit and marketing facilities3. Size of holdings

Technical problems

1. Obsolete techniques of production2. Lack of irrigation facilities3. Cropping pattern

Agro-based Industries

• Those industries which have either direct or indirect link with agriculture, industries which are based on agricultural produce and industries which support agriculture come under agro-based industries.

Need for Agro-based industries

1. They are suitable for rural areas as they are raw material oriented

2. The upliftment of rural economy is possible3. They provide employment opportunities to rural

people, solving the problem of under employment and disguised unemployment.

4. Improve the purchasing power of rural people through income generation.

5. Decentralization and dispersal of industries is possible through establishment of agro industries in rural areas.

7. To bring rural economy on par with urban economy, rural industrialization is important.

8. To achieve a balance growth of industry and agriculture, agro industries should be encouraged.

9. To solve the problem of exploitation of farmers by middleman.

10. Transportation cost of agricultural produce can be reduced by processing them at the place of production.

11. Infrastructure facilities can be improved in rural areas and create potential for establishment of others industries in rural areas.

12 They curb the migration of people from rural areas to urban areas.

TYPES OF AGRO BASED INDUSTRIES

• Agro Produce processing units• Agro Produce Manufacturing units• Agro Input manufacturing units

Importance of Agro Based Industries• Availability of Raw Material • Uplifting of Rural Economy• Provides employment• Improves the economic conditions• Establishment of agro based industries in rural areas will help in:

– Dispersal of industries– Reducing exploitation of producers by middlemen– Bring more areas under different crops– Reducing transporting costs of produce and there by price the finished

products.– Reducing wastage of perishable agricultural commodities.– Increasing the incomes of farmers– Development of backward areas– Preventing in the migration of people from rural areas to urban areas.

MAJOR AGRO INDUSTRIES IN INDIA• Cotton Textile Industry• Woolen Textile Industry • Silk Textile Industry• Artificial Fibre Textile Industries• Jute Industry• Sugar Industry• Paper Industry

PROBLEMS FACED BY AGRO BASED INDUSTRIES IN INDIA

• Infrastructure• Skills• Technology• Support services