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Indian Agro Industries and Their Development in Jharkhand

Indian Agro Industries and Their Development in Jharkhand

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Published by Dr. KSS Kanhaiya

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Published by: Dr. KSS Kanhaiya on Aug 29, 2010
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Agro Industries in India & their Development in Jharkhand
Dr. KSS Kanhaiya
BE, DCPA, MBA, MA (App. Psy.), PhD (Mgmt.)C.Eng. (I), FIE (I), MIMA, LMCSI, LMISCA
kss.kanhaiya@gmail.com(Views expressed are personal to the author)
Introduction
Agriculture in India has a long history. Indian agriculture began by 9000 BC. Doublemonsoons led to two harvests being reaped in one year. Settled life soon followed withimplements and techniques being developed for agriculture.Today, India ranks second worldwide in farm output. Agriculture and allied sectorsaccounted for 16.6% of the GDP in 2007, and employed 60% of the total workforce.Despite a steady decline of its share in the GDP, it is still the largest economic sectorand plays a significant role in the overall socio-economic development of India.India is the largest producer in the world of milk, cashew nut, coconut, tea, ginger,turmeric and black pepper. It also has the world's largest cattle population (281 million).It is the second largest producer of wheat, rice, sugar, groundnut and inland fish. It isthe third largest producer of tobacco. India accounts for 10% of the world fruitproduction with first rank in the production of banana.Slow growth in agricultural sector is a concern as some two-thirds of India’s peopledepend on rural employment for a living.Jharkhand remains among the most food-insecure states in the country. Close to half ofthe state GDP comes from industry. Forestry contributes only about 1.3% as its hugepotential is yet to unfold. Its varied agricultural economy also supports a host of agro-based industries that includes food processing.It is with this backdrop that we shall discuss about relevance, policies, potentials, andfactors for Agro Industrial Development of India in general and Jharkhand in particularand shall try to identify areas of concern that need to be pondered upon for achievingthe desired development.
An Overview of Agro Industrial Policies in India
Agro-industry is an omnibus expression. It can generally be defined as “industrieswhich have direct or indirect links with agriculture.” It covers a variety of industrial,manufacturing and processing activities based on agricultural raw materials as alsoactivities and services that go as inputs to agriculture. In 1944, Famine EnquiryCommission defined Agro-based industries as “those, which are involved in supplyingthe farm with agricultural inputs besides handling the farm products”. James E Austinavered in 1981 in a UK publication on Agro-industrial Project Analysis that “An agro-industry is an enterprise that processes raw materials, including ground and tree cropsas well as livestock. The degree of processing can vary tremendously, ranging from thecleaning and grading of apples to the milling of rice, to the cooking, mixing, andchemical alteration that create a texturized vegetable food”.Processing of agricultural produce is a well-known agro-industrial activity. Besides thetwo-way linkage to agriculture, one would need additional criteria to classify agro-industries.
 
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To make no distinction between the nature of economic activity involved in spinning andweaving in modern mills and the traditional village weaver working with home-spun yarnwould, for obvious reasons, not be justified. While agriculture is the main source of rawmaterial for cotton textiles, textile industry of Ahmedabad and Mumbai should not beclassified as agro-industries. From the viewpoint of backward linkage to agriculture also,it would appear odd to label fertilizer and tractor manufacturing units as agro-industries.Traditionally, Indian agriculture drew most of its inputs locally from the village and agro-industries were essentially perceived as first level post-harvest processing of farmproduce. Agro, village, cottage and rural industries meant the same set of economicactivities. The expressions were interchangeable.The need for a rigorous definition of agro-industries is obvious. It is not very clearwhether agro-industries are to denote only the activities directly related to agriculture orthe total farm output and related activities. An appropriate classification of dairy farming,poultry, piggery and other farm activities needs to be done and a clear-cut view to betaken on whether tea, coffee, rubber, spices and other plantations should be. classifiedas agro-industriesThe vision of agro-industries/rural industries, as projected by the political leadershipduring the pre-independence era, had some serious limitations. These were seen interms of production in a traditional village and not the village of the future modern India.It did not consider the likely impact of:(i) Spread of literacy and technical education,(ii) Availability of alternative technologies,(iii) Growth of mass media,(iv) Changing aspirations of the people and the youth in particular,(v) Easy availability of power and electricity and efficient transport.(vi) Changes due to occupational structure, employment of women and a varietyof gainful employment opportunities,(vii) Recognition of environmental and other factors associated with largeindustrial complexes, and(viii) Urbanization.It also remained un-appreciated that techniques of production are not alwaysindependent of the socio-economic system.Agro-industries were viewed as a safety valve to be built within rural areas to absorbsurplus labour and provide relief to the problem of large scale disguised unemployment.Many Indian official reports and other important writings make a plea for agro-industriesin the context of rural-urban migration.Soon after independence, an Economic Programmes Committee was constituted toprovide a broad direction to the Central and State Governments. The Committee,headed by Jawaharlal Nehru, observed in its recommendations in January 1948:Industries producing articles of food and clothing and otherconsumer goods should constitute the decentralized sector ofIndian economy and should, as far as possible, be developed andrun on a cooperative basis. Such industries should for most of thepart be run on cottage and small scale basis.The First Five Year Plan made a distinction between village industries, small industriesand crafts. The First Plan also visualized that an increase in agricultural productionwould raise farmers' incomes and expand opportunities for processing raw materials inthe villages and more persons could get employment within the village itself.
 
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The First Plan envisaged that Amenities in rural life such as pure drinking water, streetlighting, sanitation, hospitals, recreation grounds, community centres and roadsincrease the field for village industries. The possibility of turning waste into wealth, forinstance, production of gas from cow dung and other refuse of the village through gasplants, soap making out of non-edible oils, etc will further provide scope for thedevelopment of village industries.The Planning Commission decided to draw up Village Industry Programmes inconsultation with experts. For this, the industries covered were:(i) Village oil industry; (ii) Soap making with neem oil;(iii) Paddy husking; (iv) Palm gur industry;(v) Gur and khandsari; (vi) Leather industry;(vii) Woollen blankets; (viii) High grade hand-made paper;(ix) Bee keeping; (x) Cottage match industry and.(xi) Others like: Khadi, coir, sericulture, fisheries, forests, dairying and horticulture,Two schools of thought dominated the policymaking during the early sixties, onerepresented by the official circles and the other by seekers of integrated ruraldevelopment. The main concern of the official policy has been to pursue Planobjectives of growth and sectoral targets, whereas the non-official view had a deepconcern for holistic rural development.The sixties witnessed the beginning of the green revolution in some parts of India.Agricultural output per hectare rose markedly as a consequence of higher agro inputsper unit of land. The enlarged inputs were obtained from the switchover to electricity,diesel and pumpsets; the high-yielding seeds brought in from research centres; andtractors and agricultural implements, supplied by national and international sources.The green revolution brought Indian agriculture in close contact with industry, thenature of agro-industry relationships extending themselves to supply of industrial inputsinstead of agriculture playing the raw material supply function only.With a view to reducing problems of procurement of industrial inputs for agriculture, theState Governments were advised by the Centre to set up Agro-industrial Corporationswith the objectives that included :(i) Undertaking and assisting in the distribution of inputs for agriculture;(ii) Promotion of industries undertaking production, preservation and supply of food;(iii) Distribution of agricultural machinery and equipment pertaining to processing,dairy, poultry, fishery and the industries connected with agriculture; and(iv) Providing technical guidance to farmers and persons concerned withagroindustries to enable efficient conduct of their enterprises.All objectives did not find a priority in actual working, for they chose the easier course ofpromoting sales of tractors, agricultural machinery, fertilizers, pesticides, etc.In some states, beginning with the early seventies, subsidiary corporations were alsoset up to provide cold storage and crop processing facilities.Post-1985, a substantial change occured in the official policy towards technology importand role of private foreign capital, in general, and in the food industries, in particular. Ofthe 111 foreign collaborations in food related industries approved during 1951-1985,nearly 40 per cent of the collaborations by nature were for “plant and machinery”. Fruits,vegetables, edible oils and other food-related products did not have much of a place.In contrast to the 35 pre-1986 years, the number of collaborations in the area of food-related industry approved during the next seven years only (1986-93) stood at 293. Forforeign collaborations, seeds and fruits emerged as new areas. The soft areas such as

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