Opportunities in Agro based Food processing Business-The journey from the past to the future

Agro Food Proceesing

The history of agriculture sector-

Each country has his own driven economy, for India agriculture has always been important. After the independence even our economy was dominated by agriculture. As the scenario changed other sectors came to vicinity and eventually agriculture sector lost much of its importance and was inculcated by local public at a much smaller scale. With each passing budget the various proposals and amendments were implemented by the government for the agricultural sector which later not were transformed under the major consideration of sate list of incorporation.

Requirement for food processing

The demand for food and agricultural products is changing in unprecedented ways. Increases in per capita incomes, higher urbanization and the growing numbers of women in the workforce engender greater demand for high-value commodities, processed products and ready-prepared foods. A clear trend exists towards diets that include more animal products such as fish, meat and dairy products, which in turn increases the demand for feed grains (FAO, 2007). There is also a growing use of agricultural products, particularly grains and oil crops, as bio energy production feedstock. International trade and communications are accelerating changes in demand, leading to convergence of dietary patterns as well as growing interest in ethnic foods from specific geographical locations. The nature and extent of the changing structure of agri food demand offers unprecedented opportunities for diversification and value addition in agriculture, particularly in developing countries. As a reflection of changing consumer demand, the 1990s witnessed a diversification of production in developing countries into non-traditional fruits and vegetables. The share of developing countries in world trade of non-traditional fruits and vegetables has increased rapidly in the recent past (FAO, 2007).

Global Scenario of food processing

Global processed foods sales per year are estimated at well over US$3 trillion, or approximately three-quarters of the total food sales internationally. While most of these sales are in high-income countries, the percentages of global manufacturing value addition for the main agro-industry manufacturing product categories generated by developing countries have nearly doubled in the last 25 years (FAO, 2007). The prospects for continued growth in demand for value-added food and agricultural products constitute an incentive for increased attention to agro- industries development within the context of economic growth, food security and poverty-fighting strategies. Agro-industries, here understood as a component of the manufacturing sector where value is added to agricultural raw materials through processing and handling operations, are known to be efficient engines of growth and development. With their forward and backward linkages, agro-industries have high multiplier effects in terms of job creation and value addition. A new dairy processing plant, for instance, creates jobs not only at its own transformation facilities, but also at dairy farms and in milk collection, farm input supply and product distribution. The demand pull created by an agro-industrial enterprise stimulates businesses well beyond the closest links with its direct input suppliers and product buyers; a whole range of ancillary services and supporting activities in the secondary and tertiary sectors of the economy are also positively impacted. Because of the generally perishable and bulky characteristics of agricultural products, many agro-industrial plants and smaller-scale agro-processing enterprises tend to be located close to their major sources of raw materials. Consequently, their immediate socio-economic impacts tend to be exerted in rural areas.

Changes involved in Agro Sector

One of the most profound changes taking place in the agro-food economy of developing countries is the emergence of agro-industrial enterprises as part of broader processes of agribusiness development. In turn, the transformation of agro-processing from the informal to the formal sector has critical implications for participants along the entire length of the supply chain, from those engaged in agriculture, fisheries and forestry through food retailers and traders to the final consumer. Potentially, agro-industrialization presents valuable opportunities and benefits for developing countries, in terms of overall processes of industrialization and economic development, export performance, food safety and quality. At the same time, however, there are potentially adverse effects on those engaged in informal sector agro-processing enterprises, such that processes of agro-industrialization must be attuned with overall processes of economic restructuring. Further, agro-industries are changing on a global scale, presenting not only new opportunities but also challenges for developing countries, and suggesting that the future trajectory of agro-industrialization will be somewhat different than in the past.

Global Scenario of food processing-

·        The global processed food industry is valued at US$ 3.2 trillion and accounts for over ¾ th of global food sales.

·        Despite the large size of the industry, only 6% of the processed food is traded the world over as compared to bulk agricultural commodities where 16% of produce is traded.

·        Growth of the sector has been the highest in developed economies, especially across Western Europe, North America, Japan and Australia.

·        USA is the single largest consumer of processed food and accounts for 31% of global sales..

·        The food processing sector has seen substantial growth in developing economies with increase in GDP, per capita income and the resultant changes in lifestyle.

·        Organised retailing and availability of better processing technologies too have contributed to the accelerated growth of the sector. 

Indian Scenario 

·        With GDP contribution of 15%, agriculture is a key economic driver in India.

·        It is the second – largest producer of food in the world and spends more than a quarter of its expenditure on food and related items.

·        Agriculture services attracted foreign direct investment(FDI) worth US$ 1440 million between April 2000 to January 2012

·        Indian food industry is estimated to grow from present US$ 181 billion to US$ 318 billion by 2020.

·        The food processing sector in India has potential of attracting US$ 33 billion of investments in 10 yrs. And generate employment of 9mn person days. 

The Present situation of agro Based food Processing businesses

Presently there are various companies which are engaged in this business. For initials we can see the turn over of Patanjali, which was not known to anybody and started as an agro based industry but today its shares are marketized owing to its  success in the sector. India has the demographic presentation for unique and varied food processing services. Which considering to the above data will be successfully implemented in our economy.

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