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2021 | OriginalPaper | Chapter

4. The Food Processing Industry in India: Regional Spread, Linkages and Space for Farmer Producer Organisations

Authors : K. J. S. Satyasai, Aparajita Singh

Published in: Agro and Food Processing Industry in India

Publisher: Springer Singapore

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Abstract

The linkages between agriculture and industry have attracted the attention of academicians and policymakers alike, and the role of agriculture and its linkages with industry is part of the main discourse in the two-sector growth models in Kuznets’ (1961) elucidation of agriculture’s contribution to the economy. According to Bhattacharya and Rao (1986), sectoral linkages in India weakened during the green revolution (1967–1978) compared to the previous period. Since the result seemed counterintuitive, Satyasai and Viswanathan (1997, 1999) analysed the intersectoral linkages and found that these strengthened over time, though the magnitude of the relation weakened in later years. Irrespective of the metrics, agriculture and the other sectors are interrelated; none of the sectors can be sustainable in isolation. Using the by-products of one (sub)sector as the inputs for the others is the key to reaping economies of scale.

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previous chapter Output and Employment Linkages of the Primary, Secondary and Tertiary Sectors in the Indian Economy: A Computable General Equilibrium (CGE) Analysis
next chapter Forging Linkages to Promote Agriculture Exports Through Contract Farming: A Case Study of Okra Cultivation
Appendix
Available only for authorised users
Footnotes
1
India has about 5000 FPOs, and the Union Budget 2019–20 announced that 10,000 new FPOs would be formed over the next five years. The policy measures announced in May 2020 have confirmed that FPOs will be the convergence point for all agricultural reforms.
 
2
SAMPADA intends to identify agricultural clusters and grant them subsidies and enable the seamless transfer of food products from producing centres to markets. It aims to complete the linkage by plugging gaps in the supply chain, modernising or expanding existing food processing units and building processing and preservation capacity. The scheme will also benefit farmers by increasing their income, generating employment opportunities, stimulating the export of processed food and reducing food wastage.
 
3
The contract farming model can be an appropriate model for UNAEs, which are mostly (80%) own account enterprises and have limited bargaining power in input or output markets.
 
4
Here, “FPO” refers to trusts, societies, cooperatives and companies, and “FPC” to FPOs registered under the Companies Act.
 
5
Additionally, they facilitate the preparation of Detailed Project Reports for FPCs. Several organisations like Hivos, Rabobank Foundation, Sir Ratan Tata Trust, Ford Foundation and Axis Bank Foundation are investing in FPOs (Tagat 2016).
 
6
Section 581B(1) of the Companies Act elaborates the mandate of FPCs to include, among other things, production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of members or import of goods or services for their benefit; and processing, including preserving, drying, distilling, brewing, venting, canning and packaging of produce of its members.
 
7
We restrict ourselves to the data provided by NABARD and SFAC, the major promoters of FPOs in India—although other, reputed non-government organisations promote FPOs—because we do not have a comprehensive database.
 
8
The eNAM has been in existence for only four years, and already 1012 FPOs have registered as users and traded 3053 million tons of agri-produce worth Rs. 8.11 crore.
 
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Metadata
Title
The Food Processing Industry in India: Regional Spread, Linkages and Space for Farmer Producer Organisations
Authors
K. J. S. Satyasai
Aparajita Singh
Copyright Year
2021
Publisher
Springer Singapore
Book
Agro and Food Processing Industry in India

Print ISBN: 978-981-15-9467-0

Electronic ISBN: 978-981-15-9468-7

Copyright Year: 2021

DOI
https://doi.org/10.1007/978-981-15-9468-7_4