Module VIII

Agriculture and Business:

Role of Agriculture in Economic Development
Trends in Agricultural Production
Agro based Industries
Dependence of Business on Agriculture
Corporate 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 income
2. Source of employment
3. Industrial Development
4. International trade
5. Development of tertiary sector
6. Revenue to the government
7. International importance
8. 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 agriculture
2. Discouraging rural atmosphere
3. Inadequate non-farm services
4. Crop losses
Institutional problems

1. Defective tenancy reforms
2. Lack of credit and marketing facilities
3. Size of holdings
Technical problems
1. Obsolete techniques of production
2. Lack of irrigation facilities
3. 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 possible
3. 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