Discuss the Factors for Localization of Agro-Based Food Processing Industries of North-West India.

Updated December 6, 2021

Agro-based food processing industries are those industries which take agricultural products as raw material and process it to make more profitable commercial products for human and animal consumption. India’s foodgrain production of 2019-20 is about 291.56 million tonnes, most of which comes from Green-Revolution zone of North-West India. Indian Agro-based manufacturing industries have been heavily concentrated in farming heartlands of North-west due to various geographical, climatic and economic factors. It means states of north-west India like Punjab, Haryana, Rajasthan, western Uttar Pradesh has a heavy influx of agro-based industries due to these factors.

Factors for Localization of Agro-based Food Processing industries-

Climatic Factors

Longer Preservation Period- The climate in North-western India is suitable for preserving food products for a longer duration due to its cooler climates. Other parts of the country including peninsular and eastern India are more humid and is not suitable for longevity.

Economic Factors

Availability of Raw Materials– When an industry gets raw materials easily at a lower cost, then it can develop big and at a faster rate. The North-western part is suitable in this regard due to its primarily farm-based economy. Rice, Wheat, Maize along with horticulture production is high in this region.

Proximity of Market- Large markets and local markets along with the closeness to NCR Delhi region are available for selling the manufactured goods, and demand for manufactured goods generates automatically. Even, this will reduce the cost of transportation as well as gain profits for the owners in a short duration

Cheap labour- Easily available of labour reduces the cost of operating of such industries. Since there is easy availability of such human resource, it contributed towards the localization of agro-based food processing industries. Even, this industry has close links with agriculture and provides a living to farmers, cotton boll pluckers and workers engaged in ginning, spinning, weaving, dyeing, designing, packaging, tailoring, and sewing.

Investment atmosphere- Availability of capital and financial resources helped the industry to grow.

Geographic Factors

Connectivity- Inexpensive water transport, supported by a good network of railways, roadways, and waterways to facilitate the movement of raw material to the mills. India stands second as a world producer of sugar. In recent years, there is a tendency for the mills to shift and concentrate in the western states, especially in Maharashtra; this is because the cane produced here has higher sucrose content. The cooler climate also ensures a longer crushing season. Moreover, the cooperatives are more successful in these states.

e.g. In Northwest India, Mumbai got progressively well connected through rail and road links with cotton-growing areas of Gujarat and Maharashtra in the interior. This lead to the development of food processing industries in North-West India.

Geographical Advantages- Vast network of perennial rivers, fertile Alluvial soils, Fast Transportation because of northern plains, seasonal variations promote the variety of agro products.

Government at State and Centre are collaboratively made certain policies for the increment in the food processing Industries-

(a) Mega Food Parks

(b) National Mission on Food Processing

(c) SAMPADA Yojana

Despite, having numerous advantage the region is still facing some issues which are slowing down the growth percentage, Forests which need immediate attention are-

(a) Payment of Sugar mill Issue

(b) Focus more on domestic sell than export

(c) India’s total food processing remained below 10% of Production

(d) Mega Food parks locations become political issue many times

(e) Promotion of Contract Farming act

(f) Rationalization of MSPs

(g) Promotion of more cold storage and warehouse

Thus, we can observe that agro-based manufacturing can be profitable if above-mentioned criteria are fulfilled. The localization of these industries also indicates supportive policy initiatives by the respective state governments.

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