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| Importance of Value Addition in Agriculture | | |
Dr. Banarsi Lal and
Dr. Pawan Sharma
Agriculture forms the
backbone of the Indian economy. Although there has been large industrialization in the last 60 years, agriculture still occupies the prominent place of importance. Agriculture has provided us the food security but so far it has failed to provide us the nutritional security. Value addition is the process in which for the same volume of a primary product, a high price is realized by means of processing, packing, upgrading the quality or other such means. Value addition is one of the important components of nutritional security. Sometimes farmers get less price of a particular farm produce due to its surplus production. This problem can be solved by the crop diversification which creates an opportunity to earn more money from the different crops produce. Crop diversification and value addition are the two techniques for the profit maximaztion and nutritional security. The most important problem now-a-days is to provide the remunerative price to the farmers for their farm produce. This problem can be solved by the value addition in different crops produce and can be marketed both inside and outside the country. This can also generate more employment for the rural people. Value added agriculture helps to increase the value of primary agricultural commodities through a particular production process. Small scales processing units, organic food processing, traditional crops production, agri-tourism and bio-fuels development are examples of various value-added projects that have supported to create new jobs in the rural areas. Value addition in agriculture is needed for the profitability of the farmers, to empower the farmers and weaker sections of the society, to provide safe, quality and branded food to the consumers, to reduce post-harvest losses, reduction in import and increasing exports, encourage the growth of subsidiary industries, to reduce the risk of marketing, to promote the crops diversification and to increase the financial stability of the farmers. Attentiveness to consumer demands in quality, variety and packaging are important. In order to be unique and novel, new product should be attempted. The product we develop should be one of its own kinds for which crop and variability indigenous to our country should be exploited. The product should be new and unusual like black or blue rose so that no one can compete in the market. Biotechnology can be utilized for the value addition especially in horticultural crops. The product we develop should have demand in the market. The product should have high value for low volume for ease of trading and distribution and the extracts such as spices and herbal plants can fulfill this requirement. Quality and quantity of the product should be maintained in the market. Ultimately market is the key for success of any product.
In the present era the whole world has become a single global market and there is too much competition in the market. Value addition and crops diversification has become key words in the agricultural trade. Product diversification is must for harnessing the full potential from present scenario of development. Value addition helps in the avoidance of post harvest losses, industrialization, employment generation, export, extended availability of produce, foreign exchange earnings, product diversification, easy marketing etc. Agro- processing industries can play a significant role in achieving the objective of 'doubling the farm income'. The consumption of processed foods is synchronous with the rise in incomes as income elasticity of these foods is very high. Presently our country reached the status of 'lower middle-income' among the countries in the world and therefore, the share of processed food in the food basket of our population is bound to go up. Urbanisation, diversification of diets, globalization of diets, rising share of women in work force, nuclear families, changing policy perspectives including digitalisation and export opportunities propel growth of food processing sector. Agricultural innovations have a significant impact on agricultural performances and can be beneficial for both the producers and consumers. Processed foods were considered as rich people food for a long time and suffered heavy taxation, riddled with so many taxes including steep taxes for packaged products. This has been gradually changed with successive reduction in excise duties and state taxes to benefit farmers. Concept of cold chain was non-existent before the nineties and post-harvest losses were very high due to poor infrastructure facilities. Transport costs are relatively high leading scholars to conclude that importing from other countries is cheaper than transporting from one part of the country to another. Standards and protocols for food safety and laws for food safety were almost negligible.
The concept of food parks, agri-export zones, mega food parks, cold chains and human resource development have been initiated besides several incentive schemes. The central government has released a food processing policy in 2001 and again in 2005. The new agro-processing industries set up to process, preserve and package fruits and vegetables are allowed under Income tax act. The role of state is considered to be vital. Hence, the centre has urged the state governments to allow exemption for this sector from sales tax and other local taxes. Several state governments have also announced food processing policies. Most recently, centre has allowed 100% FDI in trading of food products including through e-commerce to boost growth of the sector. 42 food parks were sanctioned for setting up of processing units. The scourge of organised food processing sector continues to be very low value added at just 12% in 2013-14 and much less in some of the important industries like vegetable oils and fats (5%), dairy products (10%), grain mill products (8.6%) and fish products (7.7%). The main paradox in food processing industries is the dichotomy between organised and unorganised segment in regard to output and employment. While output and value added are higher in the organised segment, unorganised segment with one-fifth of output employs three times higher employment. Food processing sector creates lot of employment in comparison to the manufacturing sector as a whole. The productivity of this sector needs improvement though studies show that there has been improvement after 2000s. There is a need to infuse more technology in both the organised and unorganised segments with liberal provision of credit. Value of land poses the biggest threat to unorganized manufacturing in general and food processing in particular and needs special attention of the policy makers. Recent initiatives like mega food parks and cold chain schemes are well conceived and showing signs of positive impact. |
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