Sambhav-2025

Approach In introduction, highlight the importance of agro-based industries. Explain systemic inefficiencies and structural challenges with relevant facts, examples, and solutions. Conclude suitably.

Introduction

Agro-based industries play a pivotal role in India's rural development, contributing significantly to employment generation (e.g., 70% of the rural workforce is engaged in agriculture) and adding value to agricultural produce. Despite their potential, these industries face systemic inefficiencies and structural challenges that impede their growth.

Body

• Systemic inefficiencies:
  • Inadequate infrastructure: Poor rural roads, lack of storage facilities, and unreliable electricity disrupt supply chains.
    • Example: A substantial portion of perishable produce (30-40% of fruits and vegetables) is wasted due to cold storage deficits.
  • Lack of access to credit: Small and medium agro-industries often face difficulties in obtaining affordable financing.
    • Fact: NABARD data shows rural credit access remains skewed towards large industries, leaving smaller players underfunded.
  • Low technological adoption: Limited awareness and adoption of modern machinery and techniques lower productivity and profitability.
    • Example: Traditional rice mills dominate despite energy-efficient alternatives being available.
• Structural challenges:
  • Fragmented supply chains: Small landholdings and multiple intermediaries lead to inefficiencies in procurement and pricing.
  • Policy constraints: Inconsistent export policies and outdated labor laws restrict the scalability of agro-based industries.
    • Example: Frequent bans on the export of commodities like onions hurt market stability and profitability.
  • Weak linkages with agriculture: Insufficient focus on crop diversification limits raw material availability for industries like oilseeds and fibers.
  • Environmental concerns: Overuse of resources, such as groundwater, by agro-industries adds long-term sustainability challenges.
• Suggested reforms:
  • Strengthen infrastructure: Expand cold storage and rural connectivity through schemes like the Pradhan Mantri Gram Sadak Yojana.
  • Encourage FPOs (Farmer Producer Organizations): Streamline supply chains and empower small farmers.
  • Promote technology use: Subsidize and disseminate advanced processing technologies under initiatives like PM-Kisan Sampada Yojana.
  • Policy reforms: Ensure stable export policies and better integration between agriculture and industry.

Conclusion

Addressing the systemic inefficiencies and structural challenges of agro-based industries can unlock their full potential for rural development and inclusive growth. A robust agro-industrial sector c