Linkages between food processing industry and agricultutre in the context of Indian economy
Shelly1, Kaur Kuldip2
1Assistant Professor, Guru Nanak Dev University College, Jalandhar, Punjab
2Professor and Head, Guru Nanak Dev University, Amritsar, Punjab
Online published on 20 September, 2018.
In the context of Indian economy, it has been a much debated issue that whether the Agriculture is more important for acceleration in the rate of growth of economy or Industry should be considered as an engine of growth and above all, linkages between these two sectors. The Agriculture and Industrial sector in India are closely linked. Hence, growth in one sector will induce the growth in other and vice versa. However, despite the fact that there is relatively long history of studies focusing on the linkages between Agriculture and Industry. There remains a debate on whether the most effective route of development of a nation is through first developing the Agriculture sector or through directly developing the Industrial Sector. A weakening of agriculture-Industry linkage during the eighties had given rise to various controversial issues (Ahluwalia 1985; Bhattacharya and Mitra 1989; Bhattacharya and Rao 1986). This paper is an attempt to examine the inter-relationship between Agricultural Sector and Food Processing Industry of India. The linkage of Agriculture Sector with Food Processing Industry can be classified broadly into vertical integration and supply of raw materials as how the Production of Agriculture causes the acceleration of Net Value Addition (NVA) in Food Processing Industry. Furthermore, in today's global economy, it is becoming extremely difficult for agricultural producers to focus solely on producing primary commodities and still expect to realize a decent standard of living. Adding value to the agricultural production through these food processing industries is a logical way to stem the decline in income and to accelerate the growth process.
Agriculture, Industry, Net Value Added, co-integration, Linkages.