Sunday, September 03, 2006

Bright Future For Agri-Industry

Till recently, India's economy was agri-based. It is justifiably so as nearly 70% is rural India. Manufacturing and lately service sectors have now become significant contributors to the growth. But to move away from the traditional agriculture to other growing sectors would be suicidal. India gained self-sufficiency in food production after the success of its green revolution which changed the face from an impoverished begging bowl to a sleeping giant.
Be that as it may, the potential of exports of agri-products has not been fully exploited. The ambitious target of creating 60 agri-export zones (AEZs) has remained a distant dream. The commerce ministry has earmarked over $2 million for kick starting 10 to 12 AEZs having greater potential. Surprisingly, the private sector has been lukewarm to various incentives offered by the government like subsidies. Perhaps one or two success stories will serve as an impetus as has been seen throughout the history of Indian industries. As always, some wait in the wings for jumping into the bandwagon once any new line of investment claims success demonstrably.
As of now, India's agri-exports have reached $1.1 billion though a target of $2 billion had been fixed. Among the products, gherkin and rose-onion in Karnataka, mango in Chittor district of Andhra Pradesh, grapes, grape wines and mangoes in Maharastra and floriculture in Tamilnadu deserve special mention. The state of West Bengal has succeeded in attracting investment flow in processing of pineapples, mangoes and vegetables. Litchi in Uttaranchal and medicinal plants in Kerala also hold good promise. In the case of medicinal plants, India has undoubtedly an edge. Unfortunately, 65% of $150 million exports are in the form of raw products. Value addition can be achieved by infusion of capital and technologies for further processing.
Any takers?

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