Performance and Prospects of Agro-Processing Industries in Haryana

Performance of Agro-Processing Industries 1

Proceedings of 2nd International Conference on Business Management (ISBN: 978-969-9368-06-6)

PERFORMANCE OF AGRO-PROCESSING INDUSTRIES

Performance and Prospects of Agro-Processing Industries in Haryana

Dr. Rajiv Khosla; Dr. H. S. Sidhu; Dr. Sharanjit Singh Dhillon

Chandigarh Business School, Gharuan, Mohali, India



Abstract

Agro processing industries serve as an important link between agriculture and industry.

Agro- industries in India have not been developed on scientific lines, as is the case in the

developed countries of the world. Lack of proper infrastructure, inadequacy of capital, lack of

entrepreneurial environment and the absence of proper policy framework are some of the

constraints that did not allow this industry to grow on scientific lines. But during the last one and

a half decade or so there has been a significant progress in this industry. Further, the

development of this industry is expected to solve inherent problems faced in agriculture sector. It

calls for an in-depth study of the agro-industrial scene of food surplus states. Thus, in the present

study an attempt has been made to analyze the performance of agro- industries in Haryana state

to see and to analyze what is their relative position as compared to the other states of the union.

A set of agro-processing industries have been identified on the basis of pattern, performance and

scope of the industry within the state and comparative advantage vis-à-vis other states of India

which can become future of Haryana’s industrialization strategy followed by suitable policy

measures so that agro-processing industries of the state are developed on modern lines.

Dr. Rajiv Khosla is Associate Professor and Head, Chandigarh Business School,

Gharuan, Mohali. Mob. 9814722870, email: [email protected]

mailto:[email protected]



Dr. H. S. Sidhu is former Professor of Economics, Punjab School of Economics, Guru

Nanak Dev University, Amritsar.

Dr. Sharanjit Singh Dhillon is Professor, Punjab School of Economics, Guru Nanak Dev

University, Amritsar.



SECTION I

INTRODUCTION

Agro processing may be defined as a set of economic activities that are concerned with

the conservation, handling and processing of agricultural products. These activities try to make

agricultural products usable as food, fuel or industrial raw material. Agro processing industries

can be categorized as primary and secondary industries. Where primary processing is concerned

with sorting, grading and packaging of the agricultural products, secondary processing includes

the conversion of agricultural products into value added products like juices, concentrates,

pickles, jams, chutney, squashes etc. Thus, the scope of agro-processing covers all operations

from the stage of harvesting till the finished product reaches its destination.

The World Development Report (World Bank, 2007) states that in developing economies

that are a hub of rural poor, rising inequalities lead to the unfulfilled expectations that create

political tensions. It necessitates the growth in agriculture and the rural non-farm economy to

reduce rural poverty and narrow down the prevailing inequality. It assumes greater importance in

the context of Indian economy, where it is expected that the fragmented US$350 billion retail

industry will double in size by 2015, and where modernization and liberalization of retail foreign

direct investment (FDI) have given rise to heightened investment coupled with significant protest

and policy push-back (Vorley, Lundy and Mac Gregor, 2009).

Though India is the world's second largest food producer, yet the contribution of

agriculture sector to GDP is as little as 18 percent, that too, with more than 50 percent Indians

employed in agriculture related activities. The most plausible reason that may be attributed to the

dismal position of the agriculture sector can be improper value-addition to the food produced.

Whereas in developed countries, up to 14 per cent of the total work force is engaged in agro-



processing sector directly or indirectly, in India, only about 3 per cent of the work force finds

employment in this

sector.(http://agritech.tnau.ac.in/agricultural_marketing/agrimark_AgroProcessing.html) The

value addition to the produced food stands merely at 7 per cent in India compared to over 22

percent in China, 45 percent in Philippines and 188 percent in UK (Chintala, 2008).

Although post green revolution era has seen some growth in processing sector in India

still this sector is in its infancy. Not more than 2 percent of the food items are processed in the

Indian economy (Annual Report, MFPOI, 2005-06). The development of agro processing

industries in the Indian context can provide a viable answer to the problems of this sector.

Different economists have weighed the rationale for the development of agro processing

industries from their own perspective.

(Rao et al, 2006) concluded that persistently high economic growth coupled with

increasing urbanisation has given a boost to the demand for high value food commodities like

fruits, vegetables, milk, meat, eggs and fish. Further, the producers are also following the

emerging demand patterns thereby making necessary changes in their production portfolio. This

is has created an opportunity for the development of agro based industries in the country. Chadha

(1999) observed that India is world’s second largest food producer and had the potential to be

world’s number one food producer. The reasons for growth of agro processed food industry were

attributed to a rise in incomes of the people, increasing number of working women, increase in

population and expansion of media both print and electronic. Bansal (2003) reaffirmed the

proposition that development of agro-industries is the only viable option to achieve employment

led growth in rural areas. Kachru (www.agricoop.nic.in/Farm%20Mech.%20PDF/05024-06.pdf,

2006) stated that round the year availability of raw materials, social acceptability of agro-

http://agritech.tnau.ac.in/agricultural_marketing/agrimark_AgroProcessing.html

http://www.agricoop.nic.in/Farm%20Mech.%20PDF/05024-06.pdf



processing, support from the central government and vast domestic market are major strengths

favoring the development of Indian agro-processing industries. Naik (1993) argues that world

trade in processed fruits and vegetables is continuously increasing. International trade was

around US $ 5 billion consisting largely of juices, concentrates, pastes, etc. Ministry of Food-

Processing Industries (www.mofpi.nic.in, 2006) observed that domestic consumption of

processed foods is picking up with changing consumer behavior due to economic growth and

changing life styles.

The state of Haryana is 100 percent self sufficient in terms of food grains production.

Further, nearly 80 percent of the total area of the state is sown. Not only this, approximately 86

percent of the net area sown is also irrigated. Furthermore, about 70 percent of the total

population of the state is dependent on agriculture and 30 percent of the total income of the state

comes from agriculture sector. Beside this food-processed and agro-processing product worth Rs

1,500 crores are being exported annually from the state (www.techno-preneur.net/business-

ecosystem/cgovt/haryana/haryana-policies.htm as seen on 20/5/2009). Thus, the state has

tremendous opportunity for the agro-processing industries. The present study aims to identify the

promising agro-processing industries in the state. Specifically, it intends to fulfill the following

objectives:

i. To assess the performance of agro-industries in Haryana since 1998-99 and to see the

impact of economics liberalization on this industry.

ii. To compare the performance of agro – industries in Haryana with other major states of

India.

http://www.mofpi.nic.in/

http://www.techno-preneur.net/business-ecosystem/cgovt/haryana/haryana-policies.htm




iii. To identify the areas where Haryana’s agro-based industries have an advantage over

other major states of India in terms of return per unit of invested capital and per unit of

value added.

iv. To give suggestions and draw policy implications with a view to develop agro-industries

in the state on a sound footing.

SECTION II

DATABASE AND METHODOLOGY

Secondary data at 3 - digit level from Annual Survey of Industries (ASI) published by the

Central Statistical Organization has been used. Since the year 1998-99, the National Industrial

Classification (NIC) has introduced a stratum of an industry group at a 5 digit level NIC of 1998.

The new NIC 1998, which is pretty wide-ranging, at the 5 digit level, has not been found to be

comparable with the NIC 1987. Thus, keeping this limitation of data in mind, for the present

study, analysis has been undertaken at two points of time - one pertaining to the time period with

NIC 1987 and the other with NIC 1998.

The study identified a group of industries that are dominating in Haryana for the year

1997-98 in which an analysis for 42 industrial groups have been made (based on NIC – 87). For

studying the growth of agro-processing industries, compound growth rate of each of the selected

indicators have been calculated for the period from 1980-81 to 1997-98. Year 1980-81 is unique

in the sense that CSO started supplying electronic data from this year onwards only. Further, the

performance of each agro-processing industry in Haryana is compared to the same industry in

other states of India. Based on NIC–98, 17 agro-processing industries have been studied for the



year 2007-08. The modus operandi of comparison for the agro-industries remains the same as

discussed above.

The trend in growth has been studied by computing the compound growth rate through

principle of least squares, using the following formula

)( bLogtaLogYLog

The data given in ASI reports is on current prices but for proper comparison, the values

are deflated with suitable deflator and expressed in 1993-94 prices. The study has been divided

into five sections. Section I is introductory in nature. In section II database and methodology for

the present study is discussed. Pattern, performance and scope of agro-processing industries for

the year 1997-98 are identified in section III. Section IV identifies the pattern, performance and

scope of agro-processing industries for the/up to the year 2007-08. Suggestions for the

development of agro-processing industries in Haryana are given in section V. Concluding

remarks is given in section VI.

SECTION III

PATTERN, PERFORMANCE AND SCOPE OF AGRO-PROCESSING INDUSTRIES IN

HARYANA

The share of different industries in agro-processing group in the factory sector is presented in

table 1. The table shows that the grain mill products group of agro-processing industries

contributes the maximum share (22.47 percent) to the total output of the agro–processing sector

in the state. Further, grain mill products industry also holds the top rank in case of the percent

share in the net value added and total number of units in agro-processing industries. The second



slot goes to Manufacture of rain coats, hats, etc. whose share stands at 5.68 percent of the total

output of the agro – processing sector. It is also seen from the table that the top five agro-

processing industries of the state are Grain mill products, Manufacture of rain coats, hats etc.,

Wool spinning and weaving other than in mills, Manufacture of food products n.e.c. and

Manufacture of dairy products.

Together these five agro industries account for 44.23 percent of the total agro –

processing production in Haryana. Further, the table shows that Weaving of cotton, Other edible

oils, Cotton ginning, cleaning and baling, Sugar manufacturing and refining and Spinning,

weaving and finishing of other textiles along with the top five agro-processing industries

Table 1

Share of Different Industries in Agro-processing Industrial Group in

Factory Sector of Haryana: 1997-98

S.No. Industry Output NVA Units Workers

1. Grain mill products 22.47 16.71 35.31 8.04

2. Manufacture of rain coats, hats etc. 5.68 8.66 6.57 5.42

3. Wool spinning and weaving (other than in mills) 5.59 4.85 12.22 3.53

4. Manufacture of food products n.e.c. 5.25 14.38 1.06 0.96

5. Manufacture of dairy products 5.24 -1.95 1.41 58.78

6. Weaving of cotton 5.11 5.84 3.88 3.36

7. Other edible oils 4.92 1.2 3.25 0.77

8. Cotton ginning, cleaning and baling etc. 4.90 -0.52 6.36 1.72



9. Sugar manufacturing and refining 4.86 -9.77 0.64 3.53

10. Spinning, weaving and finishing of other textiles 4.80 8.47 1.69 3.4

11. Pulp, paper & paper board 4.40 4.00 3.53 0.84

12. Manufacture of leather footwear 4.34 12.43 1.77 2.39

13. Manufacture of bakery products 3.73 9.66 0.49 0.67

14. Hydrogenated vanaspati, ghee etc. 2.56 1.57 0.42 0.22

15. Weaving carpets, rugs etc. 2.10 5.23 1.27 0.45

16.

Manufacture of water-proof textiles, such as oil

cloth, tarpaulin etc. 1.81 3.79 0.64 0.73

17.

Manufacturing of textiles n.e.c. like linoleum,

wadding, upholstering and filling, etc. 1.58 0.64 0.42 0.05

18.

Manufacture of Paper and Paper Board Articles

and Pulp Products n.e.c 1.44 2.51 0.35 0.34

19. Malt liquor and malt 1.35 3.01 0.49 0.35

20. Weaving cotton textiles in power looms 1.15 1.94 2.47 1.15

21. Manufacture of soft drinks 1.02 0.37 0.21 0.12

22.

Printing, publishing books, maps, atlases,

journals etc. 0.99 1.53 1.69 1.18

23.

Manufacture of special purpose paper whether or

not printed n. e. c. 0.95 0.85 0.21 0.22

24. Production of khadi 0.49 0.51 0.92 0.17

25. Manufacture of veneer, plywood etc. 0.48 0.37 3.04 0.09



26. Distilling, rectifying and blending of spirits 0.47 -0.05 0.35 0.15

27. Manufacture of starch 0.43 0.48 0.56 0.11

28. Manufacture of threads, cordage etc. 0.39 0.84 0.42 0.18

Contd………..

29.

Printing, dyeing and bleaching of synthetic

textiles 0.32 1.50 0.35 0.11

30. Sawing and planning of wood 0.25 0.29 1.77 0.23

31.

Embroidery Work, Zari Work and Making of

Ornamental Trimmings 0.21 0.35 0.56 0.11

32. Tanning, curing, finishing, japanning of leather 0.20 -0.60 0.28 0.20

33. Manufacture of chewing tobacco, zarda and snuff 0.16 0.17 0.35 0.06

34. Knitting in mills 0.11 0.34 0.28 0.06

35. Caning and preservation of fruits and vegetables 0.07 0.04 0.28 0.07

36. Manufacture of Wooden and Cane Boxes 0.06 0.11 1.69 0.06

37. Dyeing and bleaching of woolen textiles 0.04 0.05 0.56 0.03

38.

Manufacture of containers, boxes of wood and

cane 0.03 0.05 0.64 0.02

39. Printing, Dyeing and Bleaching of Silk Textiles 0.02 0.11 0.21 0.06

40. Manufacture of wooden furniture and fixture 0.01 0.04 0.49 0.02



41. Manufacture of prepared animal feed 0.001 0.01 0.56 0.001

42.

Manufacture of Products of Wood, Bamboo,

Reed, Grass and Cane 0.001 0.01 0.28 0.001

Source: Calculated from suppliment to Annual Survey of Industries 1997-98.

contribute as much as 69 percent of the total agro – processing sector output of the state.

Furthermore, this group of top ten agro-processing industries contributes 47.87 percent of the

total agro – processing sector’s net value added and has 72.39 percent of the total number of

units in the state. The percent share of the workers employed in these top ten industries is as high

as 89.51 percent of the total workers in the factory sector of the state. Diagonally opposite is the

case of the bottom group of 10 agro – processing industries namely Manufacture of chewing

tobacco, zarda and snuff, Knitting in mills, Caning and preservation of fruits and vegetables,

Manufacture of wooden cane and cane boxes, Dyeing and bleaching of woolen textiles,

Manufacture of boxes of wood and cane, Printing , Dyeing and bleaching of silk textiles,

Manufacture of wooden furniture and fixture, Manufacture of prepared animal feed and

Manufacture of products of wood, bamboo, grass and cane – which taken together accounts for

just 0.50 percent of the total agro – processing output of the state. The trend does not turn around

even if the percent share in the net value added of these bottom 10 agro – processing industries is

taken which stands at 0.92 percent only. In case of the number of units, Manufacture of prepared

animal feed (0.001 percent) and Manufacture of products of wood, bamboo, reed and cane (0.1

percent) are found to be negligible in the bottom group 10 agro – processing industries. The least

important four industries in terms of percent share in the total number of workers (Manufacture

of prepared animal feed, Manufacture of products of bamboo, reed, grass and cane, Manufacture

of wooden furniture and fixture and Manufacture of containers, boxes of wood and cane)



contributes not more than 0.2 percent share each in the bottom group of 10 agro-processing

industries.

Thus, it is clear from the above discussion that out of selected 42 different agro–

processing industries in the state, Grain mill products, Manufacture of rain coats, hats etc., Wool

spinning and weaving other than in mills, Manufacture of food products n.e.c. and Manufacture

of dairy products, Weaving of cotton, Other edible oils, Cotton ginning, cleaning and baling,

Sugar manufacturing and refining and Spinning, weaving and finishing of other textiles are more

developed and these ten industries dominate the factory sector of agro – processing in the state of

Haryana.

PERFORMANCE OF AGRO-PROCESSING INDUSTRIES IN HARYANA

In this subsection, we have carried out the growth rates of output produced for only those

industries which facilitate output comparison. Compound growth rates of output for different

industries are given in table 2. The table shows that during 1980-81 to 1997-98, Manufacture of

food products n.e.c. industry is the fastest growing agro-processing industry in Haryana. The

output of this industry grew at a phenomenal rate of 48.63 percent per annum. This was followed

by Wool spinning and weaving other than in mills (30.92 percent), Weaving cotton textiles in

powerlooms (29.62 percent), Weaving of cotton (28.93 percent) and Manufacture of leather

footwear (23.29 percent). Next five industries in order of growth rate are Weaving carpets, rugs

etc. (20 percent), Manufacture of water proof textiles (14.26 percent), Hydrogenated vanaspati,

ghee etc. (12.90 percent), Manufacture of dairy products (12.66 percent), and Grain mill products

(10.92 percent).



The growth rate of output of all the agro-industries of the state during the same time

period has been 9.41 percent per annum. The table further reveals that almost two third industries

have been laggards having growth rate less than the state average. Those industries which

exhibited a dismal performance in terms of growth were Manufacture of containers boxes of

wood and cane (-11.10 percent), Dyeing and bleaching of woolen textiles (-4.56 percent) and

Caning and preservation of fruits and vegetables (-2.03 percent). Other industries having positive

Table 2

Growth rate of output of agro-processing industries in factory sector

of Haryana: 1980-81 to 1997-98

1. Manufacture of food products n.e.c. 48.63

2. Wool spinning and weaving (other than in mills) 30.92

3. Weaving cotton textiles in power looms 29.62

4. Weaving of cotton 28.93

5. Manufacture of leather footwear 23.29

6. Weaving carpets, rugs etc. 20.00

7. Manufacture of water-proof textiles, such as oil cloth, tarpaulin etc. 14.26

8. Hydrogenated vanaspati, ghee etc. 12.90

9. Manufacture of dairy products 12.66

10. Grain mill products 10.92

11. Manufacture of chewing tobacco, zarda and snuff 9.23

12. Sawing and planing of wood 9.02

13. Embroidery Work, Zari Work And Making of Ornamental Trimmings 8.79



14. Printing, dyeing and bleaching of synthetic textiles 8.40

15. Other edible oils 7.28

16. Sugar manufacturing and refining 6.92

17. Malt liquor and malt 6.12

18. Printing, publishing books, maps, atlases, journals etc. 6.12

19. Cotton ginning, cleaning and baling etc. 4.28

20. Spinning, weaving and finishing of other textiles 4.04

21. Manufacture of Products of Wood, Bamboo, Reed, Grass And Cane 3.40

22. Pulp, paper & paper board 0.35

23. Caning and preservation of fruits and vegetables -2.03

24. Dyeing and bleaching of woolen textiles -4.56

25. Manufacture of containers, boxes of wood and cane -11.10

Overall 9.41

Source: Supplement to Annual Survey of Industries, various issues from 1980-81 to 1997-98.

but lower growth rate than the overall growth rate include Pulp, paper and paperboard (0.35

percent), Manufacture of products of wood, bamboo, reed, grass and cane (3.40 percent),

Spinning, weaving and finishing of other textiles (4.04 percent), Cotton ginning, cleaning and

baling (4.28 percent), Printing and publishing of books and journals (6.12 percent), Malt liquor

and malt (6.12 percent), Sugar manufacturing and refining (6.92 percent), Other edible oils (7.28

percent), Printing, dyeing and bleaching of synthetic textiles (8.40 percent), Embroidery work

and zari work (8.79 percent), Sawing and planning of wood (9.02 percent) and Manufacture of

chewing tobacco, zarda and snuff (9.23 percent).



SCOPE OF DIFFERENT AGRO-PROCESSING INDUSTRIES (FACTORY SECTOR) IN

HARYANA VIS-À-VIS OTHER LEADING INDIAN STATES: 1997-98

Haryana has comparative advantage in many areas vis-à-vis other states of India and a more or

less free access to the national market gives unlimited potential to the state to grow and prosper.

In this scenario, an evaluation of Haryana’s economy or industry in isolation from other states of

India does not complete the story. Therefore, we have made an effort to compare the

performance of the main agro-processing industries of Haryana with the agro processing

industries in other states to find out whether there is any scope for further expansion in agro-

processing industries. The study, first of all, identifies five leading states on the basis of

production in each agro-processing industry and then compares Haryana with these five leading

states as well as average industry performance at the all India level. The inter-state comparisons

are made in terms of net value added per unit of invested capital and profit per unit of invested

carpets, rugs etc. (20 percent), Manufacture of water proof textiles (14.26 percent),

Hydrogenated vanaspati, ghee etc. (12.90 percent), Manufacture of dairy products (12.66

percent), and Grain mill products (10.92 percent).

The growth rate of output of all the agro-industries of the state during the same time

period has been 9.41 percent per annum. The table further reveals that almost two third industries

have been laggards having growth rate less than the state average. Those industries which

exhibited a dismal performance in terms of growth were Manufacture of containers boxes of

wood and cane (-11.10 percent), Dyeing and bleaching of woolen textiles (-4.56 percent) and

Caning and preservation of fruits and vegetables (-2.03 percent). Other industries having positive

but lower growth rate than the overall growth rate include Pulp, paper and paperboard (0.35



Table 3

Performance of Different Agro-Processing Industries in Haryana vis-à-vis other leading

Indian States: 1997-98

Industry No. Industry State

Net value

added per

unit of

invested

capital

Profit per unit

of invested

capital

% Share in

all India

production

201.

MANUFACTURE OF

DAIRY PRODUCTS

Haryana (IX) -0.07 -0.21 3

All India 0.35 0.07

Maharashtra 0.14 -0.04 26

Gujarat 0.23 0.04 18

Punjab 0.84 0.10 12

Andhra Pradesh 1.14 0.67 7

Karnataka 0.64 0.39 6

202.

CANING AND

PRESERVATION OF

FRUITS AND

VEGETABLES

Haryana (XIII) 0.10 -0.21 0.44

All India 0.17 0.32

Andhra Pradesh 0.14 -0.07 20


Gujarat 0.16 0.05 15

Delhi 0.30 -0.03 10

Punjab 0.32 0.15 9

204.

GRAIN MILL

PRODUCTS

Haryana (V) 0.13 0.01 7

All India 0.23 0.01


Uttar Pradesh 0.22 0.10 12

Maharashtra 0.32 0.02 10



Punjab 0.01 -0.12 9

Madhya Pradesh 0.26 0.05 4

205.

MANUFACTURE of

BAKERY PRODUCTS

Haryana (IV) 2.53 2.19 9

All India 0.52 0.18


West Bengal 0.19 -0.21 12

Tamil Nadu 0.04 -0.14 11

Delhi 0.84 0.37 6

Punjab 0.61 0.47 5

206.

SUGAR

MANUFACTURING AND

REFINING

Haryana (IX) -0.14 -0.36 2

All India 0.17 -0.02



Tamil Nadu 0.19 -0.03 11


Gujarat 0.31 -0.01 7

Contd….

210.

HYDROGENATED

VANASPATI GHEE ETC.

Haryana (XI) 0.21 0.07 3

All India 0.44 0.26

Rajasthan 0.68 0.54 16

Punjab 0.56 0.27 16

Uttar Pradesh 0.13 -0.08 16



211. OTHER EDIBLE OILS

Haryana (XI) 0.12 -0.03 2

All India 0.22 0.63



Gujarat 0.12 0.03 25


Madhya Pradesh -0.16 -0.32 15



216.

MANUFACTURE OF

PREPARED ANIMAL

FEED

Haryana (XIII) 2.19 1.36 0.09

All India 0.48 0.18



Tamil Nadu 0.58 0.24 8


Orissa 0.19 0.04 8

217.

MANUFACTURE OF

STARCH

Haryana (XIII) 0.86 0.27 1

All India 0.56 0.35

Tamil Nadu 1.82 1.51 35


West Bengal -0.06 -0.37 8

Gujarat 0.04 -0.11 5


219.

MANUFACTURE OF

FOOD PRODUCTS N.E.C

Haryana (V) 0.54 0.37 10

All India 0.42 0.13



Tamil Nadu 0.39 0.05 18

Gujarat 0.30 0.04 16

Karnataka 0.67 -0.40 6

Contd…….



220.

DISTILLING,

RECTIFYING AND

BLENDING of SPIRITS

Haryana (X) -0.01 -0.16 1

All India 0.56 0.29

Tamil Nadu 1.30 0.96 31



West Bengal 0.59 0.31 6

Karnataka -0.02 -0.20 6

222.

MALT LIQUOR AND

MALT

Haryana (IV) 0.25 0.17 7

All India 0.44 0.22

Punjab 0.18 0.07 26




Kerala 0.47 0.26 5

224.

MANUFACTURE OF

SOFT DRINKS

Haryana (VII) 0.05 -0.06 3

All India 0.24 0.14




Punjab 0.26 1.62 10

Tamil Nadu 0.26 0.07 7

228. MANUFACTURE OF Haryana (XII) 0.47 0.14 1



CHEWING TOBACCO,

ZARDA AND SNUFF

All India 0.29 0.04


Himachal Pradesh 0.85 0.70 22


Delhi 0.35 0.16 12

Gujarat 0.51 0.38 11

230.

COTTON GINNING,

CLEANING AND BALING

ETC.

Haryana (VII) -0.04 -0.15 4

All India 0.47 0.23


Gujarat 0.38 0.13 22


Rajasthan 0.02 -0.15 6

Punjab 0.21 0.06 5

Contd………..

234. PRODUCTION OF KHADI

Haryana (VII) 0.08 -0.08 2

All India 0.39 0.11

Tamil Nadu 0.40 0.18 62

Gujarat 0.10 -0.10 11




235. WEAVING OF COTTON Haryana (XII) 0.16 -0.07 1




Tamil Nadu 0.24 0.03 42


Gujarat 0.05 -0.09 10

Madhya Pradesh 0.16 -0.02 5


236.

WEAVING COTTON

TEXTILES IN POWER

LOOMS

Haryana (VI) -0.20 0.04 2



Gujarat 0.40 0.12 23

Rajasthan 0.13 -0.06 20

Tamil Nadu 0.08 -0.13 17


242.

WOOL SPINNING AND

WEAVING (OTHER THAN

IN MILLS)

Haryana (IV) 0.17 -0.19 14

All India 0.31 0.08

Punjab 0.20 -0.003 30



Gujarat 0.66 0.39 7


243.

DYEING AND

BLEACHING of

WOOLLEN TEXTILES

Haryana (IV) 0.30 0.08 5


Punjab 0.15 -0.10 65


Delhi 0.29 0.03 11


246. PRINTING, DYEING AND Haryana (V) -0.09 -0.30 8



BLEACHING of SILK

TEXTILES





Delhi 0.52 0.06 9

Contd……………

247.

SPINNING, WEAVING

AND FINISHING of

OTHER TEXTILES

Haryana (XI) 0.29 0.04 2

All India 0.19 -0.004



Gujarat 0.12 -0.11 17


Punjab 0.18 0.01 8

248.

PRINTING, DYEING AND

BLEACHING of

SYNTHETIC TEXTILES

Haryana (V) 0.51 0.42 1

All India 0.24 0.003

Gujarat 0.33 0.09 54


Punjab -0.02 -0.19 12


260. KNITTING IN MILLS

Haryana (X) 0.90 0.58 0.20

All India 0.31 0.01

Tamil Nadu 0.26 -0.11 62

Punjab 0.46 0.27 29



Gujarat 0.85 0.59 1



261.

MANUFACTURE of

THREADS, CORDAGE

ETC.

Haryana (VIII) 0.30 -0.10 3

All India 0.28 0.02




Gujarat 0.32 0.11 11

Tamil Nadu 0.22 -0.02 8

262.

EMBROIDERY WORK,

ZARI WORK AND

MAKING of

ORNAMENTAL

TRIMMINGS

Haryana (V) 0.05 0.52 8

All India 0.43 0.17

Tamil Nadu 1.68 1.32 33

Gujarat 0.56 0.20 20


Delhi 0.35 0.05 8

Punjab -0.53 -0.74 4

263.

WEAVING CARPETS,

RUGS ETC

Haryana (II) 0.45 0.27 27




Himachal Pradesh 0.38 0.30 5


Punjab 0.26 0.15 2

265.

MANUFACTURE OF

RAIN COATS, HATS ETC

Haryana (VI) 0.19 -0.04 4

All India 0.46 0.18

Delhi 0.46 0.25 26

Tamil Nadu 0.58 0.24 24






267.

MANUFACTURE OF

WATER-PROOF

TEXTILES, SUCH AS OIL

CLOTH, TARPAULIN

ETC.

Haryana (I) 0.43 0.23 26

All India 0.45 0.20


Tamil Nadu 0.57 0.19 10

Gujarat 0.03 -0.16 9

Delhi 0.41 0.13 9


269.

MANUFACTURING OF

TEXTILES NEC LIKE

LINOLEUM, WADDING,

UPHOLSTERING AND

FILLING, ETC.

Haryana (I) 0.17 0.05 21

All India 0.24 0.02


Tamil Nadu 0.07 -0.05 14



Delhi 0.25 0.11 4

270.

MANUFACTURE OF

VENEER, PLYWOOD

ETC.

Haryana (III) 0.26 0.10 11

All India 0.40 0.08

Tamil Nadu 0.70 0.03 23

Kerala 0.48 0.07 19

Orissa 1.19 0.81 8


Bihar 0.83 0.70 7

271.

SAWING AND PLANING

OF WOOD

Haryana (XI) 0.17 0.03 2


Assam 0.08 -0.05 21






Bihar 0.12 -0.11 7

Contd………..

272.

MANUFACTURE OF

CONTAINERS, BOXES

OF WOOD AND CANE

Haryana (XII) 0.20 0.07 2

All India 0.34 0.10

Kerala 0.23 -0.01 21

Bihar 1.95 1.86 14

Tamil Nadu 0.19 -0.06 10

Assam 0.12 0.01 9

Andhra Pradesh -0.11 -0.28 7

273.

MANUFACTURE OF

WOODEN AND CANE

BOXES

Haryana (VII) 0.70 0.09 5

All India 0.43 0.02

Gujarat 0.25 0.08 34



Delhi 0.57 0.33 11


276.

MANUFACTURE OF

WOODEN FURNITURE

AND FIXTURE

Haryana (XII) 0.28 0.09 0.43

All India 0.68 0.29






Kerala 0.41 0.03 12


279.

MANUFACTURE OF

PRODUCTS OF WOOD,

BAMBOO, REED, GRASS

AND CANE

Haryana (XII) 0.13 -0.01 0.17


Madhya Pradesh 0.31 -0.21 62

Orissa 0.03 0.20 14


Delhi 0.76 0.32 6

Kerala 0.05 -0.02 3

280.

PULP, PAPER & PAPER

BOARD

Haryana (XI) 0.22 -0.01 4



Tamil Nadu 0.13 0.03 13


Karnataka 0.23 -0.03 10


Contd………….

282.

MANUFACTURE OF

PAPER AND PAPER

BOARD ARTICLES AND

PULP PRODUCTS NEC

Haryana (II) 0.28 0.07 18

All India 0.23 0.07


Tamil Nadu 0.50 0.26 15




Gujarat -0.27 -0.64 8


283.

MANUFACTURE OF

SPECIAL PURPOSE

PAPER WHETHER OR

NOT PRINTED NEC.

Haryana (II) 0.20 0.05 23



Gujarat 0.18 -0.02 18

West Bengal -0.13 -0.23 14

Tamil Nadu -0.36 -0.67 5


285.

PRINTING, PUBLISHING

BOOKS, MAPS, ATLASES,

JOURNALS ETC.

Haryana (VII) 0.30 -0.67 5






Delhi 0.57 -0.05 8

290.

TANNING, CURING,

FINISHING, JAPANNING

OF LEATHER

Haryana (III) -0.06 -0.15 10

All India 0.28 0.10

Tamil Nadu 0.27 0.06 50



Punjab 0.14 -0.001 5

Maharashtra -0.003 -0.29 1

291.

MANUFACTURE of

LEATHER FOOTWEAR

Haryana (III) 0.97 0.70 10

All India 0.44 0.17

Tamil Nadu 0.25 0.01 41





Karnataka 0.16 -0.03 7

Punjab 0.46 0.23 3

Figures in parentheses indicates the ranking of state in all India production

Source: Suppliment to Annual Survey of Industries, 1997-98.

percent), Manufacture of products of wood, bamboo, reed, grass and cane (3.40 percent),

Spinning, weaving and finishing of other textiles (4.04 percent), Cotton ginning, cleaning and

baling (4.28 percent), Printing and publishing of books and journals (6.12 percent), Malt liquor

and malt (6.12 percent), Sugar manufacturing and refining (6.92 percent), Other edible oils (7.28

percent), Printing, dyeing and bleaching of synthetic textiles (8.40 percent), Embroidery work

and zari work (8.79 percent), Sawing and planning of wood (9.02 percent) and Manufacture of

chewing tobacco, zarda and snuff (9.23 percent).

Table 4

Haryana’s Rank among Indian States on the Basis of Product dominance, Net Value Added,

Profit, and Growth: 1997-98

Ind

No.

Industry

Net*

Value

Added

Profit* Growth*

Product**

Dominance

205 Manufacture of bakery products 1 1 - 4



216 Manufacture of prepared animal feed 1 1 - 13

248 Printing, dyeing and bleaching of

synthetic textiles

1 1 14 5

260 Knitting in mills 1 2 - 10

291 Manufacture of leather footwear 2 1 5 3

219 Manufacture of food products n.e.c. 2 1 1 4

243 Dyeing and bleaching of woolen

textiles

2 1 24 5

283 Manufacture of special purpose paper

whether or not printed n.e.c.

2 2 - 23

217 Manufacture of starch 2 2 - 13

247 Spinning, weaving and finishing of

other textiles

2 2 20 10

Source: *Computed from tables 2 and 3

**Computed from table 1

capital. The results obtained are discussed in table 3. The top ten industries of Haryana, thus

identified and ranked in descending order of comparative advantage are presented in table 4. The

table shows that in Manufacture of bakery products, Manufacture of prepared animal feed and



Printing, dyeing and bleaching of synthetic textiles industry, Haryana tops both in terms of net

value added per unit of invested capital and profit per unit of invested capital vis-à-vis its

counterpart industries in other leading states. However, in the Manufacture of bakery products

industry, Haryana ranks 4th

in terms of product dominance. Similarly, in the Manufacture of

prepared animal feed industry, state has 13th

rank in terms of dominance of this industry in

comparison to the other Indian states. In Printing, dyeing and bleaching of synthetic textiles

industry, Haryana has achieved first rank in net value added per unit of invested capital and

profit per unit of invested capital. Product dominance of this industry in comparison to the other

Indian states is at 5th

rank. Similarly, in Knitting in mills industry in terms of net value added per

unit of invested capital Haryana stands first among the other Indian states. It stands second in

profit per unit of invested capital in the same industry and the product dominance is ranked 10th

.

In Manufacture of leather industry Haryana ranks 5th

in terms of growth and occupies 12th

rank as far as the product dominance is concerned. In Manufacture of food products n.e.c.

industry net value added per unit of invested capital and profit per unit of invested capital stands

at 2nd

and 1st ranks respectively. Product dominance of the state is 12

th and its growth rate has

been at 5th

place. In Dyeing and bleaching of woolen textiles industry though net value added per

unit of invested capital stands 2nd

, but profit per unit of invested capital is at 1st place. The state

has shown good performance in Manufacture of special purpose paper, Manufacture of starch

and Spinning, weaving and finishing of other textiles industry by securing second rank in terms

of net value added per unit of invested capital and profit per unit of invested capital. Thus, it

could be held that the competitive agro industries in Haryana share little correlation with the

fastest growing and dominant agro-processing industries in Haryana.

SECTION IV



PATTERN, PERFORMANCE AND SCOPE OF AGRO PROCESSING INDUSTRIES IN

HARYANA: 2007-08

The share of different industries in the factory sector of Haryana for the year 2007-08 is

presented in table 5. The table shows that Manufacture of grain mill products, starch and starch

products and animal feeds industry was at the top with 26.65 percent contribution to the total

output, and 19.65 percent share in the number of units of the of the agro – processing sector in

the state. However, this industry stands second in terms of percent share in the net value added

(18.15 percent) and fourth in terms of number of workers (9.58 percent). Following this industry

is Manufacture of wearing apparel which contributes as much as 22.13 percent of the total output

of the agro-processing sector in the state, with highest net value added (33.73 percent) and

number of workers (44.47 percent). This industry stands third in terms of number of units (16.96

percent). The share of one of the key industry of the state i.e. Manufacture of other textiles stands

at 8.22 percent in terms of output. Together these three industries contribute more than half the

share (57 percent) of total output of agro-industries of the state. It must be mentioned that these

three industries also held the top positions in the year 1997-98. Another industry which is

dominating in terms of the percent share in output is Spinning, weaving and finishing of textiles

with 7.28 percent share. The bottom three industries of the state i.e. Saw milling and planing of

wood, Dressing and dyeing of fur; manufacture of articles of fur and Printing and service

activities related to printing together contribute only 0.93 percent of the total output of the state.

Further, it can be seen from the table that the share of Manufacture of wearing apparel

industry in net value added to the overall agro-processing group is maximum (33.73 percent)

followed by the Manufacture of grain mill products, starches and starch products, and prepared

animal feeds (18.15 percent) and Manufacture of other textiles (10.06 percent). The bottom three



industries i.e. Saw milling and planing of wood, Dressing and dyeing of fur and Printing and

service activities related to printing could yield only 1.19 percent to the net value added.

Manufacture of grain mill products, starches and starch products, and prepared animal

feeds had the maximum share in the number of units (19.65 percent) thus having nearly one fifth

of the total industrial units of the state. It is followed by Spinning, weaving and finishing of

textiles and Manufacture of wearing apparel industries whose respective shares in total number

of units is 17.74 percent and 16.96 percent respectively. These industries also figure in the

highest labor oriented industries employing 13.80 percent and 44.47 percent respectively of the

total workforce employed in agro based industries. Manufacture of other textiles industry too has

Table 5

Share of Different Industries in Agro-processing Industrial Group

in Factory Sector of Haryana: 2007-08

Industry

No. Industry

Percentage share in

Net value Number Number

Output added of units of workers

153

Manufacture of grain mill products, starches and

starch products, and prepared animal feeds 26.65 18.15 19.65 9.58

181

Manufacture of wearing apparel, except fur

apparel 22.13 33.73 16.96 44.47

172 Manufacture of other textiles 8.22 10.06 9.83 10.43

171 Spinning, weaving and finishing of textiles. 7.28 5.16 17.74 13.80



151

Production, processing and preservation of meat,

fish, fruit vegetables, oils and fats. 6.96 4.55 3.54 1.21

154 Manufacture of other food products 6.55 5.66 2.02 4.51

152 Manufacture of dairy product 5.92 1.14 1.07 1.33

155 Manufacture of beverages 4.52 5.99 1.91 2.18

192 Manufacture of footwear. 3.73 5.07 3.93 5.20

210 Manufacture of paper and paper product 1.96 3.46 3.03 1.70

191

Tanning and dressing of leather, manufacture of

luggage handbags, saddlery & harness 1.59 2.18 1.85 1.42

202

Manufacture of products of wood, cork, straw

and plaiting materials 1.52 1.40 13.36 1.85

173

Manufacture of knitted and crocheted fabrics and

articles 0.87 0.91 0.34 0.78

160 Manufacture of tobacco products 0.61 0.56 1.07 0.26

221 Publishing 0.54 0.81 0.51 0.45

222 Printing and service activities related to printing 0.51 0.82 1.12 0.36

182

Dressing and dyeing of fur; manufacture of

articles of fur 0.34 0.32 0.39 0.39

201 Saw milling and planing of wood 0.08 0.05 1.68 0.08

Source: Calculated from suppliment to Annual Survey of Industries 2007-08



Table 6

Growth rate of production of agro-processing industries in factory sector

of Haryana: 1998-99 to 2007-08

S.

No. Industry Rank

173 Manufacture of knitted and crocheted fabrics and articles 55.34

221 Publishing 44.20

181 Manufacture of wearing apparel, except fur apparel 24.00

191 Tanning and dressing of leather, manufacture of luggage handbags, saddlery & harness 23.63

152 Manufacture of dairy product 21.68

160 Manufacture of tobacco products 16.16

222 Printing and service activities related to printing 15.74

202 Manufacture of products of wood, cork, straw and plaiting materials 15.25

172 Manufacture of other textiles 14.79

155 Manufacture of beverages 12.10



153 Manufacture of grain mill products, starches and starch products, and prepared animal feeds 11.84

171 Spinning, weaving and finishing of textiles. 5.42

201 Saw milling and planing of wood 4.54

151 Production, processing and preservation of meat, fish, fruit vegetables, oils and fats. 4.50

154 Manufacture of other food products 4.09

192 Manufacture of footwear. 2.87

210 Manufacture of paper and paper product -0.49

Overall 11.21

Source: Suppliment to Annual Survey of Industries, various issues from 1998-99 to 2007-08.

given employment to 10.43 percent of the workers engaged in the agro-processing industries.

The joint share of these three industries with respect to the employment of the workers turns out

to be 68.70 percent signifying the relevance of these three industries with respect to the

employment generation in the state.

Thus, three industries which have dominated the agro-processing group in factory sector

of Haryana in 2007 -08 are Manufacture of grain mill products, starches and starch products,

Manufacture of wearing apparel and Manufacture of other textiles.

Distribution of agro-processing industries in Haryana in terms of growth rates of

production for the period 1998-99 to 2007-08 is presented in table 6. Out of seventeen agro-



processing industries, Manufacture of knitted and crocheted fabrics and articles industry has

registered the highest growth rate of 55.34 percent per annum in production. Publishing (44.20

percent) and Manufacture of wearing apparel (24 percent) are the other two high performing

industries of the state.

Tanning and dressing of leather, manufacture of luggage handbags, saddler and harness,

(23.63 percent) and Manufacture of dairy products (21.68 percent) registered a growth rate of

more than 20 percent per annum. On the whole growth rate during the time period 1998-99 to

2007-08 in terms of production stood at 11.21 percent. Only one industry i.e. Paper and paper

products (-0.49 percent) showed a negative growth.

SCOPE OF DIFFERENT AGRO-PROCESSING INDUSTRIES (FACTORY SECTOR) IN

HARYANA VIS-À-VIS OTHER LEADING INDIAN STATES: 2007-08

Table 7 compares the performance of agro-processing industries of Haryana with the

agro-processing industries in other states for the year 2007-08. First of all five leading states (on

the basis of production) in each agro-processing industry have been identified and then compared

the position of Haryana with these five leading states as well as with the average industry

performance at all India level. The top five industries thus identified and ranked in descending

order of comparative advantage of Haryana for the year 2007-08 are given in the table 7. The

table shows that in Manufacture of paper and paper product industry, Haryana tops in terms of

both net value added per unit of invested capital and profit per unit of invested capital. vis – a –

vis other leading states. Also, in Production, processing and preservation of meat, fish, fruit,

vegetables, oils and fats industry, net value added per unit of invested capital is highest in



Table 7

Performance of Different Agro-processing Industries in Haryana vis-à-vis other leading

Indian States: 2007-08

Ind.

No.

Industry State

Net value

added per unit

of invested

capital

Profit per

unit of

invested

capital

% Share

in all India

production

151

Production,

processing and

preservation of

meat, fish, fruit,

vegetables, oils and

fats

Haryana (XII)

All India

Madhya Pradesh

Gujarat

Tamil Nadu

Maharashtra

Uttar Pradesh

0.46

0.27

0.41

0.18

0.34

0.43

0.09

0.22

0.16

0.30

0.09

0.23

0.31

0.001

2

18

14

14

13

12

152

Manufacture of

dairy product

Haryana (IX)

All India

Gujarat

Maharashtra

Uttar Pradesh

Andhra Pradesh

Tamil Nadu

0.08

0.34

0.35

0.50

0.36

0.25

0.11

-0.03

0.10

0.12

0.27

0.18

-0.20

-0.35

5

18

18

14

9

8

153

Manufacture of

grain mill products,

starches and starch

products, and

Haryana (IV)

All India

Andhra Pradesh

Punjab

0.16

0.23

0.29

0.14

0.05

0.09

0.12

0.03

9

26

10



Ind.

No.

Industry State

Net value

added per unit

of invested

capital

Profit per

unit of

invested

capital

% Share

in all India

production

prepared animal

feeds

Maharashtra

Uttar Pradesh

Gujarat

0.31

0.17

0.17

0.16

0.06

0.02

10

9

8

154

Manufacture of

other food products

Haryana (XI)

All India

Maharashtra

Uttar Pradesh

Tamil Nadu

Karnataka

Gujarat

0.19

0.14

0.15

0.02

0.20

0.18

0.21

0.01

0.001

-0.01

-0.07

0.02

0.05

0.06

2

23

19

10

9

8

155

Manufacture of

beverages

Haryana (VII)

All India

Punjab

Uttar Pradesh

Maharashtra

Karnataka

Tamil Nadu

0.34

0.71

3.22

0.74

0.23

0.49

0.66

0.23

0.57

3.08

0.64

0.10

0.31

0.47

4

24

19

13

8

7

160 Manufacture of

tobacco products

Haryana (XIV)

All India

Andhra Pradesh

Karnataka

Uttar Pradesh

0.25

1.16

0.57

1.63

2.95

0.11

0.89

0.18

1.56

2.81

1

24

19

17



Ind.

No.

Industry State

Net value

added per unit

of invested

capital

Profit per

unit of

invested

capital

% Share

in all India

production

Maharashtra

West Bengal

0.69

0.53

0.38

0.30

8

7

S.No. Industry State Net value added

per unit of

invested capital

Profit per unit

of invested

capital

% Share in

all India

production

171 Spinning, weaving and

finishing of textiles

Haryana (XII)

All India

Tamil Nadu

Gujarat

Maharashtra

Punjab

Rajasthan

0.18

0.19

0.17

0.21

0.13

0.14

0.24

-0.07

0.03

0.03

0.05

-0.02

0.04

0.07

2

21

20

15

10

10

172 Manufacture of other

textiles

Haryana (IV)

All India

Uttar Pradesh

Tamil Nadu

Gujarat

Maharashtra

Punjab

0.28

0.30

0.36

0.17

0.27

0.29

0.31

0.07

0.09

0.08

0.05

0.06

0.02

0.12

13

16

15

14

11

7

173 Manufacture of knitted

and crocheted fabrics

Haryana (VI)

All India

0.27

0.33

0.06

0.09

2



and articles Tamil Nadu

Punjab

Maharashtra

Gujarat

West Bengal

0.36

0.33

0.31

0.25

0.20

0.11

0.07

0.13

0.15

0.04

53

30

7

3

2

181 Manufacture of

wearing apparel, except

fur apparel

Haryana (II)

All India

Karnataka

Delhi

Tamil Nadu

Maharashtra

Uttar Pradesh

0.35

0.50

0.82

0.14

0.57

0.46

0.51

0.06

0.12

0.27

0.58

0.10

0.08

0.10

18

26

14

13

9

8

182 Dressing and dyeing of

fur; manufacture of

articles of fur

Haryana (III)

All India

Uttar Pradesh

Tamil Nadu

Uttaranchal

Punjab

Gujarat

0.29

0.28

0.14

11.95

0.48

0.37

0.87

0.09

0.09

0.04

1.27

0.24

0.13

0.35

18

45

19

14

3

1

192 Manufacture of

footwear

Haryana (III)

All India

Tamil Nadu

Uttar Pradesh

Delhi

Maharashtra

West Bengal

0.29

0.37

0.31

0.49

0.33

0.87

0.24

0.08

0.10

0.001

0.20

0.09

0.38

0.04

7

47

21

5

4

3



S.No.

Industry State Net value

added per

unit of

invested

capital

Profit per

unit of

invested

capital

% Share in all

India production

201 Saw milling and

planing of wood

Haryana (IX)

All India

Gujarat

West Bengal

Kerala

Tamil Nadu

Maharashtra

0.43

0.31

0.36

0.12

0.47

0.46

0.26

0.08

0.11

0.14

0.06

0.12

0.10

0.04

2

27

22

14

11

8

202 Manufacture of

products of wood,

cork, straw and

plaiting materials

Haryana (VII)

All India

West Bengal

Maharashtra

Tamil Nadu

Gujarat

0.23

0.27

0.31

0.34

0.35

0.28

0.06

0.09

0.13

0.13

0.14

0.12

7

21

12

9

8




210 Manufacture of paper

and paper product

Haryana (XIII)

All India

Tamil Nadu

Maharashtra

Gujarat

Uttar Pradesh

Andhra Pradesh

0.43

0.2

0.29

0.28

0.15

0.12

0.13

0.15

0.08

0.10

0.13

0.04

0.001

0.05

2

14

14

13

12

11

221 Publishing Haryana (XI)

All India

Maharashtra

Karnataka

Andhra Pradesh

Uttar Pradesh

Kerala

0.30

0.60

0.35

2.09

0.44

0.21

1.07

-0.12

0.29

0.07

1.51

0.28

0.04

0.64

1

22

12

10

9

9

222 Printing and service

activities related to

printing

Haryana (XI)

All India

Maharashtra

Tamil Nadu

Delhi

Karnataka

Uttar Pradesh

0.30

0.35

0.38

0.32

0.40

0.31

0.29

0.10

0.12

0.16

0.08

0.13

0.10

0.07

2

30

16

12

10

9

Source: Annual Survey of Industries, 2007-08

comparison to other leading states. However, the state rank 13th

in terms of product dominance in

both these industries.



In Manufacture of other food products industry, Haryana has achieved second and fourth

rank respectively in terms of net value added per unit of invested capital and profit per unit of

invested capital. Product dominance of this industry in comparison to the other Indian states is at

Table 8

Haryana’s Rank among Indian States on the Basis of Product dominance, Net Value Added,

Profit, and Growth: 2007-08

Ind.

No. Industry

Net*

Value

Added

Profit* Growth*

Product**

Dominance

210 Manufacture of paper and paper

product

1 1 17 13

151 Production, processing and

preservation of meat, fish, fruit,

vegetables, oils and fats

1 4 14 13

154 Manufacture of other food

products

2 4 15 11

171 Spinning, weaving and finishing

of textiles

3 6 12 12

201 Saw milling and planing of

wood

3 4 13 9

Source: *Computed from tables 6 and 7

**Computed from table 5



11th

rank. In terms of growth, the industry ranked 15th

. Similarly, in Spinning, weaving and

finishing of textiles industry in terms of net value added per unit of invested capital Haryana

stands third among the other Indian states. It stands sixth in profit per unit of invested capital in

the same industry and the product dominance is ranked 12th

.

In Saw milling and planing of wood industry Haryana ranks 3rd

in terms of net value

added per unit of invested capital and occupies 4th

rank as far as the profit per unit of invested

capital is concerned. Product dominance of the state is 9th

and its growth rate has been at 13th

place. Thus, from the above table it can be inferred that competitive agro industries in Haryana

share little correlation with the fastest growing and dominant agro-processing industries in

Haryana.

SECTION V

SUGGESTIONS AND POLICY IMPLICATIONS:

Presently, the Indian agro-processing industries are capital starved and hence deprived of

the scale economies of large scale production. It requires a major effort not only from the

government side but from private sector as well to provide critical infrastructure to such

industries.

1. Owing to diversification and producers shifting to areas like animal husbandry, fishing

and dairy etc. in the recent past, it calls for an improved post harvest handling and

marketing of their products. Further, proper market identification, segmentation of

markets and bringing out products suited to each segment must be endowed with, to

ensure success in this industry in different areas. In addition to this, entrepreneurial

training programmes related to manufacturing techniques, marketing techniques,



packaging techniques and export promotion techniques should be organized for the small

entrepreneurs involved in agro processing to impart them the skill and knowledge.

2. Agro processing units should be given adequate loans at low rates of interest to upgrade

their technology and machinery and to advertise about their product. There is a need to

strengthen the network of financial institutions like NABARD, SFCs, SSICs and

commercial banks etc. to provide timely credit facilities with sufficient amount.

3. Under New World Trade Order Agreements, Quantitative Restrictions and Non-Tariff

Barriers have been relaxed by the importing countries. This move has exposed our

farmers to the world market forces. Hence, there is a growing need to upgrade the food

testing labs to the international standards. It will help our exports grow to the

international standards.

4. Lack of infrastructural facilities can severely affect or can even nullify the gains in value

in agriculture sector. There is an urgent need to make investment in infrastructure

development including warehouses, cold storages, roads, and telecommunications etc.

particularly near the production centres. But this investment should not be made

indiscriminately. While making investment some factors that need to be taken care of

include the scale of economies related to it, gestation period of the project, and the

forward and backward linkages associated to it.

5. The use of imported machinery and imported technology in agro processing sector leads

to a high cost of the venture. Looking at the medium capital scale nature of this industry,

the department of science and technology should develop indigenous technology and

equipments for this industry.



6. Agro industries are restricting themselves to the main products only. There is a need to

capitalize on the by-products also. These can generate value thereby reducing the price

of main products. A classic example of this is the rice bran which gives oil, de-oiled

cake and cattle feed. Similarly, cane and beet molasses of sugar are used in livestock

feed. Above and beyond adding value to the product, by-product transformation can

further generate good employment opportunities.

SECTION VI

CONCLUSION

The present study identifies the promising agro-processing industries in Haryana. In case

of a number of agro-processing activities all the available evidence clearly and consistently

indicates bright prospects and a good scope of their development in the state. In the case of many

other agro-processing industries evidence is equally clear about bleak prospects of further

development. However, available evidence is not consistent in case of a number of agro-

processing industries and about these no straight mechanical conclusions can be drawn. In such

situations one has to draw conclusions by exercising own informed judgment. On the basis of

these evidences, we can say with some confidence that the following agro-processing industries

have a good scope of development in Haryana.

1. Manufacture of food products n.e.c.

2. Manufacture of bakery products

3. Spinning, weaving and finishing of other textiles

4. Sawing and planning of wood

5. Manufacture of special purpose paper

6. Printing, dyeing and bleaching of synthetic textiles



7. Manufacture of prepared animal feed

8. Manufacture of leather footwear

9. Knitting in mills

10. Dressing and dyeing of fur

11. Manufacture of starch

12. Dyeing and bleaching of woolen textiles

However, a major effort is required from the government as well as the private sector to

provide critical infrastructure in order to bring a new revolution, which is agro-industrial centric

in nature.

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Documents

Performance and Prospects of Agro-Processing Industries in Haryana