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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

PROBLEMS AND PROSPECTS OF SMALL SCALE AGRO BASED INDUSTRIES: AN ANALYSIS OF PATIALA DISTRICT.
DR. PAWAN KUMAR DHIMAN*; MS. AMITA RANI**
*Associate Professor, Sant Longowal Institute of Engineering & Technology, Longowal, Punjab, India. **Research Scholar, Sant Longowal Institute of Engineering & Technology, Longowal, Punjab, India.

ABSTRACT Agro based industry is regarded as the sunrise sector of the Indian economy in view of its large potential for growth and likely socio economic impact specifically on employment and income generation. Some estimates suggest that in developed countries, approximately 14 per cent of the total work force is engaged in agro-processing sector directly or indirectly. However, in India, only about 3 per cent of the work force finds employment in this sector revealing its underdeveloped state and vast untapped potential for employment. There is no denying that India has to live with the problem of unemployment for many years to come. Therefore need arises to make all over development among all sections of the society especially in rural agro based industrial units. The present paper is an attempt to find out the status of agro based units such as rice mill industry in the Patiala district of Punjab and to analyze the various problems being faced by them. It has been found that Rice mill industry in Patiala district is in the crisis and facing the various problems regarding lack of financial assistance, improper marketing channel, high degree of breakdown of finished products and non availability of research lab for quality control. However, if this sector will be properly developed, it can make state Punjab a major player at the global level for marketing and supply of processed food for billion plus mouths to feed. KEYWORDS: Agro based industries, challenges ahead.

INTRODUCTION Ever since the beginning of 1950s, India has been in search of an appropriate paradigm for ushering in the era of prosperity, stability, peace and happiness for her people. The idea of mixed economy was adopted in the India planning system with a great deal of enthusiasm and hope of moving towards a socialistic pattern of society. The major focus was on rapid industrialization and economic development of the country .During our Five Year Plans it had gained momentum. 'The 'sixties witnessed the beginning of the green revolution in some parts of India such as Punjab, Haryana and western Uttar Pradesh, agricultural output per hectare rose markedly due to the enhanced canal and well irrigation, widespread adoption of new and improved seed varieties, enlarged inputs of chemical fertilizers and use of pesticides etc. While managerial practices are important, it is an undisputed fact that the green revolution was a direct consequence of high levels of agro inputs per unit of land. The Planning Commission identified consequently many rural areas for intensive development of small scale industries. The primary objectives of its programme were to bring about a cooperative agro-industrial economy and create employment opportunities to enable a higher standard of living, mobilize rural communities and seek diversification of rural

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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

economy in a manner that contributes to the welfare of the landless and the weaker sections of village communities. Rural industrialization was then seen to have two components, namely location and linkages with large industries as ancillaries. The Rural Industries Programmes were to cover all kinds of small industries and processing industries based on agriculture. It was recognized that with the increase in the production of cereals, pulses and a number of cash crops like sugarcane and oilseeds visualized in the Third Plan, there will be considerable scope for the expansion of processing industries in rural areas. With a view to providing full employment and strengthening and diversifying the rural economy, it will be desirable to develop these industries to the maximum extent in the decentralized and small scale sector and on a cooperative basis. The state of Punjab the Food Basket of India produces about 60 percent to 70 percent of wheat and 40 percent to 50 percent rice of India. The State has achieved highest productivity levels in the production of wheat, paddy, tomatoes, potatoes, maize, cotton, citrus, etc. Punjab produced 15.7 million metric tones of wheat (2007-08), which is more than 20 percent of countrys production and 10.5 million metric tons (2007-08) of rice accounting for 11percent of countrys production. Punjab also produced large quantity of cotton fiber i.e. around 0. 4 million tons (2007-08), which is approx. 9 percent of countrys production. The State has a potential to become agro processing hub of the country. However, Punjabs average cumulative growth in agriculture sector during 2001 to 2007 has come down to 2.2 percent as against 3.2 percent in the country. Similarly, average cumulative growth of industry in the GDP of Punjab during the same period has come down to 4.2 percent against 7 percent in the country. Share of industry in the GDP of Punjab is 17.7 percent, which is much less than the states with similar per capita income in the country. Because agro based industries make a significant contribution in the economic development of the country either directly or indirectly. Agro-based industrial units in India may be classified as wheat processing industries, rice processing industries, processing of coarse cereals, oilseed processing, processing of pulses, processing of fruits and vegetables, cotton processing technology, sugarcane processing industry, processing of jute, processing of animal produce, fish & fish products processing, processing of plantation crops, processing of commercial crops, processing of medicinal and aromatic products, Apiculture produce processing, floriculture, and processing of traditional foods research and development in Agro processing industry. Among all agro based industries Indian rice milling industry is the one of the oldest and largest and second biggest rice producing country after China in the world. The detail has been shown below: TABLE 1
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YIELD OF FOOD GRAINS IN DIFFERENT COUNTRIES (KG PER HECTARE) Name of the country US China India Nigeria Source-FAQ Rice 7694 6265 3124 1440 Wheat 2825 4455 2619 1127

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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

The above table depicts that China produces 6265 kg of rice per hectare, while Nigeria has to make do with just 1440kg per hectare and India with 3124 Kg per hectare. This is nothing but a division between rich and poor countries. Rice yield per hectare is about 4 tones in developing world, while it is over 6 tones in the advanced Countries. Hence, India contributes about 22 percent of the global output of rice production and it is also the largest producer of worlds best basmati rice. This can be depicted as: TABLE 11 INDIAN AGRI-BUSINESS FACTS ANF FIGURES Varied agro climate zone 2nd largest arable land (184 million hectares) in the world Largest irrigated land (55 million hectares) in the world Largest producer of wheat (72 million tones), accounting for nearly 15% of global wheat production Largest producer of pulses (15 million tones), accounting for nearly 21% of global pulse production Largest producer of milk(90 million tones) Largest producer and exporter of spices Largest producer of tea, accounting for nearly 28% of the global tea production 2nd largest producer of rice (92 million tones), accounting for nearly 22% of the global rice production Largest producer of the worlds best basmati rice 2nd largest producer of fruits (50 million tones) and vegetables(100 million tones) 2nd largest producer of sugarcane (296 million tones), accounting for nearly 21% of global sugarcane production 3rd largest producer of coarse grains (31 million tones), including maize, accounting for nearly 4% of global coarse grain production 3rd largest producer of edible oilseeds (25 million tones), accounting for nearly 7% of global oilseeds production Largest livestock population India produces 6.3 million tones of fish(3rd largest in the world) Source: FICCI, Ministry of Agriculture(2008) Paddy being the major crop of India covers an area of more than 42.8 million hectares, the largest under any single crop (FAQ, 1995).It has also been stated by the Economic times of India (21 July 2008) that in the year 2002 production of rice was of the
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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

order of 3.14 tons per hectare which was decreased to 3.13 tons per hectare in 2004 and slightly increased to 3.18 tons per hectare in the year 2007.The yield of rice in different years is as: TABLE-3 YIELD OF RICE CROP (TONS PER HECTARE) Name of the 2002 Country/Year Thailand Indonesia China India Brazil 2.62 4.41 6.16 3.14 3.30 2003 2.57 4.50 6.19 2.67 3.25 2004 2.65 4.56 6.06 3.13 3.43 2005 2.63 4.64 6.31 2.95 3.37 2006 2.70 4.59 6.26 3.17 3.86 2007 2.69 4.60 6.23 3.18 3.81

Source: The Economic Times of India Dated 21 July 2008. From the following table it has been revealed that there has been no remarkable increase in the yield of rice in any part of the world over last 10 years. Agricultural productivity has stagnated internationally, while the demand and consumption of agricultural products has steadily increased with the increase of income levels and population growth. Therefore, on the supply side, various constraints like stagnating area under cultivation, and plateau of crop yields etc are posing limits to production. The drought in the last year caused by deficient south-west monsoon is an immediate reason for supply shortfalls during later half of the year 2009 extended to 2010. TABLE-4 PRODUCTION AND SHORTFALLS OF MAJOR FOOD CROPS IN RECENT YEARS Crop Rice Wheat Sugarcane 2006-07 93.4(1.7) 75.8(9.2) 355.2(26.3) 2007-08 92.7(3.5) 78.6(3.7) 348.2(-2.0) 2008-09 99.2(2.6) 80.7(2.7) 285(-18.2) 2009-10 80(-19.6) 81.5(1.0) 259(-9.1)
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Source: Yojana August 2010. Note: Figures in parenthesis indicated percent change from previous year The above table depicts that the shortfall in the rice production was around 20 percent with respect to the previous years and hence suffered a perceptible reduction. The major reason behind this shortfall can be the problems faced by the various agro processing units i.e. rice mills. The various problems faced by rice mill industry are high interest rate, high cost of raw

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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

material, stiff competition, distance from warehouse, frequent breakdown of finished products, non-availability of research lab for quality control etc. In the present paper, a detailed analysis of various problems faced by these rice mills will be done. REVIEW OF LITERATURE Gupta and George (1974) have stated in study Modernization of rice processing industry in Punjab, that the fixed cost per mill increased with the increase in the size of the mill. The fixed cost was higher for modern mill than for traditional mill. The average variable cost for all the mills together was Rs.2.33 per quintal of the paddy mill. And also emphasized that the average cost curve was U shaped curve where unit cost declined as the volume increased to a certain volume level and then it increased. Further, the fixed cost per tonne declined as the capacity increased from half tonne to one tonne. They also stated that the efficient mill is one which gives maximum returns per quintal of the paddy milled. T.S. Devraja (2009) has analyzed in his book Financial Performance of Agro based industries the various estimate of processing units in 2007-2008 as : atta chakkis and small hammer mills- 2, 70,000, rice hullers- 90,000, rice shellers- 11,000, huller-cum-shellers 12,000, modern rice mils- 30,000, bullock and electricity operated oil ghannis-2,00,000, ol expellers-55,000, dhal mills -12,000, roller cum flour mills 700, rice flaking and puffing units 2,000, bakery units 54,000, solvent extraction plans 700, vanaspati plants-100, fruits and vegetable processing plants 5,000, dairy plants 450, cold storatge units 3,000, licenced units in the organised sector for meat processing- 165, pork processing units -144, fish processing units -18 and so on. G.C. Kar and S.N. Mishra has stressed in his book Agro industries & economic development that setting industries which make use the produces of agriculture directly or indirectly are considered more desirable in the context of the economic development of the country. Such a development has a two way effect i.e. Agriculture helps agro-related industries to make use of the raw materials directly supplied by this sector and it facilitates the growth of those types of industries which produce several inputs like fertilizer, pesticides and agricultural implements that help to promote the productivity and expansion of agriculture. Myint (1971) has emphasized that the logic of developing agro-based industries by not-wellto-do developing countries on the premise that the export potentiality of processed agricultural product is much brighter than the raw products. The slow growth of agriculture in most less developed countries is due to the poor terms of trade for their agricultural products in the world trade. Processed labor cost involved in processing the raw agricultural products in the developing countries. Bhagran Sarangi has expressed in his paper Economic potential of agro industries that the strategy for the development of agro based industry in the Indian context would comprise the following: The growth & expansion of agro industries form an inseparable part of the overall programme for economic & industrial development. The related groups of agro industries have to be set up in a co-ordinated manner so that the utilization of by-products can be possible simultaneously.
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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

Advanced management and marketing methods need to be introduced in agro industries which cater to the export market. Both backward and forward linkages are to be ensured in respect agro industries so that maximum growth impulses are generated. Suitable strategies have to be formulated to promote rural savings and ploughing them in rural areas for productive investments through attractive deposit and credit instruments. Extension & dissemination of information through mass media, technology development, research activities and training programmes need to be improved. OBJECTIVES OF THE STUDY The objective of the research will be: 1. To analyze the base and performance of rice mill industry in the Patiala district of Punjab. 2 To find out the various problems faced by the agro-industries particularly rice mill industry.

3. To suggest the remedial measure to improve the status of agro based industrial units for effective development of the economy. SAMPLE SELECTION, METHODOLOGY AND FINDINGS The present research is an attempt to find out the current status of rice mill industry in Patiala district of Punjab and to analyze the various factors not encouraging the small scale entrepreneurs for generating effective outcomes. Punjab is situated in the North West of India. It is bounded by Pakistan on the west , the Indian states of Jammu & Kashmir on the North, Himachal Pradesh on its North east and Haryana and Rajasthan to its South. The total population of the state is 2, 42, 89000 (2001 census) out of which 29.55 population live in urban areas and 70.45 percent in villages .And it has 19 districts namely Amritsar, Fatehgarhsahib,Gurdaspur,Forozpur,Ludhiana,Jallandhar,Kapurthala,Hosiarpur,Mansa,Moga, Muktsar,Nawanshar,Rupnagar,Faridkot, Bhatinda, Mohali , Barnala, Sangrur and Patiala. The Patiala is one of the famous princely district of erstwhile Punjab. It is the 6th most populated district of the Punjab after Amritsar, Ludhiana, Gurdaspur, Sangrur and Jalandhar as per 2001 census. The literacy rate of district Patiala is 69.96 percent only out of which 63.34 percent rural and 81.99 percent urban people are literate. In the present study out of the 8 blocks in Patiala district one block i.e. Patran has been undertaken. There are 176 private sector rice mill units in the surveyed block (Patran) of the district which are actually running and converting paddy into rice according to governmental supply in spite of the various problems being faced by the. Therefore, to analyze the nature of road look about the various problems incurred in the path of entrepreneurs of rice mill industry, the researcher prepared a questionnaire for collecting information from them as primary data. In the initial stage researcher approached 30 units of the area and many visits were made but only 19 units came forward and provided first hand information about their rice mill units
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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

that what problems they are actually facing in this competitive environment. Hence the data pertaining to their various problems has been analyzed by using weighted average score method only. In this method, a four point scale assigning 4, 3, 2,1 points for first, second, third and fourth rank respectively. For each factor of a particular problem has been used. This can be depicted in the following table number 5.

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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

Sr. No

Area of problem Cost Over Run

TABLE 5 Types of problems faced by Agro based industry High Interest rate Ranks No of Respondents Non availability of finance No of Respondents 1 12 2 6 3 1 4 Distance from warehouse Ranks No of Respondents 1 13 2 2 3 4 Market recent Ranks No of Respondents 1 2 3 4 Ranks High cost of inputs/raw material Ranks No of Respondents 1 2 3 4 1 6 12 -

1.

Financial Problem

Ranks

No of Respondents

2.

Infrastructure Problem

3.

Marketing problem

4.

Management Problem

1 2 1 3 4 18 Location Disadvantage Ranks No of Respondents 1 3 2 3 3 13 Lack of market for product Ranks No of Respondents 1 2 5 3 7 4 7 Large investment in fixed assets Ranks No of Respondents 1 10

1 6 2 6 3 7 4 Costly Transport Ranks No of Respondents 1 3 2 14 3 2 Stiff Competition Ranks No of Respondents

Dependence on Govt .supply Ranks No of Respondents 11 8 www.zenithresearch.org.in 136

1 8 2 5 3 4 4 2 Diversion of funds Ranks 1 9 No of Respondents

1 2 1 3 8 4 10 Disputed of Partners Ranks 1 No of Respondents

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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

2 9 3 Improper machinery 5. Production problem Ranks No of Respondents

1 1 2 1 3 4 17 5 Lack of skilled Labour 6. Human resource Ranks No of problem Respondents 1 4 2 15 Non availability pf 7. Research & research laboratory for development quality control problem Ranks No of Respondents 1 18 2 1 More government control 8. Miscellaneous Ranks No of Problems Respondents 1 2 1 3 18 Source: Personal prove survey

2 9 3 1 Under utilization of capacity Ranks No of Respondents 1 2 3 18 4 1 Labour investment Ranks No of Respondents 1 15 2 4 Problem of consultancy services Ranks No of Respondents

2 1 3 18 Frequent breakdown Ranks 1 2 3 4 No of Respondents 16 2 1 -

Shortage of supply Ranks 1 2 3 4 No of Respondents 1 16 2

1 1 2 18 Natural calamity Ranks No of Respondents 1 1 2 18 3 -

Unfavorable govt. policy Ranks No of Respondents 1 18 2 3 1

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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

TABLE -6 WEIGHTED AVERAGE SCORE OF THE VARIOUS PROBLEMS FACED BY RICE MILL UNITS Sr. No Area of problem Types of problems Cost Over Run High Interest rate 1. Financial Problem Non availability of finance High cost of inputs/raw material Location Disadvantage Costly Transport Distance from warehouse Lack of market for product 3. Marketing problem Stiff Competition Market recent trends Dependence on Govt .supply Large investment in fixed assets Diversion of funds Disputed of Partners Improper machinery Under utilization of capacity Frequent Weighted average score 1.10 2.94 3.57 2.42 1.47 2.05 2.47 1.89 3.00 1.52 3.57 2.52 2.36 1.26 1.26 1.94 3.78 New ranks 4 2 1 3 3 2 1 3 2 4 1 1 2 3 4 3 1
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2.

Infrastructure Problem

4.

Management Problem

5.

Production problem

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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

breakdown Shortage of supply 2.84 2

6.

Human resource problem

Lack of skilled Labour Labour investment Non availability pf research laboratory for quality control Problem of consultancy services More government control Natural calamity Unfavorable govt. policy

1.21 1.78 1.94

2 1 1

7.

Research & development problem

1.00 1.05 2.05 2.89

2 3 2 1

8.

Miscellaneous Problems

Source: Personal Prove Survey The above tables number 5- 6 reveals the real portrait of various problems being faced by rice mill industry in Patiala district of Punjab are facing many problems are as : FINANCIAL PROBLEM It has been observed that agro based rice mills in Patiala district are facing numerous financial problems as lack of finance by the financial institutions. Majority of the surveyed units have given 1st ranking to the lack of finance whereas second priority was given to high interest rate and least priority was given to cost overrun The data also depicts that the highest average scale was 3.57 for lack of finance. In addition to it these industries have to face: overrun cost, high interest rates from financial institutions and high cost of raw materials etc and their weighted average scores and ranking were found 1.10, 2.94 and 2.42 respectively. It has also been found due to financial constraints these units are not running smoothly. INFRASTRUCTURE PROBLEM For creating industrial culture in any reason infrastructural facilities are required without these no industrial enterprise can survive and sustain for long. As regards infrastructural problems of Patiala district is concerned no any industrial estates have been created by the state government. Many industries have been set up by the entrepreneurs as their own efforts and availability of

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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

land. Due to this there is not ant proper connectivity among these industries. In the surveyed units it has been found that among rice mill units, the various infrastructure problems for entrepreneurs are distance from warehouse having highest weighted average score and gave 1st ranking to this problem. Entrepreneurs are also facing the problem of costly transportation cost due to the availability of ware houses in far flung and remote location from the cities. It has also been observed that due to this reason agro based industries have to pay more for raw materials and sending the finished products in the open market. MARKETING PROBLEM The industries have very less market to sell their products in the nearby areas and have to remain dependent up on supply to government agencies like food Supply Corporation of India and other agencies , In addition to it industries are also facing stiff competition, changing conditions of market and lack of appropriate and viable market for the product with calculated weighted average score of 3.00, 1.52 and 1.89 respectively. It clearly indicates that if rice mill units do not fetch appropriate market to sell their products at competitive prices the units may be at the stage of closure. MANAGEMENT PROBLEM Many units are facing various problems due to lack of professional management. In the surveyed units it has been found that none of the units have appointed professional manager in their enterprises. Majority of the units are in partnership form of the organization and due to vested interest of the some partner, there is a dispute and lot of litigations among the partner. It has been observed that in majority of the units entrepreneurs have invested huge amount of money in constructing buildings as a dead assets. Some of the units have diversified the funds of the industry in constructing their homes. The money required in industry have been diversified in other dead assets as a result these industries are not earning good profits.. it was also observed that the main reason of management problem is in large investment in fixed assets(WAS 2.52), diversification of funds(2.56) and disputes among partners(1.26) respectively. PRODUCTION PROBLEM The production problem is one of the major problems in agro based industries in Patiala district due to less capacity utilization. The first rank was given to power break down by the promoters of the surveyed industries. Due to this industries are not producing the finished products as a result industrial workers have to sit idle for a long time and profit margin is declining year after year. In some of the industries it has been found that they have obsolete machinery. HUMAN RESOURCE PROBLEM The main asset of any enterprise is its manpower. If industries get right number and skilled manpower the profitability and productivity enhance manifold. In agro based industries of Patiala district the industries have to hire labour from other states at very high prices. After that some time labours have to impart training also which enhances the cost of the unit as well. It has been observed that in surveyed units, lack of skilled Labour (WAS 1.21) and labour investment (1.78) respectively.

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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

RESEARCH & DEVELOPMENT PROBLEM Research and Development occupies an important place for inculcating industrialization and inculcating entrepreneurial culture. In the Patiala district there is not any well equipped lab available for testing the agro based products. Units have to move for testing their products in different parts of the countries as a result the cost of production increases to a great extent. The various R & D problems in agro based industries comprises the non- availability of research lab for quality control having score of analysis 1.94 and lack of consultancy services (1.00 score). It shows that major constraint for rice mill industry in Patiala district was the non availability of research laboratory for testing and quality control. It also revealed that due to this reasons entrepreneurs have to move from pillar to post for small testing etc. In addition to it there are some other problems are there as:a) Higher cost of production of the agro-based products: Absence of cheap and easy transport services increases the cost of production of industrial products, which in turn reduces the competitiveness of the product in the international market; (b) Increasing loss of perishable products: The lack of quick and easy transport facilities increases the magnitude of the loss of products and in turn increases the cost of agro-based products. Consequently, this affects the competitiveness of the product in the international market. At the same time it increases environmental hazards; (c) Delay in the delivery of goods: Agro-based industrial products are special consumption goods and have special characteristics. They must be available when consumers need them. In other words postponement of consumption of food is not possible. Therefore, any delay in delivery reduces the confidence of consumers. Delay in delivery also damages the products, especially fruits and vegetables, and fish and fish products; (d) Urban concentration of agro-based industries: The lack of proper transport services in the rural areas forces industries to locate in the urban areas where transport services are easily available. This defeats the concept of rural poverty alleviation through industrialization; SUGGESTIONS 1. It is suggested that the financial institutions should provide the assistance without any bias to the needy and deserving entrepreneurs of agro based industry. 2. The Government must analyze the perspective problems of entrepreneurs of these agro based units before launching any developmental policy for them. CONCLUSION The Indian economy is predominantly rural and agriculture oriented. Majority of the people in our country are those living below poverty line and earn their livelihood from agriculture and other related activities. According to 2005 World Bank estimate, 42 percent of the India falls below poverty line of $ 1.25 a day (Purchasing power Parity (PPP), in normal terms Rs. 21.6 a day in urban areas and Rs. 14.3 in rural areas). Despite India being one of the fastest growing
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International Journal of Multidisciplinary Research Vol.1 Issue 4, August 2011, ISSN 2231 5780

economies of the world, it is home to cover a third of the worlds poor people. Even a fter 62 years of independence, the country has not shown expected progress in industrial sector especially agro based industry. Still there are nearly 1 billion inhabitants, an estimated 260.3 million are below the poverty line, of which 193.2 million are in the rural areas and 67.1 million are in urban areas. The data revealed that during 2009 the widespread drought brought down the agricultural growth rate to -0.2 per cent, as against the target of 4 per cent. It is widely realized that agro-based industries are essential ways for the attainment of national objectives, especially poverty alleviation and economic development in the rural areas. However, these industries are facing several problems such as Infrastructural problem, Lack of proper Skills, Upgrading technological, Support services etc. Although some of the problems could be dealt with by the industries and also requires government intervention and the cooperation and support of international agencies. At this crucial juncture, the challenge in front of entrepreneurs of the agro based units i.e. rice mill units is to produce rice for 1.2 billion people of our country because scarcity can cause considerable distortions in any country. It has been found that in Patiala district most of the agro-based industries are located in rural areas where all weather transport facilities are greatly lacking. The quality of services is also very poor and irregular not available at the time of their need. This not only creates problems in transporting the final industrial products to their destination, that is, to the market centres and ports in the case of exportable products, but also disturbs the collection of inputs for processing. Hence, the need of the hour is the with a greater emphasis on the problems faced by agro based units, require a well furnished governmental policy, It lies in the long term interest of the entrepreneurs to actively contribute in bringing the above to fruition. REFERENCES 1. Devraja T.S (2009),Financial performance of Agro Based Industries Anmol Publications Pvt. Ltd., New Delhi. 2. Kar G.C and Mishra S.N. (2004), Agro industries & economic development, Deep & Deep publications pvt. Ltd. 3. Khajuria Meenakhsi & khajuria R.K. (2010), Second Green Revolution- Prospects & Challenges, Kurukshetra Vol 58, No.5, March 2010, pp 19-20.
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4. Mohanty B. K. (2010), Agricultural Growth- Its time for Gene Revolution, Kurukshetra, Vol 58, No 9, March 2010, pp 3-4. 5. Nayak Purusottam (1996), Problems and Prospects of Agro based Industry: A Case Study,Journal of Assam University, Vol.1, No.1, 1996, pp 22-28. 6. Patro Bhagabata and Nayak Preyasi (2002), Employment Implications of Agro- based industries in India; Agro industries & economic development; Deep & Deep publications Pvt. Ltd.

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