Agro-based industries refer to a set of industries that process raw materials from the agriculture sector into value-added products. These industries use raw materials such as crops, livestock, and fishery products to produce goods such as food products, textiles, paper, and biofuels, among others.

Meaning of agro-based industries

Agro-based industries as the name implies is related to agriculture. They are also known as agro-allied industries and they derive their raw materials from agricultural products from plants and animals. The continuous existence of these industries is made possible through the raw materials gotten from agriculture.

Agro-based industries play a vital role in enhancing the value of agricultural output by transforming it into profitable goods. India’s agro-based businesses such as the textile, sugar, vegetable oil, tea, coffee, and leather goods sectors, are excellent examples of this.

These industries rely heavily on agriculture for their raw materials and other essential outputs, and their relationship is geared towards advancing the growth, development, and revenue of the country.
Establishing these industries not only accelerates the production of agricultural products but also generates employment opportunities in the country.

Twenty agro-based industries and their raw materials

1Oil milling industryOil seeds
2Beverage industryCocoa
3Soap industryOil seeds
4Feed millCereal and grains
5Paper industryPulp wood
6Tyre industryRubber latex
7Sugar industrySugarcane
9Starch industryMaize and cassava
10Tobacco industryTobacco leaves
11Textile industryCotton
12Fruit canning industryFruits
13Honey industryHoney from bees
14Coffee industryCoffee beans
15Jute industryJute fibers
16Palm oil industryPalm fruits
17Potatoes processing industryPotatoes
18Dairy industryMilk from cows, goats, sheep e. t. c.
19Aquaculture industryFishes and sea foods
20Tea industryTea leaves
agro-based industries

Read also: Reasons why you should invest in agriculture

Importance of agro-based industries

Agro-based industries are those that process agricultural, horticultural, and animal husbandry basic materials into value-added goods. These industries are essential to a nation’s economic growth because they support export growth, provide jobs, and advance the agriculture industry as a whole.
Below are some of the importance of agro-allied industries;

  1. Job creation
  2. Increased shelf life
  3. Development of agricultural sector
  4. Export revenues
  5. Development of rural areas
  6. Reduced post-harvest losses
  7. Decreased migration
Job Creation

In rural areas where agriculture is the main source of revenue, there are many employment opportunities in agro-based industries. Farmers, laborers, technicians, engineers, and other skilled and unskilled employees can find employment in these fields. The expansion of these sectors boosts the local economy and raises residents’ standards of living.

Increased shelf life

By turning raw agricultural materials into completed goods, agro-based companies increase the value of agricultural products. This not only lengthens the produce’s shelf life but also raises their price, boosting the farmers’ profits. The market prices for the processed goods are also greater, increasing the farmers’ revenues.

Development of the Agricultural Sector

By acting as a market for agricultural products, agro-based companies help the agricultural sector grow. Also, the industries supply seeds, herbicides, and fertilizers to farmers. This contributes to boosting agricultural productivity and raising the standard of agricultural output.

Export Revenues

For many countries, agro-based sectors are a substantial source of export revenue. Exports of processed agricultural goods, including textiles, sugar, tobacco, tea, coffee and the likes bring in foreign revenue for the nation.

Development of rural areas

Agro-based industries are frequently found in rural areas, and their expansion aids in the general development of these regions. Better living circumstances for residents of rural areas are brought about by the expansion of these industries, which also improves infrastructure like roads, electricity supplies, and communication systems.

Reduced post-harvest losses

Post-harvest losses result in the loss of about 35% of the food produced. Losses can be reduced if the industry has access to a storage facility.

Decreased Migration

When agro-based industries are developed in rural regions, more jobs will be created, which will result in a decrease in labor movement to larger cities.

Relationship between agriculture and industries

A symbiotic link exists between industries and agriculture, with each relying on the other to thrive and succeed. These relationships include the following :

  1. MARKET CREATION: The agricultural industry creates a market for industrial goods such farm equipment, pesticides, and fertilizer.
  2. FOOD PROVISION: Industrial workers are also fed by agriculture.
  3. Agriculture and industry compete with one another for labor.
  4. SUPPLY OF RAW MATERIALS: Agriculture gives companies access to raw resources such cocoa, cotton, palm fruit, and groundnuts.
  5. SUPPLY OF ESSENTIAL GOODS: Industries offer a wide variety of desired goods that farmers want to purchase.
  6. Increase in agricultural income brought about by a mix of efficient and economic factors leads to the growth of the industrial sector of the economy.
  7. AGROCHEMICAL PRODUCTION: Industries create agrochemicals for use in agriculture. Herbicides, insecticides, fertilizers, and immunizations are a few examples.
  8. STORAGE FACILITIES: Industries offer space for storing agricultural products such as grains, milk, fruits, vegetables, meat, fish, and other items.
  9. THE PROVISION OF PROCESSING FACILITIES: Industries also give agriculture processing facilities like grinders and millers.
  10. SUPPLY OF AGRICULTURAL TOOLS AND EQUIPMENTS: Industries manufacture machinery and tools for use in agriculture. Tractors, ploughs, cutlasses, and hoes are among the examples.

The bottom line

Every economy needs agro-based industries because they foster economic expansion, job creation, and rural development. These sectors use agricultural raw materials to create a variety of finished goods that are necessary for day-to-day living. For any nation to have sustained economic growth and development, it is crucial to encourage and support the expansion of agro-based industries.

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