1

UNIT – I

INTRODUCTION, DESIGN OF THE STUDY AND AREA PROFILE

1.1 INTRODUCTION

Agro-based food industry is of enormous significance for India’s development

because of the vital linkages and synergies that it promotes between the two pillars of the

economy namely Industry and Agriculture1. Food processing covers a spectrum of

products from sub sector comprising agriculture horticulture, plantation animal husbandry

and fisheries. Agro based food industry involves the commercial movement of food from

field to fork.

Modernisation of agriculture alone can raise the consumption levels of agro

food items and boost agriculture exports. Agro- based food industries are expected to play

a major role in ensuring rural prosperity. But, they require a problem – free and highly

modernised agricultural sector.

The agro–based food industries are classified into three categories2.

i) Village Industries

It is owned and run by rural households with very little capital investment and

a high level of manual labour. Pickles, papad, banana and potato chips come under this

category.

ii) Small Scale Industries

It is characterized by medium investment and semi – automation. Edible oil,

rice mills, baking units and confectionaries come under this category.

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iii) Large Scale Industries

It involves large investment and a high level of automation. Sugar mills, noodle

making and dairy products fall in this category.

1.2 MEANING – AGROBASED FOOD INDUSTRIES

Agro – based food industry includes processing, packing and marketing of

cereals, pulses, spices and masalas, noodles making, mini rice miling units, Indian sweet

making, bee keeping, fruits and vegetables processing, edible oil industry, processing of

maize and ragi, cashew processing, diary units, cattle feed., tea, coffee, animal feed

and so on.

1.3 CONCEPT OF AGRO BASED FOOD INDUSTRY

The perishable nature of food grains need condensing, canning preserving,

dehydrating, drying, smoking, pickling and similar other processes to make them available

throughout the year. To name a few, hulling of paddy into rice; grinding of wheat and

other grains to atta; pulse into dals; sugarcane after conversion into gut; khandsari and

sugar; oilseeds into oil; bottling of fruit juices; preparation of pickles, achar, chutneys,

juices, jams and jellies, dyhydration of pea, pinapple processing and citrus oil. These

could be developed in feed from the processing of citrus fruits areas of production of

specialized crops, vegetables and fruits3.

Besides, in the rice producing areas of East and South, there is further

possibility of setting up of industries for rice milling and rice bran oil. Likewise the

sugarcane producing areas may be developed into manufacturing units for molasses,

alcohol, methylated spirit.

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1.4 NEED FOR AGRO-BASED FOOD INDUSTRY.

Large scale disguised unemployment is one of the main characteristics of most

of the densely populated under developed economy4. These economies suffer from the

problem of rural over-population, mainly dependent on agriculture as a means of

livelihood. With unchanged techniques of production a large part of the population

engaged in agriculture and allied activities may be removed without reducing the output.

This disguised rural unemployment is the main obstacle to economic development. A

solution for the problem lies in industrialisation of rural areas by starting more number of

agro-based food industries. These industries provide productive employment for the rural

population.

The concentration of industries in urban areas increases the disparities between

the rural and urban income levels. Starting of more agro-based food industries serves as

an effective means of reducing rural-urban disparities. It stops migration of people from

rural to urban areas and accelerates the process of rural development. In brief, agro-based

food industries play an effective role in rural transformation, generation of balanced socio-

economic development through an increase in gainful employment and a rise in income

levels of rural people engaged in agriculture.

Agro-based food industries need a special attention since their importance in

the Indian context gets further enhancement.

1.5 FEATURES OF AGRO-BASED FOOD INDUSTRY

Agro-based food industry is primarily based on the utilization of locally

available raw-material and skill with little capital outlay. India has been a land of villages

and agriculture is going to remain for years to come, the mainstay of its population.

Therefore, the agro-based food industries have the following features.

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1) These industries should be such as can be conveniently taken up by the people in

the rural areas without any encroachment on their main occupation.

2) They should be simple so that they could be taken up by them with their own

labour and that of the labour of their families.

3) They should, as far as possible, involve small capital, and this should be

available from the financial institutions available locally.

4) They should be based on the regional facilities and comparative advantages of

particular district in regard to the supply of raw-materials, availability of nearby

market and the facilities of power.

5) These industries can be conveniently developed in different parts of the country.

6) There is diverse nature of markets ranging from local and regional to national

and international.

7) There are serious infrastructure constraints in the rural areas for the development

of agro-based food industries.

1.6 IMPORTANCE OF AGRO-BASED FOOD INDUSTRIES

The importance of agro-based food industries in our economy is stressed on the

basis of four arguments-employment, decentralisation, equality and latent resources. Agro

food industries are labour-intensive and are capable of generating more employment per

unit of capital employed. These industries have been the instrument in attaining self-

sufficiency by narrowing the gulf between demand and supply. These industries have

helped in increasing the national income and also in its equal distribution. Befitting the

national genius and temperament and requiring less investment, it has fulfilled the wants

of the lower class people.

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Another note-worthy importance of this sector is that it takes the benefit of

industrialization to the interior areas and this helps in arresting the lopsided development

of different parts of the country5. The agro based food industries have tremendous export

potential. These industries produce eatables of common man.

Growing agri-business is one of the feasible means of injecting purchasing

power into the rural sector. Above all agro based food industries operate as catalytic

agents for development of infrastructure.

1.7 CLASSIFICATION OF AGRO BASED FOOD INDUSTRIES

The researcher for his study classified the entire agro based food industries of

Kanyakumari district into five major categories – Rice and Flour Mills, Cashew

Processing Units, Fruits and Vegetable Processing Units, Bread Making and

Confectionaries and Vegetables Oil Mills.

CHART – 1.1

CLASSIFICATION OF AGRO BASED FOOD INDUSTRIES

Agro food Industries

Rice and Flour Mills Bread making and

confectionaries

Cashew Processing Units Vegetable oil mills

Vegetable and fruits

processing units

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1) Rice and Flour mills

Industries doing the operations such as hulling of paddy into rice, rice into

flour, grinding of wheat and other grains to atta, pulses into dals come under this

classification.

2) Cashew Processing units

The operation such as roasting of raw cashew nuts shelling, peeling, grading,

packing and marketing are done in cashew processing units.

3) Fruits and vegetable processing units

These units include bottling of fruit juices, preparation of pickles, and

preparation of snacks by using vegetables.

4) Bread making and confectionaries

Preparation of breads, fruit jams, sweets, biscuits, jellies, cakes, potato chips,

banana chips, tapioca chips, processed ground nuts, cashewnuts, pulses and grain come

under this classification.

5) Vegetable oil Mills

Vegetable oil mills include oils extracted from coconut, rice bran, gingely,

ground nut and pea.

1.8 STATEMENT OF THE PROBLEM

Kanyakumari District is one of the industrially backward districts in Tamil

Nadu, even though the district has adequate raw materials compared to other districts in

Tamil Nadu. The peculiarity of Kanyakumari District is its location, availability of raw

materials for agro-based food industries and its conducive atmospheres for starting

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industries. Nearly 75 percent of the population of the district depends upon agriculture.

The district is one of the highly literate districts in Tamil Nadu and the skilled human

resources are also available in plenty. But the district is severely affected by

unemployment.

Further, the economy of the district is backward one because of the non -

development of industries especially agro-based food industries. The livelihood of the

rural people and their improvement of their standard of living depend on the extent of the

development of agro-based food industries. But the present number of agro-based food

industries and employment opportunities provided by such industries are low when

compared to its location and availability of raw materials.

On the basis of the above observation, the researcher has raised the following

research questions.

- Why are the existing agro based food industrial units in sickness?

- What are their production and financial problems?

- Are the agro – food industrial entrepreneurs able to market their products?

- Are the existing infrastructural facilities enough to organize the agro based food

industries?

- What are the steps taken by the government to promote such industries ?

- What are the prospects of agro based food industries in Kanyakumari District.

- What is the role of District Industries Centre in Kanyakumari District ?

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Hence, the study is made to identity the real problems in the agro based

food industries in Kanyakumari District and to give suitable suggestions to overcome the

problems.

1.9 REVIEW OF LITEARTURE

Research studies in the field of agro-based food industries have been

undertaken by some individuals and government agencies. A review of the past studies

helps to define the scope of the present study and provides the frame work for analysis of

problems, drawing inferences and to suggest suitable remedies. Here an attempt is made to

review the studies undertaken in the area of agro based food industries both the studies

made within India and outside India.

Bhattacharya S.N. (1981) in his book “ Development of industries in

Backward Areas” studied economic growth and its problems in five backward district of

North Bengal and concluded that in order to achieve higher economic growth, the

potential for developing smaller and more disbursed agro related industries should be

systematically identified for each local area exploited to the fullest extent possible.1

Putaswamaiah K. (1981) in his book, “Micro plan for Employment. A

Comparative Study” favoured the establishment of those industries which are local

resources based. He points out that the aim should be to create more opportunity per unit

of output and investment.2

1 Battacharya, S.N. (1981), Development of Industries in Backward Areas”, New

Delhi, Metropohitan publishers.

2 Puttaswamaiah K. (1981), Micro Plan for Employment – A Comparative Study”,

New Delhi, Sterling Publishers.

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Miltion M. Snodgrah and Wallace L.T. (1982) in their book, "Agricultural

Economics and Resource Management" stated that labour costs for marketing domestic

agro based food products account for about half of the marketing bill.3

Sandeep Singh (1995) in his article,” Advantages and structural weaknesses

of Rural Industries” revealed that the growth of rural industries helps in raising the

standard of living of the rural population by providing them more income, consumer

goods at cheaper rates and social economic overheads.4

Mohsin Khan M (1995) in his article, “ Agro – industries as a means of

Rural Development” stated that Rural industries save us from the evil effects of the

concentration of industries such as pollution, over urbanization, congestions and growth of

slums. The role of agro industries is immense in accelerating the process of

industrialization in rural areas in a developing country like India.5

Giriappa S (1996) in his book, “ Rural Industrialization in Backward

Areas”, has analysed the employment as well as income potential from fish as well as

cashew processing industries. He also mentioned that India is among the five major

producers of atleast dozen agricultural commodities in the world. Yet its contribution to

the international trade in farm products is less than 0.5 percent. Even in domestic market,

the agro- processing is not a strong activity. It is estimated that five percent increase in the

3 Milton.M, Snodgrass and Wallace L.T., 1982, Agriculturtal and Economics and

Resource management, Prentice Hall of New Delhi, Second Edition, pp.116-146.

4 Sandeep Singh, (1995), Advantages and Structural Weaknesses of Rural Industries,

Kurushetra, 15(13).

5 Mohsin Khan M. (1995), Agro Induatries as a means of Rural Development,

Kurushetra, 15(12).

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processing of agricultural commodities can help in generating 65 million jobs for the rural

people.6

Kamta Prasad (2000) in his article, “Poverty Alleviation shift in Paradigms”,

stressed that there is a need for a occupational diversification, by increasing rural

industries and support so as to enable the weaker sections to derive maximum benefits.

The rural industries can compete with the modern large scale industries only through

development of infrastructural facilities and support system.7

Luh B.S and York G.K (2000) in their Book Commercial Vegetable Processing

stated that modern food processing technology has greatly expanded the farm produce

markets both at home and road. The increased need for processed foods has resulted from

increased standard of living, desire for a more diversified diet year – round, expanding

urbanization and an increase in population.8

Raghuramaiah B (2001) in his article, “Indian Food Regulations in the Global

context” described that effect of globalization of food trade on the Indian food regulatory

system are considered with respect to food safety, consumer protection, restrictive policies

on additives and pesticide residues, the definition of natural and artificial codex

alimentations commission rulings, FDA regulations and the need to improve both the

6 Giriappa S. (1996) Rural Industrialisation in Backward Areas, New Delhi; Daya

Publishers, pp. 18-19

7 Kamta Prasad (2000), Poverty alleviation shift in Paradigm, Kurushetra, 50(1).

8 Luh B.S. and York G.K. (2000), “ Commerical vegetable processing”, second

edition U.S. Dept. Agric. Handbook 66.

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health of the Indian population (via improved drinking water, post harvest technologies)

and inward investment in the Indian Food industry.9

Reddy Y. G. (2001) in his article, “Role of melas in marketing Agro Industrial

products”, aimed at exploring the practical problem faced by the producers participating in

the mela and the customers who buy the products. The study observe that the melas were

considered as an effective strategy for marketing.10

Kiran Sankar Chakraborty (2001) in his article “Market and marketing channel

of Agricultural produces in Tripura” stated that the presence of the rice millers and their

active involvement in the marketing process are found in almost all the sample markets.

They not only buy, process or sell the paddy but sometimes even store it for future rise.11

David Heymann (2002) in his article “Food safety, An essential Public Health

Priority” mentioned that annual mortality on account of food and water borne infectious

diseases in developing countries amounts to the high 2.1 million deaths, mainly of infants

and children. In Industrial countries microbiological food borne illnesses affect upto 30

percent of the population.12

Ramanujam K (2003) in his article, “ Agro- processing industry in Economic

Development” revealed that the role played by agro- processing industries in our economy

has multiple facets and it changes the course of development. There is a vast scope for

9 Raghuramaiah. B.., “ Indian food Regulations in the Global Context” – Indian Food

Industry, Volume. 20, No.2,2001,pp.20-23.

10 Reddy Y.G. (2001), Role of Melas in marketing of Agro Industrial products,

Research Highlights, NIRD, Hyderabad, June 2001, p.70.

11 Kiran Sankar Chakraborty (2001), “ Market and marketing channel of Agricultural

produces in Tripura”, Southern Economist, August 15, pp. 11-13.

12 David Heymann, “ Food Safety, An Essential Public Health Priority” Global Forum

of food Safety Regulations, FAO 28-30, January 2002, p.p. 66-68.

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development of agro- industries in India. India should develop agro- processing industry

as a sector of economy in a top priority.13

Nair B.C. and Oscar D. Medo (2007) in their article “Food Processing Industry:

A catalyst to Goa’s ailing Agricultural sector” reveals that there is a round the year poor

sales for bakery products, beverages, wine and liquor, packaged water, canned fish, fruits,

dairy products – milk, ice cream, butter, cheese, masalas. As per National Sample Survey

and 55th

round common expenditure survey, the average monthly per capita expenditure of

Goa is much higher than the national average. It is also pertinent to note that in Goa

people spend more on food items than non food items.14

Lakshmi A (2007) in her article "Indian Agriculture- agreement on agriculture"

some issues emphasized most of the developing countries have a persistent shortage of

foreign exchange. In this context, it may be wiser for these countries to have as much

domestic production of necessary food items as their land resources permit. It is desirable,

even if the domestic production is costly compared to the import of the food article.15

In a study by Sidhu and Kamal Ratta (2007), “Development experiences of

Indian Agriculture:. An appraisal of Post – Reform period”, stated that agricultural

developed states like Punjab, Haryana and Western Utterpradesh are facing the problem of

stagnations in agro food production and productivity.16

13

Ramanujan K.N. (2003), Agro- Processing industry in Economic Development,

Kisan world, 30(1).

14 Nair B. C. and Oscar D. Melo, 2007, “Food Processing Industry: A catalyst to Goa’s

ailing agricultural sector”. Southern economist, August.1, pp. 17 – 19.

15 Lakshmi. A, 2007, “Indian Agricultural Agreement on Agricultural: some issues”.

Southern Economist, December 1, pp. 20 – 22

16 M.S. Sidu and Kamal Vatta (2007), “ Development Experience of Indian

Agriculture: An Appraisal of post- Reform Period”- Southern Economist, October,

2007 pp. 9-14.

13

Ramachandran .R (2008) in his article “Indian’s position in Global and

Regional food production” stated that the agricultural sector has its influence on industrial

development which not only helps earning of foreign exchange, but also in satisfying the

basic needs of the population. Therefore, agriculture could assist in transforming a

traditional low –income economy to a modern high income one.17

Archana Skukla (2008) in her article ‘analysis of the problem of fruits and

vegetables processing industry in India’ stated that the country is the second largest

production of fruits and vegetables in the world. However, only 1.78 percent of the total

production is commercially processed which is below the level in comparison to many

developed and developing countries such as Malaysia, Philippines, Brazil and U.S.A18

Anjaiah. J (2008) in his article “Inter- Regional and Inter- State Disparities in

cultivation, production and productivity in food processing agricultural commodities in

Andra Pradesh” described that it is a common knowledge that lack of sufficient quantity

of agricultural material, uncertainities in the economy on account of dependence on

monsoon are the major bottlenecks for agro based units.19

Narsis.I (2008) in his article” Marketing of Agricultural products” stated that

the marketing of agricultural product is regarded as unique and deserving of special

attention due to the perishability and bulkiness of the products involved. Most farm

17

Ramachandran R (2008). Indian’s Position in Global and Regional Food Production,

Kisan world, February, pp. 7 – 9.

18 Archana Skukla (2008), Indian Journal of Agricultural Economics, September 2008,

Volume :63, p.p.387.

19 Anjaiah J., 2008 “ Inter Regional and Inter- state Disparities in cultivation,

production and productivity in food processing Agricultural commodifies in Andra

Pradesh”, Southern Economist, January15, pp. 15-16.

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products are seasonally produced and are perishable. Storage, even when practicable, is

costly and needs complex organization.20

Murugan M (2008) in his article, “Food processing Industry in India” stressed

that the potential for the food processing industry remains untapped despite the huge

quantities of processable food items that the country produces.21

Shelke R.D and Degaonkar A.M (2008) in their study “Agro-Processing

Industries in India” found that even today hardly 2 percent of the total fruit and vegetables

are used for processing in our country as against 70 percent in Brazil, 78 percent in the

Phillippines, 83 percent in U.S.A.22

Satya Sundaram (2009) in his article “Agro industries : Importance, Problems

and Prospeets”, stated that agro – based food industries are expected to play a major role

in ensuring rural prospecirty but they require a problem – free and highly modernized

agricultural sector.23

Srinvasan (2009) in his article “Projects to standardize ethnic fermented food

stated that the primary products used for making the agro-based foods are selected based

on experience and not on scientific principles.24

20

Narsis I. 2008, “Marketing of Agricultural products”, Kisan world, April 1-15,

pp.18-19.

21 Murugan.M, 2008, “Food Processing Industry in India”, Kisan world, April 15-30,

pp.29-40.

22 Shelka.R.D and Degamkar A.M., 2008, “Agro Processing Industries in India”,

Kisan world, November, pp.,23-24.

23 Sathya Sundaram (2009), “Agro - industries; Imporatnce problems and prospects”,

Yogana,pp. 38-39.

24 Srinivasan (2009), Projects to standardise ethnic fermented food: The Hindu,

Thhiruvananthapuram Edition, dated September 2009, pp. 7.

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Shinde M. N. (2009) in his article “ Indian Agriculture and Economic

Reforms” stated that in the year 2006 – 07 volume of food production in India is increased

more than 4 times as compared to the year 1950 – 51. But on average its growth rate has

declined to 2.48.25

Venkata Rao P and Ch. Thandava Krishna, (2009) in their articles, Food

security in India” stated that agro based food production increased from 55 million tonnes

in 1951 to 203 million tones in 1999, while the population also increased from 360 million

to 980 million during the same period. National Sample Survey data on hunger show that

the proportion of the rural house holds having two square meals a day of 81 percent in

1983 which rose to 88 percent in 1983 which rose to 88 present in 1991 and 93 percent in

1993.26

Swaminathan M. S. (2009) in his article, “Strengthen Food Security Based on

Home Grow Foods “ stated that increasing population leads to increased demand for agro

food and reduced percapita availability of land and irrigation water.27

Sitalakshmi. S (2009) in her article, “Towards Achieving a Second Green

Revolution – The Role of Radiation Technology in Food Processing Management” stated

that there is an urgent need for developing economies like India to utilize the technological

advances made by BRIT to revamp the food processing sector. Starting from deregulation

of the sector to investing in Research and Development facilities, to providing post harvest

25

M.N. Shinde. (2009), “ Indian agricultural and Economic Reforms”- Southern

Economist, January 1, 2009 pp. 8-12.

26 Dr. P. Venkata Rao and Dr. C.H. Thandava Krishna(2009), “Food Security in India”

Kisan World – June- 2009 pp. 7-8.

27 M.S. Swaminathan (2009), “Strengthening food security based on Home Grown

food”- Indian Journal of Agricultural Economics – volume.64, April – June pp. 179.

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storage facilities and marketing infrastructure, to linking economic policies to investments

in agricultural extension services, a lot of ground has been cleared for the successful

implementation of radiation technology.28

Syed Alag Mujtaba (2009) in his article “ Agro based sugarcane Industries in

India” stated that the economy is yet to realize the full potential of agro- based food

industries. The domestic as well as global market is enormous. Only with mass

production aided by modern technology and intensive marketing can the domestic market

as well as the export market be exploited to the fullest extent.29

Major Kumar Sarma (2009) in his article “Productivity of growth of food

grains of India” stated that a sustainable agricultural system is one that indefinitely meets

mounting demand for agro-based food with the increase in population growth.30

Saraswathi and Durai Raj (2009) in their article “Emerging food Retail chains

in India” stated that to ensure food safety and maintain product integrity from the source to

the customer (farm to place) the food retailing companies have to establish a totally

integrated infrastructure and services package. This connects and maintains the flow of

food from the source of farmers and processes to the customer.31

28

Sitalakshmi S., “Towards achieving a second Green Revoluation- The role of

Radiation Technology in food processing Management”- Indian Journal of

Marketing, January, 2009 pp. 12-16.

29 Syed Alag Majabu Pankaj, “ Agro- based sugarcane Industries in India”, Southern

Economist, June, 15, 2009, pp 9-10.

30 Major Kumar Sarma, “ Productivity of Growth of food grains of India- An analysis”,

Southern Economist, May 15, 2009, pp.13-14.

31 Saraswathi and Devaraj, “Emerging Food Retail Chains in India”, Southern

Economist, July 15, 2009, pp-37-38.

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Goenka S.P (2009) in his article “Look East for Food and Energy Security”

stated that investment in agro- industries can ease the pressure of the demands of growing

population by synergizing the national resources available in the Indo - China region with

the superior technology and manpower resources available in India.32

Sanjeeve Rao N. and Tulasi Das V in their article “Globalization and

Agricultural Marketing” expressed that the development of high yielding fertilizers, use of

plant production methods and use of modern agricultural implements helped in increasing

food production and generate marketable surplus.33

Yadav D.B, H.R.Shine and Dorage J.T. (2009) in their article “Export potential

of major fruits” stated that implementation of WTO results into lot of changes in agro-

food market in India and abroad. India is the second largest producer of fruits in the world

after China. There is an overall increase in the demand for fruits for consumption both in

the fresh and the processed form which has resulted in wide diversification on production

pattern globally.34

Kathirvel N (2009) in his article “ A Story on Satisfaction level of Farmers

Towards Production and Marketing of Agricultural products” stated that Indian farmers

are unable to secure a fair deal at the marketing and production stages of their produce and

an average farmer is denied the full fruits of his industry. The farmers need the services of

well-organised marketing system supported by marketing co-operatives, integrated means

of transport and scientific storage facilities.35

32

Goenka S.P. (2001) “Look East for Food & Energy Security”, The Hindu, September

6, p.14.

33 Sanjeeva Rao and V. Tulasi Das,(2009) “ Globalisation and Agricultural Marketing:

Some Strategies for Success”, Southern Economist, February 15, pp.16-18.

34 Yadav D.B., Shinde H.R., and Dorage J.T. (2009), Export potential of major fruits”,

Southern Economist, March pp. 13-14.

35 Kathitvel N. (2009), “ A Study on Satisfaction Level of Farmers Towards Production

and Marketing of Agricultural Products”, Indian Journal of Marketing, February,

2009 pp.41-54.

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Nageswara Rao M and Srinivas Rao S (2009) in their article “ Direction of

Trade in Indian Agricultural Commodity Exports” stated that the share of agricultural

commodities in the total value of trade is dwindling very fast. Indian exporters are

required to improve their processing and packaging facilities to meet the international

quality standards.36

Perumalsamy R (2009) in his article “ Agricultural Marketing in India’s

Economy” stated that as we have a tradition of agricultural production, marketing and

allied commercial activities, now it is time for us to brainstorm and come out with new

ideas of value added services. These value added services will give the existing

agricultural engine a new dimension. The next logical step could be food processing

which not only could be another revenue generating area but also can provide lots of full

time employment to our youths.37

Maheskumar.S (2009) in his article “ Food Industry in India” stated that while

India has an abundant supply of food, the food processing industry is still nascent. The

food processing has been declared a priority sector with various government incentives.38

Seshaadri Kumar N. (2010) in his article "Food security for India” stated that

the percapita yearly food grain consumption of 144 kilogram for an Indian compared to

300 kilograms for a China reveals loudly the reason for Chinese on top and India at the

bottom of the Olympic Medal Tally.39

36

Nageswara Rao M. and Srinivas Rao S, 2009, “ Direction of Trade in Indian

agricultural Ecommodity Exports”, Southern Economist February1, pp.21-23.

37 Perumalswamy.R,. 2009, “Agricultural Marketing in India Economy”, Kisan world,

September, pp.31-32.

38 Maheshkumar S (2009)” Food Industry in India”, Kisan World, September pp. 15 – 17.

39 Seshadri Kumar.N., 2010, “Food Security for India”, Kisan world, Vol.37, April,

pp.11-15.

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Ammananya K.K (2010) in his article “Union Budget – Primary to Agriculture

and Rural Development” quoted that increased funds is made available on development of

food processing industries by providing state of the art infrastructure. In addition to 10

mega food parks already being set up, the government has decided to set up 5 more such

parks. The government has also proposed major reduction in indirect taxes for agricultural

and food processing industries.40

1.10 OBJECTIVES OF THE STUDY

On the basis of the above research questions, the following are the specific

objectives of the study.

1. To find out the growth of agro-based food industries in India and Tamil Nadu.

2. To study the agro-based food industries in Kanyakumari District.

3. To find out the extent to which production problems of the agro based food

industries in Kanyakumari district affect their growth.

4. To find out the extent to which marketing problems of the agro based food

industries in Kanyakumari district affect their growth.

5. To find out the extent to which financial problems of the agro based food

industries in Kanyakumari district affect their growth.

6. To offer suitable suggestions on the basis of the findings in the study.

1.11 HYPOTHESIS

1. The production of different category of agro food industry is significantly

influenced by the problems of raw – material, machineries, power supply, labour

and mismanagement.

40

Ammannya K. K. 2010, “Union Budget Primary to Agriucltural and Rural

Development”, Southern Economics, Vol.48, March.15, pp.43-44.

20

2. The marketing of agro foods of different category of agro based food industry is

significantly influenced by the problems of poor market location, terms of selling,

poor sales promotion, impact of economic policies, low quantity products, poor

marketing operation, lack of technical developments and lack of facilitating

functions.

3. The finance of different category of agro based food industry is significantly

influenced by the problems of delay in getting loan, high rate of interest, difficult

procedure of borrowing, non prompt settlement, insufficient finance and diversion

of business finance.

4. The difference in annual income of each category of agro – based food industries is

not due to pure chance.

1.12 DEFINITION OF CONCEPTS

Agro based food industry is a pooled term from two words: one is agriculture

and the other is food industry

Agriculture

Agriculture is a term which refers to the work of converting the natural input

into output, essential for the survival of human beings in this world. The farmers in our

country are mostly uneducated. Due to lack of education and technological upgradation

they are unable to get effective information about processing of agricultural produce. The

selling of agricultural produce may be carried out directly by the farmers themselves or

through some agents.

21

Food Industry

India's agro based food processing industry covers rice and flour mills, fruits

and vegetables processing, meat and poultry, milk and milk products, alcoholic beverages,

fishing, grain processing and other consumer product groups like confectionary, bread and

sweet making, soy based products, protein foods, vegetable oil mills. The agro food

processing sectors in India are of the largest in terms of production, consumption, export

and growth prospects. Agro food industries produce major processed products from minor

agriculture produce. Most fruits and vegetables produced in India are still consumed fresh

except for a very small quantity going for manufacture of jam, jelly, juice, confectionaries

syrup, beverages, squash, wine, sauces, pickle, dehydration of aonla, karonda, custard

apple, tamarind and canning of foods.

1.13 METHODOLOGY

1.13.1 SOURCES OF DATA

The present study has been carried out on the basis of primary as well as

secondary data.

Primary data has been collected from the agro-food industrial entrepreneurs

who are at present primarily dependent on agro-food industrial activities as their primary

occupation. Data have been collected through interview schedules.

Secondary data related to production, sales, employment, earnings and exports

of agro-food industries in India were collected from the annual reports of the Ministry of

Industries and agro industrial units. Production, value, sales, employment and earnings of

agro food industries of Tamil Nadu were collected from the Annual Survey of Industries.

Secondary data concerning number of agro food industrial units, employment, production,

fixed investment, working capital for a period of 10 years (2000-2010) were collected

22

from the records, annual reports, and action plans of the District Industries Center.

Additional information was supplemented by Reports of Assistant Director of Statistries,

Nagercoil.

1.13.2 METHOD OF SAMPLE SELECTION

A field survey has been conducted covering 327 sample agro food industrial

units of the nine blocks and four municipalities of the district. The Proportionate Random

Sampling method has been used. Five categories of agro food industries namely flour

mills, cashew processing units, vegetable and fruits processing units, bread making and

confectionaries and vegetable oil mills are prominent in the district. Twenty five percent

of each of these category of food industries is taken for the study. Table 1.1 gives the

details of the sample selection of agro based food industries in Kanyakumari District.

TABLE 1.1

SAMPLE SELECTION OF AGRO-BASED FOOD INDUSTRIES

(25 Percent of each Category)

Sl. No Category of Industries Total Units Samples selected

1 Flour Mills 208 52

2 Cashew Processing Units 301 75

3 Vegetable and fruit Processing units 416 104

4 Bread making and Confectionaries 249 62

5 Vegetable oil mills 136 34

Total 1310 327

23

1.14 STATISTICAL TOOLS APPLIED FOR ANALYSIS

i) GARRETT RANKING

Garrett Ranking is applied to rank the various production, marketing and

financial problems of agro based food industries

ii) CHI – SQUARE TEST

Chi – Square test is applied to test the null hypothesis relating to various problems

of agro based food industries in Kanyakumari district

iii) RETURN ON CAPITAL EMPLOYED

Return on Capital Employed is applied to find out the rate of return of different

category of agro food industries for 10 years.

Return on Capital employed = Net Profit after tax + Interest

x 100Capital Employed

iv) ANOVA

ANNOVA is applied to find out the relationship existing between the profit

earned by each category of food industry and its year of operation.

1.15 STUDY AREA

As the topic of study is agro-based food industries, the researcher has covered

the agro-food industrial units of the nine blocks namely Agasteeswaram, Thovalai,

Rajakkamangalam, Kurunthencode, Thukalai, Thiruvattar, Munchirai, Killiyoor and

Melpuram and four municipalities of the district-namely Nagercoil, Colachel, Thuckalai

and Kuzhithurai.

24

1.16 LIMITATIONS OF THE STUDY

Though proper care is taken in the successful completion of the study, it is not

free from the following limitations and constraints.

The researcher encountered problems in obtaining empirical evidence from the

sample respondents on the various issues of the agro based food industries. In many cases

the data produced by the respondents were considered to be inadequate. Therefore, in

order to fill up the gaps the agro food industrial units were visited. In spite of the possible

efforts put in by the researcher, there are little data constraints where impact on

interpretations of the study is negligible as sufficient case has been taken to draw

meaningful conclusions.

The researcher experienced data constraints in the management of secondary

data too. The data published by different organizations on particular issues for a given

period of time are not been uniform. However, the researcher could overcome the gaps by

consulting experts in the field and using his own personal judgment without prejudice in

organizing the data.

1.17. PERIOD OF THE STUDY

The study is conducted for a period of two years (2009 and 2010) but the

particulars of production, sales, capital and profit of agro based food industries are taken

for a period of ten tears from 2000 to 2009.

25

1.18 THE PROFILE OF STUDY AREA

Kanyakumari district is named after the goddess “Kanyakumari”. It is

surrounded by majestic hills and fertile plains, bordered by colourful sea shores, fringed

with coconut trees and paddy fields and closely interwoven with temples, churches and

other edifices. The name of the district is spelled as “Kanyakumari” in official records

which is in tune with the spoken name of the district in Tamil language.

Kanyakumari district was reorganized and merged with Tamil Nadu on 1st

November 1956. This is the smallest district in Tamil Nadu. It ranks first in literacy among

other districts in Tamil Nadu. The district is bound by Tirunelveli district in the North

East, Kerala state in the North west and the confluence of Arabian and Indian Oceans in

the west and south.

1.18.1 ADMINSTRATIVE SET UP

Kanyakumari district comprises of four taluks – Agastesswaram, Thovalai,

Kalkulam and Vilavancode. The District has nine blocks comprising of 56 town

panchayats and 99 village panchayats. There are four municipalities, six assembly

constituencies and one parliamentary constituency.

1.18.2 POPULATION

Kanyakumari district is densely populated with 16,69,763 people which

includes 8,29,542 males and 8,40,221 females. The density of population is 992 per sq.km.

The block – wise details of the population are given in Table 3.1.

26

TABLE 1.2

AREA AND POPULATION OF THE BLOCKS AND MUNICIPALITIES

Name of the

Block. Municipality

Area (sq. Km) Population

(Persons)

Agastesswaram 143.26 1,32,413

Rajakamangalam 135.49 1,27,325

Thovalai 360.91 97.802

Kurunthencode 109.54 1,68,810

Thuckalay 127.41 1,62.019

Thiruvattar 88.37 1,59,182

Killiyoor 138.86 1,51,034

Munchirai 71.45 1,75,454

Melpuram 277.57 1,73,426

Municipalities

Nagercoil 19.37 1,90,084

Padmanabupuram 6.47 19,269

Colachel 5.18 24,305

Kuzhithurai 5.15 19,226

Source: District Credit plan, 2008 - 09

Table 1.2 indicates that Agasteeswaram block has the largest area

(143.26sqkm) and Munchirai block has the least area (71.45 sqkm). But the population is

the highest in Munchirai block (1,75,454 persons). The rural population (14,16,879) is

higher than the urban population (2,52,884)

27

1.18.3 LITERACY

The literacy rate is one of the important factors determining the socio-

economic development of a district and the number of literates in various blocks and

municipalities are given in Table 1.3.

TABLE 1.3

LITERATES OF BOLCKS AND MUNICIPALITIES

Name of the Block/

Municipality

Literates

Agastesswaram 85970

Rajakamangalam 92573

Thovalai 71075

Kurunthencode 119818

Thuckalay 109262

Killiyoor 105231

Munchirai 116522

Melpuram 120296

Municipalities

Nagercoil 152274

Padmanabapuram 14961

Colachel 16822

Kuzhithurai 14740

Source: District Credit Plan, 2008 - 09

Table 1.3 reveals that of the nine blocks, Kurunthencode has the highest

number of literates (1,19,818) and among the municipalities Nagercoil has the highest number

of literates (1,52, 274).

28

1.18.4 OCCUPATIONAL STRUCTURE OF LABOUR FORCE

People work in manufacturing, processing, servicing and repairing industries.

Transport, commerce, storage and communication play an important role in providing

employment opportunities to the labour force in the district. The employed labour of the

district (category wise) is given in Table 1.4.

TABLE 1.4

OCCUAPTIONAL STRUCTURE OF LABOUR FORCE IN KANYAKUMARI

DISTRICT

Category Number of

Laborers

Male Female

Cultivators 61,567 57,968

(94.15)

3,599

(5.84)

Agricultural labourers 1,77,410 1,59,305

(89.79)

18,105

(10.20)

Livestock, forestry, fishing, hunting,

plantation, orchards allied activities

manufacturing processing and servicing

33, 996 32,514

(98.5)

1,482

(1.4)

Repair (household)

Other than household industries

13,377

36,837

5177

(38.70)

23,435

(64.49)

8200

(61.30)

13,402

(35.51)

29

Mining and quarrying 928 829

(89.35)

99

(10.870)

Construction 20,524 20,46

(99.42)

118

(6)

Trade and commerce 38,601

34,998

(90.66)

3,603

(9.44)

Transport, storage & communication 16,404 15,964

(97.3)

140(2.7)

Other services (govt.Employees) 64,443 44,445

(97.3)

19998

(2.7)

Marginal workers (daily wages) 24,04,4 5,262

(21.88)

18,782

(78.12)

Child labour 116 84 32

Total worker 4,88,247 4,00,303

(81.99)

87,824

(57.99)

Source: Records of Statistical office. Nagercoil, Figures within parenthesis denote

percentage.

Table 1.4 reveals that, out of the total population of 16,69,763, total workers

constitute only 4,88,247 and the non –workers constitute 11,81,516. Out of the different

categories of workers, those employed in manufacturing (household industries and non-

household industries) are 50,214.

30

Out of the bulk of the labour force unemployed 1,75,869 persons have

registered in the District Employment Office. Details of registered graduates and technical

degree holders are given in the Table 1.5.

TABLE 1.5

REGISTERED EDUCATED UNEMPLOYED IN KANYAKUMARI DISTRICT

Category Number of Person registered

Below matriculates 10,993

Matriculates and higher Secondary 1, 18, 602

Graduates 21, 951

Diploma holders in Engineering, Civil,

mechanical and Electrial I. T. I holders

7, 388

Draughtsman, Welders, fitters, plumbers,

moulders

9, 850

Electroplaters, turners, Black smiths 547

Mechanics Wire men 6,538

Total 1,75,869

Source : Action plan, District Industries Centre, 2007.

Table 1.5 indicates that out of 1,75,869 unemployed persons who have

registered in the employment office, 2,323are technically qualified persons who can be

utilized by rural entrepreneurs of the district.

1.18.5 AGRICULTURAL RESOURCES

Kanyakumari district is predominantly an agricultural district having a total

geographical area 1,67,184 hectares. It is rich in various food and commercial crops.

Farmers in Kanyakumari district cultivate mainly plantation and horticulture crops. The

major plantation and horticulture crops are coconut, rubber, banana, cashew, mango, jack

fruits and pineapple. Coconut groves are concentrated in Agastesswaram,

Rajakamangalam, Thiruvattar, Munchirai and Killiyoor blocks. Rubber is cultivated

mostly in Kalkulam and Vilavancode Taluks. Banana is extensively cultivated in the

31

district. The particulars of the approximate area and the annual production of various crops

are given in Table 1.6

TABLE 1.6

AREA AND ANNUAL PRODUCTION OF CROPS

Name Area under cultivation

(in H.A)

Approximate Production

(in Tonnes)

Paddy 40,000 1,61,320

Pulses 4,000 1,760

Banana 7,250 28,500

Coconut 20,719 210 million nuts

Groundnut 145 203

Mango 1, 808 18,100

Jack 855 17,100

Cashew 2,376 2,400

Tapioca 11,402 1,71,030

Rubber 15,699 11,800

Pepper 360 180

Tamarind 1,817 18,870

Arecanut 801 13,000

Vegetables 144 125

Clove 834 630

Source : Action plan. 2008, DIC, Nagercoil.

32

Table 1.6 clearly reveals the existing production of the food and commercial

crops and also the avenue in industrial application.

Paddy serves as a source for the establishment of modern rice mills. Arecanut

is sent to Kumbakonam and Pudukotai for the manufacture of several kinds of secented

panuspari. Rubber in the form of sheets and latex offer ample scope for industrial

utilization. Major portion of raw rubber produced is used by rubber based industries for

the manufacture of rubber bands, balls, hand gloves, tubes, tyre and rubber roller. Banana

is made use of food industries for the manufacture of banana chips and banana powder.

Fresh and dry fruits are used by pickle making, jam making and fruit preservation

industries. Tapioca is the major tuber crop cultivated in this district. It is the raw material

for the manufacturing of Sagorice, liquid glucose and gum starch. Coconut is the major

plantation crop cultivated in extensive areas in this district. By utilizing the husks, about

5000 metric tonnes of white fibre and 1,800 metric tonnes of brown fibre are produced in

this district. Oil and Coir industries make use of coconut and fibre as raw materials for

their production. Palm and jaggery industries are started using sugar crop. Palmyrah is the

only sugar crop grown in this district.

1.18.6 MINERAL RESOURCES

Manavalakurichi a coastal is naturally blesses with rare earth minerals like

Brown Illmenite., Monazite, Rutile, Garet, Silumenite and Zicon. M/S Indian Rare Earth

Ltd. Manavalakurichi a Government of India Enterprise, is engaged in the separation of

these minerals. Some minerals are exported to Japan and other countries from the Colachel

coast. This has secured Kanyakumari district a place in the mineral map of the world.

There is demand for setting up a Titanium factory also.

33

The annual production and the end use of the major minerals of the district are

given in Table 1.7

TABLE 1.7

PRODUCTION, VALUE AND END USE OF MAJOR MINERALS

Name of the Mineral Production

(In Tonnes)

Value

(Rs In 000)

End use

Illuminate (Black

Sand)

90,700 23,808,75 Manufacture of

white paint

Monozite (radio

active material)

3,100 9,000 Atomic energy

Zircon 9,650 1,73,700 Atomic Energy

Rutile (Titan Oxide) 4,000 1,26,000 Welding electrodes

Garnet (Silicon

carbon)

6,540 16,350 Abrasives and

grinding wheels

Source : District Stastical Handbook.

Table 1.7 reveals that, five major minerals available in the District contribute to

the industrial development for they are used in the manufacture of white paints for atomic

energy, to produce welding electrodes and grinding wheels.

In addition to this lime shell is available in the coastal lagoons near

Thamaraikulam, Manakudy and Rajakamangalam. The lime shells available in these

regions amount to 0.96 million tonnes. This good quality shell is a raw material for the

manufacture of calcium carbide, coated cement, and bleaching power. It is also used in

chemical, paper and fertilizer industries. Pottery and stone carving are carried out as

cottage industries.

34

1.18.7 FOREST RESOURCES

Forests are an important renewable resources. They occupy a significant place

in the economy of the district and confer many benefits. They contribute to the industrial

development of the district. The total area under forests in the nine blocks of the district is

given in Table 1.8.

TABLE 1.8

AREA UNDER FORESTS IN THE STUDY AREA

Name of the Block Area Under Forests (in hectares)

Agastesswaram 795

Rajakamangalam -

Thovalai 20,856

Kurunthencode 813

Thuckalay 291

Thiruvattar 19,704

Munchirai -

Killyoor -

Melpuram 11,696

Total 54,155

Source : Action plan, DIC, Nagercoil.

Table 1.8 reveals that out of the total geographical area of the district, 54,155

hectares of land are covered under forests with rich resources of quality timber, spices,

creepers, bamboos and medicinal herbs. It is estimated that nearly 3,500 species are grown

35

in this region. Soft wood species like Elav, Alpicea, Perumaran, Malaivembu and

Manjakadambu are scarce now.

However, the available varieties of wood are used by wood – based industries

for the manufacturing of carved wooden furniture, splints and veneers, statues and wooden

electrical switch boxes in this sistrict.

The father of Siddha Medicines, saint Agasthiya is believed to have found that

Kanyakumari forest ranges are naturally blessed with rare plants of medicinal value. The

old Tamil system of medicine combined with modern technology and research offers

immense scope in the field of Siddha medical preparations.

1.18.8 LIVESTOCK RESOURCES

Kanyakumari district offers a good agro-climate condition for the development

of animal husbandry in conjunction with dairying offers a more stable base for sustained

income of the rural households in the district. The live stock population of the district is

furnished in Table 1.9

TABLE 1.9

LIVESTOCK POPULATION OF KANYAKUMARI DISTRICT IN 2008

Types of Livestock Numbers

Milch animal 1,36,520

Goat 62,484(7.28)

Poultry 6,48,598(75.58)

Sheep 1.570(0.18)

Pigs 3,642(0.42)

Ducks 5,385(0.63)

Total 8.58.195(100)

Source: Gazetters of India, Tamil Nadu State, Kanyakumari District.

36

Table 1.9 indicates that poultry constitutes 75.58 percent of the livestock

population followed by milk animals. Milk is used in the manufacturing of ice creams and

other milk based products. The animal bones and mutton tallow are good sources for

industries replication. The hides and skins available in this district are being utilized for

tanning in other districts of Tamilnadu. Kanya milk union collects milk from milk

producers cooperative society for processing it for further sales.

1.18.9 FLORICULTURE

Flowers such as Jasmine, Jathimalli, Mullai, Norium and Chrysanthemum are

mainly cultivated in Thovalai Taluk. Flowers like Cosandra and Markolundu are also

grown. The total area under flower cultivation is 185 hectares in the district. Hence scent

manufacturing industry can easily thrive here.

1.18.10 RAW MATERIALS AVAILABLE FOR INDUSTRIES IN

KANYAKUMARI DISTRICT

RUBBER

About 21, 128 hectares of land is under rubber cultivation and 22, 000 tonnes

of rubber latex is produced per annum. At present, 75 industries are engaged in the

manufactures of rubber based products like rubber gloves, rubber foams, rubber tread,

procured rubber, rubber tipped goods and rubber moulded good. The letter of intent from

the government was already given to TIDCO to start a project worth of 400 crores at

Chenbagaramanputhoor for manufacturing automobile Tyres and Tubes.

COCONUT

About 19,692 hectares of land is under cultivation of coconut and annual

production is estimated as 22 crores of nuts for the extraction of 16,000 tonnes of coconut

37

fibre per annum. Based on the above raw materials there are 240 coir based industries

functioning for the extraction of coccnut fibre, coir mat and mattings, and curled coir.

Only one medium scale industry which is 100 percent export oriented is functioning at

Ammandiviali for the manufacture of coir mat and mattings. The district is having further

scope to start coconut based industries like activated carbon coconut shell powder,

desicated coconut.

FRUITS AND VEGETABLES

The annual production of fruits in the district is estimated as 30 tonnes. At

present one fruit processing unit is functioning under cooperative sector engaged in the

manufacturing of fruit pulp and 130 cottage industries are engaged in the making of

pickles jam and juice. Tapioca is cultivated in about 10,200 hectares of land and annual

production is estimated as 1,05,000 tonns. There are 12 units, which are functioning in this

district for the utillisation of the above raw materials and there is still scope for starting

more industries for the manufacture of tapioca flour.

1.18.11 SPECIAL TYPE OF INDUSTRIES

A special feature of this is that a number of cashew nut industries are

functioning in the district with 251 units providing employment to 68,000 persons (90

percent of women workers). Ninety percent of the raw materials required for the above

industries is now being imported from foreign countries. In addition to this, 38 fishnet

units are also functioning in the district.

Twenty four industrial Co – operative Societies are functioning in this district

in the manufacturing activities of coir products, enegineering, printing, stone carving and

metals, providing the employment opportunity to about 1850 perosns. One co-operative

industrial Estate was recently established at Aralvoimozhi and 44 plots have been allotted

38

to new entrepreneurs. Under the control of Small Industries Development Corporation

(SIDCO) two industrial estates are functioning at Konam and Kappikadu and 43 units are

functioning in both the estates providing employment to 390 persons.

There are nine medium scale industries in Kanaykumari district. The details are

given in Table 1.10.

TABLE 1.10

MEDIUM SCALE INDUSTRIES IN KANIYAKUMARI DISTRICT

Name and Address Product name Production capacity

Kanyakumari Industrial Co – operative

Spinning Mill, Aralvoimozhi

Cotton Yarn 25,000 spindles

Nagammal Spinning Mill Nagercoil Cotton Yarn 2,41,160 Spindles

TAC Floor Co., Ammandivilai Coir Products 50,000sq.mts.

Indian Rare Earths Ktd.

Manavalakurichi

Rare Earth Soil 24,8000 M. T Per month

Coromonedel (Pvt. Ltd) Chemically treated

Rubber wood

500 M. T per month

Borax Morarji Ltd.,

Chenbagaramanputhur

Treated wood 12,000cub.m

Annaretnam Rubber Industries Sahaya

Nagar, vellamadam

Surgical gloves 24 crores

Pon Jesly Filaments Ltd., Sahaya

Nagar, Vellamadam

Nylon Mono

filament

180T

Vasantham Mono Filaments (Pvt Ltd)

Thammathukonam

Nylon Mono

Filament

180T.

Source : District industries Centre, Nagercoil.

39

3.18.12 INFRASTRUCTURAL FACILITIES

The district offers good infrastructural facilities conducive for the growth of

industries and the details are given in suitable table.

ROADS

Table 1.11 illustrates the details of roads available in the district.

TABLE 1.11

ROADS AVAILABLE IN KANYAKUMARI DISTRICT

Types of Roads Surfaced (Kms)

National Highways 77.60

State highways 50.66

Major District Roads 274.80

Other District 853.05

Union Roads 863.45

Panchayat Roads 210.60

From the Table 1.11 it is found that the existing roads link the District, State

and Nation. Commodities produced by rural industries functioning in the nine blocks are

marked within the locality and also reached out to the other municipal areas of the district

through roadways.

COMMUNICATION

Telephone, telegraph and postal network are very essential for industries

development of any region. It is available even in the village and hamlets of this district.

40

All the 27 telephone exchange in the district have been included in the Subscribers Trunk

Dialing (S.T.D) map of the Telephone Department.

Table 1.12 illustrates the effective net work of communication facilities

available in the district.

TABLE 1.12

COMMUNICATION NETWORK FACILITIES IN THE STUDY AREA

Details of Communication Number available

Post and Telegraph office 33

Telephone Exchanges 27

Public call offices 208

Head post offices 2

Sub post offices 106

Branch post offices 156

Letter Boxes 1316

Telephone connection 33,314

Source : Office of Telecom District Manager, Nagercoil and Office of Post Master, Head

Post Office, Nagercoil.

Table 1.12 clearly reveals the good network of communication available for the

rural industries. Through telephone and now through cell phone facility, the agro food

entrepreneurs can easily contact their suppliers of raw materials and the customers are able

41

to contact the entrepreneurs at short intervals. This reduces undue delay and promotes

prompt delivery of goods, contributing to the industrial development of the district.

ELECTRICITY

Electricity is one of the basic infrastructure facilities for industrial

development. As per the information available form the Tamil Nadu Electricity Board

(T.N.E.B), Nagercoil, all rural hamlets of Kanyakumari district are electrified. The agro

food enterpresneurs can get speedy supply. The available power generation through,

Hydro energy is shown in Table 1.13.

TABLE 1.13

DETAILS OF SUB – STATIONS, NUMBER OF TRANSFORMERS,

(Voltage Ratio and Installed Capacity)

Name of the Sub – Station Volatge Ratio No. of power Transformer

capacity

Nagercoil 110/11Kv 2x10MVA

Thuckalay 110/33Kv 1x16 MVA

Pechipparai 110/11Kv 1x5MVA

Kizhithurai 110/11Kv 1x10KVA

Kanyakumari 33/11Kv 1x3MVA

Vallan Kumaravilai 33/11Kv 1x5MVA

Mamavalakurichi 33/11Kv 1x5 MVA

Minchirai 110/11Kv 1x10MVA

Veeyanoor 110/11Kv 1x10MVA

Source : Office of the Superintending Engineer, TNEB, Kanyakumari Electricity

Distribution Circle , Nagercoil

42

HYDEL ENERGY

Further Hydro – electric power generation in the district is detailed in Table 1.14.

TABLE 1.14

POWER GENERATION THROUGH HYDEL ENERGY

Place Capacity Power generation

Kodayar I 1 x 60MW 145.027MW

KodayarII 1 x 40 MW 64.38 MV

Table 1.14 shows that hydel power is generated at Kodayar through two

projects. Besides, power is generated through non – conventional resources. The installed

and expected production capacity through windmill is 14,73,836 units through 406 fans.

1.18.13 FINANCIAL CORPORATION

TIIC AND SIPCOT

Tamil Nadu Industrial Investment Corporation (TIIC) is providing loan

facilities to agro based food industries. The maximum limits of term loans available from

TIIC and SIPCOT are given in Table 1.15

TABLE 1.15

EXTENT OF LOANS PROVIDED BY GOVT. FINANCIAL INSTITUTIONS FOR

A SINGLE PROJECT

Category Rupees in lakhs

TIIC Loans for partnership and sole

proprietorship concerns 30.00

SIPCOT (Loans for companies) 90.00

Source : Office of the Branch Manager, TIIC Ltd, Nagercoil.

43

TIIC grants financial assistance for setting up new industries, for expansion,

diversification, renovation and modernisation of existing Industries. It offers long and

medium term financial assistance. SIPCOT provides the following types of financial

assistance.

a) Term loan under IDBI Refinance scheme

b) IDBI’s seed capital scheme.

c) Underwriting the capital issues

d) Guarantee to loan from commercial banks

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT (NABARD)

NABARD has entered into the field assistance of non – farm activities

especially to cottage rural and small scale industries. Under this scheme, composite loan

assistance both for capital and working capital investment up to rupees five lakhs (Rs. 5

lakhs) is available at an interest of 10 percent. The Kanyakumari District Central Co –

operative Bank and The Tamil Nadu Industrial Cooopeartive Bank implementing this

scheme under refinance from NABARD.

Table 3.16 shows that the amount of investment credit given to rural industries

of the District, is Rs. 385 lakhs. Out of the nine blocks the investment credit is the highest

in Rajakamangalam block.

KHADI VILLAGE INDUSTRIES COMMISSION MARGIN MONEY SCHEME

To generate rural employment through setting up of cottage and village

industries, KVIC has introduced Margin money scheme. The scheme enivisages that 25

percent of the project cost for projects up to Rs. 10.00 lakhs will be provided as margin

money (30 percent in the case of weaker section). For projects above Rs. 10 lakh plus 10

44

percent of the remaining cost of the project. Since 2000 the scheme has become popular

with bank branches in the district.

1.18.14 INDUSTRIAL ESTATES

Industrial estates are columns or group of industrial units is one premise.

Generally they are formed by the Government with the support of District Industries

Centre (DIC). The industrial estate provides Land and Buildings and all other infra

structural facilities such as road, communication, power, godown, security and water

supply to entrepreneurs. The cost of developing the industrial estates is shared by central

and state governments each taking up 50 percent of the cost.

1.18.15 BLOCK PROFILE

There are nine blocks in Kanyakumari District and the resource of the blocks

are analysed.

AGASTEESWARAM BLOCK

This block is the South east part of Kanyakumari District. The area of the

clock is 13693.03 ha. The average rainfall is 694m.m. Mixed typed of red and alluvial

soil occur in this block. Major crops in this block are paddy, banana and coconut. This

block has a coastal area of 12 kms. A fishing harbour is being constructed at

Chinnamuttam. Mylaudy is a famous place for stone querrying, carving idols, epitaphs

and other sculptural arts. Kanyakumari, one of the important spots of natural beauty in the

world is situated in the block and it is the only place in the country where one can

simultaneously view sun set and moon-rise. Circular Fort and Sucheendrum Temple are

other important tourist centres in the block.

45

THOVALAI BLOCK

This block is in the south east of Kanyakumari District. The area of the block

is 36908ha. The average rainfall is 1015m.m. Mixed types of red and alluvial soil occur

in the block. Major crops in the area are paddy, groundnut, blakgram, coconut and

banana. Plantation crops such as rubber, cloves, pepper and cardamom are also available

in the block. Jasmine and chrysanthemum are grown in and around Thovalai and Aramboli

villages. There is a co-operative “KANYA” spinning mill at Aramboly. Keeriparai,

Kazhi-kesam and Olakkaruvi falls are the three important tourist centers in this block.

THUCKALAY BLOCK

This block is in the middle of Kanyakumari District. The area of the block is

1367ha. The average rainfall is 1215m.m. The block possesses laterite type of soil, Major

crops in this area are paddy, blackgram, tapioca, coconut and banana. Plantation crops

such as rubber, cloves and pepper are also available in this block. Padmanabhapuram

palace with area of seven acres is inside the block which is one of the rare archeological

museums.

RAJAKKAMANGALAM BLOCK

This block is in the southern part of Kanyakumari district. The area of the

block is 12297ha. The average rainfall is 700m.m. Mixed types of red and alluvial soil

occur in this block. Major crops in this area are paddy, banana and coconut. The block

has a costal length of approximately 15kms. and forms part of the famous “Wedge Bank”

which is one of the richest fishing grounds in the world.

46

KURUNTHENCODE BLOCK

This block in the southern part of Kanyakumari district. The area of the block

is 10954ha. The average rainfall is 700m.m. Mixed soil types of red and alluvial soil

occur in this block. Major crops in this area are paddy, banana and coconut. The block

has a coastal length of approximately 10kms. A Mandaikadu Bagavathiamman Temple

and Colachel Fishing Harbour are the two important tourist centres in this block. Indian

Rare Earth factory at Manavalakurichi is in this block.

MELPURAM BLOCK

This block is in the northern part of Kanyakumari district. The area of the

block is 19295ha. The average rainfall is 101m.m. Mixed type of red and laterite soil

occur in the block. The major crops in this area are paddy, groundnut, black-gram, cocont,

tapioca and banana. Plantation crops such as rubber, cloves and pepper are also available

in this block.

THIRUVATTAR BLOCK

This block is in the northern part of Kanyakumari district. The area of the

block is 14486 ha. The average rainfall in 1310 m.m. The block possesses laterite type of

soils. Major crops in this area are paddy, blackgram, tapioca, coconut and bananas.

Plantation crops such as rubber, cloves, pepper and cardamom are available in this block.

Mathoor dam, the highest and longest dam in Asia is in this block. Thiruvattar Bee

Keepers co-operative Society is famous for the distribution of honey in this block.

Thiparappu falls, Pechiparai, Perunchani, Kodayar Hydro Electrical Projects and Chittar

Dam are the important tourist centres in this block.

47

MUNCHIRAI BLOCK

This block is in the southern part of Kanyakumari district. The area of the

block is 7201 ha. The average rainfall is 650 m.m. Mixed soil types of red and alluvuial

soil occur in this block. The major crops in this area are paddy, banana, tapioca and

coconut. The block has a coastal length of approximately eight kilometers.

KILIYOOR BLOCK

This block is in the eastern part of Kanyakumari District. The area of the block

is 8039 ha. The average rainfall is 700 m.m. Mixed soil types of red and alluvial soil

occur in this block. The major crops in this area are paddy., banana, tapioca and coconut.

The block has a costal length of approximately Ten kilometers.

The area profile of the district and the block well reveal that they are endowed

with rich natural and material resources conducive for the growth of agro based food

industries.

1.19. CHAPTER SCHEME

The chapter scheme of the study is as follows.

1) The first chapter entitled “Introduction Design and Area Profile” of the study

deals with the definition of agro based food industry, its need, features,

importance and classification. It also covers the methodology of the study,

Review of Literature and profile of study area.

2) The second chapter entitled” Agro based food industries in India and Tamil

Nadu” deals with total number of agro-based food industries, its capital,

employment, production and export of various agro food from India and Tamil

Nadu.

48

3) The third chapter entitled “Agro based food industries in Kanyakumari District”

deals with analysis of the profile of agro based food industries in Kanyakumari

District.

4) The fourth chapter entitled “Analysis of production problems of agro based food

industries" deals with various production problems of agro based food industries.

5) The fifth chapter entitled “Analysis of marketing problems of agro based food

industries" deals with various marketing problems of agro based food industries.

6) The sixth chapter entitled “Analysis of financial problems of agro based food

industries" deals with various capital related and profile related financial

problems of agro based food industries.

6) The last chapter entitled ‘conclusion’ deals with summary, findings and

suggestions of the study.

49

Map – I.1

50

REFERENCES

1. MAHESKUMAR S. (2009), “Food Industry in India”, Kisan World, September,

pp. 15 – 16

2. SATYA SUNDARAM I. (2009) “Agro – Industries: Importance, Problem and

prospects, kisan World, June, pp. 38 – 39

3. MAMORIA C. B. and TRIPATHI BB. (1991), Agricultural Problem of India”,

Kitab Mahal Publication, p. 732.

4. RAGNAR NURKSE (1984), Problem of capital formation in under developed

countries, New Delhi, Oxford university Press.

5. NAIDU K. M. (1969), Role of co – operation in promoting Rural Electricfication

Southern Economist, 7 (i).

6. SRIVASTAVA S. C, SINGH . K. V. and JAIN S. (2011). Value Added

Horticultural Products, Kisan World, February – 2011, Volume – 38, No. 2

7. MUTHU KUMAR P. and ASOK A. (2011) Agricultural Marketing, Kisan world

April – 2011, Volume38, No. 4.