Food Processing Industry: Definition and Dimensions; Channels of Transitions; Inter linkages between Agriculture and Industry.

Food Processing Industry in India

Food Processing Industry: Definition and Dimensions

Understanding the Channels of Transitions

Food Economy and Industrial sector have traditionally been viewed as two separate sectors of the economy. They differ both in terms of their characteristics (role in economic growth, share in GDP, share in total output, role in poverty reduction etc.) and potential to generate employment.

The Food sector or Agriculture is considered to be a traditional sector of the economy. Agriculture has been considered the hallmark of First stage development with features like:

The Industrial sector is considered to be a modern sector of the economy and represents the second and most important stage of development. The Industrial sector has modern features like:

The Transition from Agriculture to Industry:

  1. Over the years, with the development of the economy, the traditional agriculture sector becomes less and less productive due to disguised employment (large no of people working on a small land without contributing to production increase).
  2. At this Juncture, the agriculture sector with excess supply of labour will start supplying labour force to the Industries and manufacturing sector.
  3. The disguised labour employed in the agriculture sector will become more productive in the factories, where they will contribute in Increasing production.
  4. At the same time, the remaining labour force in the agriculture sector will also become more productive (no of people are working is equal to no of people required) and their wages will increase.
  5. This is how a standard economy makes transition from low productive agriculture sector to high productive industrial sector. The degree of this transition and Industrialisation has been taken to be the most important indicator of a country’s progress along the development path.

The New literature on Changing Role & Interlinkages between Agriculture and Industry


Himanshu Arora
Doctoral Scholar in Economics & Senior Research Fellow, CDS, Jawaharlal Nehru University


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Revisiting the Basics

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