AGRO PROCESSING AT SMALL SCALE – A PROFITABLE BUSINESS

Tarsem Chand, Sajeev Rattan Sharma and Jarnail Singh

Department of Processing and Food Engineering
Punjab Agricultural University, Ludhiana

As far as agricultural production in the country is concerned, it has reached a plateau.

There are few chances of increasing the productivity further. Post harvest losses account for

about 10% in grains and about 30% in fruits, vegetables and other perishables. The only way to

increase the farm income is by reducing the post harvest losses and by processing. These days

more and more emphasis is being given on crop diversification. Farmers are growing new crops

such as chilli, turmeric etc. Processing of these crops is very necessary before being used by the

consumers. There is a vast scope for processing of these crops along with the traditional crops at

the farmers level or at small scale level.

The small farmers can supplement their income by adopting certain supporting activities

such as poultry and dairy farming, beekeeping, mushroom growing and small scale agro-

processing. Many farming families have successfully increased their profits and generated

employment by adopting some of these supporting businesses.

Agro processing complexes for processing of grains are quite a success. Such complexes

may have a mini rice mill, a small flour unit, a baby oil expeller and a grinder etc. for processing

of wheat, paddy, oilseeds and spices etc. These complexes can be installed by investing Rs. 1.50

lakh to Rs. 7.00 lakh on various processing machines. The entrepreneur can earn Rs. 5000/- to

Rs. 30,000/- per month along with providing employment to two persons. One the one hand, he

produces quality product and on the other he increases his income. Along with the processing of
his own produce, he can also process the produce of other farmers on custom hire basis, thereby

increasing his income. The approximate cost and capacity of various machines is given in the

following table.

Sr. No. Name of Capacit Approx. cost

machine y (Rs.)

1. Mini rice mill 250 1,00,000/-

Kg/hr

2. Baby oil 60 Kg/hr 1,00,000/-

expeller (with
oil fitters press)

3. Dal mill with 100 80,000/-

grader Kg/hr

4. Atta chakki 300 2,00,000/-

(with scrubber) Kg/hr

5. Atta Chakki 150 50,000/-

Kg/hr

6. Masala Grinder 10-20 20,000/-

(Hammer mill) kg/hr

7. Electric motor 1,00,000/-

Fruits and vegetables processing plants like dehydration plants, freezing plants can also

be set up. But as these plants require huge investment (Rs. 20 lakh or more) and number of unit

operations are involved requiring technical persons. There are many sophisticated machines in

these plants like vegetable washing machines, vegetable dicer, blancher, dryer, pre cooler,

freezing units and some machines required for specific crops. Technical knowledge is required

for operating these machines. So these plants should be set up preferably by cooperative societies

or group of farmers at centralized locations only. One pilot plant can cater to the needs of a

cluster of villages, where farmers bring their produce, get it processed and take it for marketing.
When the farmer is assured of good returns through processing by these pilot plants, he can think

of setting the one for himself. Similarly for processing of specific crops like red chilli, turmeric

etc, farmers can process their produce at their own level by doing some operations manually and

some by machines, thus reducing the investment. Fully mechanized plants can also be set up at

centralized places. Various agro processing model are available for processing at small or

medium level.

Basic training is required for starting such agro-based industries. The Department of

Processing and Food Engineering, PAU Ludhiana organizes regular training courses for

unemployed educated rural youth. These trainings impart knowledge about processing

techniques of different crops, type and source of machines, quality standards and various

schemes for arranging finances and subsidies etc. Farmers can visit the Department of Processing

and Food Engineering, PAU Ludhiana for further guidance.