Value Addition of Agricultural Produce: An Evergreen Technology for Profit Making
Authors: Rajendra Jangid, Mahendra and Manoj

Agriculture forms the backbone of Indian economy and even though there has been large industrialization in last 60 years, agriculture still occupies a place of importance. Agriculture has abled to provide us more or less food security, but, still failed in providing nutritional security.

Value addition is one of important components of nutritional security. Sometimes surplus production is the cause of lower price of produce in market. One way to solve the problem is crop diversification which is responsible for a viable market system, creates opportunity to earn more as well as strong step toward nutritional security. Other step is value addition of agricultural produce. Crop diversification and value-addition are the two important pillars of nutritional security as well as two important techniques of profit maximization. The most important problem facing the country today perhaps is providing remunerative price to the farmers for their produce without incurring additional burden of subsidy through minimum support price or some such measures. This problem could be solved largely in the surplus production of cereals, vegetables, fruits, milk, fish, meat, poultry, etc., which are processed and marketed aggressively both inside and outside the country. Value addition coupled with marketing has thus the potentials of solving the basic problems of agricultural surplus or wastage and providing rural jobs, ensuring better prices to the growers, etc.

What is value addition?

Value addition is a process in which for the same volume of a primary product, a high price is realized by means of processing, packing, upgrading the quality or other such methods.

What is value added agriculture?

Value-added agriculture refers most generally to manufacturing process that increases the value of primary agricultural commodities. Value-added agriculture may also refer to increasing the economic value of a commodity through particular production process, eg., organic produce, or through regionally branded products that increase consumer appeal and willingness to pay a premium over similar but differentiated products. Value-added agriculture is regarded by some, a significant rural development strategy. Small scale processing unit, organic food processing, non-traditional crop production, agri-tourism and bio-fuels development are examples of various value-added projects that have created new jobs in some rural areas.

Need for value addition

  • To improve the profitability of farmers
  • To empower the farmers and other weaker sections of society especially women through gainful employment opportunities and revitalize rural communities.
  • To provide better quality, safe and branded foods to the consumers.
  • To emphasize primary and secondary processing.
  • To reduce post harvest losses.
  • Reduction of import and meeting export demands.
  • Way of increased foreign exchange.
  • Encourage growth of subsidiary industries.
  • Reduce the economic risk of marketing.
  • Increase opportunities for smaller farms and companies through the development of markets.
  • Diversify the economic base of rural communities.
  • Overall, increase farmers’ financial stability.

Market forces for product differentiation and value addition

  • Increased consumer demands regarding health, nutrition and convenience.
  • Efforts by food processors to improve their productivity.
  • Technological advances that enable producers to produce what consumers and processors desire.

Producers have a challenge to be responsive to consumer demands by producing what is desired. Attentiveness to consumer demands in quality, variety and packaging are important because demographic trends show growth in the convenience-oriented, health conscious and environmentally concerned sectors where price is not as important as quality.

Horticulture as a mean for value addition

  • Horticulture deals a large group of crops. Therefore, cultivation of crops which belong to us and possess great medicinal, nutritional, health promoting values.
  • India as second largest producer of fruits and vegetables, only 10 per cent of that horticultural produce is processed, but other developed and developing countries where 40-80 per cent produce is value added.
  • Horticultural crops provide varied type of components, which can be effectively and gainfully utilized for value addition like pigment, amino acids, oleoresins, antioxidants, flavors, aroma etc.
  • Post harvest losses in horticultural produce are 5 to 30 per cent which amounts to more than 8000 crore rupees per annum. If we subject our produce to value addition the losses can be checked.
  • Horticultural crops are right material for value addition because they are more profitable, has high degree of process ability and richness in health promoting compounds and higher potential for export.

Therefore, horticultural crops are right material for value addition in the present context of agricultural scenario and we should go for new product development to be unique and novel.

Value addition as new product development: -

To be unique and novel new product development should be attempted and this can be approached through various ways.

  • A product entirely new in character.
  • A product apparently similar in character in many respects to some existing brands but with distinguishing features.
  • A product similar to one already in the market but new form of manufacture
  • A product novel in kind, made by novel process or through novel ingredient.
  • A product resulting from substantial modifications of the characters with change in nature/proportion of ingredients or processing methods or conditions or packing system.

Value addition through biotechnology tools: -

There are certain areas where biotechnology can be utilized for value addition in horticultural produce such as:

  • Genetic transformation for enhanced vase life
  • Genetic transformation for novel flower colors
  • Genetic transformation for novel fragrances

Some of the areas of achievement

  • Carnation -Enhanced shelf-life
  • Carnation - Modified flower color, sulphonylurea, herbicide tolerance
  • Melons - Delayed ripening
  • Papaya - Resistance to viral infection, papaya ring spot virus (PRSV)
  • Squash - Resistance to watermelon mosaic virus and cucumber mosaic virus and herbicide tolerance to glufosinate ammonium.
  • Sugar beet - Herbicide tolerance
  • Tomato - Delayed ripening, resistance to lapidopterian pests, delayed softening, lycopene rich tomato.

Choice for value addition: -

Any attempt for value addition should focus for following parameter for deriving maximum benefit.

  • Unique - The product we develop should be one of its own kinds for which crop and variability indigenous to our country should be exploited.
  • Novelty - The product should be new and unusual like blue or black rose and likewise so that no one can compete.
  • Export potential - The product developed should have demand in international market for higher return and appreciation of benefit of global trade.
  • High value - The product should have high value for low volume for ease of trading and distribution and the extracts from Indian spices and herbal medicinal plants can fulfill this requirement.
  • Availability - Consistent availability of the product in required quantity should be ensured for stable market and faith.
  • Market - Any product that is developed must have market because market is the key for success of any product.
In the present agricultural scenario when the globe has become a single market agriculture has to be competitive, the diversification, quality enhancement and value addition have become key words of success in agricultural trade at international level. If our agriculture has to be competitive, we will have to diversify and the produces will again have to be subjected to product development and product diversification for harnessing full advantage from present scenario and development. Besides making agriculture competitive, value addition also helps in avoidance of post harvest losses, industrialization, employment generation, export, extended availability of produce, foreign exchange earnings and product diversification, easy marketing etc. It is therefore, appropriate time for us to come out of primary processing and bulk exporting of pulps and get into newer product development and marketing of ready to consume product through value addition.

About Author / Additional Info:
I am currently pursuing Ph.D. in Agricultural Economics from SKRAU, Bikaner.