HR essay on: Agro-industrial development plans employment

Introduction

The food processing industry merits a key position in the agro-industrial development plans of the country in general the agricultural region in particular. The emergence of food processing industry in an organized fashion is recent origin. At present this industry has been accorded as priority status realizing the importance for increasing and improving food supplies through preservation of post-harvest losses and generating larger employment potential. The food industry throughout United Kingdom is extensive where it accounts to employ over half a million people. Being one of the largest manufacturing sectors across UK it accounts to about 16% of the entire manufacturing sector. The latest turnover figures were calculated in over £70bn. Another significant figure is about 15% people being employed in the manufacturing industry related to food and drink industry. The estimated figures are around 4,00,000 workers working in around 6,000 organizations(Mofpi 2005).

Most of these organizations are small companies who employ 10 or lower number of people in each unit. The challenges are huge where increasing raw material and energy costs, regulation around greenhouse gas emissions and waste management are posing a significant economic and operational challenge to the sector. Overall the industry has a very complex food supply chain where at all stages it generates greenhouse gas emissions as well as large quantities of wastes. With increased wastages and lessor number of units to preserve the production a huge potential is evident in the food processing industry.Industry Statistics

Food and drink manufacturing has contributed over 31% of the GVA (Gross Value Added) whereby it has shown an increase of about 1.5% in total factor productivity. The average increase has been 1.3% since the year 2000. The year 2000 saw a marginal increase of over 2000 employees in this sector. There has been a rise in the volumes of output as compared to the volumes of input productivity since 2010. In the chart below the output of the industry was seen at 7% higher in the year 2010 as compared to the one in 2000. Also a 14% increase is evident in the food manufacture productivity. This tends to suggest that the food processing unit has been growing steadily and still has a huge potential to be exploited (defra.gov 2012).

Across the European Union, UK ranks at the 4^th spot to produce cereals and oilseed crops. It accounts for about 8% of the total agricultural production in the European Union. The agricultural products include: (UK Agriculture n.d.)

• Pastoral farming: Rearing and production of animals including pigs, chickens, hill farming sheep, beef and dairy cattle
• Mixed farming: Combination of arable and pastoral
• Horticulture: Production of flowers, fruit, vegetables or ornamental plants
• Market gardening: Production of fruit and vegetables
• Viticulture: Grapes

Listing down the principal crops it would be:

• wheat
• barley
• oats
• potatoes
• sugar beet
• vegetables
• oil seed rape
• fruits

Coming to the Livestock products they are:

• poultry
• sheep
• cattle
• milk
• meat
• eggs
• wool

Why is there a need for a food processing unit?

About 60% of the food need of Britain is provided from their own agricultural produce, although it employs only 1.4% of the country’s labour force. There has been a drastic change in the last 30 years in the pattern of agricultural produce and the production levels have gone up drastically. This brings in a need for preserving their production to last longer and reduce any kind of wastage which may be happing. Moreover this production provides a huge potential to the processing industries to make new products and hence expand the range of processed food on offer (Innovateuk 2012)

The growing perception of its importance as a means of increasing food availability was officially acknowledged with the creation of the Ministry of food processing in 1988. Of the many sub-sectors which comprise the food processing sector as a whole, the fruit and the vegetable processing industry commands a unique position (Ecifm.rdg.ac 2011)

• Production in the organized sector grew at over 14% per annum in the last decade
• It has immense growth potential since less than 5% of fresh fruits and vegetables are utilized for processing.
• It provides a large proportion of the total exports of processed foods in value terms
• It has strong backward linkages with agriculture and equally crucial forward linkages with modern markets
• It is the only sector in which the processed product competes with its own raw material for consumer demand (Czechtraden.d.)

Location of the Project

The prospect of agro-based industries in the economy needs no emphasis. Agro based industries particularly the Food Processing industries have tremendous potential for development around areas where resources are and can make significant contribution towards solving the rural employment problem which at present a big issue in the country. The potential in a district in the rural area of Britain which has a very good transport system and connectivity with both the city and the villages would be ideal for the project(Ecifm.rdg.ac 2011).

The industrial development of the region would only be possible by setting up resource based industries. Among the variety of resources, the region is gifted with wide range of fruits and vegetables due to its unique geographical and climatic condition which provides great scope for development of fruits and vegetables processing industries.

We intend to process more local fruits and vegetables which are unique and only available in the state to strengthen its market base. We would be processing products out of cereals, oilseed, potatoes, vegetables, cattle, sheep, poultry, fish of many varieties based on the availability of the raw materials. The product mix would be such that, production of processed food will be sustained throughout the year (Food Processing-technology 2012).

Factors to determine the Plant Capacity

The capacity of the proposed unit is suggested on the basis of the following consideration-

1. Market Consideration
2. Availability of Technology
3. Equipment Capacity

Market Consideration

As already discussed in previous pages, there is a high demand potential for establishing a Food Processing Unit. There will be various types of packaging of these proposed products for proper marketing to meet the need of various types of customers. The packaging will be done in food grade bottles and polypacks.

Availability of Technology

The proposed unit based on proven technology. All the equipment required for the proposed project is simple & manufactured indigenously. The raw materials available locally will be used and other items are available from the dealers/agent of the manufacturer of the locality.Equipment capacity

Another criterion taken into consideration while suggesting the capacity of the unit is the equipment capacity. The capacity of the unit is envisaged in such a way that this is not run at 100% load to achieve Annual Production. This will allow it to run at an optimum load thus ensuring longer life of the equipment. The above capacity is planned on the following basis and assumptions.

a)     The unit will run for 300 days in a year based on a single shift of 10 hours of working per day.

b)     The water and power will be supplied on sustained basis.

c)      The capacity utilization is envisaged as 60%, 70% and 80% in the 1^st, 2^nd and 3^rd year respectively.

Computing all the above the things need to be considered to provide adequate machinery along with timely resources so that the entire processing is done with ease. The plant capacity needs to be pre-planned and equipped to the increase in productions which will be there in the course of its operations.

Industry Potential for the beneficiaries

Though there are a number of problems for setting up of food processing industry, there are various prospect sides for setting up this industry in the region:

• Abundance of raw materials within the region and eliminate condition suitable for setting up and climatic condition suitable for setting up of the food processing unit
• Wide range of products can be manufactured
• High growth rate predicted in the region
• Bright Export potentials to the other countries across Europe
• Scope for improved techniques and enhanced productivity through more judicious use of the available raw materials
• At the present processing is restricted to only few vegetables. There is a vast potential to tap under-exploited in the fisheries industry
• This industry is eminently suited for development in the co-operative sector where farmer themselves can participate. This will generate rural employment and will improve their standard of living

The growing perception of its importance as a means of increasing food availability was officially acknowledged with the creation of the Ministry of food processing. Of the many sub-sectors which comprise the food processing sector as a whole, the agricultural product processing industry commands a unique position.

Primarily a few decades ago the Government policy was not conducive for the entry of large private sector units into the food processing industry unit. The few large and medium size units were confined to some selected milk products, chocolates and vegetables products. They were not allowed to expand capacity while new large units were denied entry.

Using the Output

A comprehensive survey of the industry reveals that there exists a huge market for exploiting in the food processing sector. Although there are large players in the industry already, the market still holds potential for the smaller units. The output of the processed food would be marketed to the:

• Hotels and Restaurants: There are huge numbers of hotels and the industry of Hotels and Restaurants is still rapidly increasing in the country. Because of growing importance of the state for business and due to change of food habits of urban and semi-urban people owing to rise in per capita income. This is a growing market segment for processed foods.
• Railways:A long and dense railway network requires processed foods to be used for their passengers. Thus, railway has become a good potential market for processed food items in the state.
• Domestic Consumers (Households): Due to increasing activities, people now-a-days have less time. This situation has further been aggravated by the working women folk who have less time for cooking and the children who developed a taste for processed food products.Therefore, processed food finds a favourable response from domestic households. Thus with increasing population, the processed food market is certainly going to rise.
• Linking with the producers (Making the raw materials available):The primary activity which needs to be done before the processing and preservation step is initiated is linking with the producers. Agricultural land across UK comprises of 77% of the entire land area. The last 30 years has seen farming across UK change to a newer level with advanced farming machineries and tools. The main agricultural products are cereals, potatoes, vegetables, oilseeds, sheep, fish, poultry, etc. There are different regions across Britain where different forms of agriculture are practiced. This means in order to procure things from different areas the initial activity would be to link to different areas and producers. Some parts of Britain have excellent soil for crops, while others are used for cattle, sheep, pigs and poultry (Resources.woodlands-junior.kent.schn.d.). For products such as cattle, sheep and other poultry produces the north-west of England, Wales as well as Scotland would be ideal to look forward to (Ecifm.rdg.ac 2011).

Activities

For producing dairy products the south-west region of England is ideal to link up to. For processing vegetable products the procurement can be done from the south-east region of England and Scotland where grains, sugar beet and potatoes are produced in plenty. Coming to the other products for processing breads, loafs, and other vegetable products the East Anglia region of eastern England would be ideal.

• Procuring the agricultural products: At the present moment the processing industry is dependent for the raw materials on the local market and agents who procure the materials on their behalf for these ill organised markets causing supply of raw materials fluctuating and most unpredictable. The processing unit does not have a regulated and continuous supply of raw materials at an acceptable price. As result production plan become unsteady and liable to wide fluctuation. There is no control on quality raw material and also no control over plant capacity and manpower utilization(Smallb 2002).

A good rapport with the producers of agricultural products in the district and also in neighbouring district would be recommended for directly procuring the products from them. Fruits and vegetables being seasonal, it should be procured at peak season when it becomes cheaper without compromising the quality. For non-veg. Items, these are available all-round the year.

• Preserving the procurement:The entire processing unit would have a dedicated unit for preserving the procured agricultural products. This activity would involve the right measures to be taken to preserve the entire procurement for a longer time.
• Processing the agricultural products:For processing the tomatoes and making sauce and ketchup fully ripe tomatoes selected from the lot are washed, at 1^st and then sliced. It is heated and passed through the pulper to produce pulp followed by sieving. Similarly to jams and jellies, making except that pulp and pieces of fruit, instead of a clear extract, are used. Jams may be made of a single fruit or from a combination of 2 or more fruits. For the non-vegetarian products the processing to packaged foods would also require extensive processing and chemicals to keep the food secured for consumption. This step would require different processing divisions and machineries so that none of the processed foods are affected by the other.
• Preparing a Distribution Channel: The next step as any manufacturing unit would do is preparing a distribution channel to distribute the end products to the targeted market. A comprehensive distribution channel would need a backup of an efficient management and transportation channel so that the products could be delivered in time.

Monitoring and Evaluation

When the operations of the project get started the next step would be continuous monitoring and evaluation of the same. Regular monitoring is essential while evaluating the plans and its implementations holds the key for the success of the entire project. Answering some of the questions which are related to this would be as follows:

• Indicators to be measured: The indicators that need to be measured include the data which directly or indirectly impacts the entire production cycle. Costs of procurement, time for performing specific tasks (includes the process from procurement to the end delivery), the production per day and the costs incurred, etc. These should be constantly checked and analysed so that the costs can be brought done considerably and hence brings down the cost of the products manufactured.
• Collecting the information (Sources):For collecting the data of the above mentioned units the organization would need to have strong personnel to record these data on a regular basis. The data can be easily available or calculated by taking into the accounts of daily inflows and outflows of the costs, raw materials and the time taken on a daily basis. Recording each of them on a daily basis would be recommended so that it is easier to get the exact units. The reporting needs to be offered on a monthly basis so that there can be a fixed base for comparisons.
• Monitoring and Evaluation: After the data is made available and compared against the ones in the previous months it would help in evaluating efficiency levels. The efficiency of the monitoring process and hence a check on the entire process can be placed.

Key Personnel for performing the entire set of activities

To start with a unit having average production per annum the personnel required would be as follows:

Sustainability and quality adherence

Food is the basic requisite for human survival and also for socio economic welfare and progress of the society. It is primary duty of the government that public has access to safe food. Food safety is brought about by Food Legislation (Hygieniusn.d.).

Fruit and vegetable processing sector is regulated by the norms and acts lay by the Ministry of Food Processing Industry. It lays down specifications and quality control requirements on production and marketing of processed Fruit and Vegetable products including vinegar, aerated waters and synthetic syrups (Fao 2002)

All processing units are required to obtain a license under this order which will be followed by periodic inspection. Under the Act, ‘Fruit products’ means any type of the following articles, namely,

i)                    Synthetic beverages, syrups and sherbets

ii)                  Dehydrated fruits and vegetables

iii)                Squashes, Crushes, Cordials, Barley Water, RTS beverages, Fruit Nectars, Fruit Juices or Fruit Pulps.

iv)                Jams, Jellies, Marmalades

v)                  Tomato products, Ketchup and Sauces

vi)                Preserves, Candied & Crystallized fruits and peels

vii)              Chutneys

viii)            Canned and bottled fruits, juices & pulp

ix)                Canned and bottled vegetables

x)                  Frozen fruits and vegetables

xi)                Sweetened aerated water with or without fruit juice/fruit pulp

xii)              Fruit Cereal flakes

xiii)            Any other unspecified item relating to fruits and vegetables.

The product shall have label and license number. Each unit container shall bear License number, batch number and date of manufacturing. In order to sustain the manufacturing foods which has a huge potential across UK and the neighbouring countries adherence to the acts by the concerned authorities is very important. The demand for processed food has been increasing and would increase considerably in the coming years. The market is huge to explore and holds potential too. If the quality control is in place and right markets are targeted the project is of high potential.

Conclusion

The annexures below provide the implementation time which would be required to start and commence the project. It takes about 15 months for setting up the entire infrastructure required with adequate funding in place. The Budget for the entire project seems to have been evaluated at $50,000 which is the amount for any food processing industry to be set up and initiated. During the 15 months it is essential for the team involved for the entire project management to tie up with the concerned bodies, obtain licenses, setup their distribution network, recruit skilled as well as unskilled employees, etc. The industry would be highly effective in terms of saving the wastages of agricultural products by preserving them and processing them to obtain product with could be used for some months or even years.Executive Summary

With the idea and scope of this industry we would like to venture out in the fruits and vegetables processing industry. We propose to process all the available fruits and vegetables in the district and also from the neighboring districts. The project if implemented has a large scope as these are everyday use products and the market for these products is huge. The entire report summarizes the project prospects and other details related to the project. The grants are requested from the following bodies:

• The Technology Strategy Board
• The Department for Environment Food
• Rural Affairs, the Biotechnology
• Biological Sciences Research Council
• Scottish Government

The report carries out an in-depth analysis of the food processing unit and the potential it has. The problems which have been discussed in the report include the hurdles which may come while setting up a food processing unit, the licensing norms, and the funds required, etc. The project would take around 6 months to start its operations and the payback period is expected to be about 2 and a half years.

The major objectives for requesting the grant for the specified projects are:

• To create employment directly and indirectly.
• To enhance the production of farmers by paying them remunerative prices for their produce.
• To avoid wastage of local production of fruits and vegetables.
• To create more awareness among the villagers to take up horticulture farming as self-employment.
• To strengthen the proper Backward Linkage and Forward Linkage.

To achieve the goals above setting up a clean channel starting from procurement of the food products to be processed, bringing it to the processing unit and final processing it to get the final products is required. A food processing unit once established and the channels defined could well be the point to take advantage of the untapped potential of this industry. The activities for this project includes procurement of the agricultural products such as vegetables and fruits, bringing them to the processing unit, processing the same with the use of advanced machinery and final creating products such as jams, jellies, juices, frozen agricultural products, etc.

The end products after processing these agricultural products would be marketed all over United Kingdom and also exported to the other countries across the world. The unit would be equipped with all the storage facilities so that the procured agricultural products could be stored for a longer period and hence reduce any sort of wastages. The project costs would be about $50,000 for the initial setup and the entire grants are expected from the above mentioned bodies under their Sustainable agriculture and innovation platform. The program has been made available for increasing the efficiency, sustainability and competitiveness for the food processing and manufacturing sector.

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