Agro-based industries are those that (a) provides inputs to farmers (b) use agricultural products as raw materials (c) produce goods consumed in the villages (d) carrry on industrial activity in rural areas

Agro-based industries are those that use agricultural products as raw materials.


Famine Enquiry Commission (India), 1994 defined an agro-based industry as the industries that are involved in supplying the farm with agricultural inputs besides handling the product of the farm, maybe termed as agro-based industries. Agro-based industries comprises of processing, preservation, and preparation of agricultural produce for the intermediate and final consumption. The government has undertaken the implementation of various schemes and policies to promote the Agro-based industries across the country to help the farmers in raising their income.

Benefits of Agro-based Industries

  • Provides competitive advantage both within and outside the country
  • Absorption of the surplus rural labour and address the problem of large-scale unemployment in rural areas
  • This industry is labour-intensive, hence turning it into a major export industry will create vast employment opportunities
  • Employment opportunities in rural areas increases where the industries are located (to be near the source of raw materials, especially perishable agricultural produce)
  • Provides profitable diversification in the rural areas which ensures an all-round industrial growth in the rural areas
  • It has the propensity to stabilize and make agriculture a lucrative option to take up
  • They have a high potential as foreign exchange-earners too

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