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Justify the statement ‘The development of an industry depends upon agriculture.’

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  • Last Updated : 04 Jul, 2022
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India is agrarian country where majority of the population depends on agriculture. More than 60% of people leave in rural areas and predominantly they rely on agriculture or allied activities. Agriculture is classified as primary industry and drives more than  42% of the labor force. Even though it encompasses nearly half of the workforce, its contribution in GDP ( Gross domestic product) is merely 18%. That shows quite a huge bridge in the number of persons employed and their overall outcome. 

The development and growth of any economy relies on industry or manufacturing sector. The secondary sector includes all the activities and labor force working in industry or any manufacturing unit. It accounts for nearly 28% contribution to GDP. Since India drives a huge workforce in the manufacturing sector, various factors contributing to the growth of economy depends on its industries.

Agro based industries

Those industries which rely on agriculture for its primary input needs. Few of them are listed below:

  • Cotton Textile
  • Sugar
  • Beverages like – tea/coffee/coco
  • Edible oil
  • Silk
  • Bamboo
  • Alcohol industry
  • Rubber
  • Lac 
  • Wood timber 
  • Jute

How is Industry dependent on agriculture?

  1. Agriculture as a provider of raw material – Input based
  2. Agriculture sector as food provider
  3. Source of labour force for industry
  4. Agriculture as source of demand for industrial products
  5. Source of fund for industry
  6. Industry as provider of market for the agro products

Agriculture as a provider of raw material 

Almost all the products sourced from agriculture have a direct/indirect path to industry. Food products directly go to food processing industry while others may be utilized for consumable items

Below table shows raw materials provided by agriculture and its use in various industries

Raw material


Cotton Cotton / Textile
Sugarcane Sugar
Tea Leaves  tea
Coffee beans Coffee
Oilseeds  oil
bamboo bamboo products/items
Rubber  Tyres/ rubber based items
Grapes/apple  wine/ alcohol
lac  ornaments/ decorative items
Jute  Jute products/ reusable items
Timber  Furniture

Forest based products also find a huge way as an input to Industries. Thus the major raw material source of any manufacturing sector is agrarian products

Agriculture sector as food provider

The basic need of human being to satisfy hunger is directly linked to availability of food material. Agricultural sector as a major driving source of food. The entire population whether they are working in agriculture/ manufacturing unit or tertiary sector is dependent on food. hence the availability of food is a precondition for the stagnant development of any industry.

Source of labour force for industry

In any economy , as it develops, the industry grows at a faster rate. The growth urges the need for more workforce for its expansion. As the country moves from agrarian to manufacturing based, the workers from the agriculture are rendered surplus. The requirement for industries are supplied and met by the workers spared from agricultural labour force. Thus the main and fundamental source of the labour for industry is met by agriculture.

Agriculture as source of demand for industrial products

Once the primary need of basic food necessity is satisfied , the demand focus on other necessities like home consumables and daily usable. They are met by the production of industries. Items like Fridge, TV, Washing machine, Clothes, vehicles, stove, furniture, shoes, electricity, houses all are supplied from industries. demand is directly dependent on purchasing power of the people. If the growth of agriculture sector is low, the growth of industries will also be low. For the development of industrial sector and to rise their income, the rise of income from agricultural sector is also necessary.

Source of fund for industry

Rural deposit their savings in banks, post offices or other financial institutes. The savings directly depends on the agricultural . Since they can not contribute their extra income to agriculture, they have to rely on urban banks for their savings. The banks in turn satisfy the financial needs of the Industries. More the liquidity available to them , better the progress they make. Thus agriculture becomes a source of fund for the industry.

Industry as provider of market for the agro products

Since the base of any production relies on absorption of the goods in the market and without proper channel, that is not possible. Industry provide a market for agricultural products, either in raw form or as a whole. This works like a two way :
Thus there is a dependence of industries on agriculture and there is dependence of agriculture on industries. Both are complimentary for growth of each other.

Sample Questions

Question 1: What is the need for agro based industries?


  • Major source of rural upliftment 
  • Provides employment 
  • As a raw material absorber of agricultural production
  • Income generation uplifts the living standard of people
  • Provide goods/ consumables to common mass
  • Mitigate rural to urban migration
  • Generate balance between agriculture and industries

Question 2: What are the challenges in agro based industries?


  • Change in cropping pattern
  • No stagnant production 
  • No proper tools/ technologies available for the efficient production
  • Financial credits to the farmers
  • Market demands very uncertain
  • No guidance/ training or mentorship to agro based industries for large scale production

Question 3: What are the major agro based industries?


  • Textile industries : Takes agro products as raw material and manufactures cotton textile, jute products, synthetic fibers, silk and woolen products as production goods. It is the biggest employment provider. India is the second largest country in producing textile products
  • Sugar industries : India’s rank in the production of sugar is second in the world. It is one of the largest and leading industries in the country. Not only is the sugar produced is consumed in India but is exported to the world as well .
  • Oil industry : India belongs to the major oil consumption country in the world. Various oil seeds like ground nut,  cottonseed, sesame, castor, rice bran are manufactured in enormous volumes and the belong to daily food basket of every home
  • Tea / Coffee :India is renown as major tea producer and consumer in the world. Assam, Darjeeling, Nigiri are major regions for its productions.
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