Study of the Food Processing Sector in Bihar

Being largely agricultural and with abundant water, food processing is a natural choice for industrial development in Bihar. Discussions with stakeholders reveal unambiguously that this is the sector that is capable of generating a thriving industrial scenario with sufficient employment generation for Bihar in the future. Economic Survey (2014-15), Government of Bihar, reports that not only is Bihar the seventh largest producer of fruits and vegetables, the food processing sector has generated an employment of 21, 240 from the 181 units in operation in food processing as on September 2014.

Nonetheless, this comes with its share of challenges, foremost being allocation of land. As in much of Eastern India, small land-holding size per household makes land acquisition a big challenge for the government as well as the industry. Finance, skilled manpower, infrastructure (electricity, roads for market access) and law and order are the other supporting criteria for industrial development in food processing that are likely to pose challenges in the future.

In this context, the primary aim of this study is to understand the driving forces for industrial development in the food processing sector in Bihar. The specific questions that we intend to study are:

  • Identification of the sub-sector(s) in food processing that has the largest growth potential in the next 10 years: by analyzing strengths and weaknesses at both the upstream factory/mill level and the downstream retailing/marketing channel level of the production chain.
  • Identification of the major bottlenecks in these sub-sectors and the best possible policy intervention for addressing it: along the entire supply chain of the production process (mill/plant level and retail/marketing level analysis)
  • Characterization of the profile of entrepreneurs (locals from Bihar, non-residents with family links in Bihar and non-residents with no family ties in Bihar) engaged in the food processing sector and evaluating their differential risk-assessment for investment.
  • Understanding the nature and causes of business failures and exit in the food-processing sector.

Outputs

  • Research in progress.

    Project last updated on: 4 May 2016.